10 Economic Evaluation 10.1 Introduction 10.2 Economic Assessment 10.3 Wider Economic Input

10 Economic Evaluation

10.1 Introduction

The economic assessment considers the monetised benefits of the options for the Forth Replacement Crossing and compares these benefits to the costs associated with its construction and maintenance in accordance with the requirements of the Scottish Transport Appraisal Guidance (STAG). In this exercise, all costs are rebased to 2002 prices and are discounted to 2002 in line with the practice for transport schemes. The maintenance costs associated with retaining the Forth Road Bridge are included in this assessment.

The cost-benefit analysis looks specifically at transport user efficiency benefits and compares these to the scheme costs. Wider economic benefits have not been monetised at this stage of this project development. The wider economic impact of closure or restricted use of the Forth Road Bridge, without a replacement crossing, on the local economies of Fife and the Lothians and the national economy of Scotland, would be significant, as illustrated in recent studies by FETA (reference "Feasibility Study for the Replacement or Augmentation of the Main Cables", http://www.feta.gov.uk.

10.1.1 Benefits to Transport Users

Benefits to transport users have been calculated for the proposed scheme. In terms of performance, these benefits are calculated by comparing the travel times and distances travelled by users within the proposed network with those that would have occurred in a Do-minimum scenario.

For the purposes of the assessment, a Do-minimum comparator has to be defined. The calculation of all costs and benefits is undertaken as a comparison against this Do-minimum scenario.

10.1.2 Forth Replacement Crossing Study (FRCS)

This economic assessment in the FRCS compared the economic performance of various options for a replacement crossing against a Do-minimum scenario which, given the uncertainty of the future reliability of the Forth Road Bridge, assumed that the Forth Road Bridge would not be capable of accommodating traffic over the Forth Estuary beyond 2019.

Under such assumptions, the options assessed within the Part 2 Appraisal all had monetised benefits greater than the costs. The recommended option (Cable stayed bridge in Corridor D) was assessed to have a Benefit to Cost Ratio (BCR) of 4.31.

The Forth Replacement Crossing Stage 2 Corridor Assessment work also assumed that the Forth Road Bridge would be closed for the comparator Do-minimum scheme.

10.1.3 Revised Do-minimum Comparator

The FETA Feasibility Study into Replacement/Augmentation of Main Cable offered two key updates to inform the development of the current economic assessment. These were that:

  • There appears to be a greater degree of confidence that the Forth Road Bridge can be repaired and strengthened.
  • The duration of bridge repair works and the likely traffic disruption in the absence of a replacement bridge are significant.

The various combinations of replacement options and traffic management options suggested a minimum range of potential programmes of works and associated traffic disruption of between 5 years and 2 months (with full bridge closures) and 8 years 11 months (off peak carriageway closures). The programmes assume no holiday impacts or slippage due to inclement weather conditions. Other closures would be required as necessary for all other routine and cyclical maintenance activity.

As would be expected, the benefits attributable to the project will be lower than the FRCS assessment if it is assumed that the Forth Road Bridge can be repaired and brought back into full use. The impact on the benefit to cost ratio of different base case scenarios, together with an illustrative weighted assessment, is illustrated in Table 10.1.

Table 10.1: Dealing with uncertainty: impact on benefit to cost ratios

Figure 6.3 Junction 1a Layout

In addition to the cable problems, the Forth Road Bridge has a number of identified on-going and significant maintenance issues, some of which are typical for a bridge of this type and age. These include without limitation, the repair of the main movement joints and periodic deck re-surfacing. Much of the work has or will have a significant impact on users and the wider economy.

10.2 Economic Assessment

In light of the results of the recent work by FETA that there is a greater likelihood that the Forth Road Bridge could be strengthened, albeit with a high level of disruption to users in the absence of a replacement crossing, a revised approach to the Do-minimum situation was adopted.

The Do-minimum for the purpose of the current economic assessment was taken as the existing crossing and road network, with use of the Forth Road Bridge interrupted for a 10 year period by restrictions to carriageway availability to allow for routine and cyclical repairs and refurbishment, including the replacement of the existing cables.

Following completion of the Stage 2 Corridor Assessment, further work was undertaken to refine the cost and operation of the Full Corridor Scheme. Economic evaluation was undertaken on the refined scheme and compared with the Managed Crossing Scheme. The results of the Transport User Benefit Appraisal (TUBA) evaluation are presented in Table 10.2.

Table 10.2: Economic Appraisal of the Full Corridor and Managed Crossing

Full Corridor Scheme

Managed Crossing Scheme

Present Value of Benefits



Present Value of Costs



Net Present Value



Benefit to Cost Ratio




The Managed Crossing Scheme offers significantly improved value for money over the Full Corridor Scheme, demonstrated by the improved benefit to cost ratio of the Managed Crossing Scheme compared with the Full Corridor Scheme. Although the Managed Crossing Scheme offers marginally lower transport user efficiency benefit than the Full Corridor Scheme, this is more than offset by the additional cost of the Full Corridor Scheme.

10.3 Wider Economic Input

As noted above, the wider economic impact of closure or restricted use of the Forth Road Bridge, without a replacement crossing, on the local economies of Fife and the Lothians and the national economy of Scotland, would be significant. To illustrate the scale of this potential impact, the FETA cable augmentation study included a preliminary economic assessment, addressing the wider impact on the economies of Fife and the Lothians, resulting from traffic disruption, delays and reduced accessibility related to the works.

A sample of representative businesses was canvassed for predicted responses to pre-defined level of disruption, which in turn was seen as representative of the likely level of disruption which would be experienced. The impact on the economy resulting from cable replacement/augmentation works depends on the structure and competitiveness of the local market. It could potentially increase costs to the travelling public, add to distribution costs, affect customer markets, and lead to a competitive disadvantage. The inconvenience and added cost of travel could potentially discourage tourism and reduce recreational travel. The net effect would be to reduce business and government revenues resulting in a contraction in economic activity and a loss of jobs.

The response to the questionnaires was analysed and scaled to represent the business community as a whole. The forecast economic impact was depicted in terms of business turnover and business output and presented as ranges. For a range of treatments between cable augmentation measures and cable replacement, the forecast impact is that turnover would reduce by between £539 million and £1,320 million in Scotland as a whole and output would reduce by, between £443 million and £1,085 million in Scotland as a whole. Cable replacement, which was regarded as the preferred option, yielded the higher end figures, and the possibility of job losses of 3,200, many of which would be permanent.