NEW NORTH LUZON EXPRESSWAY: BENEFITS OUTWEIGH COSTS

MANILA
, June 21 , 2004
 (STAR)
HIDDEN AGENDA By Mary Ann Ll. Reyes  -  What better way to explain the benefits of the new North Luzon Expressway than to translate them into pesos and centavos or into something that each and everyone of us can relate to?

The UP Planning Development and Research Foundation (PLANADES) estimates that with the new NLEX, Class 1 vehicles which include cars, jeepneys, pickups, and vans can expect to reduce vehicle operating costs (without travel time savings) by 32 centavos per kilometer. If you include travel time savings, then the savings rises to as much as 95 centavos for every km traveled on good roads.

Class 3 vehicles or those with three or more axles will save a whopping P5.02 per kilometer on vehicle operating costs on good roads. Class 2 vehicles which includes two-axle trucks, buses and vans will generate savings of P2.90 (excluding travel time savings) and as much as P7.44 per km (including travel time savings).

But more importantly, better road pavement means lower incidence of road traffic accidents. For Central Luzon, the accident rate due to road defects is 0.018 per thousand vehicles. The World Health Organization however estimates the under declaration factor to be as high as 4.51. The improved NLE is projected to eliminate accidents resulting from poor road conditions.

Of course, good roads means reduced travel time. Motorists can drive to an average speed of 80 km per hour which could reduce travel time by almost half. Reduced travel time in turn increases productivity.

Every kilometer of paved roads and bridges yields P20 million annually in gross value-added. With better mobility for people, goods, and services resulting from road facility improvements, there is higher economic activity thus generating more employment.

And imagine what good roads can do to land values. UP PLANADES says that proximity to an NLE access point adds on the average P1,054 per square meter to the benefited lots. And the farther the land is from the NLE, the lower its price becomes. The percentage decrease in land prices for every kilometer distance from an NLE access point ranges from 3.1 percent for socialized housing properties and 4.1 percent for economic housing ones.

It is estimated that access to the NLE will most probably result in a whopping 52 percent price premium on a benefited land. These land value effects will most likely be felt along a corridor measuring 14 to 15 km on both sides of the NLW. This impact corridor covers most of Bulacan and Pampanga and could potentially extend up to Capas in Tarlac.

Some detractors say the NLEX is costly. But the UP study proves otherwise. The improved NLEX can be regarded as socially desirable since its potential socio-economic benefits far outweighs its construction and maintenance costs. While total economic costs can reach P23.4 billion, total user benefit is estimated at P35.5 billion, or a benefit to cost ratio of 1.52. This does not include the total economic output stimulated by the project which can run to as high as P41.6 billion for Phase I alone.

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Reported by: Sol Jose Vanzi

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