CSCR’s EIRR Revisited

This column’s title is in acronyms simply because they’re quite long and might not be proper as a title.  CSCR means Cebu South Coastal Road while EIRR stands for Economic Internal Rate of Return.  We all know what CSCR is – that valuable stretch of long highway stretching from Plaza Independencia (thus connecting to the Cebu North Road), made up of a viaduct towards the South Road Properties (SRP), then the wider land-based expressway, extending up to inside Talisay City.  Non-existent until the mid-1990s, the CSCR is one of Cebu’s two most notable visible infrastructure, visible even in space (try Google Earth).  The other is MCIA’s runways.

EIRR, of course, stands for Economic Internal Rate of Return.  It is the measure of how an infrastructure, or any endeavor for that matter, contributes to the general economy, and is a measure of whether the government approves it or not (should be greater than now 10%, which was 15% back when SRP and CSCR were approved).  But it does not take an economist to know how huge the benefits are, reaped from both the SRP and the CSCR.  If there are any projects which have gained such huge economic benefits to Metro Cebu, these two stand out at the top.  Thousands of Cebuanos have benefited so much from the SRP and CSCR, on a daily basis.

The computation for EIRRs for roads is very simple – time savings and vehicle operating costs (VOC savings), both saved by providing faster delivery of people and goods.  In the case of the CSCR and other expressways, these are gained due to the continuity of the roadway, i.e., without stops.  Introducing intersections impedes both the speed and the throughput (in vehicles per hour), and drastically decreases the EIRR.  The continuity of travel time was the main reason these U-turn slots were built by DPWH at both ends of the SRP section of the CSCR.

We don’t need a transport economist to tell us that the signalized intersections “inserted” into the CSCR at the SRP has, thus, decreased its EIRR significantly.  The time intervals between turning signals at each intersection might just be a few minutes each cycle, but we have to consider that these involves “expressway” traffic that sometimes approached 60 - 80 kph.  At these speeds, significant time is lost when intersections are introduced which is the reason you can’t find intersections on other expressways in the country.

The introduction of intersections at the SRP has downgraded the CSCR to a mere urban road instead of the expressway it was originally designed for, approved by NEDA, and funded by the Japanese government.  We will need actual computation to figure out the resulting exact economy but it suffices to say that these would be huge simply by the fact that this was an expressway in the first place, not just an ordinary road.  Besides these losses, we have to contend with both the economic AND financial loss in making the multi-billion pesos U-turn slots at the SRP’s ends useless!  I hope DPWH won’t get into trouble with the Commission on Audit (COA).  But worse, the Cebu City government and DPWH seem to be clueless about it.