NSW Long Term Transport Masterplan - April 2012


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SMART's submission to the NSW Long Term Transport Masterplan.

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NSW Long Term Transport Masterplan - April 2012

  1. 1. TRANSPORT FOR NSWNSW LONG TERM TRANSPORTMASTER PLANSUBMISSION BYSMART INFRASTRUCTURE FACILITY27 APRIL, 2012 Contact Details: Garry Bowditch Chief Executive Officer garry_bowditch@uow.edu.au Ph: +61 2 4298 1241
  2. 2. SMART INFRASTRUCTURE FACILITYContents1 Executive Summary……………………………………………………………………………………………..32 What can a NSW Long-Term Transport Master Plan achieve? ………………………….. 63 Setting Transport Infrastructure Performance Benchmarks...................................234 Better Integration and Planning …………………………………………………………………………345 Better Governance and Regulation…………………………………………………………………….466 Lessons for Congestion Charging ……………………………………………………………………….637 Public Transport…………………………………………………………………………………………………68SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 2
  3. 3. SMART INFRASTRUCTURE FACILITY Executive Summary It is critical that the NSW Government, in undertaking a long term transport master plan, uses the opportunity to give clear and concise commitments to the people of NSW that its passenger and freight transportation task will see a continual improvement over the period of the next 20 years. To do that, there is a need for the Government to do what no other government has been prepared to do in the past, and that is commit to a series of benchmarks that measure the performance of the transport system and report on it every year of the plan. Without clear benchmarks of performance and a concrete commitment to deliver against them, the process of reform will run the risk of being directionless and consume huge resources without knowing if it is for the betterment of the transport system. Regardless of what Transport for NSW does, if there is an absence of objective performance indicators, then the agency and its actors simply will not know where they are in the process of change. It is imperative that the NSW transport system adopt a clearer minded and purposeful reform process, and anchors its activities day to day and year to year to its objectives and performance metrics. Without these mechanisms, choosing where to invest and in what becomes little more than relying on chance or luck to achieve outcomes. Matters of importance like transport investments conducive to better international competitiveness, improved liveability for the community and enhanced resilience must be central to the reform process. The SMART Infrastructure Facility recognises and commends the NSW Government commitment to do transport planning better and their acknowledgment of the centrality of the customer in this process. At the same time, Australia and its global city of Sydney is not a large city compared with the major centres of East Asia, and our place within it is not assured. Across nearly all metrics relating to the road, rail, aviation and maritime systems of transport, Sydney has deteriorated in recent decades as the population has grown and the intensity of economic activity increased. Sydney’s high quality workforce that connects us to the world spends more time commuting than ever before, as the system struggles to deal with congestion and lost productivity and amenity. The Master Plan must build the analytical tools to anticipate and address congestion. In particular, understanding where and when the emerging tipping points of the transport system will be and what can be done to avoid dysfunctional performance is an essential part of the new toolkit needed to manage Sydney for the rest of this century. Chapter 2 develops the proposition that performance benchmarks are an essential stepping stone to higher levels of accountability in the management of the transport system in NSW. We attempt to start the conversation on this important and sensitive area, and in doing so establish that NSW should set its performance aspirations on at least the levels achieved in OECD equivalent jurisdictions. The transition to global best performance will take time, and we recognise that policy makers must have clear milestones to know if continuous improvement is occurring and to use these benchmarks to reassure the public that the program of capital expenditure and maintenance are directed and purposeful towards these benchmarks. A number of benchmarks are outlined in the chapter however with a particular emphasis on identifying the key transportation routes across the modes and setting out the travel timeSUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 3
  4. 4. SMART INFRASTRUCTURE FACILITY performance improvement that should be achieved at milestones in the 20 year planning horizon. SMART is calling for the NSW Government to commit to a reduction in road and rail travel times along principle routes by 30 per cent by the end of the 2042. For example, a train journey from Parramatta to Sydney would be complete in 19 minutes (rather than 26 minutes currently), and a car journey from Campbelltown to Sydney Airport in 46 minutes (rather than 63 minutes currently). These are tangible and purposeful objectives that must anchor the Master Plan process as a legitimate and meaningful exercise in the eyes of business and the community. The importance of better long-term integrated planning is examined in Chapter 3. It is argued that where the community and business experience high quality urban planning there is an increased likelihood to a more positive predisposition for investment, growth and ultimately accommodating larger populations. Larger urban populations coupled with increasing density can reduce the per capita costs of infrastructure services. The Master Plan can be reasonably certain that it will have to accommodate a population of at least 7 million people in Sydney by 2050; leading to 500,000 new jobs, tens of millions of square metres of new commercial space, and a doubling of passenger kilometres travelled each day. The enduring disconnect between transport and urban planning is unacceptable and a root and branch reform is required to achieve a more integrated approach to meet these known challenges. As a community we must expect a higher level of planning about the future of NSW, and its place in Australia and the world. Chapter 4 examines the five key principles of good governance that should drive all future deliberations of integrated transport planning and management. These are: i) whole of government planning and coordination; ii) enhanced accountability; facilitated by iii) independent review; iv) increased transparency; and v) better information and analytics as we know very little about the system of infrastructure, and if a change is in fact an improvement. The remainder of Chapter 4 is committed to the importance of setting in place a regime and culture for outstanding cost benefit analysis to inform better evidence based decision making. Much needs to be done in NSW in improving the quality and consistency of cost benefit analysis to shift old mind sets and culture and, ultimately, achieve better outcomes. Congestion is the new tobacco for infrastructure and the Master Plan will need to be front footed in managing it. Chapter 5 sets out the principles and lessons of other jurisdictions in their endeavours to address the impact of congestion and supporting the enhanced performance of the transport system. Finally, we reflect on the tale of three cities about how Vancouver, London and Zurich all had relatively difficult journeys in planning and delivering on long term transport plans for their cities. The lessons from these cities are set out to inform ourselves and set realistic expectations, however the enduring one for Sydney is that it is important that the community is consulted and engaged in a very meaningful way. The mandate ofSUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 4
  5. 5. SMART INFRASTRUCTURE FACILITY governments to change transport systems will always be difficult and Sydney must find its own unique way of managing the winners and losers and also be clear minded on what it will compromise on and what it will not. In the end, it’s always about the trade-offs at play in these cities, and Sydney will need to rise to the challenge of doing the same in a mature, thoughtful and informed way. Key Recommendations - Where projects involve large amounts of government funds, say over $100 million, such reviews should be conducted in a transparent manner by national or state auditing offices, the Productivity Commission (if Australian taxpayer money is involved), or IPART. - As a general target, NSW should aim to have the best public transport system in Australia by 2020, and be in the top five OECD countries by 2025. Roads - NSW should commit to a target of increasing average speeds at peak AM and PM times on the 100 busiest arterial roads by 15% by 2022 and a further 15% by 2032. - Reduce the absolute number of road fatalities and halve the road fatality rate by 2020. Passenger Rail - NSW should commit to reducing passenger rail travel trip times by 15% by 2022 and a further 15% by 2032. - NSW should commit to increasing the frequency of trains per hour on major routes by 10% by 2022, and a further 10% by 2032. Passenger Bus - NSW should commit to reducing passenger bus travel times by 15% by 2022 and a further 15% by 2032. - NSW should commit to increasing the frequency of bus services on major routes, in particular connecting new growth areas to the existing train network, by 20% by 2022, and by a further 20% by 2032. Active Travel - NSW should aim to double the proportion of Active Travel (walking and cycling) for trips less than 3 km in each of the next four decades, from around 3 per cent currently to around 50% by 2050. This commitment aims to reduce traffic congestion, improve human health by lowering obesity and reduce energy consumption and pollution. Rail freight - NSW must commit to separating the passenger and rail freight network in the Sydney basin as soon as practicable in order to maximise the use of efficient rail freight transport options and reduce road freight on Sydney’s major road transport routes.SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 5
  6. 6. SMART INFRASTRUCTURE FACILITYChapter 1 What can a NSW Long-Term Transport Master Plan achieve?You cannot escape the responsibility of tomorrow by evading it today.Abraham LincolnThe NSW Government has released a discussion paper on the development of a long-termtransport master plan for the State (Transport for NSW, February 2012).The discussion paper poses dozens of important questions about the future of transportinfrastructure for Sydney and regional NSW in relation to customer (commuter) service,planning, integration of the modes of transport, public transport quality, governance issues,and funding.The release of a discussion paper has been an important step in developing the Master Planbecause seeking input from the wider NSW community is essential to securing widespreadand long-term public support. As the COAG Reform Council has noted:This issue highlights the importance of governments seriously and genuinely engaging thecommunity and stakeholders in strategic planning so that these visions may be durable,should governments change. [COAG Reform Council, 2012, p.97].The discussion paper defines ‘long-term’ as a ‘20 year challenge’. SMART supports a long-term focus, but considers a 20-year timeframe at the lower end of what would be aneffective timeframe for the Master Plan. In SMART’s view, a more appropriate timeframefor establishing the framework and implementation of the Master Plan is 30-40 years, from2013 to 2050.This is not to say that every new road, bridge and rail track that needs to be built betweentoday and 2050 should be known today and listed and costed to the last shovel full of gravelin the Master Plan. It would, obviously, be unrealistic to expect the population in 40 years’time to accept such a detailed plan made today. And it is near impossible to predicttransport technology four decades into the future. There are also demographicuncertainties (discussed in Chapter 3). However, what is critical, is to set a clear planningframework for this long timeframe to better manage the existing asset base and subsequentadditions to the transport capital stock in an integrated system-wide manner over the nextfour decades.The NSW Government has committed to releasing the Master Plan before the end of theyear.The discussion paper is customer focussed in terms of the questions it seeks to answer,which is a subtle, but important and welcome change, in the NSW transport public policyframework. SMART believes that a greater focus on innovation is required to ensure theMaster Plan is more soundly based.SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 6
  7. 7. SMART INFRASTRUCTURE FACILITYThe benefits of transport infrastructureAn underperforming transport system means an underperforming economy and afrustrated, time-pressed society. A bad transport system costs time and money. Butmarginal improvements to the transport system can lead to significant economic and socialgains. A healthy transport system is as vital to society as healthy blood vessels are to thehuman body. But, like medicine, we need to better understand our transport system inorder to diagnose and prioritise problems, and find cures.A key benefit of transport infrastructure, is the reduction in transport costs, largely theresult of time saved. Better transport infrastructure, as well as directly benefittingtravellers, helps create new markets for goods and services, and realize the benefits ofagglomeration. This clustering of businesses fosters competition, spurs innovation, lowersprices and raises productivity, leading to an increase in living standards.That said, the benefits from transport investments need to be large to exceed their oftenenormous costs. But if done right, infrastructure investment can improve the economy andbenefit NSW’s residents. On the other hand, there is also the potential for massive waste.If done wrong, infrastructure investment could weaken the economy rather than improve it.Unfortunately, infrastructure investment in Australia has often failed to maximise socialbenefits, or even generate benefits that exceed its costs. The influence of special interests inthe political process can tip the political scales in favour of bad projects.We must remember that, even though Australia is a rich, developed country, it is by nomeans immune from getting poor or negative returns to public or private infrastructureinvestment.SMART welcomes the opportunity to submit to the discussion paper.Asking the right questionsWhy does NSW need to plan its transport infrastructure requirements so far into the future?Why is it better to plan than to react to the immediate needs of the community? After all,community needs and transport preferences are unpredictable and subject to unknownfuture demographic, economic and social development. There is, therefore, potentially anenormous cost to investing billions of dollars of today’s resources in transport infrastructurethat either may not be required in the future or not suit future transport preferences. Howcan we ensure that taxpayers get value for money, well into the future, from investmentdecisions made today? How should these large investments be funded – taxpayer ordirectly user-funded?The answer to the overarching question, ‘what can a long-term transport master planachieve?,’ comprises the basis of this submission.SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 7
  8. 8. SMART INFRASTRUCTURE FACILITYSMART Infrastructure Facility │ Addressing the challenges of the futureInfrastructure in our cities and regional areas, both public and private, faces serious challenges.There are competing calls for new infrastructure; congested ports, roads and railways stations; stressed energy and watersystems; agreed needs to reduce carbon emissions; and shortcomings in how projects and systems are being procured,implemented and managed. There is an urgent need to respond to the increasing volatility of our modern times, make betteruse of the existing infrastructure and undertake long term planning of these vital systems.With such a line up of risks and demands there is an obvious and critical need for research into how infrastructure systemsand society’s players interrelate and connect.To address this matter of national significance funding was provided by both the Australian Government ($35M) and NSWRailCorp ($10M) to establish SMART. SMART has set out to provide the research, knowledge and tools required forexecuting evidence based public policy and investment decision-making.Our aim is to be a relevant and compelling intellectual partner in the development of infrastructure in Australia and abroad.SMART has established Australia’s first Professorial chairs in infrastructure governance, infrastructure systems, infrastructuremodelling and simulation, and appointed a professor of infrastructure economics.A modern and sustainable four storey facility has been established at the University campus, housing 30 integratedlaboratories, simulation and modelling hub, rail logistics research centre and 200 higher degree research students. SMART isone of the largest facilities of its type in the world.SMART is working collaboratively with all the University of Wollongong’s faculties, ranging from engineering to law. Thatcollaboration takes the form of various endeavours from joint academic research to the placing of higher degree researchstudents from various faculties into the SMART Infrastructure Facility.Our infrastructure modelling, simulation and visualisation capabilities are assisting industry and government organisations tobetter understand their planning and management options. SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 8
  9. 9. SMART INFRASTRUCTURE FACILITYWhat is Transport Infrastructure1? Transport infrastructure is defined as relatively long-lived physical assets such as the road network (including bridges and tunnels), the rail network used for freight and passenger rail transport, shipping ports and airports, that provide the means or physical support on which most economic and social activities rely. A second common characteristic of transport infrastructure is that any addition to the existing stock is expensive, potentially costing in the hundreds of millions or billions of dollars. Third, although investment projects typically focus on individual links, their consequences depend on how they affect what is a highly meshed transport network, making assessment of those wider effects crucial to rational decision-making. Despite these characteristics, investing in transport infrastructure is no different to investing in any other physical asset. Ultimately, it is a cost like any other, even though the stream of benefits generated by that investment is exceptionally durable. There is no virtue in having more infrastructure rather than less; rather, the crucial issue is that the costs associated with infrastructure be incurred efficiently, that is, in a way that maximises the net benefits they provide to society. This requires efficiency in the selection of infrastructure projects, in their financing, deployment and operation, and where user charges are imposed, in the level and structure of those charges (see chapter 4 of this submission for further discussion). It is crucial to get transport infrastructure investment right because, generally, market forces cannot by themselves repair incorrect decisions. Many transport assets are extremely expensive and difficult to replicate by the private sector (for example, tunnels and bridges). Some assets are natural monopolies (for example, some geographically isolated ports or the public road network). This means that any under-investment (or over-investment for that matter) in transport infrastructure does not self-correct via market forces: alternative sources of supply will not develop, or develop efficiently, if the existing supplier (i.e. the State Government) is prevented (by a lack of funds for example) from engaging in timely and efficient capacity expansion. The resulting bottlenecks are therefore likely to impose particularly severe constraints on economic growth, such as congestion. 1 This discussion is based on Ergas (2011), Better Use Measures, Infrastructure Funding and Project Prioritisation, SMART Infrastructure Facility, University of Wollongong.The infrastructure task in NSW todayNSW is Australia’s largest state by population and economic output. Its capital Sydney is amid-sized global city of 4.5 million people. Sydney’s importance is derived from its positionas Australia’s largest city and the ninth largest city in the South-East Asian and the South-Western Pacific region, as the NSW State capital, a significant global gateway for trade andtourism, and a sporting and cultural capital in the Australasian context.The growth of Sydney to a global gatewayWithout Port Botany and the rail freight network, the Sydney International Airport, theSydney Harbour Bridge and the motorway network, Sydney could not be the size it is todaynor carry the economic and cultural significance that it has in its region or globally.SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 9
  10. 10. SMART INFRASTRUCTURE FACILITYSydney has grown into its role fairly consistently over the past 100 years, although withsignificant transport infrastructure projects allowing capacity and productivity to reach everhigher levels.At Federation, NSW was Australia’s largest state by population and Sydney Australia’slargest city1. But Melbourne was unarguably Australia’s most important city. In Australia’sfirst decades Melbourne boasted a larger population than Sydney, was home to theAustralian Parliament and Government, and managed the largest share of Australia’sinternational trade through the Port of Melbourne. At least until the Melbourne OlympicGames in 1956, Melbourne was considered to be Australia’s greatest city and the gatewayto the world.How did Sydney catch up and then overtake Melbourne? The short answer is via theprovision of significant and productive transport infrastructure capacity such as the SydneyHarbour Bridge and Port Botany.In 1901, the horse was still the main form of transport for both people and freight inSydney. In fact, horse manure was a major health problem in Sydney and many inner citysuburbs were rife with disease and even suffered from outbreaks of plague. Australia had2.5 million horses by 1918, and there were quite possibly more horses than people inmetropolitan Sydney in the first decade of the twentieth century. At Federation, the JohnSands Sydney Directory listed 122 retail saddlers and harness makers, 211 coach, carriageand buggy proprietors, 114 coach builders, and 51 livery stables2.From Federation until the Depression, Sydney relied primarily on ferries to get across theHarbour. For example, by 1904 ferries were carrying 19 million passengers each year. Bycomparison, 131 million passengers were carried by tram and 30 million by train. The use offerries reached a peak in 1927, by then carrying 47 million passengers annually. With theopening of the Sydney Harbour Bridge, ferry traffic fell rapidly to 20 million annually.Private and public bus, and tram patronage increased dramatically following the opening ofthe Bridge in 19323.Sydney grew steadily after 1945 adding suburbs in the west and south-west along the Humeand Great Western Highways. Expansion also continued along the Great Western Highwaytowards Penrith. By 2000, when Sydney hosted the Olympic Games, the NSW capital hadbecome an economic and cultural powerhouse in South-East Asia and the South-WesternPacific and the centre of trade, financial services, government, culture and sport in the stateof NSW.NSW suffered a post-Olympics slump and spent most of the first decade of the twenty-firstcentury in the economic slow lane compared with the other ‘big four’ states of Victoria,Queensland and Western Australia (Table 1.1).1 The 1901 census enumerated the population of NSW and Victoria at 1.4 million and 1.2 million respectively. The most common estimates of the populations of metropolitan Sydney and Melbourne in 1901 are between 450,000 and 500,000.2 http://www.boardofstudies.nsw.edu.au/archives/ozid/federation1901_4.html3 This discussion draws on NSW Board of Studies material, accessed at:http://sydney-harbour-bridge.bos.nsw.edu.au/SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 10
  11. 11. SMART INFRASTRUCTURE FACILITY Between 2000-01 and 2010-11, the NSW economy expanded by $77 billion, or 22 per cent, well below long-run trend growth. This expansion compares poorly to the expansions in Queensland ($84 billion, 50 per cent), Victoria ($80 billion, 35 per cent), and Western Australia ($68 billion, 57 per cent). Overall, the Australian economy expanded by $345 billion over the decade, or by 35 per cent. In part, slower growth in NSW reflected a hangover from the pre-Olympics infrastructure investment in the 1990s. A broader reason was the convergence of per capita income levels within Australia, aided by the removal of barriers to interstate trade in the late 1980s and 1990s4. As well, the mining boom expanded opportunities in Queensland and Western Australia, encouraging the flow of resources to those states. But NSW Government policies also played a part, acting to restrict economic expansion in the Sydney basin during the first decade of this century. It can be argued that, as a result of NSW Government policies in relation to infrastructure during this decade, constraints in transport and energy infrastructure began to bind as the decade advanced.Table 1.1 Comparison of decade-average State and Territory GSP growth rates, 2000-01 to 2010-11 % 60 State and Territory decade average GSP growth 50 rates, 40 30 20 10 0 WA QLD NT VIC ACT SA TAS NSW Source: ABS 5220.0, Table 1. Nevertheless, in September 2007, Sydney proudly hosted the APEC Leaders meeting, attended by the American, Chinese and Russian Presidents, and several other heads of state and government. The political and security decision to host the Leader’s Meeting in Sydney was partly driven by logistics. The fact was that there were (and still are) critical infrastructure limitations in the nation’s capital Canberra – most notably at Canberra’s small domestic airport and in the quantity and quality of 5-Star hotel accommodation services to securely host 21 world leaders and their enormous entourages. 4 Although free trade between states is a cornerstone of the Australian constitution, many factors acted to prevent more interstate commerce prior to the 1990s, such as the high cost of air transport, the poor condition of national highways (often winding single lane tracks outside of major cities), binding constraints on interstate electricity interconnectors, and relatively limited credit availability preventing costly interstate migration. SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 11
  12. 12. SMART INFRASTRUCTURE FACILITYThe previous year, in 2006, Melbourne hosted the G20 meeting of Finance Ministers andCentral Bank Governors. This meeting was a logistical success and similar in scale, if notimportance, to the APEC Leaders Meeting. The choice of Melbourne may have been theresult of the fact that the then Treasurer Costello’s home town is Melbourne. However, thechoice of Sydney to host the APEC Leader’s Meeting was probably more to do with Sydney’sstatus as Australia’s leading city than the fact that the Prime Minister’s home town wasSydney.Sydney in global and regional contextOver the past decade, Sydney has consistently rated in various lists of the top ten mostliveable cities in the world. Criteria generally includes the quality of the private and publictransport system, as well as safety, hygiene, culture, environment, recreation and politicalstability. Cities in Sydney’s peer group in terms of liveability include Melbourne, Helsinki,Geneva, Vancouver, Vienna, Zurich and Toronto.Metropolitan Sydney covers an area of about 2,800 square kilometres. Geographically,Sydney is a large city for its population size by world standards. A plausible candidate forthe ‘centre of Sydney’ could be the industrial and freight distribution hub at Wetherill Parkadjacent to the Prospect Reservoir, which is about 30 km from Penrith in the west,Richmond in the north-west, Campbelltown in the south-west, and about 35 km to Long Bay(near Port Botany) in the south-east.Although not technically a ‘conurbation’, the proximity of Newcastle and Wollongong(including their ports) add to Sydney’s economic productivity by reducing costs (viaeconomies of scale) in transport and utility (electricity, gas and water) services. More thanthree-quarters of the NSW population (around 5.5 of 7.4 million people) live within thetriangle made by connecting Newcastle and Wollongong via Sydney’s coastal edge, andPenrith on Sydney’s western edge at the base of the Blue Mountains. The ‘height’ of thistriangle, or the distance between Glenmore Park and Vaucluse, is about 70km. The base ofthe triangle, the distance between Newcastle and Wollongong, is about 185 km. The area ofthe triangle is 6,500 square kilometres.In terms of population, Sydney is not a large city by world standards, coming in at about 50 thin terms of the metropolitan (or ‘built-up’) population. Compared with Asian cities to thenorth, Sydney is dwarfed by the mega-cities of Jakarta, Hong Kong, Seoul, Tokyo, Shanghaiand Beijing.Table 1.2 illustrates that Sydney is not a particularly large city in the South-East Asian andSouth-Western Pacific region. The two dominant cities, measured by built-up metropolitanarea, are Jakarta and Manilla with populations in excess of 20 million residents. A furthersix cities in ‘our region’ are also larger than Sydney, including Bangkok, Thailand (8 million)and Kuala Lumpur, Malaysia (7.2 million).Undoubtedly, Sydney is a significantly richer and more amenable city than these megacitiesto the north. However, this may not always be the case and will depend on several factorsincluding the quantity and quality of transport infrastructure investment over the comingdecades.SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 12
  13. 13. SMART INFRASTRUCTURE FACILITY1.2 Largest Cities (metropolitan areas) in South-East Asia, above 1 million residents Estimated Metropolitan Rank Metropolitan Area Population 1 Jakarta, Indonesia 21,000,000 2 Manila, Philippines 20,000,000 3 Bangkok, Thailand 8,000,000 4 Bangdung, Indonesia 7,414,560 5 Kuala Lumpur, Malaysia 7,239,871 6 Ho Chi Minh City, Vietnam (Saigon) 6,700,000 7 Hanoi, Vietnam 6,500,000 8 Surabaya, Indonesia 5,622,259 9 Sydney, Australia 4,541,849 10 Yangon, Myanmar (Rangoon, Burma) 4,348,000 11 Singapore 4,200,000 12 Medan, Indonesia 4,144,583 13 Melbourne, Australia 4,079,629 14 Cebu, Philippines 2,619,362 15 Davao City, Philippines 2,274,913 16 Phnom Penh, Cambodia 2,234,566 17 Brisbane, Australia 2,047,105 18 Haiphong, Vietnam 1,884,685 19 Perth, Australia 1,718,645 20 Johor Bahru, Malaysia 1,463,800 21 Palembang, Indonesia 1,535,592 22 Auckland, New Zealand 1,486,000 23 Makassar, Indonesia (Ujung Pandang) 1,334,090 24 Adelaide, Australia 1,205,529memo Wellington, New Zealand 393,400 Canberra, Australia 361,814 Port Moresby, New Guinea 307,643 Newcastle, Australia 288,732 Hobart, Australia 218,657 Wollongong, Australia 205,847 Dili, Timor Leste 193,563 Townsville, Australia 191,329 Cairns, Australia 150,920 Darwin, Australia 131,209Sources: ABS 3222.0, United Nations Population Information Network, and Wikipedia. Note: South-East Asia and the South-Western Pacific is defined as including Australia, New Zealand, PNG, Fiji, Western Samoa, Tonga, New Caledonia, Philippines, Vietnam, Laos, Cambodia, Myanmar (Burma), Thailand, Malaysia, Singapore, Timor Leste, Brunei and Indonesia. The definition excludes Taiwan, China (Hong Kong) and Bangladesh.SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 13
  14. 14. SMART INFRASTRUCTURE FACILITYThe stock of transport infrastructure in NSWThe stock of transport infrastructure in NSW includes the state and local government roadnetwork, the federal highway network, the passenger rail network, the rail freight network,the ports and airports. The NSW taxpayer owns most of the public road and rail networksacross the state. The Australian taxpayer shares funding responsibility for federal highways.The National Accounts provide estimates for capital stock by industry, for the wholecountry. Unfortunately, the State Accounts do not provide similar capital stock estimates.Table 1.3 shows the estimated national capital stock for the Transport, Warehouse andPostal industry. At year-end 2010-11, the capital stock in this industry was just under $330billion.Table 1.3 Australian Transport, Warehouse and Postal Capital Stock (year-end) Year $ billions Description 2009-10 (year-end) 316,541 Year-end capital stock 2010-11 31,700 Investment (GFCF) 2010-11 18,690 Consumption (Depreciation) 2010-11 (year-end) 329,551 Year-end capital stockSource: ABS 5204.0, Table 58. Note: GFCF is Gross Fixed Capital Formation, meaning investment.Based on this data, a first-pass estimate of the transport capital stock in NSW, based on anallocation of state GSP shares (ie. state shares of GDP), can be made. In 2010-11, the NSWshare of national GDP was 32 per cent, implying a transport, warehouse and postal capitalstock of $105 billion. However, this estimate may not be accurate because states havedifferent transport capital requirements depending on geographic size and industrystructure.Based on total road length relativities across the states (i.e. using road length as anallocator), the estimated share of the national capital stock would change, with NSW havinga lower share relative to its GSP because of the longer road lengths required in Queenslandand Western Australia to serve larger geographic areas.Based on AustRoads data (Road Facts 2005), NSW share of total Australian paved roadlength is 22%, which is equal to Queensland’s share. AustRoads estimates Victoria’s shareat 19 per cent and Western Australia’s share at 18 per cent. Based on this information, thevalue of the NSW transport capital stock is estimated to be around $73 billion. However,this figure is well below the sum of publicly available estimates of the transportinfrastructure capital stock in NSW (see Table 1.4).SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 14
  15. 15. SMART INFRASTRUCTURE FACILITYTable 1.4 Replacement value of NSW transport infrastructure Value of the stock of transport infrastructure Transport Mode Stock ($b) (estimate) 180,000 km of roads Of which:Public road network Local 160,000 km(including value of land State 13,500 km 86.0 under roads) National 4,300 km 5,000 bridges 22 tunnels 3,300 km track 1,700 carriagesPassenger rail network Over 300 train stations 12.5(SYD-NEW-WOLL) 1 million passenger journeys/dayRail freight network 6,300 km track 7.0 4 large portsPorts 10.0 2 regional portsInter-modal freight 5 1.0 terminalsTotal (estimate) - 116.5Source: RMS, SMART estimates.What is the return we get for the stock of transport infrastructure assets?It is important to recognise where Sydney stands today in terms of the efficiency of thetransport network, in order to develop plans for Australia’s largest and most significant cityacross the coming decades.Road networkBased on RTA data, average morning peak speeds in Sydney have generally declined(worsened) over the decade, although there was a marginal improvement in 2009 and 2010to 31 km/h across the seven routes from a decade low average of 30 km/h in 2007 and2008. The low point in 2007 and 2008 is driven by significant slowdowns in the M5/EasternDistributor, from 44 km/h in 2006 to 34 km/h in 2008.SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 15
  16. 16. SMART INFRASTRUCTURE FACILITYTable 1.4 Morning Peak speeds in Sydney, 2004 to 2010 Morning Peak Speeds 2004 2005 2006 2007 2008 2009 2010 (km/h)F3/Pacific Highway/F1 39 35 38 35 35 35 34M2/LCT/Gore Hill 36 34 36 38 31 36 40 FreewayM4/Parra Rd/City W 33 32 31 25 28 29 28 LinkM5/Eastern Distributor 45 39 44 40 34 41 35Pittwater Rd/Military 28 27 25 27 26 26 25 Rd/F1Princess Highway 31 28 28 28 28 30 31Victoria Road 29 22 23 22 23 21 26Combined seven 34 31 32 30 30 31 31 routesSource: RTA (2008 and 2011).SMART examined average commute times in Sydney and London utilising the real-timeGoogle Maps traffic applications. The average speed study is based on morning peaks, forthe whole trip not just average speeds on major arterial roads, with commutes averaging 60km across 12 trips, with individual trips ranging from 10 km to 180 km.Based on this analysis, average commute speeds for Sydney, for trips generally into SydneyAirport or the CBD, was 40 km/h for the average trip length of 60 km. Average Londonspeeds were, on average, 54 km/h for the same average trip length of 60 km. Based on thisanalysis, London morning peak speeds are 35 per cent faster than Sydney morning peakspeeds (Tables 1.5 and 1.6).Table 1.5 Sydney morning peakSource: Google Maps and SMART analysis.SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 16
  17. 17. SMART INFRASTRUCTURE FACILITYTable 1.6 London morning peakSource: Google Maps and SMART analysis.International data can be difficult to compare as standard methodologies differ acrosscountries. A study by Texas A&M University compared average traffic speeds in US cities byfreeway and arterial road. Freeway speeds across mid-size and large US cities ranged fromthe mid-60 to mid-70 km/h. Expectedly, arterial road speeds were lower and rangebetween 40-45 km/h. Despite methodological differences, it would seem that US city trafficspeeds are higher than in Sydney (see table below).Table 1.7 US Cities traffic speeds, Texas A&M University estimatesHILDA data (Household Income Labour Dynamics Australia) indicates that Sydney workersspend more time commuting than workers in other Australian capital cities and thesituation in Sydney is worsening over time. For example, in 2002 the mean commuting timefor a full-time worker in Sydney was 5.4 hours per week, or 32.4 minutes per trip to andfrom work. By 2006, the mean commuting time had increased to 5.8 hours per week, or34.8 minutes per trip. While some of this increase may be the result of people changing to amore distant job or home, most of the increase is likely to be caused by increasedcongestion.SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 17
  18. 18. SMART INFRASTRUCTURE FACILITYWhile the increase of 2.4 minutes per trip does not, at first, seem alarming, when multipliedover the millions of trips taken daily in Sydney, it is plain to see that the cost of additionaltravel time could be in the tens of millions of dollars annually.Table 1.8 Mean commuting times of full-time workers by location (hours), HILDA dataSource: HILDA.AustRoads compiles weighted aggregate speed data for a sample of arterial roads andfreeways in the major Australian cities and publishes the data by state. Figure 1.1 illustratesthe morning peak speeds across states from 1998-99 to 2008-09. The data reveals a clearworsening trend in traffic speeds in Australia’s major cities over the decade. NSW beganthe decade is last place and finished the decade in last place, showing no relativeimprovement in traffic speeds compared with other states.SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 18
  19. 19. SMART INFRASTRUCTURE FACILITYFigure 1.1 Australian states weighted aggregate speed for sample of arterial roads and freeways in major cities (km/h) - morning peakSource: Austroads.Passenger Rail trip timesA sample of Sydney passenger rail commute times were sourced from the CityRail timetable(see Table 1.9 below). The times are ‘as scheduled’ or the ex-ante times that presume nostoppages due to maintenance failures or other problems. SMART has found that, onaverage, Sydney rail journeys are 4 km/h faster than road times, saving commuters a littleover 2 minutes on an average 30 km journey.However, this analysis does not account for walking or driving time from home to stationand from station to work, potentially adding another 10-30 minutes to the commute, nordoes it take account of the constraints imposed on travellers by rail schedules (which maynot align with their preferred travel times). These considerations can often make rail travela poor option in terms of time for many commuters. And it hardly needs saying that allpublic transport commuters value their time.SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 19
  20. 20. SMART INFRASTRUCTURE FACILITYTable 1.9 Sydney passenger train travel, morning peakSource: CityRail and SMART analysis.The most significant transport infrastructure issues in Sydney in 2012Most Sydneysiders of 2012 would agree that Sydney suffers from chronic and increasingcongestion, particularly at the entry points into, and out of, the CBD and Sydney Airport.Some studies (BITRE 2007) have estimated the economy-wide cost of Sydney’s trafficcongestion at $3.5 billion a year (2005 estimate) and this figure is predicted to grow to $7.8billion by 2020 if present infrastructure is not better managed and new infrastructure wellintegrated5. BITRE estimates the ‘avoidable’ cost of congestion, where the net costs ofcongestion are positive. Clearly, some amount of congestion would be, overall, beneficial tosociety since the infrastructure cost of completely eliminating congestion would beexcessive.Based on these congestion cost figures, most Sydneysiders would likely argue that there is aclear case for increased spending on infrastructure.While the case to tackle congestion might be clear to the commuter heading into the CBD atthe Monday morning peak, it is far from clear where to allocate the next billion dollars in anattempt to reduce the economy-wide costs of congestion.The options to address Sydney’s chronic congestion are numerous. Sydney’s EasternDistributor (the M1), the M5 East Motorway and the Concord to Lapstone section of theWestern Distributor (the M4), are all congested 13 or more hours a day (RTA).5 For comparison, BITRE (2007) avoidable congestion cost estimates for Melbourne ($3.0 billion in 2005; $6.1 billion in 2020), and Brisbane ($1.2 billion in 2005; $3 billion in 2020) we lower than Sydney.SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 20
  21. 21. SMART INFRASTRUCTURE FACILITY Moreover, most of the main Sydney links – the Harbour crossings, the M5 and the M5 East, Southern Cross Drive and the M7 – average over 20,000 vehicles per lane daily, which is close to or exceeds theoretical carrying limits, and other major links (such as the Eastern Distributor, the M2 and the M4) are not far behind. Yet projections (again, controversial) are that traffic on the M5 will double by 2031, while traffic generally in the Sydney area will rise by around 80 per cent (Ergas 2012). Themes of SMART’s submission SMART has explored five primary themes in this submission. The five themes are:- Infrastructure performance benchmarks, transparency and accountability (chapter 2)- Integrated networks and planning (chapter 3)- Infrastructure governance, regulation and economic efficiency (chapter 4)- Congestion pricing (chapter 5)- Public Transport (chapter 6) All of these themes are directed towards answering the overarching question – what can a long-term transport master plan achieve? SMART submits that the overarching objective of the NSW Long-Term Transport Master Plan should be to contribute to the maintenance and improvement of the quality of life of NSW residents. Ideally, government spending on transport infrastructure should promote the public interest. Infrastructure investment is a vital determinant of our state’s productivity and, ultimately, the standard of living of its residents. Choosing how to use limited resources; how much to spend on infrastructure and how to spend it, is no easy task for governments. Investment options tend to involve complex forecasting and funding issues, long planning horizons, inherent risk, and conflicting interests. In other words, at SMART, we believe that the Master Plan must be about finding ways to ensure that the marginal transport infrastructure dollar is more wisely invested, based on reliable infrastructure benchmarks, integrated network-wide planning, and a consideration of economy-wide wellbeing and customer needs. A unified strategic plan is essential to integrate the often disparate road, passenger rail and rail freight, and port strategies with population growth forecasts and land use planning. A related but secondary objective should be to maintain and improve Sydney’s status as a global city and an Asian economic, political and cultural powerhouse, so long as the first objective is not compromised by the second. In practice, achieving the first objective is an excellent way of promoting the second. Table 1.8 sets out the concordance between questions raised in the Transport for NSW discussion paper and SMART’s submission. SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 21
  22. 22. SMART INFRASTRUCTURE FACILITYTable 1.8 Concordances between Discussion Paper and SMART Submission Section in this Discussion Paper questions SMART Themes submissionWhat should the Master Plan All themes All chapters be trying to achieve?The 20-year infrastructure Integrated networks and planning Chapter 3 challenge Integrated networks and planning Chapter 3Sydney Public Transport Chapter 6NSW regions - - Chapter 3Freight transport Port Botany Chapter 4 Economic efficiency, funding &Funding issues Chapter 4 pricingSUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 22
  23. 23. SMART INFRASTRUCTURE FACILITY Chapter 2 Setting Transport Infrastructure Performance Benchmarks An efficient and extensive transportation system reduces the cost of nearly everything in the economy and enhances the trade, industry, labor, and urban sectors, which greatly enrich the standard of living in modern society. By increasing frictions, however, an inefficient transportation system – just like poorly functioning financial institutions – can cause economic activity to collapse. Winston (2011)An efficient and extensive transportation system reduces the cost of nearly everything inthe economy and enhances the trade, industry, labor, and urban sectors, which greatlyenrich the standard of living in modern society. By increasing frictions, however, aninefficient transportation system – just like poorly functioning financial institutions – cancause economic activity to collapse. Winston (2011)How would we know if the NSW transport system, both as a network as well as thecompartment transport modes of road, rail, ferry and air transport, is improving and towhat target. How would we know whether the stock of transport infrastructure is at theright level? Or whether the administering government bureaucracy is the right size orshape? In SMART’s opinion, the Master Plan should address these issues.The concept of economic efficiency relates to how society uses scarce land, labour andcapital resources to best maximise community wellbeing6. In relation to governmentexpenditure, efficiency is generally about achieving value for money on behalf of thetaxpayer. Its achievement relies on carefully assessing the costs and benefits of publicexpenditure, on a project by project basis.The theme explored in this chapter is that it is less likely that economic efficiency, ortaxpayer value for money, can be achieved without knowing a great deal about the inputs(land, labour, capital) and outputs (km travelled, time taken per trip), and the resulting costs(expenditure) and benefits (reductions in congestion costs, value-added of goods andservices transported), of transport infrastructure at a network or system-wide level.It is certainly true that there is voluminous published time series data on road and railinfrastructure (both stock and flow measures), trip times for private and public transport byroute, freight network data etc. But how these data are compiled and interpreted in anintegrated system is critical to the quality of analysis of the NSW transport system.Ultimately, the question for state treasurers and transport ministers should be where tospend the next (or marginal) infrastructure dollar to maximise community wellbeing.6 Economic Efficiency is discussed in detail in Chapter 4 of this submission.SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 23
  24. 24. SMART INFRASTRUCTURE FACILITYThis question cannot be answered without both a ‘helicopter’ and ‘grassroots’ view of thetransport system. Good information, reasoning and analytics, therefore, are vital toachieving efficiency in the provision of transport infrastructure.We feel that a dashboard of key infrastructure benchmarks can benefit politicians, policy-makers, industry players and academics to maintain a consistent focus on agreed long-termobjectives using a consistent language.Only with better metrics comes improved learning about the transport system. Only withbetter benchmarks can we define and agree on the problem we are trying to solve beforeundertaking often complex modelling and policy development.Good benchmarking also requires an understanding of the needs and values of multiplecommunities of interest so as to keep all stakeholders engaged. Research needs to bedeveloped in line with common and agreed national, state and local priorities.A lack of coherent system-wide datasets is a real impediment to the advancement oftransport infrastructure knowledge and intelligent planning in NSW and Australia moregenerally. The advantages are numerous and significant and include, for example, thepotential to develop a better understanding of asset management or to better understandthe characteristics of the Sydney commuter.SMART recommends that this important work should be undertaken collaboratively and, atleast initially, some of the more data intensive work is often best undertaken byindependent academic research bodies away from the day to day hustle and bustle ofgovernment departments.From benchmarks to accountabilitySetting transport benchmarks for NSW is one thing; holding government agencies and,ultimately, politicians to account, is another. Experience in the field of economic regulationhas shown a general resistance within government to subject government policies toregulatory impact statements and rigorous cost benefit appraisal. But where someindependent review has been applied, policies have been better at achieving thegovernment’s objectives for a minimum use of scarce community resources. No lessimportant, rigorous, public and transparent evaluation helps avoid the worst mistakes:Sydney’s Cross city Tunnel contract, for example, would have faced greater obstacles hadproper evaluation of that contract been in the public domain. And last but not least, it canassist in resisting the pressures that come from rent-seekers and from self-serving demands.There needs to be a movement towards greater accountability in transport infrastructureinvestment and performance but this cannot happen until better system-wide benchmarksare developed and agreed to by all stakeholders.Having agreed benchmarks against which governments hold themselves accountable,means a more results (outputs) oriented system, rather than the current input-focussedsystem featuring, for instance, multi-billion dollar announcements that simply assume theywill solve congestion or other transport problems.SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 24
  25. 25. SMART INFRASTRUCTURE FACILITY Better data, a better market SMART believes the NSW Government must do more to actively and explicitly shape the infrastructure market according to its public policy objectives. For instance, the NSW Government can do more as a ‘market maker’ meaning that it can enhance efficiency via better connecting market agents, acting as an information broker, which increases information efficiency in the same way that higher liquidity levels can lower transactions costs in financial markets. In this way, more and better information will assist in the creation of a more durable NSW transport infrastructure market. What this means in terms of government action is to commit to a detailed and fully-funded long-term transport infrastructure plan, rather than just project lists, and articulate strategic and enduring objectives for NSW transport. For Government that means:- Establishing transport infrastructure benchmarks- Committing to a long-term infrastructure plan, not just project lists- Articulate strategic and enduring objectives- Define infrastructure by outputs not inputs Together these will help shape the culture and behaviours of the infrastructure market with much greater clarity and support a deeper engagement from all actors in the infrastructure market, particularly from private sector funding pools. Sanctions SMART supports specific sanctions if transport benchmarks are not achieved. For government, the ultimate sanction is the ballot box. For this sanction to work, voters must be informed. All transport metrics and benchmarks must be made publicly available. For the private sector, financial penalties for non-performance must become the norm for public-private partnerships, so that risk is shared more appropriately between the private sector and the NSW taxpayer (discussed further in chapter 4). SMART Benchmarks SMART recommends that the NSW Government set accountable benchmarks to the achievement of international best practice in private and public transport and freight transport. In other words, the role of public administration needs to be about more than just identifying good performance benchmarks, the system needs to perform to those benchmarks. Future NSW governments must be prepared to clearly articulate the ‘required outcomes’ of transport infrastructure. These objectives must be strategic, high level, enduring for decades ahead, insightful and anticipate customer needs. SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 25
  26. 26. SMART INFRASTRUCTURE FACILITYFor example, the Sydney passenger rail network will be at peak saturation in 2012-2013.How we deal with this problem is dependent on the benchmarks that we set for ourselves inthe long-term. Is the 90 minute train trip from Wollongong to Central Station good enough,or should we aim to cut that time by 50% to 45 minutes? And if so, by when should thisobjective be achieved?Another example relates to passenger and freight transport. NSW needs to continue towork towards the separation of freight and passenger services within NSW, so long aseconomic and social benefits exceed costs. The separation of the freight and passengertasks can potentially increase the rail freight market share in the Sydney conurbation bybetween 30-50 per cent. But without a clearly articulated benchmark for rail freight and adeep understanding of the system-wide impacts of rail freight bottlenecks, we can’t be surewhy, when or how this objective should be achieved.A final example relates to Active Travel. In SMART’s opinion, the NSW Government shouldtarget an ambitious share for Active Travel (cycling and walking) among transport modes.This is where innovation and enterprise of the community can be important in finding lowcost solutions to the so called ‘last mile’ problem of infrastructure provision. Targeting adoubling of the share of Active Travel for trips under 3 km in each of the next four decadesfrom the less than 4 per cent proportion today. Importantly, this target will need to besupported by increased investment and maintenance of a safe and efficient city-wide activetravel network and appropriate metrics and benchmarks with which to measure success. Itwould be impossible to pursue this objective without the appropriate metrics andbenchmarks to engage the community and government in an open and transparent debateas to the costs and benefits of supporting more Active Travel.A dashboard of transport benchmarksSMART has developed a dashboard of proposed transport metrics to function asbenchmarks for the NSW transport system. We believe that a publicly available suite ofperformance benchmarks, committed to by successive NSW governments and widelyavailable as an easy-to-read dashboard, would contribute significantly to advancingtransport infrastructure policy in NSW.SMART will commit resources to developing a transport infrastructure dashboard topromote transparency and forward-planning in transport.The NSW Government already publishes an extensive array of data on transportperformance. The extracted tables below illustrate some of the information available tocommuters, industry and government.The first figure is an extract from RMS and shows trip times and average speeds on majorNSW arterial roads across the AM and PM peaks. This data is published quarterly. Thesecond figure is also an extract from RMS (RTA) and shows the top ten (of one hundred)busiest roads in NSW that the government is specifically targeting to improve performance.SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 26
  27. 27. SMART INFRASTRUCTURE FACILITYFigure 2.1 Trips times on major NSW roads, RMS dataFigure 2.2 Top ten busiest roads in NSW, RTA (now RMS)SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 27
  28. 28. SMART INFRASTRUCTURE FACILITYWhile all of the data produced by NSW government agencies is useful and, indeed,essential, this does not go far enough. These metrics need to be transformed into targetbenchmarks so the NSW transport policy has a vision and a pathway to improvedproductivity.Tables 2.1 (Road benchmarks), Table 2.2 (Rail benchmarks) and Table 2.3 (Bus benchmarks)summarise SMART’s proposals for transport benchmarks against which governmentagencies, politicians, private sector providers and, ultimately, the NSW community shouldmeasure the success of transport policy.On all measures, an overriding aim is that NSW should be the leading state in Australia by2020, and by 2025 achieve the average of the 5 best OECD countries on each measure.The focus of the benchmarks in the tables below is on transport infrastructure deliveringbetter outcomes in support of the NSW economy and community wellbeing. Higheroperational (productive) efficiency is a key focus.The mode-specific measures focus on four key elements: attractiveness, efficiency, qualityand safety.The attractiveness of travelling is very important to commuters. Travel is a universallifestyle activity and its attractiveness should reflect the current living standards, not thelifestyle of 20 or 30 years ago for example. In relation to public transport, the more relevantand attractive the mode and ease of switching between modes, the more modal shift mayoccur.Efficiency is the absolute key to controlling infrastructure costs. Getting the most out of theexisting stock of infrastructure is the first step towards the transport sector fostering higherliving standards. Efficiency benchmarks are aimed at increasing productive efficiency,reducing per capita or per km travel costs. Efficiency is particularly important in the contextof the current, mainly taxpayer, funding model. There is considerable political reluctance todecrease the significant subsidy to public transport, which constrains large additional capitalexpenditure.An effective and efficient rail system is the priority for improving public transport in Sydney.However, capital and operational effectiveness needs to be significantly improved so thatthe quality of service delivery and price can compete with the car.There is a need for clarity of strategic purpose for public transport authorities that is aboutthe customer and that they expect the system to accommodate and work with (not against)the private motor vehicle.Improved service quality focuses on improving system reliability whether on roads, rail orbuses. The benchmarks here look to reduce failure rates such as road closures, cancelledtrains and broken down buses.Ensuring high levels of safety is an absolute pre-requisite for advanced developed societies.Transport safety levels in NSW transport should aim to be the best in the world in terms ofthe lowest number of fatalities and serious injuries caused by system breakdown.These benchmarks aim to introduce the concept that Australia should try to achieveperformance equal to the average of top tier OECD countries.SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 28
  29. 29. SMART INFRASTRUCTURE FACILITYWe have kept the number of benchmarks to a minimum because having a large number ofmeasures and developing measures to high granularity often works against improvement asit increases the ability avoid the really tough improvements.Table 2.1 Proposed System-Wide and Road Benchmarks Performance Measure Key Performance Indicator Benchmark Road Attractiveness Average speed - Increase the average speed of the 100 busiest Travel time roads in NSW, at peak, by 15% in ten years (2022) - Increase the average speed of the 100 busiest roads in NSW, at peak, by a further 15% in twenty years (2032) Quality Ride quality - Decrease proportion of roads in poor condition by 10% by 2020 Target lowest proportion of poor roads in country Efficiency Value for money - Increased capital or operating expenditure improves attractiveness, quality and safety metrics against benchmarks - Efficacy of modal interchange (ease of switching between modes whether by distance or time) Road safety Fatalities and serious injuries - Reduce the absolute number of deaths per year - Halve the fatality rate by 2020 (deaths per 100,000 trips) - Target top 5 OECD countriesSUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 29
  30. 30. SMART INFRASTRUCTURE FACILITYTable 2.2 Proposed Rail BenchmarksPerformance Measure Key Performance Indicator Benchmark Rail Rail RailAttractiveness Travel time - Rail trip travel times, at peak, to decline Average Speed by 15% in 10 years (2022) - Rail trip travel times, at peak, to decline by a further 15% in 20 years (2032) Frequency - Increase number of trains per hour by 10% by 2022 - Increase number of trains per hour by a further 10% by 2032Quality Reliability - Reduce failures per passenger km by 20% in 10 years Complaints - Halve the number of complaints in 5 yearsEfficiency PT market share - Reduce subsidy per KM travelled by 50% in 20 years. - Efficacy of modal interchange (ease of switching between modes whether by distance or time)Rail Safety Fatalities and serious injuries - Reduce the absolute number of deaths per year - Halve the fatality rate by 2020 (deaths per 100,000 trips) - Target top 5 OECD countriesTable 2.3 Proposed Bus Benchmarks Performance Key Performance Benchmark Measure Indicator Buses Buses BusesAttractiveness Travel time - Bus trip travel times, at peak, to decline by 15% in 10 Average Speed years - Bus trip travel times, at peak, to decline by 15% in 20 years Frequency - Increase number of buses per hour on major routes by 20% by 2022 - Increase number of buses per hour on major routes by a further 20% by 2032Quality Reliability - Reduce failures per passenger km by 20% in 10 years Complaints - Halve the number of complaints in 5 yearsEfficiency PT market share - Reduce subsidy per KM travelled by 50% in 20 years. - Efficacy of modal interchange (ease of switching between modes whether by distance or time)Bus Safety Fatalities and serious - Reduce the absolute number of deaths per year injuries - Halve the fatality rate by 2020 (deaths per 100,000 trips) - Target top 5 OECD countriesSUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 30
  31. 31. SMART INFRASTRUCTURE FACILITYWhat the Master Plan should seek to achieve (Road and Rail examples)Table 2.4 Examples of Road Performance TargetsRoads: 2012 2020 2030Increase the average speed of the 100 busiest roads in NSW, at peak, by 15% in ten years; and Minutes Minutes Minutes a further 15% in 20 yearsPenrith to Sydney Airport 85 72 61Newcastle to Sydney Airport 165 140 119Wollongong to Sydney Airport 94 80 68Campbelltown to Sydney Airport 63 54 46 Inner City:Sydney Airport to CBD 31 26 22Parramatta to CBD 58 49 42Parramatta to Epping 32 27 23North Ryde to Manly 53 45 38Table 2.5 Examples of Rail Performance TargetsRail:Increase the average speed on the busiest rail 2012 2020 2030 lines, at peak, by 15% in ten years; and a further Minutes Minutes Minutes 15% in 20 yearsPenrith to Central Station 58 49 42Newcastle to Central Station 165 140 119Wollongong to Central Station 91 77 66Campbelltown to Central Station 73 62 53 Inner City:Parramatta to Central Station 26 22 19Cabramatta to Central Station 50 43 36North Ryde to Central Station 40 34 29Cronulla to Central Station 50 43 36SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 31
  34. 34. SMART INFRASTRUCTURE FACILITYChapter 3 Better Integration and PlanningDemography is destiny.Auguste ComteThe transport planning challengeIt is widely accepted that the way in which transport infrastructure is planned in NSW, andmany other jurisdictions, is well below best-practice. Transport infrastructure planningneeds to be undertaken in a more integrated way to address future constraints that mightwork to reduce efficiency and limit productivity growth. This is particularly the case insignificant economic zones such as Port Botany where road, rail, maritime and aviationnetworks that service the precinct are approaching binding constraints well below peakdemand needs.These types of issues need to be addressed in a comprehensive, system-wide, as well astimely manner. This is why it is vital for the NSW Government to move further towardsaddressing planning needs across all relevant departments and, indeed, the three tiers ofgovernment.It is now widely accepted across OECD countries that, in order to maximise taxpayer valuefor money, public and private transport infrastructure investment needs to be bettercoordinated, better integrated and investment options better evaluated. Further,governments need better tools to ‘look over the horizon’ and understand communityinfrastructure needs decades into the future.In the Australian context, long-term planning between the three levels of government needsimprovement. Recent COAG reforms and the formation of Infrastructure Australia andInfrastructure NSW are good reforms, but further gains can still be achieved via institutingbetter planning processes across all modes of transport.Demography is destinyThe often quoted catchphrase demography is destiny is as relevant to NSW as any otheradvanced stable democracy. Relatively constant fertility rates, very low and stable infantmortality, and continued access to advances in life-extending medical technology meansthat it is possible to accurately project population levels and distributions decades into thefuture.However, in addition to this comfortably narrow band of demographic uncertainty, there isa wider band of uncertainty, caused by unpredictable overseas and interstate migrationflows, which are dependent on domestic (federal and state) and foreign economic andsocial policies that in turn influence relative incomes and migration patterns.SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 34
  35. 35. SMART INFRASTRUCTURE FACILITYBased on ABS demographic projections7, Australia’s population could nudge 40 millionpeople by 2050. Under Series A (the higher migration and fertility scenario), Sydney’spopulation would pass 6.5 million in 2040 and be over 7 million residents by 2050.Assuming continued investment in critical energy, transport and social infrastructure, it ishighly likely that Sydney will remain Australia’s most important city throughout this century.The population of NSW is projected to grow by 1 million in each of the next four decades,reaching 8 million by 2020, 9 million by 2030, 10 million by 2040 and 11 million by 2050.Sydney’s share of the total NSW population is projected to remain relatively constant at justbelow two-thirds, while its share of the total Australian population is projected to onlymarginally decline from its current share of one in five residents (Table 3.1).Table 3.1 ABS Population Projections, 2012, and 2020 to 2050 by decade (series A) Population 2012 2020 2030 2040 2050Sydney 4,597,949 5,084,611 5,762,506 6,456,613 7,186,862Balance of NSW 2,705,991 2,977,704 3,328,166 3,651,593 3,958,056Total NSW 7,303,940 8,062,315 9,090,672 10,108,206 11,144,918Australia 22,874,044 26,098,377 30,499,959 34,961,511 39,607,981Sydney / NSW 63% 63% 63% 64% 64%Sydney / 20% 19% 19% 18% 18% AustraliaNSW / Australia 32% 31% 30% 29% 28%Source: ABS 3222.0 (Excel data cube) Tables 3 and 4. Population at year ended 30 June. Series A (the high series) assumes a fertility rate of 2.0, net overseas migration rate of 220,000 per year and life expectancy at birth (in 2056) of 93.9 years for Males and 96.1 years for Females. Net interstate migration is assumed to be a constant outflow of 29,000 per year over the projection period, comprising an outflow of 48,000 per year from Sydney, but an inflow of 19,000 per year into the Balance of NSW.Federal Treasury’s 2010 Intergenerational Report (IGR) was released in January 2010, 15months after the release of the ABS projections and a year after the end of the surge netoverseas migration.The IGR projections fall between the ABS high and medium population scenarios (Series’ A &B) and projects Australia’s population to be 35.9 million people in 2050. Based on ABSgeographic distributions, this implies a NSW population of 10 million residents and a Sydneypopulation of 6.5 million residents in 2050. The Treasury projections are reasonablyconservative and, in fact, assume a reduction in the rate of population growth compared tothe last 40 years, from 1.4 per cent to 1.2 per cent per year. And Treasury’s projection ofnet overseas migration, which is based on an average ‘absorption rate’ of 0.6 per cent of theresident population, is well below recent experience (Table 3.2).7 ABS 3222.0, Population Projections, Australia, 2006 to 2101, released 9 April 2008.SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 35
  36. 36. SMART INFRASTRUCTURE FACILITYTable 3.2 Population Projections Assumptions, ABS Series A (2008) and IGR (2010) Australia 2012-2050 ABS Series A (2008) IGR (2010)Fertility rate (births per woman) 2.0 1.9 at 0.6% of residentNet Overseas Migration Constant number population 2012 220,000 138,000 2020 220,000 154,200 2050 220,000 215,400Life Expectancy at birth at 2056 at 2050 Men 93.9 87.7 Women 96.1 90.5Population growth rate Rate in year Chart 1 IGR (interpreted) 2012 1.7 1.4 2020 1.7 1.3 2030 1.5 1.2 2040 1.3 1.1 2050 1.2 0.9Average growth rate 2010- 1.5 1.2 2050Source: ABS 3222.0 (Excel data cube) Table 1 and IGR 2010 Chart 1 and Section 1.3. Population at year ended 30 June.The IGR 2010 demographic projections are likely to prove low given Australia’s relativeglobal economic strength and political and social stability. Moreover, the much improvedopportunities to exploit Australia’s resources endowments over the next several decades (asa result of the Asian demographic ‘super-cycle’) will require a continued strong demand foroverseas migrant labour.Because of Australia’s abundant natural endowments in terms of land and resources, andour relatively very high standard of living, labour demand is likely to remain strong over thenext several decades to maintain this high living standard.Hence, based on these considerations, we feel that the ABS high series is the most prudentset of projections on which to base the NSW Long-Term Transport Master Plan, primarilybecause the (higher) net overseas migration figure will prove to be the most accurate of allrecent projections.The Master Plan should, therefore, embrace this demographic destiny and facilitate (ratherthan discourage) strong population growth, particularly in the Newcastle-Sydney-Wollongong-Canberra region to reap the benefits derived via increased economies of scale,agglomeration, knowledge accumulation, cultural diversity and national security.SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 36
  37. 37. SMART INFRASTRUCTURE FACILITYIs a Big NSW a bad idea?Population growth and the idea of a ‘Big NSW’ and in turn a ‘Big Australia’ currently have abad rap, despite the potential for a larger population to address a number of our currentinfrastructure problems (such as high utility service costs per capita and a relatively low taxrevenue base per square kilometre of inhabited land), and provide wider benefits in termsof national security (such as maintaining a larger and better equipped military to protectAustralian values).The populist belief that a larger population spells a decline in urban living standards viamore congestion and higher living costs, has come about, first as a result of significantunderinvestment in energy and transport infrastructure in the 1990s (thus leading todramatic declines in service quality), and second, by a significant but misdirectedoverinvestment in energy and transport infrastructure in the 2000s (thus leading todramatic price rises in the case of energy infrastructure, and further declines in servicequality (more congestion) in the case of transport infrastructure).The squeezing of the NSW transport infrastructure lemon in the late 1990s and early 2000sled to community unrest in Sydney by the end of the first decade. This is unsurprising asgovernments failed to keep pace with transport demand and cost of living pressures (suchas electricity and water bills) seemed to be correlated with strong growth in population(Ergas 2011).Throughout the period of significant underinvestment in transport infrastructure, the NSWGovernment also attempted to use regulatory instruments to reduce urban sprawl and,thus, avoid increased outlays for new suburban roads and rail lines. However, it didn’twork. And unfortunately, the costs of these regulations hurt lower income groupsdisproportionately because the supply of cheaper housing on the urban fringe contracted asa result of government planning policy (Ergas 2011).There is nothing inherently undesirable about urban sprawl. Indeed, SMART is not againstextending Sydney’s urban fringe so long as citizens face the true incremental cost of theirdecisions and are prepared to pay that full cost. And there is also nothing inherentlydesirable about forcing higher density living against the preferences of most residents(Ergas).Australia is endowed with an abundance of land and Australian settlement patterns havereflected this fact. A ready supply of land on the urban fringes combined with historicallypoor planning and weak local governments unable to voice the concerns of their localcommunity, has exacerbated the costs of urban sprawl because the incidence of theseincremental costs has fallen on the whole taxpayer base, rather than new residents at theurban fringe. Thus, under this policy, new residents get a good deal, and everybody else isworse off.SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 37
  38. 38. SMART INFRASTRUCTURE FACILITYPolicy distortions leading to urban sprawl1 While SMART is not against urban sprawl, there could be an inefficiently high level of urban dispersion as a result of existing policies that distort habitation incentives. The first and probably most important factor is the tax preferences to owner-occupied housing, which amount to a sizable subsidy to land use as land is a large part of the purchase price of housing. Second, under-pricing of goods and services that are complements such as local public goods (schools) and the absence of congestion charges on roads, which add to the social cost of congestion. Third, institutional structures such as constraints on local government rates which means there is no incentive for locals to support increased density which may raise rates revenue. Given these factors, it is not necessarily inefficient for government to ―lean against‖ urban sprawl, but the way it‘s done is inefficient. The way governments have pursued denser settlement patterns has not been ideal. For example, using urban growth boundaries, such as those implemented in Sydney, may avoid inefficient commuting, but it only does so at the expense of inefficient use of capital, moreover urban growth restrictions distort the aggregate supply of housing and shifts the composition to higher cost, higher quality homes. Cost of policy falls disproportionately on low income houses. Overall, there is a substantial risk that current policy promoting densification will waste capital and increasing local congestion in the areas rezoned to denser settlement. 1 This discussion is based on Ergas (2011), Better Use Measures, Infrastructure Funding and Project Prioritisation, SMART Infrastructure Facility, University of Wollongong.Australian cities have not resolved the ‘big’ versus ‘sustainable’ population debate. And itnot at all surprising that residents and commuters do not currently accept the sustainedpopulation growth that the large Australian cities experienced during the 2000s. Quiterightly, residents of Sydney want to see the payoff from an ever increasing population.While we have argued here that demography is destiny, SMART believes that theimmigration lever, at least outside of recessions, needs to remain at fully-enabled. In ourview, that means an immigration rate of at least 200,000 and rising to 300,000 over the nextfour decades needs to be contemplated in order to maximise the productivity gains fromlarge metropolitan conurbations.For example, better transport and retail productivity is achieved with a denser populationvia economies of scale (PC 2007, Can Australia Match US Productivity Performance).Further, per household electricity, gas and water costs can be reduced with larger urbanpopulations. Finally, large efficient metro rail systems usually exist internationally in citieswith populations of 5 million residents or greater (such as in London, New York, Paris andSantiago).A broader reason favouring a larger population is that more people of working age canaddress the fiscal gap identified in the IGR 2010. And the evidence suggests that immigrantsare complements to high-skilled workers, which is Australian policy to develop a nation ofhighly skilled workers.SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 38
  39. 39. SMART INFRASTRUCTURE FACILITYThe alternative of a stagnant or declining population creates significant economic and socialproblems. For example, countries with low growth or declining populations must addressmore extreme ageing challenges, with greater demands for publicly funded social services,but a reduced ability to meet these challenges. There are growing concerns about the fiscalsustainability of some of these countries, such as Italy and Japan.Thus, even though population growth puts pressure on infrastructure and services, it can besocially and environmentally sustainable provided governments plan and invest, well aheadof time, for a larger population.Magnitude of the infrastructure taskMuch of Sydney’s capacity to accommodate population increases while supportingproductivity growth will be dependent on the adequacy and efficiency of its transport andenergy infrastructure, and its housing stock.All things being equal, given the expected population growth in NSW (from 7.3 million to11.1 million people) and in Sydney (from 4.5 million to 7.2 million people) between 2012and 2050, the stock of transport infrastructure in NSW either has to expand, by 52 per centin regional NSW and 60 per cent in Sydney, or the productivity of transport infrastructuremust improve by a similar magnitude, or a combination of both.Because of the size of the transport infrastructure task, simply improving the productivity ofthe existing capital stock by 1-2 per cent per year will not cut into the expected increases inurban congestion over the next four decades.The population of metropolitan Sydney will be over 7 million people by 2050. Based oncurrent rates of household formation, this increase would equate to the requirement forwell over 1 million new home sites in Sydney and the Central Coast-Lower Hunter region.The space to site around 500,000 new jobs equates to tens of millions of square metres ofnew commercial, industrial and retail floor space. Like today, these new workers mustcommute to new jobs, potentially requiring a doubling of passenger kilometres travelledannually from 45 billion today to over 90 billion passenger kilometres by 2050. And with the‘super-cycle’ demographic and economic growth of China, India and Indonesia, we canexpect significantly increased passenger growth at Sydney Airport (based on Mrdak, CEDAspeech).A further reason why planning is increasingly important, is that the lifespan of majortransport infrastructure in NSW is in the decades rather than years. This means of coursethat planning must be ‘in decades’ rather than years. Hence, the relevant timescale for theLong-Term Transport Master Plan is 30-40 years (ie. from 2012 to 2040/2050), rather thanthe shorter “20 year challenge” flagged in the Discussion Paper.Better Land Use PlanningThe Master Plan as a comprehensive and integrated one should explicitly address how landuse planning can play a fundamental and complementary role in improving transportplanning and provision of infrastructure. This is important because a better understandingof the impact of land uses and of ensuring travel patterns should mean that the transportplanners can have more confidence in identifying appropriate and enduring solutions.SUBMISSION │ NSW LONG TERM TRANSPORT MASTER PLAN Page 39