Economic benefits of road widening: Discrepancy between outturn and forecast

Cost-benefit analysis of road investments involves models that generate travel time savings as the main economic benefit. Monitoring of traffic flows after the widening of the section of the M25 London orbital motorway between Junctions 23 and 27 found substantial increases in traffic volumes, of up to 23% two to three years after opening, but no increase in speed of travel beyond the first year. Comparison was made with the forecast traffic flows, made using a variable demand model based on SATURN software. The model projected increased traffic volumes and speeds as a consequence of road widening, but underestimated traffic volumes and overestimated traffic speeds compared to outturn. The forecast of faster traffic speeds was the input to the economic model used to compare investment benefits with costs, yielding a benefit-cost ratio of 2.9, which justified the investment. However, the absence of observed increase in traffic speed raises questions about the applicability of a long-established transport model and of travel time savings as the main economic benefit of road investment, as well as about the value of investment to increase the capacity of strategic roads where these are used extensively for local trips.