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Financial Analysis of theColumbia River Crossing
Joseph Cortright,Impresa, Inc.,October 2010Prepared for Plaid Pantries, Inc.
This report analyzes the forecast accuracy, financial costs, and financial risks associatedwith the proposed Columbia River Crossing Project. It reaches three principalconclusions: 1) the traffic forecasts on which project finances are based are inaccurateand unreliable; 2) the thirty-year cost of building and operating the CRC will be at leastdouble the $4 billion estimated and could reach $10 billion or more; 3) the project willnecessitate a huge increase in bonded public debt and poses substantial additionalfinancial risks including mega-project cost overruns.
1. CRC traffic forecasts are inaccurate.
CRC forecasts grossly over-estimate the traffic growth on the I-5 Columbia RiverCrossing. These forecasts are critical because they provide both the justification for thesizing of the project (number of lanes and size of interchanges), and because theyunderpin the financing of the project through toll backed bonds.The CRC forecasts that traffic over I-5 will grow at an average of 1.3 percent per yearfrom 2005 to 2030, from 135,000 vehicles per day in 2005 to 184,000 vehicles per day in2030. But in fact, traffic on the I-5 bridges has declined every year after 2005.Traffic levels in the nearly five years since CRC forecasts were completed have declinedby about 7,000 vehicles per day, rather than increasing by about 7,000 vehicles per day asforecast by the CRC. In the five years prior to the CRC forecast (1999-2004) trafficincreased on the bridges at only about 0.6 percent annually. The CRC forecasts assumedthat traffic growth on the I-5 crossing would accelerate from 0.6 percent annually to 1.3percent annually. But instead of growing at an accelerating rate, the volume of trafficcrossing the bridges has declined every year after 2005, and the traffic growth rate hasbeen decelerating systematically over the past 15 years.The effects of this forecasting error are significant. In order to reach the 2030 predictedlevel of traffic in the no-build scenario, traffic growth rates would have to reverse theircurrent decline and then accelerate to 1.8 percent per annum for the next 20 years.