KEY POINTS:
Fans of private investment to hasten the $1.89 billion Waterview motorway tunnels project in Auckland have seized on a new study into benefits from Sydney's orbital network of toll roads.
Accountancy giant Ernst & Young, a lead adviser to the New South Wales and Queensland governments on public private partnerships (PPPs) for big transport projects, has counted A$22.7 billion ($27.6 billion) in direct economic benefits from Sydney's 110km orbital motorway system.
The firm says that is 18 per cent higher than forecast and represents a direct, net present value to NSW's economy from the orbital's eight tollways between 1986 and 2020.
Although that includes A$1.1 billion ($1.34 billion) in environmental benefits expected from better-flowing traffic, it does not extend to "network" benefits from the system as a whole.
Ernst and Young Australian partner David Cochrane predicts these will reach an annual A$900 million ($1.095 billion) by 2020 from A$600 million ($730 million) last year, representing about 30 per cent of the orbital's overall economic worth.
Dr Cochrane, an economist, told a seminar at his firm's Auckland offices that previously unassessed network benefits included extra economic stimulation from better "connectivity" and the development of new homes and workplaces to take advantage of the motorway system.
The orbital also produced social benefits such as a greater use of recreational facilities around less congested local roads.
He noted that the study did not determine whether the economic benefits would have been greater or fewer had the toll roads been publicly funded.
He also said large variations in toll charges, depending on directions of travel, raised equity concerns as some Sydney commuters could pay A$15 a trip around the orbital while others might get by for just A$5.
Even the lower amount may be too much for New Zealanders, given the haste with which National rejected a prediction by its transport spokesman Maurice Williamson of tolls of $3 to $5 for new roads.
But Dr Cochrane said the NSW Government was considering PPPs for more transport projects.
Although Sydney's Cross City Tunnel proved a dismal failure for developers who went into liquidation after vastly over-estimating traffic numbers, fellow Ernst & Young executive Neal Johnston said its transfer to new operators did not cost taxpayers anything.
Dr Cochrane said traffic across the overall orbital was six per cent higher than predicted, even after accounting for Cross City and the newer Lane Cove Tunnel, which is carrying 37 per cent fewer vehicles than expected but which he believes will pick up business as it becomes established.
Council for Infrastructure Development chief executive Stephen Selwood, a member of a Government-appointed working party recommending Waterview be built as a PPP, said there was simply not enough money available from traditional sources to provide that project without private investment.
He said that although the 4.5km link had a relatively low benefit-cost rating when assessed in isolation, it was "the last piece in the jigsaw" of a network with far higher value, and he welcomed the Australian study as supporting that view.
Dr Cochrane acknowledged to the Herald that an independent estimate for the Automobile Association in 2004 of $838 million of annual economic benefits flowing from the 48km western ring route seemed a little optimistic, given the differing sizes of Auckland and Sydney.
But he told the seminar that network-wide benefits were heightened by links to major destinations such as an airport, to which the western route will improve access.
Mr Johnston said an "appetite" remained for private investment in transport infrastructure despite the credit crunch.
