Summary of Representation 1.1
Mr Mainhood suggests that the improvement to the section of the A21
could be achieved by using the existing A21 for one 2 lane carriageway
and constructing a new 2 lane carriageway for the other direction. 1.2
Mr Mainhood also considers the Department's analysis of the scheme to
be
flawed in respect of the Traffic Forecasts and the COBA analysis. 2.
Draft
Orders Effected 2.1 The A21 Trunk Road (Tonbridge Bypass to Pembury
Bypass
Dualling) Order 199 The A21 Trunk Road (Tonbridge Bypass to Pembury
Bypass
Dualling Slip Roads) Order 199 The A21 Trunk Road (Tonbridge Bypass to
Pembury Bypass Dualling Side Roads) Order 199 The A21 Trunk Road
(Tonbridge
Bypass to Pembury Bypass Dualling Compulsory Purchase Order (NO SE )
199
3. Department of Transport's Response 3.1 On Line Improvement 3.1 The
Department
could not accept the scheme suggested by Mr Mainhood in paragraph 1.1
above
for the following reasons: i) The existing A21 has eight frontage
accesses
and two side roads connecting to it. On grounds of highway safety it
would
be unacceptable for them to be connected directly to the trunk road. As
well, even if such connections were permitted, significant disbenefit
would
be incurred by these properties since only left in and left out
manoeuvres
would be allowed. ii) The existing A21 is substandard in respect of
horizontal
and vertical alignment, particularly at the Castle Hill Bend. This bend
has a history of serious accidents including a number of fatalities and
in the event of the road becoming one way, with increased traffic speed
resulting from driver perception of a high standard dual carriageway,
these
substandard sections would become an unacceptable highway safety
hazard.
iii) The environmental benefits of removing traffic pollution and noise
from properties would not occur. iv) The Department considers that the
new road should be three lanes wide in each direction to cater for the
predicted traffic demand. The existing road is only wide enough to
accommodate
2 lanes. 3.2 Traffic Forecasts Mr Mainhood states that the Department's
traffic forecasts imply annual compound growth of up to 4.63%. It is
incorrect
to suggest that the increase in traffic flows are due to growth, per
se,
as they make allowances for transfers of trips from other routes.
Taking
1986 as the base, the forecasts make allowances for transfers due to
the
Pembury Bypass, the Tonbridge Eastern Relief Route, as well as the A21
improvement. The Department has adopted forecasts which reflect the
inevitable
uncertainty involved. The "low" and "high" growth forecasts represent a
range of conditions based on alternative views of the future and which
indicate the widest extremes within which it is considered sensible to
plan. The high growth assumption represents a growth of 2% per annum in
the economy which has been sustained at least on average by the UK
economy
since the war. Mr Mainhood acknowledges that growth has been "a little
over 2%' since 1964. On the other hand, the alternative view is based
on
a very low growth economy by historical standards, equivalent to a 1%
growth
per annum in the economy. The overall range is intended to provide a
realistic
but cautious view; the centre of the range being slightly below that
achieved
by the UK economy over the last century 3.3 Vehicle and Road
Utilisation
It is acknowledged that private cars have a low occupancy. Surveys of
trunk
road traffic indicate that the national average is 1.76 persons per
car.
With regard to commercial vehicles, the nature of business implies that
there will often be empty return trips. Nevertheless, it is surely in
the
operator's interest to minimise the amount of dead mileage on financial
grounds - an example of market forces. Mr Mainhood suggests that
traffic
delays are a good way of encouraging better road utilisation. Whilst
this
may be the case theoretically, traffic delays on trunk roads are
environmentally
damaging and cause diversions to less suitable roads as well as being
harmful
to the economy. This is contrary to the Secretary of State's declared
policy.
3.4 Cost Benefit Analysis Mr Mainhood suggests that cost benefit
analysis
(COBA) is discredited and a return on capital evaluation is "absolutely
vital". COBA was developed specifically to assess the economic worth of
highway schemes and it is a matter of policy that it should be applied
to each new project. It was developed for a sector which does not have
a marketable output, and typically it is geared to measuring costs and
benefits to society at large. Since users are not asked to pay directly
for the benefits received, they have to be estimated on the
"willingness
to pay" principle, and COBA therefore uses what is technically known as
a "consumer surplus" approach. It is also necessary to allow for the
fact
that the benefits are typically received over a long- term future
period
(30 years), whereas the capital cost is incurred in the short term. By
stating that roads investment requires a return on capital evaluation,
Mr Mainhood implies that COBA is less rigorous than the evaluation
applied
to other forms of investment. COBA uses the principle of discounting
rather
than paying interest to an investor. The discount rate principle was
established
in 1978 when the White Paper on Nationalised Industries (Cmnd.7131) was
published. The then Chief Secretary to the Treasury announced the
figure
in the following terms:- "In selecting the appraisal rate [for project
appraisal in the non-trading public services] account has to he taken
of
the special circumstances, for example the absence of market forces and
the greater risk of appraisal optimism for projects where returns are
primarily
non-financial. The appraisal rate will generally therefore need to be
set
somewhat higher than the rate which reflects the opportunity cost of
capital
(which represents the rate which an investment would have to earn in
order
to justify in economic terms the commitment of national resources which
could be used in other ways)." 3.5 Assessment of Benefits Mr Mainhood
comments
on the validity of the benefits claimed for the project, particularly
the
reductions in accidents and savings of travel times. He suggests there
are more cost effective ways to reduce accidents than to build roads.
Whilst
this may be true in some cases, in the particular case of this section
of the A21, being a link between two existing sections of high standard
dual carriageway, it is difficult to see realistically how the hazards
of under capacity, seriously substandard alignment, and direct accesses
from properties and side roads, could all be addressed except by new
road
construction. In any event, the published scheme brings substantial
other
benefits, in addition to accident savings, for example, relief to the
A26,
time savings, and reduction in noise and improvements in amenity at
residential
properties close to the road. In 1987 the Government announced an
objective
to reduce the number of accidents by one third by the end of the
century.
On average, accident savings account for 18% of trunk road benefits. In
particular Mr Mainhood questions the validity of time savings. Working
time is valued at its cost to the employer of the travelling employee,
on the grounds that the value of the output produced in working time
must
be at least equal to the cost to the employer of hiring labour for that
time. This assumes that all savings in working time can be used for the
production of output by the employee. As such it is assumed that the
savings
translate, in Mr Mainhood's words, directly to the bottom line.
Non-working
time embraces all other purposes of travel, including travel to/from
work,
personal business, shopping and 'pure' leisure travel. There is no
direct
market in which non-working time can be bought and sold in the same way
that the employer can buy the working time of an employee. However, it
is not correct to say that it has no value. In economic terms, this
would
assume that there is no other activity the traveller would rather be
doing
(i.e. no opportunity cost has been foregone). The value of non-working
time used in COBA has been derived from studies of how people choose to
travel when faced with a choice The results suggested that on average
people
value savings of in-vehicle non-working time at a sum equivalent to 25
per cent of their gross hourly wage rates and this has been adopted in
COBA. A principle of cost benefit analysis is that benefits are
estimated
as they accrue to society as a whole. The existence of indirect
taxation
in the economy means that an adjustment must be made to the valuation
of
benefits to avoid overstatement. Indirect taxation involves transfers
between
sectors of society rather than a cost to society as a whole. This
adjustment
is incorporated in the values used in COBA. It is, therefore, not
correct
for Mr Mainhood to suggest that the values of time are overstated
because
of personal taxation. 3.6 "Table T2 Reassessed" In his proof, Mr
Mainhood
has re-presented information from the COBA assessment of the Published
Route (Table 2 Doc. 91) but inflated the PVC values to represent 6 and
9 lane roads respectively. He asserts that expenditure of two or three
times that proposed is worthwhile, thereby calling into question the
COBA
assessment. This hypothetical case has some validity in that a positive
NPV suggests a worthwhile project. However, in determining the
appropriate
scale and timing for proposed investment it is necessary to test a
number
of viable alternatives and select that which maximises the NPV.
Clearly,
a 6 or 9 lane road would indeed be 'oversized', and this is indicated
economically
(as well as by common sense) in a reduced NPV compared with the
Published
Scheme.
Added < 02-07-01, Changed; 14/09/09, 12/08/09