This document summarizes an economic analysis conducted by the Queensland Department of Transport and Main Roads to assess the benefits of investing in cycling infrastructure across Queensland. The analysis found that completing the state's highest priority cycling routes could yield nearly $5 in economic benefits for every $1 invested. Three funding scenarios were modeled, and Scenario 2, which focused on completing the highest priority routes and separating 20% more routes, was found to have the strongest economic returns with a benefit-cost ratio above 2.0. The analysis supports allocating additional funding to cycling infrastructure, with a focus on separated routes, to maximize the economic and mobility benefits.
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Economic Benefits of Cycling Infrastructure
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ECONOMIC BENEFITS OF
CYCLING INFRASTRUCTURE
AT THE PROGRAM LEVEL
Robyn Davies, Adam Rogers, Craig Lawrence and Ben Vardon
Australian Institute of Traffic Planning and Management National Conference
15-17 August 2017, Melbourne
4. 4 | ECONOMIC BENEFITS OF CYCLING INFRASTRUCTURE AT THE PROGRAM LEVEL | 13 August 2017
Our strategic plan
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About us…
3,029
bridges
20
ports
3,260
taxis licensed
5m
vehicles registered
3.5m
drivers licensed
256,151
recreational vessel
registrations
997,289
boat licenses
180m
in SEQ
12.1m
outside SEQ
trips taken annually on bus,
rail, ferry and light rail
33,343km
state-controlled roads
As at 30 June 2016 we manage: As at 30 June 2016: As at 30 June 2016 there were:
3.63m
customers served
face-to-face at
59
Customer Service Centres
2.5m
go cards
in use
Over 490,000
passengers travel on the
south-east Queensland
network on average
each day
Our customers conducted
6.68m
online services
Creating a single integrated transport network accessible to everyone
ECONOMIC BENEFITS OF CYCLING INFRASTRUCTURE AT THE PROGRAM LEVEL | 13 August 2017
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Background
• The Queensland Government has
invested $200 million over 10
years on more than 400 projects
to deliver over 465km of facilities
• New Queensland Cycling Strategy
sets direction for next 10 years
• Consultation revealed a
preference for facilities physically
separated from traffic
• Strong demand – 760,000
Queenslanders ride a bike each
week; Another 1.53 million more
would ride if the conditions were
right
ECONOMIC BENEFITS OF CYCLING INFRASTRUCTURE AT THE PROGRAM LEVEL | 13 August 2017
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Cycling in Transport and Main Roads
POLICY
SUPPORT
Technical
Training
Technical
Standards
Research/
Evaluation
Business Case / Investment Strategy
Benefits Realisation Plan
Risk Management Plan
INVESTMENT
Works Grants Operations
PLANNING
Principal Cycle
Network Plans
Priority Route
Maps
Highest Priority
Routes
OUTCOMES
More cycling,
more often
Queensland
Cycling Strategy
Queensland
Cycling Action
Plan
State of Cycling
in Queensland
Report
Maintenance
Cycling
Champion
Network
TMR Cycling
Infrastructure
Policy
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Background
• Queensland Department of
Transport and Main Roads (TMR)
undertook business case
development
• Analysed scenarios for future
investment in cycling
infrastructure over 10 years
• This presentation:
• Details economic analysis behind
the business case
• Describes how it is being used to
reshape investment to maximise
benefits
ECONOMIC BENEFITS OF CYCLING INFRASTRUCTURE AT THE PROGRAM LEVEL | 13 August 2017
Brinsmead-Redlynch path, Cairns
North Brisbane Bikeway Stage 1B
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Background
• Principal Cycle Network Plans (PCNPs) and
Priority Route Maps (PRMs):
• PCNPs identified 10,237km of future
cycling routes connecting important
origins and destinations in each
community
• PRMs identify Highest Priority Routes
(HPR) and Next Highest Priority Routes
(NHPR) for investment
• Australian Transport Assessment and
Planning (ATAP) Guidelines for Active
Transport (in draft at the time of the
analysis) – guidance for economic
assessment for active travel
projects/programs
ECONOMIC BENEFITS OF CYCLING INFRASTRUCTURE AT THE PROGRAM LEVEL | 13 August
2017
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Project overview
• Business case assessed the economic benefits of rolling out
Queensland’s Principal Cycle Network (PCN) through Cost Benefit
Analysis (CBA) for several funding scenarios:
• CBA grounded in demographic, cost data and working papers on
international practice
• Used previous learnings from cycling infrastructure roll out,
adjusted for on-road or off-road characteristics
• Initial estimates reveal positive economic returns from different
levels of program investment
• Shows credible NPVs and BCRs for establishing a statewide
cycling infrastructure program
• Generally conservative approach taken for inputs so that benefits
are not overstated
ECONOMIC BENEFITS OF CYCLING INFRASTRUCTURE AT THE PROGRAM LEVEL | 13 August 2017
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Project methodology
ECONOMIC BENEFITS OF CYCLING INFRASTRUCTURE AT THE PROGRAM LEVEL | 13 August 2017
CBA model diagram
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Project methodology
ECONOMIC BENEFITS OF CYCLING INFRASTRUCTURE AT THE PROGRAM LEVEL | 13 August 2017
Key assumptions
• Core discount rate 7%
• Period of analysis 30 years
• Dollar values: real 2016
• A 50-year economic life is
assumed for all new cycling
facilities
• Residual value: remaining capex
value at Year 30 using straight line
depreciation
• Induced cycling activity: ‘rule of
half’ used
• Maintenance costs are estimated
to be 2% of the capital
expenditure
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Key inputs
ECONOMIC BENEFITS OF CYCLING INFRASTRUCTURE AT THE PROGRAM LEVEL | 13 August 2017
Capital costs
• Four year forward estimates in all scenarios
• Leveled expenditure of remaining funding under each scenario
for Years 6-10
• Unit rates used for off-road, on-road and structures, based on
existing data
Network size
• Very High Priority Routes (HPR): 552km
• Next Highest Priority Routes (NHPR): 1,722km
Network composition scenarios
• Proportions of off-road/on-road (60/40 vs 80/20)
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Key inputs
ECONOMIC BENEFITS OF CYCLING INFRASTRUCTURE AT THE PROGRAM LEVEL | 13 August 2017
• Baseline projected cycling activity
• Medium scenario Queensland population growth
• 16.2% of population cycle weekly (3.2 times/ week, 2 trips/day)
• 7.5km per trip (15km/h, 30 minute trip)
• No year-on-year background increase in weekly cycling percentage
• Occurs across a 1,000km existing network
• New cycling activity
• 50% expected use of new network compared to existing
• Cycling activity lag – cycling activity in response to new cycling
facilities is lagged by a year from the year in which construction
occurs
• Cycling activity ramp – ramp to full cycling activity is included in the
first four years of the model (2016-17 to 2019-20) to account for a
gradual increase in the patronage of new facilities
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Key inputs
ECONOMIC BENEFITS OF CYCLING INFRASTRUCTURE AT THE PROGRAM LEVEL | 13 August 2017
Diversion rates
Weighted average diversion rates used
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Key inputs
ECONOMIC BENEFITS OF CYCLING INFRASTRUCTURE AT THE PROGRAM LEVEL | 13 August 2017
Monetised benefits
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Key inputs
ECONOMIC BENEFITS OF CYCLING INFRASTRUCTURE AT THE PROGRAM LEVEL | 13 August 2017
Benefits application
Diverted
from Car
(13%)
Diverted from
Public
Transport
(10%)
Diverted from
Existing
Routes
(60%)
Induced
Cycling
(17%)
Decongestion benefit 1.0 1.0 1.0 1.0
Savings in car user costs 0.5 - 0.5 0.5
Parking cost savings 0.5 - 0.5 0.5
Bicycle injury costs
(disbenefit)
1.0 1.0 1.0 1.0
Health benefits of cycling 1.0 1.0 - 1.0
Air pollution reduction 1.0 1.0 1.0 1.0
Noise reduction 1.0 1.0 - -
Infrastructure provision
savings
1.0 1.0 - -
Greenhouse gas reduction 1.0 1.0 - -
Journey ambience –
separated cycling facilities
1.0 1.0 1.0 1.0
Journey ambience – non
separated cycling facilities
1.0 1.0 1.0 1.0
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Other model inputs
ECONOMIC BENEFITS OF CYCLING INFRASTRUCTURE AT THE PROGRAM LEVEL | 13 August 2017
• Network density – density uplift of 77% for additional kilometres of
route-length constructed in existing square kilometre areas where
network already exists
• Uplift factor of 1.14 for average route cycling response where a
proposed funding scenario is intended to improve the proportion
of separated facilities constructed above 60/40 off-road/on-road
• Safety factor – a reduction of the crash disbenefit for every new
kilometre of separated facility, reflecting the improvement to safety
that separated facilities offer
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Scenarios tested
ECONOMIC BENEFITS OF CYCLING INFRASTRUCTURE AT THE PROGRAM LEVEL | 13 August 2017
Business as Usual (BaU) plus design/pre-construction &
maintenance
60% physically separated
Scenario A: 100% delivery of the 552 km of identified HPR
80% physically separated
Scenario B: as per Scenario A plus build 10% of the next HPR
Scenario C: as per Scenario B plus build 30% of the next HPR
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Key outcomes
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intended to show the correct
size and position of the text
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ECONOMIC BENEFITS OF CYCLING INFRASTRUCTURE AT THE PROGRAM LEVEL | 13 August 2017
Notes:
1. PVs calculated
using 7%
discount rate.
2. PV costs include
Cycling
Operations,
design/planning,
and
maintenance.
3. Benefit/cost
measures based
on ATAP
guidelines using
conservative
values.
BaU Scenario A Scenario B Scenario C
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Sensitivity tests
• +30% capex and maintenance
• -25% unit values of benefits
• 5 year delays in program start
• 60/40 route mix, same lengths
• Lower weekly cycling participation rates
• Shorter program appraisal period
ECONOMIC BENEFITS OF CYCLING INFRASTRUCTURE AT THE PROGRAM LEVEL | 13 August
2017
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Sensitivity tests
ECONOMIC BENEFITS OF CYCLING INFRASTRUCTURE AT THE PROGRAM LEVEL | 13 August
2017
• Cycling participation rate cut in half to 8.1% – NPV of $864
million and a BCR of 2.49 under the HPR funding scenario
• Shorter program appraisal of 10 years – removal of 2/3 of
program benefits still yielded an NPV of $219.7 million and a
BCR of 1.40
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Key findings
ECONOMIC BENEFITS OF CYCLING INFRASTRUCTURE AT THE PROGRAM LEVEL | 13 August
2017
• NPVs increase in accordance
with level of investment
• BCR appears to maximize
around HPR and HPR + 10%
next HPR, which could be due
to current population levels and
cycling activity
• BCR for HPR + 30% is lower
because insufficient benefits
are recouped for higher cost
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Conclusions and next steps
ECONOMIC BENEFITS OF CYCLING INFRASTRUCTURE AT THE PROGRAM LEVEL | 13 August
2017
For the HPR/next HPR routes the economically strongest scenario is
Scenario 2. Key benefits of Scenario 2 are:
• Completion of the HPR within a 10 year window by completing a
further 30 kilometres compared to BaU
• Compared to BaU, construct additional 20% of new cycling facilities so
they are constructed to a separated standard, helping realise higher
levels of cycling participation as proposed in the Queensland Cycle
Strategy
• Related to construction of separated cycling facilities is the reduction
in bicycle injuries as a result of improving cycling facility standards
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Conclusions and next steps
ECONOMIC BENEFITS OF CYCLING INFRASTRUCTURE AT THE PROGRAM LEVEL | 13 August
2017
• Innovative program level business case
• Results suggest nearly $5 in economic
benefits for every dollar invested in cycling
infrastructure
• Supports case for additional funding
• TMR refining funding guidelines to:
• Prioritise funding towards HPRs over the
next 10 years
• Achieve a higher proportion of physically
separated infrastructure
• Invest more in planning projects on HPRs
• Encourage joined up project planning and
delivery with local governments
• Fund targeted promotion of completed
corridors to boost usage.
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Questions
ECONOMIC BENEFITS OF CYCLING INFRASTRUCTURE AT THE PROGRAM LEVEL | 13 August
2017
Schulz Canal Green Bridge - Delivered by Brisbane City Council
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Thank you and stay connected
Twitter @TMRQld
Facebook @TMRQld
LinkedIn Department of Transport and Main Roads
Blog blog.tmr.qld.gov.au
Editor's Notes
Values
In 2013 the Queensland Public Service launched new values to help revitalise the public service.
These are customers first, ideas into action, unleash potential, be courageous and empower people.
At TMR we are working hard to embed these in our culture and we are already working more collaboratively, more productively and smarter.
Diversity
We have a responsibility to ensure our employee pool reflects and better serves the diverse nature of the Queensland community.
Diversity brings different perspectives into the workplace.
An inclusive workplace ensures employees feel confident and supported to contribute and participate fully in the workforce.
Diverse and inclusive teams:
generate new ideas
challenge the status-quo
introduce fresh ways of looking at problems
offer a wider range of potential solutions.
Queensland Government objectives
The state government has four objectives for the community:
Creating jobs and a diverse economy
Protecting the environment
Delivering quality frontline services
Building safe, caring and connected communities
TMR has a key role to play in ensuring we are achieving these objectives and as such, our priorities are aligned to do so.
Advance Queensland
The Queensland Government is investing $405 million over four years to create the knowledge-based jobs of the future – this is Advance Queensland.
Advance Queensland is a comprehensive suite of programs, based on international evidence of ‘what works’, and is designed to:
create the knowledge-based jobs of the future,
drive productivity improvements and
build on our natural advantages.
It will help position the state as an attractive investment destination with a strong innovation and entrepreneurial culture.
OUR STRATEGIC PRIORITIES
TMR has responsibility for shaping the transport system, building the network, managing use of the system and providing passenger services for Queenslanders.
We need to deliver our responsibilities in the right way. Our priorities are:
Our customers
Innovation
Liveable regions and active cities
Regulation
Sustainable funding
Contemporary workforce.
In the short and long-term we continue to deliver new and upgraded infrastructure under a substantial capital program.
The Queensland Government’s vision for cycling is ‘more cycling, more often on safe, direct and connected routes.’
Achievement of the vision is driven through the Queensland Cycle Strategy 2011-21 (QCS).
The QCS is a whole-of-Government strategy which identifies four Priority Areas for action:
Building safe, direct and connected cycle networks
Growing a cycling culture
Creating cycle-friendly communities
Developing a cycling economy
The new Queensland Cycling Strategy is in advanced development and will replace the current strategy. Infrastructure/ development of a network will remain a core focus