The Case for Concrete Roads Re-Confirmed
Thursday, 2 May 2019
An updated Infometrics report restates 2013 conclusions that concrete pavements are the most economical option over the life of a road.
In 2013 Wellington based economics consultancy Infometrics produced a report for the then Cement and Concrete Association of New Zealand (CCANZ) which examined the competitiveness of concrete pavements as the construction of the Roads of National Significance (RoNS) got under way.
The report addressed issues such as the historical changes in the prices of petroleum products (which include bitumen) and non-metallic mineral products (covering cement and concrete), the choice of discount rates and time horizons for roading projects, and the outlook for future changes in prices.
Infometrics found in a baseline scenario comparing the economics of asphalt and concrete roads, that concrete was around 25 percent less expensive than its asphalt counterpart.
With the RoNS approaching completion and the Labour-led Government starting to articulate with greater clarity their vision for New Zealand’s transportation network, Concrete NZ felt that the time was right to ask Infometrics to update their report.
Infometrics found that the price volatility of oil compared with cement is a material factor in the continued competitiveness of concrete as road pavement option.
Petroleum products prices have risen 123 percent since 1994 and look likely to continue to increase annually at 4 percent. This is compared to a rise of just 55 percent in cement prices over the same period, with a projected annual increase of 1.8 percent.
In short, Infometrics’ conclusions from 2013 remain, with concrete still around 25 percent cheaper than the asphalt option.
Download a copy of the 2018 version of Infometrics’ The Case for Concrete Roads.