How To Save On Your Roadworks Contributions

By Jason van Paassen. Manager – Transport, Calibre Consulting
I am often surprised when looking at road designs for various types of development at how often clients have been conditioned or advised to provide for more than is needed, and how infrequently they challenge this. I’ve seen this happen for various types of projects, whether it be a residential land development project, a mine or an industrial development.

It seems a widespread problem that perhaps stems from an uncritical acceptance of status quo or “that’s how we’ve done it for years”.

Whatever the reason, providing road infrastructure to a level that exceeds the standard required based on actual demand, results in unnecessary costs being incurred by developers, Council and home buyers.

Whilst mostly common sense, there are three things I always suggest clients look closely at. They are:1) Is the amount of traffic being estimated reasonable and consistent with relevant standards and actually representative of what your development demands? Traffic estimates can be an inexact science and there is a tendency for some agencies and engineers to estimate at the upper end of a probable range. However, developers who are paying real costs for a project need to be sure they are providing road infrastructure that is no more and no less than what is needed for the safe and efficient movement of traffic, in line with reasonable standards and guidelines;2) Where is the traffic coming from, going to, and when?  The actual distribution of traffic across the road network and the time of the day it impacts can make a dramatic difference to what you as a developer may need to contribute in terms of upgrade roadworks; and3) Does the amount of proposed roadworks (roads or the intersections themselves) to mitigate any impact arising from your development sound extravagant or at least substantial? It is not unusual for some agencies to use a new development as a trigger for long intended upgrades. You as a developer should only be paying for the direct impacts of your development, not for any wider or more regional traffic impacts arising from other causes or as a result of legacy issues. The correct balance needs to be struck and requires negotiation and open communication between parties.

Almost always, it is worth investing in getting the right advice from the beginning. It often means the difference between a project going ahead and not going ahead. On a recent 1,000 lot subdivision, we saved the client over $1,200,000 in road costs. And on a recent mining project, we negotiated savings of $20 million plus by developing a more reasonable interchange configuration. Acting on poor advice or blindly accepting outcomes because “that’s the way it’s been done for years” without pragmatic and professional scrutiny is a guaranteed way of incurring potentially more cost than you are legally or technically required to pay.