THE TAY ROAD BRIDGE: A CASE STUDY IN COST‐BENEFIT ANALYSIS*
| DOI | http://doi.org/10.1111/j.1467-9485.1969.tb00025.x |
| Date | 01 February 1969 |
| Author | N. R. GILLHESPY |
| Published date | 01 February 1969 |
THE
TAY
ROAD BRIDGE:
A
CASE
STUDY
IN
COST-BENEFIT
ANALYSIS*
N.
R.
GILLHESPY
IN
the last few years interest in cost-benefit analysis
as
a
form of
investment appraisal has been increasing rapidly, stimulated
no
doubt
by the failure of the price-mechanism to place a true social valuation
upon the resources used in an ever-expanding public sector. With
each
rise
in
Government expenditure it becomes imperative to develop
evaluation techniques more appropriate to the needs of the public
sector. This requires the rejection of the traditional methods of invest-
ment appraisal and their pre-occupation with private returns, and their
replacement by
a
more broadly based model. One of the alternatives
that has been suggested
is
cost-benefit andysis, which essentially
is
a
form of investment appraisal that specifically takes
into
account
all
the benefits and costs generated by
the
project,
no
matter to whom
they may accrue.
It is this method that shall be
used
in
an
analysis of the Tay Road
Bridge recently opened in August,
1966.
This
procedure has been used
frequently
in
connection
with
a multitude of transport projects, the
technique remaining basically unaltered throughout. Nevertheless,
each project must inevitably have its
own
special characteristics and
it may be worthwhile to identify at the outset those characteristics
peculiar to
this
study.
First, the building
of
the Bridge constitutes
an
isolated improve-
ment within the context
of
the existing
road
system which
in
all other
respects remains unaltered.
This
is in sharp contrast with, for instance,
the London-Birmingham motorway3 in which the whole pattern
of
road communications was radically transformed. This means that,
for this project,
the
benefits and costs are relatively well contained
and consequently more readily identifiable. Secondly, the analysis
attempts to quantify, albeit tentatively, both the value of the saving
in leisure time spent travelling
and
the value
of
the changes in conges-
tion
on
the old and new routes. These are factors which generally
have not had sufficient attention
in
some other studies. Thirdly, the
data available, although adequate, has certain limitations which have
required the adoption
of
a
more unorthodox approach to the project,
and this is especially true in the manipulation of the basic traffic flow
data.
Finally, one of the chief objectives
of
this
study is to
pass
some
*
All
references in
this
article appear
on
page
183.
167
168
N.
R.
GILLHESPY
judgment upon the efficacy of the tools available to the tr&c emno-
mist.
So,
by limiting the data strictly to that which was available
before the opening of the Bridge, the ‘ex-ante’ traffic projections
may then be compared to those flows now being experienced, a com-
parison which for this study is not entirely unfavourable.
To
turn now to the project in greater detail, the position before
the opening of the Bridge was that the traffic travelling between the
south and north-east of Scotland could either
cross
the Tay by ferry
at Dundee or by bridge at Perth, some twenty miles upstream. The
presence of the new bridge has radically altered the traffic flows in
the region, bringing in its wake a variety of benefits and costs.
As
with any project these may be divided into primary, spillover and
secondary benefits and costs, and it
is
to a practical, rather than
theoretical, enumeration, evaluation and assessment of these that
attention is now turned in the three ensuing sections.
11
PRIMARY
BENEFITS
AND
COSTS
First to be considered are the primary (direct) benefits which
Eckstein5 has defined
as
the value of the immediate products and
services for which the initial and associated costs were incurred.
As
far as this project is concerned the immediate output is obviously
associated with the crossing of the River Tay, but through an investi-
gation of the motives of the potential Bridge users it may be identified
more explicitly than this. Those who had previously been using the
Ferry will now use the Bridge, principally because of a reduction in
journey-time. Presumably
this
would also be the dominating motive
for those transferring from the route through Perth. Unfortunately, to
determine where there is such a reduction involves the detailed estima-
tion of vehicle speeds on different routes, for which there are no
reliable statistics.
As
a
working approximation to
this
hypothesis, a
reduction
in
the distance involved has been taken as the criterion
for
the use of the Bridge. Clearly, then, for the
diverted
traffic (leaving
aside for the moment the
exzkfing
traffic) the output
of
the Bridge may
be defined as the reduction in vehicle-mileage, the actual value of
this being dependent upon the value
of
the individual benefits to
which this generic saving gives rise.
Consequently, the first step in the evaluation of these primary
benefits must be the determination of this reduction in vehicle-mileage;
and here
this
is calculated from the knowledge of, first, the saving in
mileage associated with each route likely to be affected and of,
secondly, the number of vehicles using each route.
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