Pacific Highway Bypass Economic Impacts Kempsey

Cover of Pacific Highway Bypass Economic Impacts Kempsey



The Kempsey bypass was opened on March 27 2013 as stage 1 of the 40 kilometre Kempsey to Eungai project. A key justification for this critical infrastructure project was the need to meet existing and future traffic and population increases on the Mid North Coast between the Sydney–Brisbane corridor, the need to alleviate major traffic bottlenecks at Kempsey and Frederickton, especially during holiday periods, and to improve the safety of travel between Kempsey and Eungai.

The traffic study completed by the NSW Roads and Traffic Authority (2007) indicated that south and north of the Kempsey town centre, the Pacific Highway carried average weekday traffic volumes of about 10,000 to 12,000 vehicles per day over the survey period. Of this volume, 20.5% was through traffic and the proportion of stopping traffic as a percentage of through traffic was 20.4% (approximately one in five through travellers). Most of the through traffic was expected to use the Kempsey bypass and it was expected that there would be a significant reduction in through stopping traffic as travellers used the alternative bypass route. The modelling undertaken by Roadnet (2011) came to a similar conclusion. This would have a negative impact on highway generated trade and gross annual turnover of highway related businesses.

The socio-economic assessment conducted in Kempsey and Frederickton, prior to construction of the bypass as part of the Environmental Assessment process (NSW RTA, 2007), identified likely negative and positive impacts on highway related businesses and on employment in the town based on a detailed survey of 79 businesses. The key findings are as follows:

  • As a direct result of the proposed upgrade the town of Kempsey is likely to see an overall reduction of between $3.4 - $4.7 million in expenditure by through motorists stopping in town.
  • The town of Kempsey is not likely to see any loss of trade from overnight stayers – at best the losses will be very minimal and of short-term duration.
  • The total reduction in gross annual turnover is estimated to be in the order of $17-$20 million – the largest component being the loss of trade by the service stations and eateries.
  • A total of up to 176 jobs could be lost as a direct result of the opening of the upgrade, with the highest losses likely to occur in the eateries sector.
  • The loss of jobs, particularly casual and part-time positions, could result in a marked reduction in job opportunities for females in the area.
  • It is not expected that the upgrade will be associated with any indirect impacts on local businesses, or that these will be negligible.
  • A Highway Service Centre proposal for the southern interchange is likely to employ 65-70 full-time equivalent positions, approximately equal to 130 jobs, thereby compensating for a large number of jobs which are likely to be lost as a direct result of the upgrade.
  • The loss of highway related trade in the main commercial shopping areas in Kempsey is likely to be partly offset by the benefits to trade of an improved shopping environment.

In 2011 Kempsey Shire Council allocated funding to the development of a bypass strategy (Kempsey Shire Council, 2011). The recommendations of the Background Issues Paper that was developed were expanded upon to, in effect, became the Kempsey Shire Council Bypass Strategy. The strategy indicates the priorities and timing of actions that Kempsey Shire Council intends to take to mitigate against the expected negative impacts of the bypass, including steps to take advantage of the opportunities created by the bypass. One priority identified in the strategy was the monitoring and assessment of economic impacts on highway dependent businesses.

This report, commissioned by Kempsey Shire Council, aims to address the Bypass Strategy requirement for monitoring and assessment of economic impacts of the opening of the Kempsey bypass. The objective is to assess the actual direct and indirect economic impacts of the bypass on highway related businesses within the Kempsey CBD and at Frederickton, north of Kempsey, in the eight months following the opening of the bypass.

The approach adopted in this report has been based on the author’s involvement with extensive studies of the economic impacts of bypass roads on country towns, especially on the Hume Highway - studies that use and promote a ‘Before and After’ approach to the assessment of economic impact on a community (Parolin and Garner, 1996a, 1996b, 2011a, 2011b). A similar approach has been adopted by other researchers in the study of the one year and five year impacts of the Karuah bypass (Rowe and Phibbs, 2005; Phibbs, Heidrich and Cooney, 2009). The present study of Kempsey, therefore, represents only the second example of a ‘Before and After’ bypass study of communities that have been bypassed on the Pacific Highway between Sydney and Brisbane.

The report presents the results of the assessment of actual direct and indirect economic impacts of the bypass on highway related businesses within the Kempsey CBD and at Frederickton. The document includes the following information:

  • Background on Kempsey in the pre-bypass environment;
  • Key findings of the study in terms of economic impacts on businesses; and
  • Conclusions and recommendations.