Urban freeways (4 and final)

Management systems and operational budgets in projects concerning the creation or substitution of urban freeways vary according to local conditions and to the ideological orientation of government officials in place.

Comparing the economics of this kind of projects in different countries and cities is utterly complex: exchange rates, differences in the materials and labor costs, accounting principles and technical requirements diverging, debt payment terms, inflation… Dividing the project in tranches and packages makes it even more complex, and unified data is scarce.

Anyway, some conclusions from the three cases seen and some other.

  • The cost of works in Europe is substantially higher than in emerging countries, as much for environmental or safety requirements as by the cost structure. According to a 2007 report of the Comptroller and General Auditor of India, the Bandra- Worli new construction project (5,8 km) had an estimated  cost of 13,06 billion Roupies (about 200 million Euros). According to Paris city documents the covering of 10.000 sq m of freeway at the Porte de Vanves for less than 500 m of length had a cost of 58 million Euros. Nevertheless, taking into acount the average disposable income of  local citizens, the situation is the opposite.
  • Urban integration and underground works in Europe are on a similar cost scale per km. The higher technical complexity of the M30 tunnels in Madrid was compensated by a greater freedom in traffic diversion schemes layout during works, while the Boulevard Peripherique projects had to be executed with much less margin and over a functioning original right of way; the tunnel security rules create an increased cost, having to monitor a series of small tunnels instead of a long single one.
  • The debt burden caused by these works varies. In Mumbai the Bandra- Worli Sea Link, a project of the State of Maharashtra, has been defined as a 30 years concession contract with a toll which should allow it to self-finance. Paris counts its costs in its general budget, without a separate chapter, and benefits from a strong participation by the central State and the Region Ile de France. In Madrid the city alone bears the cost, having constituted a public- private partnership; Madrid Calle 30 (80% municipal) has a separate accounting scheme, showing that the debt caused by the project is slightly larger than half the added remainder of the municipal debts.
  •   The budget problems are not an exclusive of the right or the left; Boston’s Big Dig (similar in many instances to Madrid Calle 30) was an initiative supported by official from the Democratic Party, and in Mumbai the city and the State of Maharashtra have different governments.

Some links:

Economic and Financial Plan of the Madrid City Council for 2012-2016, with data regarding the Madrid Calle 30 debt:

http://www.madrid.es/UnidadesDescentralizadas/Presupuestos/OtrosContenidosPresupuestarios/PlanEconomicoFinanciero20122016/FicherosPEF/PEF_2012_2016_con_informes.pdf

2004 Report by the Comptroller and General Auditor of India, including references to the Bandra- Worli Sea Link: http://pibmumbai.gov.in/English/PDF/E2008_PR1050.PDF

Paris City budget for 2012:

http://labs.paris.fr/commun/budget_primitif_2012/

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