Riding the rollercoaster

Transcription

1 Riding the rollercoaster David Turner Director, Halcrow The impact of prolonged high fuel prices and other factors on the region s roads MACQUARIE ASIA INFRASTRUCTURE CONFERENCE 8 9 DECEMBER 2008, MACAU

2 Traffic and Revenue Forecasting What are the Main Drivers of Revenue? Background Socio-economic Changes Physical Changes Imposed Costs 2

3 What are the Main Drivers of Revenue? Background Socio-economic Changes Changes GDP per capita Car ownership levels Underlying population levels 3

4 What are the Main Drivers of Revenue? Physical Changes New Development New Intersections / Feeder Roads Competing Schemes Capacity Constraints 4

5 What are the Main Drivers of Revenue? Imposed Costs The Level of Toll Internal Fiscal Policies (changes in tax) External Factors (Fuel shortages / price rises) 5

6 What are the Main Drivers of Revenue? Traditionally, traffic forecasters tend to concentrate on understanding: Background Socio-economic Changes Physical Changes Toll Levels 6

7 What are the Main Drivers of Revenue? Traditionally, fuel prices are assumed to behave in an understood manner 7

8 What are the Main Drivers of Revenue? Traditionally, fuel prices are assumed to behave in an understood manner This is confirmed by looking at historic data 8

9 Fuel Prices Malaysia Fuel Prices (Real Values) Malaysia Index Year Fuel Price 9

10 Fuel Prices Philippines Fuel Prices (Real Values) Philippines Index Year Fuel Price 10

11 Traffic Usage Philippines Traffic Usage Index Year Traffic Usage 11

12 However, in 2008 all this changed 12

13 Fuel Prices Philippines 2008 Fuel Prices (Real Values) Philippines Index Year Fuel Price 13

14 What impact did this increase have on vehicle operating costs? 14

15 What impact did this increase have on vehicle operating costs? In developing countries values of time are generally low Hence, fuel costs make up a significant proportion of operating costs 15

16 Others 1% Other maint 7% Depreciation 7% Interest 4% Staff 23% Oil 1% Tires 6% Truck operating costs in the Philippines Fuel 49% Jan

17 Others 1% Other maint 5% Oil 1% Tires 4% Depreciation 7% Interest 3% Staff 16% Truck operating costs in the Philippines Fuel 63% July

18 How much were these increases? Jan 2008 July 2008 Philippines $ 0.54 $0.75 South Korea $ 1.10 $1.30 Malaysia $0.52 $

19 How much were these increases? Jan 2008 July 2008 Philippines $ 0.54 $0.75 South Korea $ 1.10 $1.30 Malaysia $0.52 $0.74 All increases were around $0.20 to $0.22 per litre 19

20 How much were these increases? Jan 2008 July 2008 Philippines $ 0.54 $ % South Korea $ 1.10 $ % Malaysia $0.52 $ % All increases were around $0.20 to $0.22 per litre 20

21 How much were these increases? Again, as fuel prices are generally lower in developing countries, because of lower taxes, the impact (in percentage increase terms) is greater 21

22 How much were the increases? Again, as fuel prices are generally lower in developing countries, because of lower taxes, the impact (in percentage increase terms) is greater This combination of low values of time + cheaper fuel costs means that the impact of fuel price rises will be much higher in countries like the Philippines and Malaysia, than in Europe, USA and Australasia 22

23 So, how did road users respond? 23

24 So, how did road users respond? Did traffic volumes decrease? 24

25 Fuel Prices Philippines Philippines Index Year Fuel Price 25

26 Corresponding Traffic Activity - Philippines Philippines Index Year Traffic Usage 26

27 Relationship Fuel Prices / Traffic Activity Philippines, Philippines Index Year Traffic Usage Fuel Price 27

28 Relationship Fuel Prices / Traffic Activity Philippines, Philippines Index Year Traffic Usage Fuel Price 28

29 Fuel Prices South Korea South Korea Index Year Fuel Price 29

30 Corresponding Traffic Activity South Korea South Korea Index Year Traffic Usage 30

31 Relationship Fuel Prices / Traffic Activity South Korea, South Korea Index Year Traffic Usage Fuel Price 31

32 Relationship Fuel Prices / Traffic Activity South Korea, South Korea Index Year Traffic Usage Fuel Price 32

33 Fuel Prices Malaysia Malaysia Index Year Fuel Price 33

34 Corresponding Traffic Activity Malaysia Malaysia Index Year Traffic Usage 34

35 Relationship Fuel Prices / Traffic Activity Malaysia, Malaysia Index Year Traffic Usage Fuel Price 35

36 Relationship Fuel Prices / Traffic Activity Malaysia, Malaysia Index Year Traffic Usage Fuel Price 36

37 What does this mean for the future? 37

38 What does this mean for the future? While fuel prices continue to be volatile the risks around revenue forecasting are increased A wide range of fuel price change assumptions may need to built into future forecasts May be, investors will be more sceptical about putting money into toll roads in developing countries, particularly if they are taking on all the revenue risk 38

39 What does this mean for the future? However: Over the longer term, research has tended to show that fuel price increases are generally matched by technology based efficiency improvements. This, coupled with a general move towards smaller, more efficient cars, could offset the worst impacts of fuel price rises. 39

40 What does this mean for the future? The key issue is likely to be the short term uncertainty that surrounds fuel prices, rather than the longer term impacts 40

41 David Turner Transport Planning Manager, Halcrow Riding the rollercoaster The impact of prolonged high fuel prices and other factors on the region s roads 41