19 Aug 2013

The costs and benefits of a bridge

You have plenty of time to take photos...
We took a ferry across the Yukon River to Dawson City yesterday -- after waiting for 30 min. That gave us time to think about the costs and benefits of replacing it with a bridge.

First, you have the costs of building the bridge. The river is about 250m across and a bridge with a metal-grate bed (standard here, with ice and snow) might cost $10 million (I don't really know; tell me)

Second, you have the benefits:
  • Avoided costs of fuel and upkeep for the 24-hour ferry. Let's say that's $2,000 per day in summer. There's no ferry in winter, when the river's frozen.
  • Avoided labor costs.* Five staff on three shifts may cost $3,600/day.
  • Avoided waiting time. At peak hours, the ferry is taking 60 cars/hour across the river, with 2 people in each car. Let's call that 1,000 cars/day with 2,000 people, each of who waited 30 min @ an opportunity cost of $20/hour. That's $20,000/day.
  • Avoided accidents from the ferry crashing or damaging cars or hurting staff. Then there's the risk of accidents to people driving over the river ice in winter. These numbers are available, but I'll ignore them.**
Let's assume a three month summer (pop. here is 2,500 and LOTS of visitors) and a nine month off-season (pop. 1,000; few visitors) where the ferry runs at 100 percent and zero percent capacity, respectively.

Now, we get bridge benefits of ($2,000+$3,600+$20,000)*(90 days) = $2.3 million.

Those numbers indicate that a bridge may "pay for itself" in about four years.

So why isn't there a bridge? I'd say that the obvious reason (jobs, tradition) is not as important as the problem of funding a bridge that will create benefits that are mostly non-cash, i.e., the time saved to people who do not have to wait to cross. This is an example of visible winners (ferry workers) and invisible losers (ferry passengers).

Taking time into consideration, it's possible that a bridge will be built, but I wouldn't count on it. Sadly, it's more likely that a bridge will be built AFTER a ferry accident kills someone or dumps a bunch of cars into the river -- or maybe never. Too bad.

* Labor -- and JOBS -- are COSTS. They are NOT benefits as far as projects and businesses are concerned. They ARE benefits to the workers, but the whole point of "progress" is to move labor into uses that produce net benefits. A project that has jobs but no benefits is a waste (think TSA staffing). I asked one ferry-guy "why no bridge?" and he said "because the ferry is traditional and a bridge is ugly." Those are not good explanations compared to "job for me." Also note that a bridge need not harm the environment.

** There's also some "benefit" for tourists who want to watch the ferry struggle across the river, but visitors complain about ferry delays -- their #1 complaint about visiting Dawson, according to a touring company.


Anonymous said...

Regarding the benefits of the ferry, you would think that there are benefits in terms of pollution reduction. I am thinking of our ferry here in Cape May, NJ, that travels to Delaware. I went to a meeting just last week, and was able to take the ferry (as a foot passenger) instead of driving. So I realize this is merely anecdotal evidence, but it seems that there could be an argument for public transportation leading to lower emissions levels than the level of emissions that would result from the bridge.

Anonymous said...

I think there is a confusion of terms for many people. For some people, "more jobs" means more people getting paid, regardless of what they do. For others, "more jobs" means more people doing productive work of some sort. That's a big difference, and I think a lot of times people are talking past each other because they are using the same term, "jobs," to refer to different concepts.

Rich Mills

David Zetland said...

@Anon -- great point, esp. when lots of people keep their cars running while they wait (10-30 min) for the ferry.

@Rich -- those ideas may get mixed up, but only by workers. A boss will want value for salary. A politician may not, since it's not his money going to useless workers.

Jason said...

I think there are a few items you're missing from the cost side of building the bridge. You include upkeep for the ferry, but have nothing on upkeep for the bridge, which is probably significant. Doing a quick Google search I found around 5%/year of the initial cost of the bridge, which seems reasonable.

Also, you include labor costs for operating the ferry, but there are also potentially labor costs for operating the road. Presumably, the ferry isn't free? Therefore, I would presume the bridge would have a toll, with a tollbooth and a 24 hour tollbooth operator. It's possible the toll could be automated with whatever the regional EZ pass is, but there are recurring costs involved with maintaining that as well.

Finally, I don't know what type of cargo travels down the Yukon River in that area, but if the bridge is not high enough to allow river traffic to flow below it, the bridge will need to be a drawbridge, adding another layer of complexity, higher maintenance costs, and at least another employee there to operate the bridge.

David Zetland said...

@Jason -- Agreed on upkeep. I think the ferry costs more. There's no toll. Cargo would indeed matter, but I think there are just pleasure ships and salmon in the river...

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