Public Transport

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GUEST OBSERVER
Australians have very high expectations of their public transport systems. They consistently prefer investment in public transport over investment in roads. State elections have been lost when politicians don’t meet those expectations.
As a researcher in public transport, I am frustrated by a narrative I see time and again. It comes up in comments in focus groups and pops up at the bottom of news articles. It goes something like this:
"I’ve been to London / New York / Tokyo and their public transport system is better / cheaper / more reliable than ours! Why can’t our public transport be that good?"
Australia’s public transport systems seem shoddy compared to other countries for a number of reasons. These reasons make me question whether those comparisons are valid.
<h2>When on holiday, don’t do as commuters do</h2>
The first reason this comparison is flawed is because when we’re on holiday, we don’t use public transport the same way we do in our mundane commute back home.
When you’re on holiday your concept of time and money is different. A few extra dollars for a tourist pass, a few extra minutes on the platform, it all becomes part of the adventure of travel. A few extra dollars or minutes back home is another inconvenience in your daily grind.
Chances are when you visited London, Tokyo or New York you visited the exciting tourist centres of these cities – places where public transport is at its best.
You probably didn’t visit Woldingham, Tachikawa or Port Washington – outlying suburbs beyond the reach of metro systems. Places where the trains only run every 20 minutes or, heaven forbid, you may have to use a bus. Places a lot more like the suburbs back home.
<h2>Australia’s super cities</h2>
The other reason this comparison is flawed is due to the super-size of Australia’s cities. How that came about is an accident of history as much as anything. Many of the overseas cities Australians idolise did most of their growing before the private car became embedded into the transport system. This resulted in compact urban forms served by narrow, winding streets.
That urban form was designed to suit the needs of pedestrians, horse carts and trams. By the time the car came along it had to be retrofitted into the city.
In contrast, Australian cities – along with many American cities – did most of their growing in parallel with the explosion of motor vehicle ownership. Highways and cars facilitated the post-war suburban explosion, allowing millions to live the dream of quarter-acre blocks far from the city centre.
Because of this legacy, Australian cities are enormously far-reaching. In most capitals you can drive for 100km and still be within the same city limits.  Melbourne’s footprint is six times the size of London with half its population; Brisbane is 20 times the footprint of New York City with one-quarter of its population. 
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London (1,572 sq km, 8.3 million people) vs Melbourne (9,990 sq km, 4.3 million). https://mapfrappe.com
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New York City (790 sq km, 8.4 million people) vs Brisbane (15,826 sq km, 2.2 million). 
In Australia, public transport has to play catch-up constrained by an urban form designed by and for the car. This isn’t an impossible task, by any means, but it suggests that perhaps we’re comparing ourselves to the wrong cities.
What if we made more realistic comparisons? For example Portland, Oregon, is around the same size and has about the same population of Brisbane. It is held up as one of the “best transit cities” in the United States. Yet Brisbane has more public transport trips per capita – around 70 per year – than Portland, which has 58 per year.
If Australia’s cities were ranked alongside American cities in public transport trips per year, Sydney and Melbourne would both rank third behind New York and San Francisco, Perth would rank ninth (above Chicago) and Brisbane would rank tenth (above Philadelphia).
<h2>A call to (realistic) action</h2>
I am glad that Australians have high expectations of their public transport systems, and I will continue to advocate for improving public transport as an integral part of efficient, sustainable cities. But Sydney will never be Tokyo and Adelaide will never be London – nor should they be.
We already have strong, uniquely Australian legacies to build on. Adelaide and Brisbane were some of the first cities in the world to invest in bus rapid transit. Melbourne has the largest streetcar (tram) network in the world.
Rather than lamenting what we are not, let us focus on making Australian public transport systems the very best they can be.
Alexa Delbosc is lecturer in transport at Monash University and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/alexa-delbosc-147245" target="_blank">here</a>.
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jchancellor-FAypfDUnLy

Public transport is always greener on the other side

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<img src="https://counter.theconversation.edu.au/content/78190/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">GUEST OBSERVER
The light rail project pushed up property values within 800 metres of the stations by over 30 percent from 1996 to 2016. Gains on this scale offer a potential source of finance for public transport.
Gold Coast’s light rail scheme has attracted great interest since the streets of Surfers Paradise were torn up and stations and track were built. Was it worth spending A$1.5 billion on 13km of light rail and more than $40 million a year in subsidies?
Are we right to be spending another $420 million on an extension to Helensvale in time for the Commonwealth Games? Should we be taking it all the way down to Gold Coast Airport?
Another question is whether gains in property values served by the project could be “captured” to fund such infrastructure.
Previous studies of property values in areas serviced by the light rail showed only modest gains after it opened. Our research cast a wider net back to when we first started planning the system in 1996 through to the latest data we could get in 2016.
The results were intriguing. We found that prices in the catchment areas started to increase in the earliest planning phases. The effects of the light rail were to push up property values within 800 metres of the stations by more than 30% in total from 1996 to 2016.
This is well above most previous estimates of a light rail system’s effects. This is mainly because we looked earlier for the property value gains and used a carefully designed control to make the comparison.
<h2>Impact after opening seemed modest</h2>
These findings cast a different light on the apparently modest impact of the light rail after it opened.
When the first stage from Broadbeach to our university at Parkwood opened it was well received. But the behaviour change we all hoped for was rather modest at first. After opening in 2014, patronage did not surge compared to bus ridership on the route in earlier years.
New passengers got on board, but it was an uphill climb for the new system. Fare increases of almost 50% from 2010 to 2014 pushed passengers off public transport across southeast Queensland, especially on rail.
Not all passengers enjoyed improved service for their particular journeys either. Those who used to travel through the corridor in a bus now had to break their journey at the light rail terminus and transfer, adding travel time and annoyance.
In the second year of operation, however, patronage jumped 16% and our contacts suggest third-year patronage is tracking well. Subsidies per passenger are falling. The decision to add the connection to Helensvale looks a sound one.
But, seemingly, other changes everyone expected weren’t there. The Bureau of Infrastructure, Transport and Regional Economics analysed property values in the corridor from 2000 to 2013 using a coarse geography and didn’t find much evidence of any uplift. This gave many cause for concern.
Reassuringly, Cameron Murray used valuation data for a similar period using a different geographical scale and found a 10% increase for properties within 400 metres of the new stations. But there was still uncertainty.
Our new research backs up and expands on Murray’s findings, suggesting there was substantial positive impact.
<h2>What did our research look at?</h2>
Our research team in the Funding on the Line Australian Research Council Linkage Project took a different approach.
In a peer-reviewed paper, which will shortly be presented at the World Symposium on Transport and Land Use Research, led by Barbara Yen, we used sales data for residential properties along the corridor. Our study compared areas within 800 metres of the stations with a control area containing locations a little further away but still in the same vicinity.
We used a longitudinal methodology to see when the value uplift occurred from back in 1996, when planning of the system first started, through to the latest 2016 data. Property prices in the catchment areas started to increase very early in the planning phase. The property value uplift was highest in the locations between 100 and 400 metres from the stations.
Values went up 11.9% in these locations compared to our control areas between 1996 and the feasibility study’s announcement in 2002. They increased a further 26.3% from 2002 to 2006 over the control areas when the feasibility study was completed. Prices rose only 2.3% from 2006 to 2011 when the formal funding commitment was made and construction began, and then by another 5.4% after the line opened to the end of the study period in 2016.
<a href="https://www.propertyobserver.com.au/images/2017/05/29/file-20170524-5749-1f04vgx.png" target="_blank">Click to enlarge</a>
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The areas less than 100 metres from the stations, and between 400 and 800 metres also recorded strong increases compared to the control areas, though not quite as much.
This is to be expected. Sites closest to the stations received some nuisance from the light rail and road corridor; sites further away obtain fewer advantages in travel time savings for passengers.
<h2>What are the funding implications?</h2>
The property value gains attributable to the project from 1996 to 2016 of more than 30% are very significant. Yet it’s pretty much only the landowners who benefit.
The City of Gold Coast recoups some of its $120 million investment in the light rail through its rates and its public transport levy on urban residents. The Queensland government may end up getting a little slice via stamp duty as properties are sold. The few pieces of government-owned land likely rose in value.
But the state and federal governments generally have no other mechanisms to take a small sliver of the increased property value their investment generated to help pay for the light rail system or reinvest in public transport elsewhere. We’ve written about this previously in The Conversation and suggested ways we could change the system.
A recent federal parliamentary inquiry and moves to set up “value sharing” units in the Queensland and New South Wales governments suggest we are now getting serious about generating alternative funding for public transport.
Our study’s results only add more support to these initiatives. Get it right and we should be able to deliver more metros, busways and light rail to serve our growing population and its increasingly urban way of life.
 Matthew Burke is an Associate Professor, Cities Research Institute, Griffith University and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/matthew-burke-1677" target="_blank">here</a>.
 
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Why Gold Coast light rail was worth it: Matthew Burke

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<img src="https://counter.theconversation.edu.au/content/64233/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
A new report, commissioned by the Australian Automobile Association and compiled by SGS Economics and Planning, has estimated transport costs for a typical household in Australia’s capital cities.
The calculations factored in public transport spending and car costs such as registration, fuel, insurance and tolls.
In a media release accompanying the report, the Australian Automobile Association said that “the average Australian family is spending up to $22,000 every year to get around.”
Is that accurate?
<h2>Checking the source</h2>
The Conversation asked SGS Economics and Planning and the Australian Automobile Association to clarify several aspects of their calculations. You can read their full response here.
The SGS Economics and Planning full report explains in detail the assumptions that underpin their snapshot of transport costs for a typical household in Australia’s capital cities.
Their hypothetical household in each capital city featured a couple in their 30s with children. The adults were employed, lived in a detached house and had two cars, which were driven 15,000 and 10,000 kilometres per year. The car that drives 10,000 kilometres per year is assumed to be ten years old and owned outright. The car that drives 15,000 kilometres per year is assumed to be less than three years old, purchased new and financed with a car loan. In addition, one member of the household is assumed to travel by public transport into the CBD and home again, five days a week.
In each city, the hypothetical household is assumed to live in middle to outer ring suburbs, with a relatively high population density, good access to public transport, and – in the case of the Sydney, Melbourne and Brisbane householders – use toll roads to access the CBD.
These assumptions and estimates contained in the report appear valid to me. Overall, the report seems to be a reasonable attempt to deconstruct transportation costs. Assumptions about both cars being used for more than 10,000 kilometres per year while one person commutes daily via public transport could be questioned, but this would only make a difference at the margins.
<h2>Report finds national average annual transport cost is closer to $17,000</h2>
The Australian Automobile Association said the report “reveals the average Australian family is spending up to $22,000 every year to get around” – but the key phrase there is up to.
The authors of the report looked at two consecutive quarters of transport data – Q1 of 2016 (quarter one, January to March) and Q2 of 2016 (quarter two, April to June). The report found that:
Annualised figures reveal a total transport cost for Q2 of $21,791 in Sydney, while the annual cost for Hobart is $7,691 less, at $14,100.
So the figure of $22,000 relates to Sydney, not the national average. The higher costs in Sydney relate to tolls, registration and compulsory third party insurance, the report said.
In fact, the researchers estimated that the national average transport cost for the second quarter of 2016 is around $323.36 a week, or an annual national average of $16,814.72, as shown in this table from the report:
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Household total weekly transport costs, Transport Affordability Index: August 2016. Transport Affordability Index: August 2016, SGS Economics and Planning.
So the Australian Automobile Association’s assertion that the report reveals the average Australian family is spending up to $22,000 every year to get around is correct – but just remember that’s the upper end of the estimates range detailed in the report, as this chart shows:
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<h4>
Household total weekly transport costs SGS Economics and Planning 
</h4>
The report found that the national average annual spend on transport is closer to $16,814 or $17,000 if you round up.
<h2>Checking the numbers against other sources</h2>
The report’s estimate of roughly $17,000 in annual household transport costs for the national average is higher than transport cost estimates produced by the Australian Bureau of Statistics.
But it’s not uncommon for different economic models to produce different results – it all depends on what assumptions you factor into the modelling.
The last Household Expenditure Survey, conducted by the Australian Bureau of Statistics in 2009-2010, indicated that Australians spent an average of $193 per week on transport expenses. After adjusting for inflation, that is the equivalent of $221 per week in 2016, or $11,531 per year.
Included in the ABS survey’s definition of transport costs is motor vehicle purchase, fuel, registration, insurance, parts, public transport fares and several other expenses.
In their response to The Conversation, SGS Economics and Planning said the discrepancy was partly because the ABS' Household Expenditure Survey:
"includes figures on transport costs from a range of households, from couple families with kids in the outer suburbs to inner-city singles who rarely drive to regional pensioners… We chose to focus on couple families with children and the costs they are likely to face as they are the most common family type in Australia… Couples with children are likely to have higher transport costs than other family types such as singles, single parents or couples without children, as they are larger and more likely to be working."
You can read more of their response <a href="https://theconversation.com/full-response-from-sgs-economics-and-planning-64308" target="_blank">here</a>.
The ABS data treats the major part of a car purchase as an asset (i.e. is not included in expenses related to travel), so if you treat household motor vehicles as a cost rather than an asset you can get a number that approaches the annual figure in the recent SGS Economics and Planning report.
The report assumes regular toll road usage in the capital cities, which, of course, doesn’t apply to all of us. And it also makes the debatable assumption that one member of the household uses public transport regularly while another member uses toll roads with similar regularity.
Naturally, the biggest contributor to overall costs may be how expensive your car or cars are (and, thus, any associated repayments), the level of which is largely at the discretion of the household.
<h2>Verdict</h2>
Overall, the SGS Economics and Planning report appears to be a reasonable attempt to deconstruct transportation costs, but is specific to a particular type of household within each city rather than all households who travel.
The Australian Automobile Association’s statement that the report “reveals the average Australian family is spending up to $22,000 every year to get around” is technically accurate, thanks to the inclusion of the qualifier “up to”.
However, it is worth noting that the $22,000 figure (which applies to a typical Sydney family) represents the highest end of the range of estimates contained in the report.
The report found that the national average annual spend on transport is closer to around $17,000, which is higher than transport cost estimates produced by the ABS in the past. 
Review
I agree with this FactCheck and its conclusion.
The really important missing cost is the time lost to travel, especially when it is over one hour per day. Marchetti’s constant, a concept based on the research of Italian physicist Cesare Marchetti, posits that anything more than an hour of travel time per day is problematic.
It would be interesting to compare options than the hypothetical “average Australian household” example given in the report. For example, both the dollar costs and time costs in Australia could be reduced by having one fewer car for the average family, and living in a location that allows that option to become viable.
My own research suggests that many cities around the world are increasingly opting for greater investment in public transport and higher density urban redevelopment, rather than building housing on the fringes of cities where houses cost less but transport costs are huge. – Peter Newman
Matthew Beck is senior lecturer in Infrastructure Management, University of Sydney an author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/matthew-beck-90705" target="_blank">here</a>.
 
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Does the average Australian family spend up to $22,000 every year on transport?

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<img src="https://counter.theconversation.edu.au/content/68326/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Large transport infrastructure projects, which can cost billions of dollars, are major drivers of the economy, and political flagships.
They have significant impacts on health and wellbeing. Yet our research finds these impacts are not as well considered in the project assessment phase as they should be.
A recent Lancet series is the culmination of knowledge linking transport and health. For example, it recommends reducing reliance on private cars and enhancing opportunities for walking, cycling and public transport use. It argues this will improve health both by reducing air and noise pollution, and by promoting physical activity, community connectedness and better access to goods and services, particularly for the socio-economically disadvantaged.
Each transport project’s environmental assessment thus presents a crucial opportunity within the mandated planning process to consider health. This is also when the wider community can engage with the design of projects. The main output of this process, the environmental impact statement (EIS), is available for public scrutiny and comment prior to final project approval. 
<h2>A health check on assessments</h2>
We recently compared the inclusion of health issues in four major transport project assessments. Three involved motorways (WestConnex M4 East and NorthConnex in New South Wales and the 2010 Darlington Upgrade in South Australia) and the fourth the Sydney CBD and South East Light Rail. We did this by first applying a “health audit” to each EIS, then interviewing a range of stakeholders. 
The road assessments emphasised risks from air quality and noise, concluding these were minimal. Indeed, each project was predicted to improve air quality and, by extension, health. 
When health was assessed, human health risk assessment was the method used, which we judged to be of good quality. The 2010 Darlington upgrade was the only road project not to include health data explicitly in its calculations. 
The light rail EIS referred mainly to the connection of the project to health facilities, with some reference to noise and dust in construction. This statement’s chapter on social impacts, in which health featured strongly, reflects the tone of the recent Lancet report, albeit with less detail. It considered wider health benefits of the project, including better access to health facilities and employment opportunities, improved road safety, opportunities for walking and cycling, better air quality and enhanced social interaction. 
Of the four environmental impact statements, WestConnex M4 East had the most detailed coverage of mental health issues, mostly related to property acquisition. Despite this, there was limited detail in the health chapter when compared to other issues like air and noise risks. Mitigation measures were limited to the provision of phone counselling services. 
The EIS for each of the other projects lacked assessment of mental health impacts due to construction and operation. 
As outlined above, evidence that links transport and health advocates for access to a mix of transport options, giving people opportunities to walk, cycle and use public transport. The importance of this mix was excluded from the project and parameters set for the two NSW motorway projects. 
While the EIS for each of NorthConnex and WestConnex acknowledged the need for multi-modal transport options, their provision was described as being outside the project’s parameters. It wasn’t clear how or when this was being done elsewhere, only that it was not the proponent’s responsibility and not within the scope of the EIS.
This mix of options was minimal in the 2010 Darlington report we analysed. However, the most recent 2016 iteration of this project design appears to emphasise walking and cycling facilities, with a recent announcement of a rail link adjacent to the motorway.
<h2>Why were health impacts neglected?</h2>
Stakeholder interviews were held with project co-ordinators, consultants, the health department and affected community members for the NSW-based projects. We were unable to conduct interviews for the Darlington case due to changing and uncertain project parameters at the time of the research. 
Informants stressed the importance of the requirements issued to proponents by the state Department of Planning and Infrastructure. Health featured in these requirements, largely on the advice of the state Ministry of Health. 
These requirements focused on environmental health risks, particularly concerning air quality. This corresponded to historical community concerns about motorway impacts. 
Despite an overall consensus that health was an important issue, there was little appetite for comprehensive consideration of broader health impacts, such as those advocated by evidence-based research. Crucially, as reported in the environmental impact statements and confirmed through stakeholder interviews, the design of each project reflects prior financial and strategic decisions. The purpose of the EIS is focused on minimising these risks within those existing design parameters. 
Supporting the considerations behind the light rail, there was reference to the cost savings from the health benefits associated with public transport use. This suggests that health was part of that project’s preceding business case. For the motorway projects, however, our research suggests these early decision points failed to comprehensively consider health impacts. 
If health is to be comprehensively included in the environmental impact statement, it is clear that it needs to be considered much earlier on when the decisions are made on the parameters of the project. Our findings suggest the design of these projects – from business case to assessment – lags well behind the evidence surrounding transport and health. 
The community can be confident that these assessment processes were conducted thoroughly within their set purpose. But the bar for considering the full range of health impacts needs to be raised. This will ensure communities are aware of the long-term impacts of infrastructure provision, and that opportunities to promote and protect health through transport are maximised.
Patrick Harris is senior research fellow, University of Sydney and can be contacted <a href="https://theconversation.com/profiles/patrick-harris-102775" target="_blank">here</a>.
Emily Riley is research assistant , University of Sydney and can be contacted <a href="https://theconversation.com/profiles/emily-riley-315794" target="_blank">here</a>.
<a href="https://theconversation.com/profiles/jennifer-kent-13822" rel="author">Jennifer Kent</a> is research fellow, University of Sydney and can be contacted <a href="https://theconversation.com/profiles/jennifer-kent-13822" target="_blank">here</a>.
All are authors for The Conversation.
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Why transport projects aren’t as good for your health as they could be

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<img src="https://counter.theconversation.edu.au/content/65247/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
At first glance you’d be forgiven for thinking the new Sydney Metro rail line will turn the suburbs between Sydenham and Bankstown into an urban paradise.
Amid cheerful community facilities and cycle paths, the Department of Planning’s zoning brochure shows a colourful mass of new higher-density zones. Every town centre along the route – including Campsie, Lakemba, Canterbury and Belmore – is in line for a facelift. A raft of new apartment towers, pavement cafes and boutiques will crowd around the Metro stations.
All cities need renewal and no-one would argue that this part of Sydney isn’t crying out for it. However, the Baird government needs to explain what the changes will mean for existing residents. Compared with the rest of the city, they are typically poor, older and renters. What’s in it for them?
And who’ll profit from the value uplift that will flow from the massive investment of taxpayers’ funds, both from higher land values resulting from the new density and from being snug up against a new Metro line?
These are just two of the outstanding questions to which the government should already have articulated some answers. That’s because, as each day passes, developers are doing their maths based on the existing scenario set out by the Department of Planning. Soon it will be too late to retrofit any changes.
<h2>Where do existing residents fit in?</h2>
To understand the reality, it’s worth taking a closer look at the area along this stretch of the new Metro.
The Sydenham-to-Canterbury corridor is home to one of the largest concentrations of lower-income renters in Sydney, compounded by a large population of retirees on fixed, low incomes. Gentrification, the driver for urban renewal across much of Sydney, has not come knocking on these doors – yet.
So, what percentage of the 36,000 new apartments and other dwellings along the renewal corridor has been allocated for affordable housing? We can be sure they won’t be pitched at the pockets of those who live there now.
And as new investment comes in, so rents will rise. Without a significant affordable housing component, many of the essential workers who live there today – the mechanics, care attendants and shop workers – will be pushed further towards Sydney’s periphery. That will leave the rest of the city struggling to get the lower-paid workforce it needs to function productively.
In comparable renewal projects in cities like London and New York, a significant proportion of new stock is set aside as affordable housing, precisely to avoid such problems. It’s accepted as completely reasonable that lower-income working families should also benefit from new housing delivered as a result of public investment.
The Baird government must make it clear to developers exactly what proportion of the new homes will be set aside for this purpose – and quickly. The case for a zoning policy that mandates a proportion of all new homes as affordable has never been clearer.
The government also needs to show us where it is placing services, such as the new schools that the expanded population will need. With the government’s zoning map not identifying where these services will go, land-owners will rightly question any subsequent proposal for a school or park that would diminish their profits from possible residential development.
The government has not yet provided any explanation of the expected amount of the massive value uplift that will come from the Metro and all the amenity upgrades.
Nor have we been told whether any of it will be used to fund the Metro itself or investment in the infrastructure that will be needed to make this extensive new precinct vibrant and liveable – let alone whether it will be used to provide for affordable housing.
<h2>A model for inclusive renewal</h2>
Let me suggest a way the government can tackle all this.
We need a new model of inclusive renewal. Why not establish an arm’s-length, non-profit corporation to work in consortia or joint ventures with councils, landowners, businesses, residents (particularly in older strata properties), developers and the community housing sector?
Innovative funding for new infrastructure could come through hypothecated value-capture mechanisms. These could take the form of up-front levies on land and property sales and public borrowing supported by the increased local rates that will be collected. In this way the value uplift will be properly shared and paid for over the longer term.
Planning should be devolved to the newly amalgamated council in line with the district plans being drawn up by the Greater Sydney Commission. Affordable housing would be the responsibility of community housing providers, working with developers and the new agency. The model would also apply to other town centre and corridor renewal projects.
The new Sydney Metro promises a revolution in mass transit. However, the accompanying renewal of this corridor will affect one of the most socially and economically disadvantaged communities in Sydney. Perpetuating – or indeed enhancing – that disadvantage through wide-scale displacement and unaffordable apartment building would be disastrous.
This new urban paradise must not be just for those with deep pockets.
Bill Randolph is director, City Futures - Faculty Leadership, City Futures Research Centre, Urban Analytics and City Data, Infrastructure in the Built Environment, UNSW Australia and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/bill-randolph-147968" target="_blank">here</a>.
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Sydney Metro's Sydenham-to-Bankstown line – nirvana or nightmare?

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<img src="https://counter.theconversation.edu.au/content/78527/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
A new report from Infrastructure Australia, Improving Public Transport: Customer Focused Franchising, and its associated technical report from Pricewaterhouse Coopers (PwC), will have state and federal treasurers salivating. The accompanying press release is clearly intended to set their fiscal juices flowing. It suggests that:
"… subjecting the operation of Australia’s government-operated bus and rail services to competitive tender processes could save Australian taxpayers up to $15.5 billion by 2040…"
This A$15.5 billion is the estimated high operational cost savings scenario, in present value terms (2016 prices; 7% real discount rate). Infrastructure Australia/PwC’s conservative savings estimate is still a very substantial A$11.6 billion.
The magic pudding is competitive tendering of a range of government-operated rail and bus public transport services, as well as Melbourne’s privately run bus services, which are not currently awarded by competitive tendering.
Just how realistic are these savings?
Rail services
Ownership and contracting of public transport services has been a major transport policy focus for 30 years. This issue has had its own two-yearly conference, the Thredbo International Conference Series, for most of that time.
The Thredbo series (named after the location of the first conference) provides a vast array of international material that sheds light on ways to improve the efficiency and effectiveness of public transport under different operating regimes. Australian federal and state government officials rarely attend.
The PwC report presents Australian and international examples of competitive tendering of rail and bus services. It concludes that first-round rail tenders will deliver operational cost savings of 15-20 percent (conservative and high estimates respectively) by the end of the first tender and 25-32 percent by the end of the second. For bus services, the report estimates savings of 15-20 percent from the first tender and 30-35 percent by the end of the third round.
International experience on rail privatisation is sparse, with the sources that PwC cites among the more well known. We are concerned, however, that contrary evidence is given no attention. This raises questions about the objectivity of the analysis.
Andrew Smith and colleagues, in a paper to the Thredbo 6 Conference, reviewed the UK rail experience. They found costs rose after privatisation.
Total passenger train operating costs (excluding infrastructure) per train-kilometre were 14 percent higher in 2006 than at privatisation ten years earlier. Between privatisation and 2008-09, real average salary costs rose much faster than in the economy as a whole.
Pedro Cantos and colleagues reviewed the European experience across 16 countries. Their study concluded that tendering regional passenger services did not have a significant effect on efficiency and productivity.
Melbourne’s early rail franchising experience also left a lot to be desired. One operator handed back its contracts – train, tram and bus – before completion.
As Public Transport Users Association president Tony Morton wrote in May 2017 to The Age:
"Victoria’s train/tram privatisation hasn’t saved taxpayers one cent. A former minister, the late Lynne Kosky, admitted as much ten years ago. We do save money relative to Sydney by not having train guards, a decision that predates privatisation."
Those labour savings were part of large reductions in Melbourne rail staff, from 18,000 to 8,400, during the 1990s. This was done in a corporatisation process that preceded privatisation.
Taking account of the sources cited above and Melbourne’s experience, as well as the sources PwC cites, an assumption that rail privatisation will deliver cost savings of 25-32% by the end of Term 2 tenders is, to say the least, heroic.
We would see even the “conservative” figure of 25% as a high estimate. Melbourne’s experience suggests many of the mooted savings might also be achievable by a thorough corporatisation process. Infrastructure Australia, by simply taking the competitive tendering pathway, does not do justice to the choices available.
Bus services
In a 2007 review of bus privatisation, one of us reported cost reductions from the first round of tenders as follows:
Great Britain 50-55%
Scandinavia most in the range 20-30% but with a range of 5-34%
USA 30-46%
Australia: Perth 22%; Adelaide 38%
New Zealand: 40% ex-public operators; about 5% private operators
Norway 10%. 
The savings for Norway are lower than elsewhere because the local bus industry had been improving its efficiency over some time, mirroring NZ experience. The Norwegian study suggested the threat of competitive tendering was important in driving savings.
One of us recently analysed the tendering of private bus services in Sydney, where private operators run some existing services. The analysis found savings of under 4% on a like-for-like basis.
These various bus findings suggest the cost savings range of 30-35% selected by PwC and reported by Infrastructure Australia might be possible, if an efficient private operator replaces an inefficient public operator. We make no comment on the efficiency of the public bus operators reviewed by PwC.
But such savings will not be achievable in Melbourne, where private operators already provide service. Cost savings of less than 5% are more realistic there.
As we argue below, achieving the latter savings does not rely on competitive tendering. Importantly, all such savings, in rail and bus, are a one-off windfall gain. Our research commonly shows evidence of significant real cost increases after the initial tender round.
What about the alternatives?
Wallis, Bray and Webster, pioneers of the Adelaide privatisation experience, recognised the tendency for costs to increase in subsequent tendering rounds. They proposed that performance-based contracts negotiated with incumbent operators should replace the city’s fourth round of bus tenders.
It is surprising that neither the Infrastructure Australia report nor PwC technical paper mention such contracts as an alternative to competitive tendering.
Our research suggests that negotiated performance-based contracts with efficient operators deliver cost outcomes in line with competitive tendering. And this approach provides two other benefits. Transaction costs are lower and it provides opportunities for closer partnering between purchaser and provider on service planning.
Importantly, given competition law in Australia, if it can be shown that the benefits of a particular contracting regime, such as competitive tendering or negotiated performance-based contracts, outweigh the costs, then the compliance case is strong.
It is surprising that Infrastructure Australia is either not aware of, or more likely has chosen for some reason to ignore, the opportunities afforded by negotiated performance-based contracts, particularly for bus services. This narrowing of the policy options put forward for public consideration risks loss of benefits from important transport reforms.
In short, we believe that Infrastructure Australia, and its advisers PwC, have overestimated the achievable cost savings from competitive tendering of publicly provided rail services. They have also ignored the potential for savings within existing publicly provided public transport services. Competitive tendering of such services will deliver cost savings, but it would be surprising if they were as big as suggested.
For Melbourne bus services, any operating cost savings from competitive tendering are likely to be much less than forecast, most likely under 5%. Such savings will be equally achievable under negotiated performance-based contracts.
Although we recognise that the first round of any competitive tendering will produce a windfall gain, this will be partly at the risk of service quality. Once we consider this, the one-off financial benefits are diluted.
<a href="https://theconversation.com/profiles/john-stanley-115" target="_blank"></a>
<a href="https://theconversation.com/profiles/john-stanley-115" target="_blank">John Stanley </a>is Adjunct Professor, Institute of Transport and Logistics Studies, The Business School, University of Sydney.
<a href="https://theconversation.com/profiles/john-stanley-115" target="_blank"></a>
<a href="https://theconversation.com/profiles/david-hensher-11295" target="_blank">David Hensher </a>is Director, Institute of Transport and Logistics Studies, University of Sydney.
<a href="https://theconversation.com/profiles/john-stanley-115" target="_blank"></a>
Both are authors for <a href="https://theconversation.com/au" target="_blank">The Conversation</a>.
<a href="https://theconversation.com/profiles/john-stanley-115" target="_blank"> </a>
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Why touted public transport savings from competitive tendering are too high

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GUEST OBSERVER
Planning approval of the Sydney Metro from Chatswood to Sydenham is great news, however there is a lack of certainty for development around the stations and areas around the rail corridor.
The planning approval of the Sydney Metro including tunnels under the harbour demonstrates the commitment of the Baird Government to an extensive metro network across metropolitan Sydney.
Along with the Metro West line between Sydney and Parramatta the Metro network sets the framework for extensive areas of urban renewal around the new stations, which will help boost must-needed housing supply.
The Urban Taskforce is concerned, however, that planning for the urban renewal of areas around the rail corridor is taking far too long. Developers have no certainty and cannot proceed with housing projects as strategic land use planning around the metro is lagging far behind.
An example is the Sydenham – Bankstown Urban Renewal Corridor Strategy. The draft Strategy was exhibited by the Department of Planning in October 2015, however rezoning proposals for areas along the Corridor are on hold until local councils prepare detailed planning controls. 
This could take an additional 2 years, even more if the council is subjected to an amalgamation, before the local environmental plan is complete. Developers simply cannot sit on land for that long with no outcome.
Until planning around these corridors comes up to speed, the NSW Government must fast track plans around metro stations, or develop a process where land owners and developers can obtain a development approval or rezoning in significantly less than 3 years.
The Department of Planning’s Guide to Preparing Planning Proposals issued in August 2016 states that the rezoning proposals have merit ‘if they are consistent with relevant district, corridor or precinct plans applying to the site, including any draft regional, district or corridor plans released for public comment.’ It seems that the Greater Sydney Commission Planning Panels are not following this guide.
Boosting Sydney’s housing supply is absolutely critical if we are to alleviate the housing affordability crisis. It is an excellent time to fast-track planning proposals for new housing around proposed metro rail stations.
Chris Johnson is chief executive officer of property development industry group Urban Taskforce and can be contacted <a href="https://www.urbantaskforce.com.au/index.php?option=com_content&amp;view=article&amp;id=97&amp;Itemid=126#.Vdaart55dFI" target="_blank">here</a>.
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Sydney Metro forging ahead but urban renewal lags behind: Chris Johnson

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GUEST OBSERVER
Cities are complex systems, some may even say messy systems. Many independent and concurrent decisions shape the experience, form and opportunities in a city. And many stakeholders have their views, their data and their interests without necessarily sharing with others.
Let us try to systematise the mess. A city consists of the physical, tangible, mostly immovable environment, the social component of people, institutions, workplaces or public transport, and the information infrastructure, from smartphones and urban dashboards to traffic counters and traffic lights.
The relationship of the physical, the social and information (the virtual) forms a triangle: people make decisions and interact with the world (for example, moving around, building); they consult with information systems (location-based services, taxi apps or maps); and information systems control parts of the world (building access, bus preference at intersections, or dynamic road pricing) and interact with people (for example, pushing messages).
 
<img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/102562/width668/image-20151119-18441-m4wjj1.png" alt=""> 
 
<h2>Highly connected but often hidden</h2>
Embedded in this picture is already a degree of connectivity unheard of only a couple of years ago. A rapid transformation of our cities is happening. This consists of three components: urban sensing, urban analytics and urban interaction. Each of these tells fascinating stories, and yet each is more or less hidden from attention.
Three short examples illustrate the potential of urban connectedness:
<ul>
<li>
Connected vehicles communicate with each other or with other transport infrastructure about their presence and intentions, thus allowing for early braking, avoiding congestion, or ad-hoc ride-sharing.
</li>
<li>
Smart waste bins sense their load and allow for optimising the routes of waste-collection teams, saving the cities significant dollars.
</li>
<li>
Open data provides access for citizens and entrepreneurs, enabling public participation as much as transparency and empowerment.
</li>
</ul>
How do we make use of this new level of connectedness? As an example, imagine you want to visit a market in the CBD on a Saturday.
Your first thought is to drive to the market, but you face the challenge of where to find a parking spot. Online services are starting to emerge that provide real-time data streams about where free parking spaces are available.
However, this information may just increase the traffic congestion as everyone heads for the same parking spot. What we need is the ability to harness these new sensor data streams using predictive analytics, which can predict when and where parking spaces are likely to be free soon.
Taking this a step further, we can envisage services that recommend the best time to leave home, or when to switch modes of transport. Rather than queueing for a parking spot at the market, we are advised to take advantage of cheaper parking spaces in the financial district (which is quiet on the weekend) and then take a free tram to the market.
<h2>Balancing access and privacy</h2>
These types of data-driven services have the potential to transform the way we interact with our city. And yet we need a critical consideration of unintended consequences, intrusion of privacy, or unequal access. 
An important challenge will be how to find a balance between ease of access to these data streams and the privacy of citizens in our urban environment. New developments in privacy-preserving data analytics are helping to make this possible. This is done by randomising the raw data, while still preserving the important trends in the aggregate data.
Let us close with an invitation to all Melburnians for a hands-on experience of urban connectedness. Until the end of November you can participate in a mobility survey using the sensors of your smartphone, and thereby sharing your day-to-day transport demand with researchers who explore ways to better inform governments on transport planning. Participants may be eligible for a $50 gift card. Click <a href="https://imod-au.info/">here</a> for details.
We think Melburnians are passionate about their transport system, and we want to look for ways to capture the joys and frustrations of travelling around this great city.
 
Stephan Winter is professor of spatial information, University of Melbourne and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/stephan-winter-13767" target="_blank">here</a>.
Christopher Leckie is professor of computer science, University of Melbourne and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/christopher-leckie-1922" target="_blank">here</a>.
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A city thrives on connectedness but access all hours makes privacy a problem

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<img src="https://counter.theconversation.edu.au/content/66394/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Last week Fairfax Media reported that the Parramatta Light Rail is set to cost the NSW government not A$1 billion (together with part of the proceeds of a levy on new residential developments), as budgeted, but a whopping A$3.5 billion.
People could be forgiven for thinking that the revelation of a A$3.5 billion price tag is surprising, and much higher than expected from what’s been budgeted. But as a new Grattan Institute report shows, cost overruns in public transport infrastructure are far too common.
The report is the first comprehensive Australian study of all 836 transport infrastructure projects valued at A$20 million or more and planned or built since 2001. It reveals that over the past 15 years, Australian governments have spent A$28 billion more on transport infrastructure than they told taxpayers they would spend. Much of this overspending should never have happened. 
The A$28 billion over the originally promised costs does not stem from the accumulation of small cost overruns on most projects. Rather, most projects come in reasonably close to their original announced cost, as the figure below shows. The problem is that when projects do run over, it can be spectacular: 90 percent of the cost overrun problem is explained by the 17 percent of projects that overran their cost promise by more than 50 percent.
<a href="/images/2016/10/26/image-20161023-15963-pm2um9.png" target="_blank">Click to enlarge</a>
<h4><img src="/images/2016/10/26/image-20161023-15963-pm2um9.png" alt=""></h4>
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The main culprit for this startling finding is premature announcements. Ministers and shadow ministers frequently promise to build a road, bridge or rail line for a particular cost, especially in the lead-up to an election. 
History shows that projects with costs announced before a formal budget commitment are at much more risk of a large cost overrun than those announced when they are better developed. Over the past 15 years, 74% of the total value of cost overruns is explained by the 32% of projects announced early.
The poor performance of projects with early announcements is not just a warning to mistrust politicians’ promises. Premature cost announcements continue to haunt projects throughout their lives, as the figure below shows.
<a href="/images/2016/10/26/image-20161023-15930-107f13l.png" target="_blank">Click to enlarge</a>
<h4>
<img src="/images/2016/10/26/image-20161023-15930-107f13l.png" alt=""> 
</h4>
It is not common practice to analyse projects from as far back as when they are first announced, but it should be. Once politicians have announced a project, they and the public treat that announcement as a commitment. They are right to do so: two-thirds of these projects end up being built. 
In fact, it is not common practice to analyse the cost outcomes of infrastructure projects in any systematic way. Analysts are hindered by the absence of meaningful reporting on the outcomes of these projects – by the lack of information on how well they performed against the costs and benefits, such as travel time savings, that were used to make the original investment decision.
Failing to collect and aggregate information about past projects also hampers those trying to estimate what today’s projects will cost. Without actual Australian data on past projects, cost estimators may be able to factor in the prices of equipment, material and the workforce, but they can’t factor in how to protect against unusual and unforeseeable events that can have a big impact – “unknown unknowns”.
Today’s projects suggest we are not learning from history. For every project, cost estimators forecast what they expect the project will probably cost (known as a “median” or “P50” cost estimate), and also what it could cost for the one in ten times that a project will probably go over budget – a “worst case” cost estimate (known as a “P90”). 
The experience of the past 15 years shows that the difference between the median cost estimate and the “worst case” cost estimate is 21% on average for transport infrastructure projects valued at A$20 million or more. 
But cost estimates for current projects do not reflect this experience. Instead, the difference between the median and “worst case” estimates is generally about a third to a half this size. Judging by recent history, this suggests that either the median cost estimate is too high or – more likely – the “worst case” cost estimate is too low. 
What’s wrong with this approach is that it probably won’t be one in ten projects that governments are expecting, but actually more likely one in three, that go over the “worst case” estimate. 
Our research also shows that, if history is any guide, these overruns will be bigger than expected. Some of today’s big-budget projects that have these surprisingly low “worst case” cost estimates are the Inland Rail between Brisbane and Melbourne, Sydney’s WestConnex and Melbourne’s Western Distributor.
This is not to slight the motives or the abilities of cost estimators, who deal with intrinsically uncertain costs. But without historical information to draw on, these estimates are inherently limited. The evidence is clear: over the past 15 years, cost estimators expected between 10% and 25% of projects to exceed their budget. In fact, 34% did so.
<h2>Policy changes required</h2>
The solutions are within reach. Governments should not commit to building transport infrastructure before tabling a proper evaluation and the underlying business case in parliament. And once a project is completed, governments should report to the public on how it performed against the costs and benefits behind the original decision to invest. 
Governments can also improve project assessment methodologies, collect and publish data that would enable cost estimators to learn from experience, and manage contingency funds with more discipline. 
We must start to learn from history. Our infrastructure systems should promise what is worth having, and then deliver what is promised.
Marion Terrill is transport program director, Grattan Institute and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/marion-terrill-169480" target="_blank">here</a>.
 
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Spectacular cost blowouts show need to keep governments honest on transport

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<img src="https://counter.theconversation.edu.au/content/57114/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Come election time, voters could be forgiven for seeing transport infrastructure as a slush fund. Politicians insist they’re all for sound economic management, but we might well be cynical about how much that really matters in the race to win votes.
The main parties have made big commitments to transport in this campaign. The Coalition has promised A$5.4 billion, Labor A$6.7 billionand the Greens A$6.5 billion.
The 2016 election follows the pattern of the past decade where more money is promised in Queensland than in any other state. Grattan Institute’s recent report, Roads to Riches, found that over the past decade Queensland received a disproportionate share of Commonwealth transport investment – in aggregate, per head, and compared to its relative need as a state.
<a href="/images/2016/06/27/image-20160623-30259-1ls4uzj.png" target="_blank">Click to enlarge</a>
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<h2>A lack of consensus?</h2>
Line up the parties’ election promises against the others, though, and it’s remarkable how little consensus there is.
In New South Wales, only about 15% of the promised money has been pledged by more than one party.
There is not one project that all three parties have promised to build, and not one project that both the Coalition and the Greens have committed to.
We once had no way of knowing a good project from a bad one, but that was before the federal government set up Infrastructure Australia. It is charged with assuring the quality of government investment by assessing business cases against a national significance test. Generally, these business cases are for projects where state governments want a Commonwealth funding contribution.
Sometimes Infrastructure Australia identifies gaps on its own initiative. It is only involved in projects that are both nationally significant and worth more than $100 million.
The funding proposals are sorted into three categories:
<ul>
<li>
If there is a full business case and the proposal is worth doing, it is classed as a “project”. An example is the WestConnex motorway in Sydney.
</li>
<li>
If there is a full business case but the project is not worth doing, it is not classified but Infrastructure Australia publishes the evaluation on its website. An example is the Winchelsea to Colac road duplication, with an extraordinarily low benefit-cost ratio of 0.08 – that is, only eight cents worth of value for every dollar spent.
</li>
<li>
If there is not yet a full assessed business case, the proposal is classed as an “initiative”; the Melbourne Metro Rail proposal, for example.
</li>
</ul>
It should be simple. All parties should commit to the “project” list – in part or in full – and then stop spending. These “projects” have been properly assessed and found to be worth doing, and specifically worth doing by the federal government because they have some national significance.
But that is not what is happening. The Coalition, Labor and the Greens are making substantial commitments to projects that not only lack proper business cases, but are not even on the Infrastructure Australia priority list at all. This includes projects like:
<ul>
<li>
the Walkerston Bypass in Queensland ($150 million from Labor) and the Townsville Ring Road and related infrastructure ($900 million from the Coalition), which could not even under the most charitable definition be described as nationally significant;
</li>
<li>
the duplication of the Princes Highway from Winchelsea to Colac in Victoria (to which the Coalition has promised $181 million), which Infrastructure Australia has rejected as not worth doing; and
</li>
<li>
small projects, such as a $32 million roundabout upgrade at Hobart Airport promised by Labor, that are not subject to the Infrastructure Australia assessment, or often to any other evaluation either.
</li>
</ul>
Almost all the funding promised by all parties is for proposals that lack a proper business case. Some of this spending may turn out to be worth doing; much will not. Only a small share of it is for projects that we know to be worth doing.
The Coalition’s spending is more aligned with the projects we know to be worth doing than the other parties’, and Labor’s is slightly better aligned than the Greens’.
<a href="/images/2016/06/27/image-20160623-30289-w5j724.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/06/27/image-20160623-30289-w5j724.png" alt="">
If the parties were to commit to the whole list of projects that we know to be worth doing, it wouldn’t send us broke. Only seven items have been classified as “projects”. These are the WestConnex motorway and the M4 motorway upgrade in NSW, the Ipswich Motorway and the M1 Pacific Motorway in Queensland, the Perth Freight link and the Mitchell Freeway extension in Western Australia, and Brisbane-to-Melbourne inland rail.
Some are certainly expensive, but so too are many other proposals of uncertain value that parties have committed to anyway.
It turns out that all parties have ignored or shunned projects that we know to be worth doing. Two of the seven worthwhile “projects” have no support from any party in this campaign. These are the M4 motorway upgrade and the Mitchell Freeway extension.
<a href="/images/2016/06/27/image-20160623-30283-af54jk.png" target="_blank">Click to enlarge</a>
<div class="enlarge_hint"><img src="/images/2016/06/27/image-20160623-30283-af54jk.png" alt=""></div>
<h2>Why parties pick the wrong projects</h2>
Failing to choose these projects seems like not bothering to pick up $50 notes from the floor. Why do parties do this?
A big clue lies in the state breakdowns. All parties want to spread their spending around, unless the state or territory in question offers no electoral advantage. But the projects known to be worth doing are spread unevenly – two are in NSW, two in Queensland, two in Western Australia and one is national.
<h4><a href="/images/2016/06/27/image-20160623-30259-fol9rt.png" target="_blank">Click to enlarge</a></h4>
<img src="/images/2016/06/27/image-20160623-30259-fol9rt.png" alt="">
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Another clue is that parties want to spend in the regions, but most proposals that stack up are based in major cities, improving commuting and connections with ports and airports.
Most of Infrastructure Australia’s “project” assessments are urban. The NSW projects are both in Sydney. The Queensland projects are in Ipswich and a link between Brisbane and the Gold Coast. The Western Australian projects are road projects substantially centred on Perth. The sole non-urban project is rail, running from Brisbane to Melbourne via inland NSW.
A third clue lies in the mode of transport that the parties favour. Prime Minister Malcolm Turnbull’s enthusiasm for public transport notwithstanding, the Coalition tends to choose road over rail more than Labor does.
The Greens have taken the approach of committing to one major public transport project in every capital city – none of which have been classified as “projects” by Infrastructure Australia, and most of which are not even on its initiative list.
A fourth clue lies in project size. The Coalition and Labor have both promised a large number of small projects on top of their big commitments. By contrast, the Greens have only their major capital city public transport proposals, although they would probably support a government seeking to advance proposals such as the Gold Coast light rail.
<h2>It doesn’t have to be this way</h2>
All three major parties exhibit a big gap between what they say and what they do. All claim to support proper process, both to get the infrastructure needed and to spend money wisely.
The parties may well excuse their bad habits by saying the voters seem to like them. On one level this is true – if you are the direct beneficiary of a new road-widening project on a country highway, or if you travel to the airport regularly but don’t like buses, you may understandably support the candidate offering the big new road or the airport rail link.
By contrast, the losers are dispersed, and the boondoggles are paid for by worthwhile projects that are never built.
Australia doesn’t have to guess what transport infrastructure to build – it has a process that determines the answer. Cost-benefit analysis, with all its imperfections, remains the one way we can compare projects on a like-for-like basis.
Marion Terrill is transport program director, Grattan Institute, and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/marion-terrill-169480" target="_blank">here.</a>
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