Estimating cost expansion factors in the Sydney urban and NSW rural road networks for economic evaluation of road projects

Transport modelling and economic evaluation are two key components of a road project assessment. Transport modelling is usually undertaken for a two hour peak period and then annualised to determine the costs and benefits. A key parameter used in the annualisation is the expansion factor. Currently, practitioners use expansion factors derived from traffic volumes in different time of day and day of year. With ever increasing traffic and worsening urban congestion, transport economists and modellers are questioning the accuracy of using volume based expansion factors to annualise the costs and benefits. To overcome the deficiency of volume based expansion, this paper will develop a methodology to derive cost expansion factors in the Sydney urban road network and remaining New South Wales rural road network. We have sampled hourly traffic volumes in 2011/12 at traffic observation stations representing freeways, arterial and local roads in Sydney inner, middle and outer rings and rural regions of NSW. Travel speed, vehicle operating cost, accident rate and greenhouse gas emissions are modelled in peak and off-peak hours for weekdays and weekends to capture the effects of dynamic traffic volume, road capacity and resulting road congestion. Cost expansion factors are estimated and implications to economic evaluation will be explored. Results indicate that cost expansion factors are around 10 per cent lower, suggesting volume based expansion tends to overestimate travel costs. As a result, the paper recommends the use of volume based expansion factors for traffic demand modelling and cost expansion factors for cost-benefit analysis of road improvement proposals.