Maximising the economic returns of road infrastructure investment

The aim of this study is to explore ways to maximise the economic returns of road infrastructure investment. In order to achieve this objective, the study was divided into five parts involving the following: analysing the nature of road infrastructure, determining the relationship between road infrastructure investment and economic development, considering aspects of economic modelling, developing a formula of road investment, and refocusing road investment practices. In the first part the characteristics of road infrastructure are examined and the demand and supply approaches to road investment outlined. The focus is on the balanced approach versus the unbalanced approach to infrastructure investment. The second part analyses the causal relationship between road investment and economic development. Four components are highlighted, namely the investment component, the network-performance component, the transport economic component and the economic development component. The third part analyses the applicability of modelling techniques. In the fifth part, the formula of road investment and economic development is focused on four markets. Finally, it is argued that road infrastructure investment must be refocused. The following was found: Road infrastructure investment must be demand led. This is because of the characteristics of roads, namely their indivisibility, long gestation period, lumpiness and high cost. Road infrastructure investment can only realise economic development if the four causality components are complied with simultaneously. Input-output modelling is preferred in South Africa. The modelling strategy developed in this study is recommended for transport economic studies. The probability of economic returns of road infrastructure investment is a function of the real estate market, the land development market, the urban economic market and the infrastructure market. An agenda for reform in the road investment industry was also proposed. The study clearly identifies the relationship between road infrastructure investment and economic development, and the proposed formula is an appropriate tool for a first-order priority system.Transport Economics, Logistics and TourismD. Com. (Transport Economics