The cost avoided

The annual deficits of the ferry service

In 2001-2002, this deficit was 15.9 M$. The costs avoided during the life of the bridge should include this large amount of the percentage of the foreseeable increase in traffic in the years to come.

Actually, the constant increase in traffic requires additional investments in the ferry.

The cost for the government of Quebec in 2001-2002 was 12.9 M$ plus the costs of winter storage1 of the 3rd ferry reached approximately 3 M$ per year while the costs in 1996-1997 were 6.7 M$. The costs have thus increased 137 % in 6 years, this is an average of 23 % per year. The increase in the cost of the ferry goes beyond the effects of inflation and the continuous growth in the amount of traffic implies that these costs, at present value dollars, will continue to increase in order to ensure an acceptable ferry service.

Moreover, when the 3rd boat added during the summer cannot prevent the saturation of the service2 , massive investments must be granted for the construction of two new docks and two new boats. This option is being dismissed actually by the Ministry because of the high costs of immobilization that it generates and costs relating to operation. This hypothesis only partially solves the problems of smooth traffic flow (ice, fog, currents, strikes, damage to the boats, etc.) while intensifying safety problems, particularly the frequent formation of platoons and the increased incidence of "ferry fever". However, it remains the only conceivable option other than a "no through road" or driving around the Town of Saguenay which would mean an extra 3-hour drive for a round trip from the region to central cities. This option is unthinkable unless the social and economic disorganization of all Northeast Canada is the real goal.

 

The costs for North Shore industry

boisThe industrialists in the lumber industry have affirmed that it costs them 2.6 million $ per year in direct expenses caused by waiting lines, delays and the precariousness related to the crossing of the Saguenay4 and as much in indirect expenses. They estimate that approximately 35,800 trucks used the ferry in 2001 to transport their products. Knowing that this same year, the Tadoussac ferry transported 146,377 truck-trailers and 18,803 trucks, the annual cost to the North Shore industry for the crossing of the Saguenay at Tadoussac can be estimated at 12 M$ yearly without considering that the sustained increase of road haulage in the region for more than 15 years which in the future will bring a continuous increase in the costs in present value dollars, which will be avoided by the construction of a bridge. Only the construction of a bridge could reverse the actual tendency of cost increases and so the noncompetitiveness of the regional industries already affected by the remoteness of the region.

 

Costs related to road safety

An important part of the SAAQ list of 1 063 accidents between 1995 and 2000 at the approaches to the Saguenay River, the 338 slightly injured, the 75 seriously injured and finally the 27 deaths could be avoided with the bridge construction. It means non negligible costs that the consortium should calculate in its impact study in progress.

The governments of different countries as well as the federal government and the provincial governments use methods which are often very different in order to estimate the cost of accidents for society. In the past, the method of "human capital" (HC) was used. Today, the method called the "willingness to pay" is used more often because of its more ethical approach. Countries like the United States, England, Australia, Sweden and Switzerland have adopted it. A document prepared by the Quebec Ministry of Transport "Guide to benefit-cost analysis of public projects in transport" shows this tendency. (Extract of "Guide de l'analyse avantages-coûts", avantages-couts.pdf  (french version) As the use of these methods could or not justify a project, the choice of the consortium as to the calculation of costs avoided is very important. By applying the rule of the willingness to pay according to Quebec or American values and in considering that 50 % of the accidents can be attributed to ferry fever and the ferry itself, we obtain very diverse values which when studied over long periods, make for big differences.

 

Variation in costs avoided from an accident using the formula willingness to pay (WTP)

 

 USAQuebec
with death4 991 9093 660 656
with serious injuries2 087 799605 327
with light injuries234 30960 898
with material damage only18 9937 574

  *The values for the USA are in Canadian dollars from 1997 adjusted according to the inflation in 2002 and come from the document on cost-benefit analysis cited on this page.

 

Example

From information transmitted by the SAAQ about the number of accidents between La Malbaie and Les Escoumins we have evaluated the accident costs avoided by the Society by the construction of a bridge.

accidentThese costs are evaluated according to the values proposed in a document by Mrs. Desrosiers ("Guide de l'analyse avantages-coûts", avantages-couts.pdf 368KB, french version) of Transport Quebec from accidents listed by the Société de l'Assurance Automobile du Québec (Quebec Automobile Insurance Society) on the approach sections to the Saguenay River for the period from 1995 to 2000. They are evaluated in 2002 dollars and do not take into consideration the risks of maritime accidents or the accidents and incidents happening on the ferry boats themselves. They also do not take into consideration the risks caused by the hills at the approaches to the Saguenay, particularly on the Tadoussac side where a brake problem of a truck-trailer or the malaise of a driver at the top of the hill could cause a real human and/or ecological disaster. A truck-trailer has already lost its brakes and ended up in the Saguenay, happily without causing deaths or seriously injured. However, during peak periods and in summer, the possibility of a catastrophe is present when users of the road waiting to get on the ferry get out to stretch their legs or when more than 100 vehicles are waiting and the emergency lane constructed to prevent this type of catastrophe is not accessible because it is obstructed by the waiting vehicles. The maritime risks (collision, running aground, imprisonment by ice floes, etc..) like those linked to the hills at the approaches are difficult to calculate but the probability of them happening over a period of 30 years is clearly more significant than the reference period of 6 years (1995-2000). The construction of a bridge will allow these dangers to be eliminated.

 

30 years estimation of accident costs avoided in relation to the Saguenay ferry services according to different methods and regions

 

Québec (Human Capital Method)84,183,825.00 $*
Québec (Willingness to pay Method WTP)325,687,712.00 $*
Colombie-Britannique (WTP)335,390,140.00 $*
Ontario (WTP)416,069,718.00 $*
USA (WTP)701,673,659.00 $*

* in non discounted 2002 dollars.

 

The construction of a bridge would allow 67 deaths and 187 seriously injured to be avoided on the roads approaching the Saguenay in the 30 years following the opening of the bridge; this is 50% of the foreseeable accidents from the reference period. This estimate measures neither the possible benefits for safety that improvements in the road network will bring, nor the added effect of predictable accidents as the saturation level of the ferry service approaches. In fact, as more and more vehicles are using this road, longer strings of traffic are formed by vehicles exiting the ferries thus leading to an increase in the number of victims of ferry fever. Both of these situations are difficult to measure.

To resume, the monetary value of accidents for the Society can vary greatly (in our example, between 84 and 701 million over 30 years) according to the calculation method and parameters that we choose. This value is, however, a determining factor in establishing the urgency to activate the project. Another variable which cannot be overlooked in order to avoid long delays :

« Even though political pressure and other constraints can influence the application of the advantages-costs analysis as described in this guide, it allows analysts to better defend their cause and constitutes an essential tool for decision-making. » Extract of "Guide de l'analyse avantages-coûts" (french)

 

The costs linked to loss of time, waiting and slow-moving traffic between Les Escoumins and La Malbaie

traversier2Studies have already established the costs of waiting for different types of travellers.

The difficulty in evaluating these costs come mainly from the lack of precise data about the delays for the users of the ferry service. As well, a fair value should be used to measure the annual waiting time linked to the delays in waiting during the day, evening and night for each type of vehicle and user. It should take into account the costs for potential users who, for various reasons, have to make the long detour towards the Town of Saguenay. It should also measure the real consequences of waiting and delays in the long strings of traffic formed by vehicles and trucks getting off the ferry. As should be the costs linked to peak periods in summer, congestion during the year and the times when ice prevents the ferries from following their schedules. It is the same situation when a ferry is damaged or during strikes or threats of strike when users are invited to make the long detour towards the Town of Saguenay.

These costs will be briefly estimated by the consortium from estimates as realistic as possible.