A Review of Cost-Benefit Analysis for Freight Projects Sae Chi, Tom - PowerPoint PPT Presentation

A Review of Cost-Benefit Analysis for Freight Projects Sae Chi, Tom Frost and Ben Ellis NineSquared

A Review of Cost- Benefit Analysis for Freight Projects Sae Chi, Tom Frost and Ben Ellis 27-29 November, 2017 Australian Transport Research Forum 2017, The University of Auckland

Presentation outline 1 Background Case Study Benefits Impacts of the new Literature review Background of each facility Research gap and case that has been Impacts to the existing aim studied rail and road facilities Quantifying Conclusion Study findings How benefits are Future research quantified

Background why freight? 2 Passenger task in AU (pax-km): Freight task in AU (tonne-km): 427 billion passenger- 726 billion tonne-kilometres * kilometres * Freight vs occupant VOT ** B-double Art 5 axle Med rigid Freight VOT Occupant VOT Note: * Data from 2013-14: National Transport Commission. (2016). Who Moves What Where: Freight and Passenger Transport in Australia . Retrieved from https://www.ntc.gov.au/Media/Reports/(D62E6EFC-36C7-48B1-66A7-DDEF3B04CCAE).pdf * * Data for urban roads: Australian Transport and Infrastructure Council. (2016). Australian Transport Assessment and Planning Guidelines: PV2 Road Parameter Values . Retrieved from https://atap.gov.au/parameter-values/index.aspx

Background Literature review 3 Cost-Benefit Analysis (CBA) Well-established and well-discussed Academic studies Measures the net impact of a project Most commonly used to evaluate transport in freight CBA projects. Scholars claim excluding reliability can impact the results Opinions differ between scholars CBA Guidelines Freight projects are seldom discussed Some rail parameters are not provided

Background Research aim 4 Aim Gaps Review CBA conducted for Conflicting views on freight reliability, existing/past land freight projects and env. and ext. impacts The US study suggests improvement Investigate the CBA methodologies of CBA for freight used in practice CBA for freight projects are not as 4 Australian cases + 2 international well documented as road and cases public transport projects Study Contributions Questions Types of guidance that need to be How are CBA conducted for freight provided projects in practice? Which benefits are included? The methodology that need to be How are the benefits quantified? better established and documented A list of the parameters that need to be provided

Case Study

Cases Inland Rail 5 Melbourne-Brisbane Inland Rail (MBIR) 1,700 km long rail corridor between Melbourne and Brisbane Consists of 13 projects across Victoria, New South Wales and Queensland 4 projects in Queensland will be delivered through PPP scheme

Cases SFRCS and DFRC 6 Southern Freight Rail Corridor Study (SFRCS) 55 km long rail corridor between Kagaru and Rosewood Aligned with MBIR Dedicated Freight Rail Corridor (DFRC) Extending from the existing Fisherman Islands rail line for 37 km to the Interstate Standard Gauge Rail Line (ISGR) Upgrading the ISGR for 25 km from Larapinta to Kagaru Development of SFRC and Toowoomba Second Range Crossing Upgrading the QR Western Line (approx. 260 km)

Cases GRBP 7 Global Rail Baltica Project (GRBP) 870 km freight and passenger railway in the Baltic states, which consists of Estonia, Latvia and Lithuania

Cases NSFRCP and WVIF 8 Northern Sydney Freight Corridor Program (NSFCP) An initiative to improve the capacity and reliability of the freight network between Strathfield and Broadmeadow − Rail underpass − Development of 3rd track − 2 x passing loops Western Virginia Intermodal Facility (WVIF) WVIF is proposed to be located southwest of Roanoke, Virginia in U.S.

Cases Summary 9 Types of projects: Location of projects: 5 rail freight + 1 4 Australian + 2 internodal facility international Size of the capital: Influences to CBA: AU$5+b The nature of costs – The nature of AU$65+m benefits

Benefits and Quantifying

Benefits of the proposed rail/intermodal facility 10 Type of Reduced Reduced Reduced Reduced Induced Freight benefits environmental crash operating freight freight availability included and external rate cost unit travel volume and costs unit price price time reliability DFRC Yes Yes Yes MBIR Yes Yes Yes Yes Yes Yes NSFCP Yes Yes Yes Yes Yes SFRCS Yes Yes GRBP Yes Yes Yes Yes WVIF Yes Yes Yes

Benefits for surrounding rail facilities 11 Type of Delaying Improved Reduced Reduced travel benefits constructions reliability of maintenance time included to replace the passenger costs existing rail services facilities DFRC Yes MBIR Yes Yes NSFCP SFRCS GRBP Yes

Benefits for surrounding road facilities 12 Type of Reduced Reduced Reduced Reduced Reduced benefits road maintenanc crash rate environmen travel time included congestion e costs tal impacts DFRC Yes Yes Yes Yes Yes MBIR Yes Yes Yes Yes NSFCP Yes Yes Yes SFRCS Yes Yes GRBP Yes Yes Yes WVIF Yes Yes Yes Yes

Benefits from other changes 13 Type of benefits included Increased track access Impacts of modal shifts from private vehicles - revenues reduced operating and maintenance costs DFRC MBIR NSFCP Yes SFRCS Yes GRBP Yes WVIF

Quantifying benefits 14 National Guidelines for Transport System Management in Australia Volume 3: Appraisal of initiatives Environment and external costs for rail and road Austroads Guide to Project Evaluation Part 4: Project Evaluation Data Environment and external costs for road Road congestion costs Value of time Road vehicle operating costs Crash costs Principles and Guidelines for Economic Appraisal of Transport Investment and Initiatives Value of freight time Proportion of business peak hours

Quantifying benefits 15 Economic effects of a Brisbane- Melbourne inland railway Value of freight time Melbourne – Brisbane Inland Rail Alignment Study Environment and external costs for rail Crash rate of rail Rail maintenance costs Value of time including freight time

Quantifying benefits 16 Railway Safety Performance in the European Union 2013 Rail crash rate Update of the Handbook on External Costs of Transport Environment and external costs for rail Crash costs Road congestion cost Addendum to the 1997 Federal Highway Cost Allocation Study Final Report Environment and external costs for road Road congestion cost Crash costs Pavement costs

Conclusion

Study findings 17 INCONSISTENCIES IN ACADEMIC STUDIES Inconsistencies in academic studies in terms of the types of benefits and quantifications of those LACK OF GUIDANCE Lacks guidance in: scope of the analysis, the types of impacts that need to be captured and WEBs INCONSISTENCIES IN PRACTICE The review of past freight CBA found inconsistencies between analyses WEAKNESS OF FREIGHT CBA CBA of freight projects highly rely on analysts’ judgement; importance of demand forecasts

Future research 18 Standardised Analysis approach methodology and may need to differ clear guidance from road projects 0 A list of impacts that Further research into need to be considered developing common in CBA and traffic parameters forecasts

Key references 19 Academic Paper Guidelines Australian Transport and Infrastructure Council. Boardman, A., Greenberg, D., Vining, A., & Weimer, D. (2014). Cost- (2016a). Australian Transport Assessment benefit analysis : concepts and practice (4th ed.). Harlow, and Planning Guidelines: PV2 Road Essex: Pearson Education Limited. Parameter Values . Retrieved from https://atap.gov.au/parameter- Chi, S., Bunker, J. M., & Teo, M. (2017). Measuring impacts and values/index.aspx risks to the public of a privately operated toll road project by considering perspectives in cost-benefit analysis. Journal of Australian Transport Council. (2006a). National Transportation Engineering , 143 (12). 10.1061/ Guidelines for Transport System Management in Australia Volume 3: JTEPBS.0000088 Appraisal of initiatives . Retrieved from http://transportinfrastructurecouncil.gov.au/ Jakob, A., Craig, J. L., & Fisher, G. (2006). Transport cost analysis: publications/ a case study of the total costs of private and public transport in Auckland. Environmental Science & Policy , 9 (1), 55 – 66. Tan, F., Lloyd, B., & Evans, C. (2012). Guide to https://doi.org/10.1016/j.envsci.2005.09.001 Project Evaluation Part 4: Project Evaluation Data . Sydney, NSW. Janic, M. (2008). An assessment of the performance of the European long intermodal freight trains (LIFTS). Transport for New South Wales. (2013). Principles Transportation Research Part A: Policy and Practice , 42 (10), and Guidelines for Economic Appraisal of Transport Investment and Initiatives . 1326 – 1339. https://doi.org/10.1016/j.tra.2008.06.008 Retrieved from http://www.transport.nsw.gov.au/sites/defa Protopapas, A., Warner, J., & Morgan, C. (2012). Evaluation of ult/files/b2b/publications/tfnsw-principles- methodologies in benefit-cost and economic impact analyses and-guidelines-for-economic-appraisal-of- for freight rail projects. Transportation Research Record , transport-initiatives.pdf (2288), 83 – 90. https://doi.org/10.3141/2288-10

Contact Nine-Squared Pty Ltd Level 6, 243 Edward Street Brisbane QLD 4000 GPO Box 21 Brisbane QLD 4001 Australia www.ninesquared.com.au Sae Chi schi@ninesquared.com.au