Bridge Benefits

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The benefits of the Bridge were something which the cost-benefit analysis (CBA) commissioned by the GNWT in 2002 (with an update in 2006) tried to look at. Of course, not all benefits can be easily expressed in terms of money. Here's my take on what the CBA came up with.

The easiest one is the savings from not having to operate the ferry and build an icebridge each year. The Department of Transportation indicates that these costs are currently $2.7 million annually. This is actually rather higher (even accounting for inflation) than the $1.6 million the CBA used in 2002. Over 35 years the savings of $95 million or so make a big contribution to the Bridge finances.

Most of the other benefits have to do with those paying the tolls - the trucking companies and their customers. The firmest is the cost of airlifting freight across the river, mainly during breakup. There are also cost savings by those businesses which would no longer build up larger inventories before breakup. However, these savings will be made by certain types of businesses (grocery stores, for instance) which may balance out whatever the increased freight charges, while others with fewer breakup issues may instead have slightly higher costs from higher freight charges. The CBA estimated the net effect to communities would be neutral or slightly positive overall, but there will be winners and losers.

Truckers will see benefits mainly in the form of lower costs to cross the river - less fuel burned idling at the ferry landing, time and fuel savings from avoiding the icebridge detour, etc. If the trucking companies are not able to actually realize these and reduce the amount of the toll costs that are passed along to their customers, the benefits to the communities will be reduced.

The mines are already required to operate on the basis of limited accessibility on the winter road, and see much fewer savings from the bridge, mainly from any trucker benefits mentioned above. The CBA indicates these will be well below the level of the tolls.

Other benefits included in the CBA calculations include the value of time and vehicle cost savings to private individuals, similar to those seen by truckers.

A number of things have changed since the CBA was updated in 2007. The ferry savings are greater, but obviously the construction costs have increased substantially, and various operating costs are different with the DCBC no longer involved. It would be interesting if the government would plug in all these to the CBA model and provide updated figures.