Skip to main content

Transport planning starts with a budget

16 July 2018
From our 'Thinking outside the box' series
Benefit-cost analysis in the transport sector often involves designating a corridor then conducting appraisals on a few options, writes David Hensher. But what if we start with a specific budget and don’t allow it to vary?

It is common practice in benefit-cost analysis (BCA) in the transport sector to pre-define a corridor where future investments may be attractive, and to undertake a formal appraisal on a few selected options. A good example is a specific corridor where a rail based and a bus based investment are to be compared.

These projects have different costs and benefits, and within the constraint of placing the service and infrastructure development along the exact same (more or less) corridor, one can arrive at the benefit-cost ratios and use them as an input in the decision making process. But what if we started with a given budget for the project instead of allowing it to vary across project options?

We use MetroScan, developed by the Institute of Transport and Logistics Studies, a quick-scan tool for investigating the demand opportunities for both passenger and freight-related activity (all in the one system), and associated benefit-cost outcomes, as well as the wider economic impacts of transport initiatives.

We have selected the only location in the Sydney metropolitan area where the government has proposed to invest in bus-based rapid transit, in contrast to the many other locations in Sydney where only a rail-based system has been proposed. How does a bus-based system compare to light rail on patronage and benefit-cost? The location, the northern beaches, is on the northern side of Sydney Harbour along the coast. Access to this location Sydney's CBD involves crossing the Harbour Bridge (or through the harbour tunnel) and through the lower north shore (North Sydney and Mosman).

The government has selected a bus-based system known as the B-Line to proceed (with some amount of opposition from local residents and businesses). We have added a more substantial BRT option (BRT Full) together with light rail (LRT).

The two bus-based options are essentially the same as published by Transport for NSW with the service stopping at Wynyard (a main heavy rail station in the CBD), 10-minute off-peak frequency, 5-minute peak frequency, and travel time of about 50 minutes between Mona Vale and Wynyard. The B-Line replaces some express bus services from the northern beaches to the CBD, but most (local) buses remain unchanged. B-Line buses are counted as "BRT" together with other buses along dedicated corridors (for example, the Liverpool-Parramatta transit way.)

Alignment of B-Line

Alignment of B-Line.


In addition, the BRT Full option is the same alignment as B-Line but with a 20 per cent improvement in travel speed, a completely dedicated corridor with physical separation, BRT stations equivalent to existing light rail stops (with ticketing machines, platform level with floor of the bus and priority traffic lights when crossing other roads), and approximately double the cost of B-Line with the exception of vehicles that would cost the same. The alignment takes away existing road capacity.

The LRT has the same alignment as BRT except for a short connection from Wynyard to the City and the South East Light Rail line at George Street (the main road in the CBD) into the CBD across the harbour, with all other service attributes identical to BRT Full. Furthermore, the LRT costs four times BRT Full, which covers design/engineering, vehicles, construction, maintenance and operations. The LRT is also connected to the City and South-East Light Rail; thus the Northern Beaches service acts as a direct connection between the Northern Beaches (where Rail is not available) and the whole of the CBD.

We found that network effects have a significant impact on the appeal of the public transport solution for the northern beaches, and it appears that for a single alignment, LRT offers greater value for money simply because of the connectivity appeal offered, especially for lower north shore patronage. This is despite there being more trips on BRT than LRT on the sections within the Northern Beaches. If BRT is to be successful, we concluded that this setting must integrate into the LRT network that will be in place in 2036, and depending on how well this can be achieved (a seamless transfer), it might just satisfy the needs of lower north shore patronage.

If, however, we were to spend the same amount on BRT Full as on LRT at the LRT cost level, then BRT Full would deliver a significantly higher benefit-cost ratio, travel benefits and economy wide impacts making it undeniably a much more attractive investment (and value for tax payers money) than LRT. The resulting service coverage, frequency, connectivity and visibility would mean that the northern beaches (together with the lower north shore) of Sydney would see improved accessibility that only BRT and not LRT can provide for the same dollar outlay of investment.

This is a very important finding and recognises that the served catchment area can change substantially for a given budget in a way that supports many more ‘corridors’ of service frequency that is typically not identified in an overly constrained corridor interpretation of project appraisal. Maybe it is time to rethink the context within which BCA is undertaken?

David Hensher is a Professor of Management at the University of Sydney Business School, and a Founding Director of the Institute of Transport and Logistics Studies.

Hensher, D.A., Ellison, R., Ho, C. and Weisbrod, G. (2018) How well does BRT perform in contrast to LRT? An Australian case study using MetroScan_TI, Bus Rapid Transit, edited by Fiona Ferbrache, Edward Elgar Publisher. Chapter 8.