The Trans-Israel Highway: Do We Know Enough to Proceed?
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The Floersheimer Institute for Policy Studies The Trans-Israel Highway: Do We Know Enough to Proceed? Yaakov Garb Working paper No. 5 Jerusalem, April 1997 About the Author Dr. Garb's training and research interests are in environmental studies and the social and cultural studies of science and technology. After completing his doctorate (Berkeley, 1993), he has held postdoctoral positions at the Institute for Advanced Studies at Princeton, the History of Science Program at Harvard University, and the Hebrew University. Author's email address: [email protected]. About the Working Paper This working paper examines the planning and evaluation of the Trans- Israel Highway project. Its main findings were first presented at a seminar held at the Floersheimer Institute for Policy Studies on April 17, 1997. The working paper format is intended to allow a timely way to initiate and inform rigorous debate on critical issues facing decision-makers. Comments are welcome and will be considered in the preparation of the study's final published format. About the Institute The Floersheimer Institute for Policy Studies is devoted to research on fundamental processes likely to be major issues for policymakers in years to come, analyze the long-range trends and implications of such problems, and propose to policymakers alternative options and strategies. The members of the Board of Directors are Dr. Stephen H. Floersheimer (chairman); Y. Amihud Ben-Porath, advocate (vice-chairman); David Brodet, former director-general of the Ministry of Finance; and Hirsh Goodman, editor-in-chief of the Jerusalem Report. The director of the Floersheimer Institute is Prof. Amiram Gonen of the Department of Geography of the Hebrew University of Jerusalem. Responsibility for the content of this working paper is that of the author alone. © 1997, The Floersheimer Institute for Policy Studies 9a Diskin St. Jerusalem, 96440. Tel. 972-2-5666243. Fax. 972-2-5666252 Email: [email protected] ISSN 07926251 Table of Contents The goals of this report .................................................................5 1. Rethinking Israel's transport situation ............................................7 Why Israel's size matters..............................................................7 Higher vehicle densities at lower motorization rates.........................7 The pressing problem: commuting to work in central Israel................14 Small country, big plans ........................................................15 Israel's "lag" in highway construction...............................................16 2. The planning process: A road apart.................................................22 Introduction and overview.............................................................22 Inadequate guidance by national-level planning.....................................24 Poor integration with land-use, intermodal, and demand management considerations...........................................................................24 Counter to recommendations of major transport planning documents ...........26 The Highway moves forward as other modes are neglected ......................29 Lack of project alternatives ............................................................30 Intensive rail improvements--once prerequisite, now unlikely....................32 Vaguely specified and contradictory transport functions...........................33 No formal assessment of cumulative and area-wide impacts......................34 Even now, the project remains inadequately linked to land use and multi-modal planning...................................................................35 Conclusion ..............................................................................36 3. The traffic forecast and economic analysis.......................................37 The cost-benefit analysis: overview and chronology...............................37 The erosion of time savings by travel demand elasticity ...........................42 A brief overview of induced traffic ............................................43 The growing recognition of induced traffic phenomena.....................48 The implications and scale of induced traffic .................................53 Correcting basic parameters and benefit figures ....................................56 Choice of appropriate discount rate............................................56 Questioning the traffic forecasts................................................59 Will fuel prices be constant over three decades? .............................61 Taking toll diversion into account..............................................64 Expropriation costs that reflect the social valuation of land.................64 Added social costs......................................................................66 Environmental costs .............................................................66 Additional road deaths and injuries ............................................69 Improved assumptions for traffic forecasts and economic evaluation............71 4. Implications of the level of government subsidies ............................77 Introduction .............................................................................77 The proposed subsidies................................................................77 Should subsidies for car use be continued and extended? .........................79 Does the level of subsidy undermine the rationale for a private sector project?...................................................................................81 The choice of private sector funding...........................................81 Preserving the virtues of public/private partnership: criteria for allocating risks and costs........................................................82 The environmental and land-use implications of financial arrangements ............................................................................84 5. Conclusions and Recommendations.................................................86 Inadequate information in critical areas ..............................................86 Filling in the gaps in our knowledge .................................................87 Setting acceptable motorization levels. ........................................88 Re-opening the problem definition lens .......................................88 Putting together an optimal basket of transport investments................89 Improving the traffic modeling.................................................89 Improving the economic evaluation............................................90 Improving the environmental evaluation ......................................91 Assessing the Highway's likely effects on land-use in light of current development policies ...................................................91 Systematic project evaluation as a means to greater consensus ...................92 Appendices ..................................................................................93 Appendix A: Cost-benefit analysis of the Highway ................................94 Appendix B: Developments relevant to the appraisal of road projects............95 Acknowledgments.........................................................................99 Notes ..........................................................................................100 Tables Table 1. Projections underlying the Trans-Israel Highway "Traffic Forecast and Economic Analysis"...............................................8 Table 2. Transportation parameters of similar European countries ....................12 Table 3. Growth in car fleet and resulting densities .....................................13 Table 4. Car use as function of ownership ...............................................14 Table 5. Costs and benefits of the Trans-Israel Highway ..............................41 Table 6. Traffic effects of roadway improvements ......................................44 Table 7. Quantifying the effects of induced traffic.......................................54 Table 8. Discount rates used in evaluating transport projects ..........................58 Table 9. Gasoline prices in Israel and six European countries .........................61 Table 10. Some assumptions built into the traffic modeling and cost-benefit analysis performed for the Trans-Israel Highway and alternatives to these .............................................................................73 Table 11. Declining value of the Trans-Israel Highway to the Israeli economy once more realistic assumptions are used...........................75 Figures Figure 1. Cars and light commercial vehicles per square kilometer.....................10 Figure 2. High car impacts at low motorization rates.....................................11 Figure 3. Vehicles per kilometer of total road network...................................17 Figure 4. Vehicles per kilometer of motorways, highways/main, and regional/secondary roads.........................................................19 Figure 5. Percentage of passenger-kilometers on rail in 1993...........................20 Figure 6. Costs and benefits of the Trans-Israel Highway ..............................41 Figure 7. An elastic demand curve..........................................................43 Figure 8. An inelastic demand curve .......................................................46 Figure 9. Erosion of user benefits due to induced traffic ................................47 Figure