Calculate ROI on Pothole Repairs, Too

potholeby James A. Bacon

Del. Christopher Stolle’s transportation-prioritization bill (described here) has passed the House of Delegates and has been referred to the Senate Committee on Transportation. The bill would create a methodology for prioritizing the expenditure of transportation funds, including such factors as congestion mitigation, economic development, accessibility, safety, and environmental quality. Given the fact that it has stirred no controversy, passing the House 97 to 0, it appears that the bill has a good chance of being enacted into law.

While the Senate still has a chance to amend the legislation, it should take the opportunity to add one more factor to the mix: the cost of deteriorating roads on Virginia motorists. If the goal is to create economic benefit to Virginians, then one benefit would be to reduce the wear and tear of potholes and ailing pavement on vehicles — a sum that The Road Information Project (TRIP) says costs Virginians $1.4 billion a year in extra vehicle repairs and operating costs, or $264 per motorist.

To get an idea of how significant that is, compare it to the estimated $5.2 billion-a-year cost of traffic accidents (medical costs, lost productivity, travel delays, insurance costs and legal costs) in Virginia, and the roughly $2.4 billion-a-year cost of traffic congestion (time wasted, extra gasoline consumption). Damaged roads may be the least of the three but it’s still a biggie.

Now consider that, according to TRIP, 22% of Virginia’s major roads are in poor or mediocre condition. The implication is that additional investment in upgrading the condition of Virginia streets, roads and highways would reduce the damage that motorists incur. Currently, the commonwealth spends about $1.8 billion yearly on road maintenance. Let’s say, for purposes of illustration, that by spending an extra $500 million a year on maintenance to bring roads up to tippy-top standards the Commonwealth could save motorists $1 billion a year in lower repair costs. That would represent a two-to-one cost benefit ratio. It would be hard to argue that such an investment should not be made — as long as the money invested comes from motorists themselves, not the general public.

Conversely, one could argue that if cutting maintenance by, say, $100 million resulted in an increase of only $50 million in statewide repair costs, the Commonwealth would do well to cut that spending, suck up the resulting deteriorating in road quality and spend the money on something that provides more economic bang for the buck.

I have no way of knowing which case is the more plausible, and I doubt Virginia’s elected officials and policy makers do either. The point is, we need a methodology for estimating the Return on Investment of maintenance dollars just as much as we need it for estimating the ROI on new construction projects. If better-maintained roads yields more benefit to the public than a new highway, light rail line or traffic-light synchronization, we should spend the money on better maintained roads. Likewise, it’s possible that we’re spending more on maintenance than we should. In either case, we can make better decisions if we know what the heck we’re doing.

Update: Here’s the latest VDOT data on the state operations & maintenance program. The condition of Virginia’s secondary roads, primary roads and Interstate highways all continued to improve in 2013.

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4 responses to “Calculate ROI on Pothole Repairs, Too”

  1. Here’s an interesting booklet that explains the nitty-gritty of VDOT in many activities:

    Board of Supervisors Manual

    lots of useful information to better understand how VDOT does business.

  2. and were folks aware that you can report a pothole or other maintenance issue (and VDOT will communicate back to you)?

  3. I love this idea, as well as the tools VDOT and local municipalities are deploying to make it easy to report potholes. Seems like I’m always having to get an alignment, and these plus the accompanying tire wear issues add up.

    An interesting piece to consider as well, as I understand it it’s much cheaper in the long run to regularly maintain the roads, as when they get too far gone they require far more expensive repairs. Including some sort of negative ROI on deferred maintenance projects should have an impact on the prioritization as well.

    1. VDOT discusses the issue. It’s a big of a balancing act as to when or how long a road is patched and maintained and when they repave it or re-surface especially when some of it depends on how long and severe a winter is.

      but potholes cannot be really ‘fixed’ in the winter especially if the ground is frozen.. all they can really do is throw a temporary patch on it and the freeze/thaw will undo the repair fairly quickly.

      North, they have enough winter to justify these guys:

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