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Aviation History
1970
1970 - 0369.PDF
FLIGHT International, S March 1970 327 Researching for Roskill A look at the cost-benefit studies for the third London airport THE EXTENT—NOT YET APPRECIATED by everyone—of the effort and time being put into the Roskill Commission's studies for the third London airport was amply demon strated by the publication* last month of the results of the assessment by the research team of the four short-listed sites. In addition to examining the factors related to the timing of the need for the third airport (to be summarised in a later article) the team has made a detailed cost-benefit analysis covering not only the more easily quantified costs, but also those of non-material factors—such as imposition of noise on a previously quiet area. This, the research brief (Proposed Research Methodology, published in June last year) had said, "may be assumed to be equivalent to the sum of money which might be subscribed to preserve the initial state of affairs. In other words, things are worth at least what people are prepared to pay for their retention." The "quantifying of the unquantifiable" may appear to be carrying the overall study into somewhat ethereal spheres, but the report explains why this effort is absolutely essential. Under the heading of "objectives" in the chapter devoted to general principles, the research team's report says, in effect, that a subjective assessment of unquantified factors would be mis leading and inadequate, and that the results might not be acceptable. "It had been suggested," the report says, "that the right procedure would be to evaluate in money terms those costs and benefits which presented no problems of valuation. . . . The four sites would then be ranked . . . and a subjeotive assessment made whether the second class of factors was sufficiently important to disturb the ranking in money terms. "This method has two major defects. It is impossible to handle satisfactorily more than one or two unquantified factors. For example, if there is a £50 million difference between site A and site B in respect of the costed factors, and that £50 million differential has to be compared with the advan tages and disadvantages of several non-costed factors, it will be impossible to demonstrate the validity of the result to those directly affected, or to the general public. The second and more fundamental defect of this method is that it merely substitutes implicit for explicit valuation, and postpones the time when some attempt, however rudimentary, has to be made at valuing the residual elements. . . ." The research brief had sensibly commented also that "the idea of assessing in money terms the value of non-material things . . . may sound strange, but it is something people are all doing from time to time." It is made clear in a foreword by Mr Justice Roskill that these cost-benefit findings, and those from other studies, will not influence the commission, which will remain uncommitted until the results have been thoroughly tested during the public hearings and debate at Stage V, which start on April 6. There will then, no doubt, be plenty of "subjective" objections to the "objective" valuations. In the research brief, incorporated for convenience in the report, the basis of the assessment of costs and benefits was explained. The costs, if they are to be expressed in capital terms, have to be attributed to the particular year in which they occur, and' adjusted, or "discounted," as if they were incurred in a common base year. "A decision to spend £1 million in ten years' time involves lower costs than if the sum were to be spent this year, because that sum of capital invested elsewhere betwen now and then would earn a return. . . . Like wise a benefit arising in ten years' time will be worth less than a benefit received now, because it would have been directly investable across the intervening years. . . ." All costs and benefits are discounted in this study at the same rate of interest—10 per cent per annum. The evaluation covers more than a score of subjects, from the costs of airport construction, and of replacing Defence establishments, to the impact on the environment and the Continued overleaf Results (right) of the Roskill Commission's cost-benefit analysis (adapted from the tabulation given in the report referred to at the foot of this column) 'Commission on the Third London Air port : Papers and Proceedings, Volume VII, Parts 1 and 2 (Stage III: Research and Investigation Assessment of Short-listed Sites). HM Stationery Office, £4 4s. SUMMARY OF BEST ESTIMATES OF COST AND BENEFITS (£ x 1 million; 1968 prices, discounted to 1975, final row discounted to 1982) Elements of cost or benefit Third London airport construction Extension/closure of Luton airport Airport services Meteorology Airspace movement Passenger user costs Freight user costs Road capital Rail capital Air safety Defence Public scientific establishments Private airfields Residential conditions (noise, off site) Residential conditions (on site) Luton noise costs Schools, hospitals and public authority buildings (including noise) Agriculture Commerce and industry (including noise) Recreation (including noise) Work and service journeys to airport Total net costs (discounted to 1975) Total net costs (discounted to 1975) expressed as differences from lowest cost site Total net costs (discounted to 1982) Total net costs (discounted to 1982) expressed as differences from lowest cost site Cublington 184.0 - 1.3 74.6 5.0 960.0 887.0 13.4 7.4 4.4 0.5 66.0 2.0 8.7 9.0 4.8 — 2.5 3.1 0.6 6.7 26.2 2,264.6 0 4,416 0 Foulness 179.0 10.0 62.9 1.6 973.0 1,041.0 23.1 7.4 16.0 2.5 20.0 3.4 3.1 3.6 — 6.7 6.8 4.2 0.1 0.3 26.5 2,385.2 120.6 4,651 235 Nuthampstead 178.0 - 1.3 70.7 3.0 987.0 868.0 17.0 7.5 8.0 0.5 52.0 11.2 9.8 19.0 3.0 — 4.1 7.2 1.2 3.6 24.4 2,273.9 9.3 4,434 18 Thurleigh 166.0 - 1.3 67.2 2.0 972.0 889.0 13.9 2.7 3.8 0.5 73.0 16.6 12.2 5.6 2.4 — 4.9 4.6 2.0 3.8 25.4 2,266.3 1.7 4,419 3 Costs directly attributable to noise, extracted from the above: (discounted to 1975) (discounted to 1982) 14.3 28 11.1 22 23.9 47 14.4 28
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