Wed, 23 Aug 2017 - 09:51
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The large and growing value of our road system

Australia has nearly 900,000 kilometres of roads.

But as a recent research note from the Bureau of Infrastructure, Transport and Regional Economics (BITRE) points out, that simple statement conceals some very interesting details.

If you look at the way the road network developed, as far back as 1910 there were 450,000 kilometres of roads. By 1950 the total length had reached nearly 800,000 kilometres, and growth has been much more gradual since then.

Length of roads is one thing. Quality is a very different thing. In 1910 most of the roads were rudimentary. They certainly weren’t paved; most weren’t even covered in gravel. Today around 45 per cent of total roads by distance are paved.

But the really interesting part of BITRE’s analysis comes from looking at the relative price of a kilometre of gravel track – estimated at $15,000 – compared to a kilometre of freeway which is estimated at $7 million. The comparison to the cost of a tunnel – such as the Lane Cove Tunnel in Sydney or the Clem 7 tunnel in Brisbane – is even more stark at $120 million per kilometre.

Based on this analysis, BITRE points out that the growth in the value of our road system over the last century has been immense. There are 750 kilometres of freeway in Australia today, and 42 kilometres of tunnel.   Sixty years ago there were zero kilometres of freeway and tunnel.

Put another way, although by distance paved roads are 45 per cent of our road system, the paved roads make up 95 per cent of the value of our road system.

The numbers are indicative not precise – for example the 6 kilometre extension of the Mitchell Freeway in Perth, opened recently, cost $236 million. But the key point is very clear: as the quality of our roads continues to be upgraded, the total asset value of our road system is very large and continues to grow.

If you want more detail, the BITRE report is here.