National Guidelines for Transport System Management in Australia

1. National Guidelines for Transport System Management in Australia South East Australian Transport Strategy 11 May 2007 Dr Anthony Ockwell, Executive Consultant

2. Acknowledgement • This work was undertaken by a working group of officials from the Australian, State/Territory Governments; • The Australian Local Government Association was also participated on the Committee; • Although this presentation is given in my present role as Executive Consultant with Meyrick, Meyrick & Associates was not involved in the preparation of the Guidelines. • This presentation focuses on the outcomes of the Working Group, and reflects my former role as Chair of the SCOT Working Groups.

3. Background • AusLink Green Paper (2002) identified four key areas to be progressed in support of AusLink: • Maintenance • Assessment methodology • Inter-government agreement • National Transport Advisory Council • Assessment methodology: develop a multi-modal transport system management framework (strategic planning) • Initial report April 2003 • National Guidelines for Transport System Management in Australia (Dec 2004) • National Transport Data Framework (Dec 2004) • National Guidelines for Transport System Management in Australia (Feb 2007) • February 2006, COAG

4. The Guidelines Five volume set comprising: • Volume 1: Introduction to the Guidelines and Framework • Volume 2: Strategic transport planning and development • Volume 3: Appraisal of initiatives • Volume 4: Urban transport • Volume 5: Background material

5. Strategic Planning Objectives • Responsive to government priorities • Forward looking • Multi-modal in outlook • Considers alternative solutions • Initiatives include infrastructure and non-infrastructure solutions • Takes account of project interactions • Encourages private sector participation • Brings together all relevant considerations • Takes account of stakeholder’s views • Based on Australian-State/Territory-Local government cooperation • Focused on project appraisal and programme development

6. Guiding principles • Select and rank projects according to specified objectives • Cost-effective • Defensible, comprehensive, rigorous • Consistent across projects • Able to compare different types of projects including different modes • Transparent assessment criteria

7. Flowchart of system planning Transport system performance indicators and targets Multi-Modal Network Planning Feedback Define multi-modal transport networks and their functions Step 1 Determine multi-modal network performance indicators and targets Step 2 Network assessments Demand analysis Deficiency assessment Economic assessment Develop multi-modal network strategies to achieve system objectives and performance targets Step 3 Stakeholder engagement, identification of challenges, options analysis (infrastructure & non-infrastructure) (Optional) Determine affordable, multi-modal intervention benchmarks Indicative funding availability Step 4 Corridor/Area Planning Determine objectives, performance indicators and targets for individual corridors/areas Feedback Corridor/area studies Demand analysis Deficiency assessment Economic assessment Develop multi-modal corridor/area strategies to achieve objectives and performance targets Define and protect transport routes/links Route/Link Planning Develop route/link plans Feedback

8. Transport System Objectives Performance Indicators Transport System Targets (‘Desirable’ Outcomes) Transport System Performance (‘Actual’ Outcomes) GAP CHALLENGES Policy Advice Development System Planning Individual Initiatives Infrastructure and Non-Infrastructure Options to Address Challenges Stakeholder Input 1 3 5 Options Analysis 2 4 Decision: Preferred Option SOLUTIONS

9. Phases • 1: Objectives setting • 2: Policy choices • 3: System planning • 4: Identifying initiatives • 5: Appraisal and business case development • 6: Prioritisation and programme development • 7: Programme delivery • 8: Performance review

10. Community engagement

11. Objectives-Led Strategic Planning • Phase 1: Objective setting • Phase 2: Policy choices • Phase 3: System planning Phase 4: Identification of initiatives Phase 5: Appraisal and Business Case Strategic merit test Rapid BCA Rapid adjusted BCA Rapid non-monetised assessment Other analyses (financial, environmental impact statement etc.) Detailed adjusted BCA Detailed non-monetised assessment Detailed BCA Appraisal Summary Table, AST Business case development Recommendation Minister’s decision Phase 6: Prioritisation and program development Phase 7: Delivery Rejected initiatives Phase 8: Post-completion evaluation • Note: Dashed lines show paths for initiatives that fail the various steps of the process

12. Appraisal methodology – three stages Strategic merit test • I • II • III Rapid BCA Adjusted rapid BCA Detailed BCA Adjusted detailed BCA

14. Strategic Merit Test What is it? • Consists of a series of questions • Alignment with government strategies and policy choices • Consideration given to • alternative solutions • options • broader context of the project Aims of the SMT: • Filters projects into those that should be • taken to next stage of assessment • revised • abandoned • Living document that develops into the Business Case • Assists with ranking of projects for programme development

16. Rapid BCA • Rapid BCA • cost-effective way of gauging whether a project is likely to pass a detailed appraisal • assesses the ‘economic merits’ of options • methodology the same as that used for detailed BCA • estimates are less precise • supports the SMT by helping to clarify objectives of the project • application to all projects, particularly at an early stage of development and for small-scale projects

17. Detailed BCA • Specify the initiative and analyse the options • Identify the benefits and costs • Estimate investment costs • Make demand forecasts • Estimate infrastructure operating costs • Estimate user benefits • Estimate cross-modal and network effects • Estimate safety benefits • Estimate externality costs and benefits • Discount benefits & cost; calculate summary results • Assess risk & uncertainty

18. Adjusted BCA • Optional new appraisal technique • BCA-based multiple-objective decision-making tool • Formal approach to re-weight or incorporate non-efficiency objectives • Substitute nominal values for market-based values • Multiply benefits & costs by weights • Apply subjectively determined monetary values for benefits and costs previously not valued • Apply a distributional multiplier to the benefits • Hybrid of BCA and multi-criteria analysis that uses weights • retains the monetary measuring rod of BCA • Weights applied to benefits and costs to reflect government objectives • May be employed at both the rapid and detailed stages of project appraisal

19. Business case • Combines the results of all the assessments and analysis • Presents information about proposal to decision-maker • Self-standing document • supported by detailed documents eg. Environmental Impact Statement, financial analysis, social impact assessments, regional and distributional impact assessment, employment impact assessment, etc. • Includes the results of the SMT (including the Objective Impact Table), BCA, Appraisal Summary Table

20. APPRAISAL SUMMARY TABLE (AST): TRANSPORT PROPOSALS FUNDS, $m: 06/07: Bypass of Outer Eastern Region of Metropolis 05/06: 07/08: 08/09: Total: PROJECT NAME Increased congestion and delays on the Eastern Arterail Road into Metropolis. Affects its suitability as a declared National Highway, with significant impact on freight PROBLEM transport movements of exports to the Port of Metropolis Involves the construction of a new high speed, high standard, contolled access road to bypass the Eastern Region and draw traffic off the Eastern Arterial. The new bypass DESCRIPTION would become the National Highway, and the Eastern Arterial would revert of a state arterial road. Traffic coordination to maximise capacity on the Eastern Arterial; at grade flaring of intersections where cost is low; banning certain movements on the Eastern Arterial and BASE CASE certain types of traffic. Three other options were assessed: 1) upgrading the Eastern Arterial to a high standard road, with road widening and grade separation of major intersections; 2) the introduction of a toll on the Eastern Arterial to limit traffic growth; 3) upgrading services in the parallel rail corridor. Each of these options were considered inferior to the OTHER OPTIONS (1) bypass option (1) METROPOLIS STATE STRATEGIC PLAN TARGETS CONFI- IMPACTS QUALITATIVE DESCRIPTION ASSESSMENT QUANTITATIVE MEASURE DENCE PVC $252m H Capital cost PVC $10m H Infra Maintenance Cost New asset provided, hence increased maintenance costs (2) Slight -ve H Infra Operating cost Mainly lighting costs PVB $423m H Economic: Jouney times Substantial travel time savings 10 minute saving PVB -$15m H Veh. operating costs Greater travel distance Large +ve H Journey quality, reliability Smoother flow, fewer stops, reduced driver frustration (3) Bypasses 24 sets of traffic lights Mod -ve M Regeneration Some induced demand in local rural area (4) PVB $45m H Social: Crashes Reduced crash outcome overall (5) Neutral H Public security Little change from base case (6) Slight +ve L Access to public transport Principal bus corridor remains Eastern Arterial. Little change. (7) Mod -ve M Severance Moderate on new road (8) Slight -ve M Pedestrians & cyclists Generally longer length of travel for pedestrians to cross (9) Environmental: Greenhouse Mod -ve L Increased efficiency on Eastern Arterial, offset by extra traffic generation (10) Slight -ve M Noise Lower on Eastern Arterial, higher on new route (11) Mod +ve M Local air quality (12) Slight +ve M Landscape Impacts on existing landscape offset by project landscaping (13) Slight +ve M Biodiversity New road will be used to maximise +ve's, but some loss likely (14) Slight -ve L Heritage Some impact on aboriginal heritage, minimal other heritage impact (15) Slight+ve M Water Stormwater retention basins required (16) PVB = $443m PVC = $252m NPV = $191 NPV/K = 0.8 B/C = 1.8 BENEFIT COST ANALYSIS RESULTS (b): Notes: 1. "ASSESSMENT" levels (non-monetised): Large -ve; Moderate -ve; Slight -ve; Neutral; Slight +ve; Moderate +ve; Large +ve 2. "CONFIDENCE" levels: VL - very low; L - low; M - medium; H - high; VH - very high 3. PVB = present value benefit; PVC = present value cost; NPV = net present value; BCR = benefit cost ratio; NPV/K = NPV per $ of capital cost.

21. Object of review Standard of comparison Objectives Network outcomes Performance targets Network review Objectives Corridor/area route/link outcomes Performance targets Review of process from strategic planning through to implementation Corridor/area/route/link reviews Objectives Program outcomes Performance targets Program review Initiative outcomes Base case Initiative review

22. Website • National Guidelines for Transport System Management in Australia available on: • Australian Transport Council website: http://www.atcouncil.gov.au/index.htm