My notes from a quick skim of the #EWLink business case

Late last night, the Herald Sun unexpectedly published the entire East West Link business case, ahead of its official release today.

Some notes from me from a quick flick through:

p12 makes various high-level claims, particularly faster trips for motorists — but as we know, this benefit never lasts because traffic increases.

EWLink: Proposed tolls

p17 flags the toll prices used in the modelling: (2012 pricing) cars $5.50 in peak, $4.40 off-peak. Light commercial vehicles $8.80 peak, $7.04 off-peak. Heavy commercial vehicles $16.50 peak, $13.20 off-peak. I wonder what regular motorists (especially those with commercial vehicles) make of these toll levels?

By comparison, bypassing the city along the Bolte Bridge or the Domain/Burnley tunnels (not both) currently costs $7.06 in a car, or $8.15 for both sections. It’s only marginally more expensive for both because there’s a cap… I assume it’s unknown if a similar cap could exist where adjoining motorways are run by different operators.

p17 says the funding gap between the toll revenue and the cost of construction is $5.3 to 5.8 billion.

p39 says north-south public transport is being degraded by traffic congestion, which may be the case, but that’s because authorities have allowed it to happen by failing to provide tram/bus priority through busy intersections such as Alexandra Parade. They continue to prioritise large numbers of vehicles (single-occupant cars) over large numbers of people. It’s important to recognise that while the greater East West Link project includes tram priority measures, these can be implemented without building a big road tunnel.

p41-42 appears to be cherry-picking statistics to try and claim there’s a lot of demand for cross-city traffic. For instance the diagram at the top of page 42 implies lots of cross-city traffic, but it’s mapping out in percentage terms the demand from different directions heading to the Eastern Freeway in the AM peak — in other words, feeding into the freeway in the counter-peak direction, as if counter-peak travel is where the congestion problem is.

A diagram on page 41 does look at AM peak from the Eastern Freeway, and like previous studies shows little traffic heading to the west of the city — 2% to the south-west (eg Newport area), 6% due west to Footscray and beyond, 7% north-west to around Essendon and beyond. The vast majority of traffic is heading to the CBD and inner north.

In comparison, here’s the screendump from VicRoads traffic status web site this morning (8:16am, peak hour). The camera image shows counter-peak the Eastern Freeway seems to be free-flowing. It also shows free-flowing traffic most of the way across to the west (in both directions), again underscoring that the east-west route isn’t the main problem; as per the page 41 diagram, it’s traffic going into the CBD and inner suburbs.

EWLink: Realtime traffic on Eastern Freeway and Alexandra Parade, 15/12/2014 8:16am

p100 forecasts traffic rampup to % of steady state volume: 91% by month 6. 96.5% by month 12. 100% by month 22. I wonder: Is this in line with recent experience?

A NSW Auditor-General report on Sydney’s Cross City Tunnel (see page 32) found that projections of 80% initially, and 88% after a year were about double the traffic levels that actually eventuated. Brisbane’s Clem7 and Airportlink tollways, and Melbourne’s EastLink had similar problems.

Note that in East West Link’s case the taxpayer bears the risk.

p165 Whoa! The construction cost is much much higher than theoretical revenue of $112 million/year (56x) relative to Citylink (8x) or Eastlink (20x). The average construction cost is also much higher per kilometre than those projects.

p168 The assumed tolling period is 40 years.

p176 Benefit Cost Ratio of stage 1 is 0.8 (eg it costs more than it makes) when “Wider Economic Benefits” (WEBs) are excluded. Including WEBs is 1.3-1.4.

Update: The earlier estimate, using the methodology preferred by Infrastructure Australia, came out at just 0.45. In later versions of the document, the methodology changed and the estimate rose to 0.8. The version released by the Herald Sun has the higher figure, and it’s been speculated that someone supportive of the project dropped that version to them deliberately to pre-empt reporting of the lower figure. Josh Gordon at The Age has some nice analysis of how the figure grew from 0.45 to 0.8 with some WEBs, and then to 1.4 by including other projects such as the Tullamarine Freeway widening, and even Wider WEBs.

WEBs are notoriously wibbly-wobbly in their calculation, and often controversial. For instance it’s not clear how they claim $2153m in agglomeration economies (specifically “growth in Melbourne’s competitive central core”) when the tollway doesn’t directly serve Melbourne’s central core.

It also claims a lot of benefits from travel time savings, but as I’ve already noted, we know these never last.

Compared to the 1.4 the road gets with WEBs, the metro rail tunnel (which is also an incredibly expensive project) apparently got 1.9. And compared to the 0.8 for EWL without WEBs, the metro rail tunnel got 1.17 — so at least it isn’t loss-making when evaluated without possibly dodgy WEBs.

p193. If they built the road elevated rather than underground, the BCR (excluding WEBs) would still only be 0.9. It’s only by building it as a surface road (eg a ground-level motorway, thus obliterating large areas of the inner-northern suburbs) that you can get a BCR above 1: 2.6 to be precise.

EWLink costs and revenues

p209 summarises the revenues and outlays, and if I’m reading this right, seems to show toll revenue of about $200m per year against availability service payments from the government to the operator of about $345m each year. I assume by June 2023 that’s the “steady state”.

If the toll revenue doesn’t get that high, then taxpayers foot the larger bill. And remember this is only stage 1.

p211 ponders the state privatising the road later — that is, selling the toll revenue stream, presumably to offload the taxpayer risk in case revenue flops in the future.

I’ll keep dipping into the document as I get time in the next day or two, and may add some points as I find them.

Hopefully when there’s an official release in the next day or two, the PDFs available will be searchable — it’ll make finding things a lot easier!

And presumably there’s more detail coming as well — for me one thing that stands out is the courageous predictions of quick growth in tollway traffic and revenue, in the face of recent experiences with other Australian tollroads.

And I’d love to see detail on the modelling assumptions that show how well the traffic would flow if the revenue targets are met. It still strikes me that these massive tollroad projects can be profitable, or provide for free-flowing traffic, but not do both.

Update: The official release of documents has now occurred.

Photos from last week

The hi fi box was a big hit with my niece (and nephew)
The box is a hit with my neice

Having obtained a government-provided “boarding pass” (they were handed out with some MXs — I missed out but managed to get one via Kev, who saved it for me), I went searching for the airport rail link. Strangely enough it wasn’t listed on the network status board.
Searching for the Airport rail link

A while back I bought some shirts from that Charles Tyrwhitt mob who advertise a lot. Pretty nice shirts, and I’ll probably buy more from them. One thing’s for sure though, they WILL send you promotional catalogues and emails afterwards. You won’t feel neglected.
Charles Tyrwhitt promotional mail

The channel 7 news the night following the Endeavour Hills stabbing. You know things are serious when they’re doing five live crosses for one story.
Live crosses following Endeavour Hills stabbing

Just a bunch of trams rolling down the road? Not quite — if you look closely, they’re going the wrong way, heading north along the southbound track. They were headed by a Yarra Trams car with flashing lights. There was an underground fire at the corner of William Street and Flinders Lane, and Yarra Trams decided to move the trams backwards rather than have them stuck for an indefinite period. For reasons that escape me, this is known in tram circles as running “bang road”, and is rare enough that Marcus Wong shot video of it.
Trams running backwards up William Street

For some months now this signage at Bentleigh station (and others with more than 2 platforms) has been incomplete. Despite repeated queries over several months via Twitter, it hasn’t been fixed. (I’ve been querying Metro, though they apparently need to chat to PTV to get it resolved.)
Incomplete signage, Bentleigh station

Here’s how packed some CBD trams can get — really testing the new E-class trams’ theoretical capacity. Now, how packed will it be from January when free CBD tram rides are introduced? Packed enough, I suspect, that I told a PTV survey person several weeks ago that, in all honesty, the change is likely to reduce my use of CBD trams — remembering that I have a Yearly Myki, so if I opt-out due to increased crowding, my paid rides will have been replaced by freeloaders.
Packed CBD tram

Spotted in Bourke Street one lunchtime.
'Lies' #EWLink

Seddon and Yarraville both have campaigns against paid parking on at the moment. I’ve gotta say, having had the need to drive to both recently, and having spent ages (particularly in Yarraville) looking for parking, I think I’d prefer having a price signal to discourage people from staying longer than necessary and/or to go without their cars (both centres are quite well served by public transport).
No Paid Parking campaign, Seddon

Lois Lane in Yarraville. No sign of Superman. Or Clark Kent, for that matter.
Lois Lane, Yarraville

On the western suburbs train lines, there’s only a service every 40 minutes on Sunday mornings. This is the result: the 10am train from Footscray to the city, packed to the gills. The Show is on, but even after North Melbourne, plenty of people stayed on board going into the CBD. Not every square centimetre of floorspace was occupied, but it’s not good enough when the rail system has plenty of spare capacity, and should be trying to attract extra trips. High time extra trains ran on Sunday mornings.
Werribee line, Sunday morning. Trains 40 minutes apart.

Both South Yarra and Footscray have six platforms. Sadly only one of them has live information on the concourse for all six platforms.
South Yarra station concourse
Footscray station concourse

In the past few days rubbish bins have been removed at Melbourne’s major railway stations. Apparently the transparent design wasn’t considered secure enough. Here’s what they looked like. (I snapped this pic last week to email in to Crikey, whose people had apparently never seen/noticed them. Crikey didn’t use it, but The Age did.)
Transparent rubbish bins, Flagstaff station

Four minutes? Impossible!

I can’t help noticing that when traffic is relatively light, this sign on Kings Way always it’s 4 minutes to Williamstown Road.

4 minutes to Williamstown Road

This seems as optimistically unlikely as those old Citylink travel time promises. Google Maps reckons it’s 7.7 kilometres, and estimates a travel time without traffic of 6 minutes.

The speed limit along the freeway and over the Westgate bridge is 80 km/h, which by my calculations makes it just under 6 minutes if you were able to consistently do the speed limit for the whole distance. To do it in 4 minutes you’d need to be zooming along at about 115 km/h.

The estimate to get to the Western Ring Road seems a little more accurate.

Of course the very reason these signs are needed is because travel times on the roads can vary widely. In peak hour they are crowded and slow… in a city the size of Melbourne, this is inevitable, because it’s simply not efficient to move people in ones and twos in their cars.

Vicroads figures just released show that traffic continues to get slower… and that’s despite a multitude of motorways having been built, extended or widened over the last decade. This graphic from the PTUA:

Despite billions spent on roads, traffic is still getting slower.

In a big city I contend that it’s probably not possible to fix road congestion. But is it possible to reduce overall average travel times for everyone (not just motorists)?

Well yes it is. Vancouver’s managing to do it. How? By not building motorways, but upgrading public transport instead. The more people are off the road, the better.

Airport rail begins here… well, eventually, maybe

There’s some big news on the East West Link today, with Labor saying that if the Supreme Court agrees with the Cities of Moreland and Yarra that the planning approval was invalid, they will rip up the contracts if elected. Read all about it here in The Age.

But meanwhile… Lots of ads for the Airport rail link have gone up around Southern Cross Station in the last few days.

Dear tourists, don't go looking for the airport train. First departure not expected for about a decade.

Wonder how much govt is paying PPP station operator to display all these ads. #SpringSt

Dear tourists, sorry, when they say the airport rail link "begins here", they mean in about ten years

Yesterday morning they outdid themselves, including a massive ad on the steps from Bourke Street. Update: Pic below
Airport rail ad, Southern Cross Station

A bewildered tourist (or blissfully unaware local) might wander around the station looking for this train to the airport that departs every ten minutes and “begins here”.

The problem of course is that the link doesn’t exist. It won’t exist for at least a dozen years.

And that’s if it goes ahead. The 2014 Budget Papers show that in the 4 year budget forward estimates period, there’s $850 million of funding, or about 10% of the total cost of Melbourne Rail Link and the Airport Link.

State budget 2014-15: Asset initiatives

This seemed to be confirmed last night by Liberal MP for Caulfield David Southwick at the Glen Eira MTF Transport Forum, who when asked about it said that the current funds would cover extensive planning and preparatory works, with the rest of the money to follow.

(Note in contrast the East-West Link western section, which gets around $3 billion in funding in the next 4 years — well and truly enough to get lots of actual construction underway, and provide the project enough momentum that it can’t be stopped.)

The danger is that with most of the project as yet unfunded, a government of either flavour could easily put it on ice, just as the Coalition has done with the Metro rail tunnel, which has had many millions of dollars already spent on it.

Meanwhile, the ads pile up. In this post I compared the current crop of ads with the Labor ads in 2010. But these have gone a lot further: At least Labor stuck with promoting initiatives that were actually in the delivery phase.

Promoting an unfunded plan that may never happen, just months before an election? That really is just a pitch at re-election.

Giving with one hand, taking with the other: 2014-15 #Myki fare reform

I’ve already written previously about the fare changes happening (some announced in December, others announced in March), but it’s probably worth considering them all together.

Ad in train for government fare changes

Exact 2-hour fares — from 10/8/2014

From yesterday, 2-hour fares are exactly two hours.

Although it was originally flagged in December, this has crept up, quietly announced on Friday by PTV, with only two days notice — quite different from the “good” changes that the government is promoting heavily, many months in advance.

(They still last until 3am if started after 6pm; and long V/Line trips still get extra time if travelling across more than 5 zones. The Daily cap still applies, eg a maximum of two 2-hour fares. And the touch-off can be after the expiry time without incurring another fare.)

2-hour Met ticket from 1991-92This was arguably a hangover from paper tickets, which had a limited number of notches to mark the hour of expiry. But the rule had been carried over to Metcard and to Myki.

On one level it’s logical to use a fixed time period rather than starting from the next hour.

But some people used it to get a cheap round trip, for instance a quick journey to the shops or the doctor. It seems unlikely this change will pull in a lot more revenue, but for those watching their pennies, it may make a big impact.

It remains to be seen if people will mill about station entrances waiting until the train is coming to touch-on. I never saw a huge number of people waiting for the hour to tick over, though some certainly did.

And it may cause problems on long trips, as if you’re travelling for two hours, then go to touch-off, the system will treat it as another touch-on (with a default two-zone fare). At a station you can touch-off again using the Change Of Mind feature, but on a bus, such as Melbourne’s loooong orbital Smartbus routes, there’s no such option.

I actually think it would have been a better move to make it a fixed three hour period. (At one stage, all tickets were 3 hours.) Minimal impact on revenue, but fairer for those on limited budgets wanting to make short local trips, especially in the outer suburbs where services are often infrequent.

And of course, Myki equipment should show the expiry time of the fare. At the moment, it’s not shown anywhere for Myki Money — and it’s not like many people will be able to remember they touched-on at precisely 11:06am.

Weekend daily cap rise — from 1/1/2014

We shouldn’t forget this one: Last year the maximum daily fare in Melbourne on weekends and public holidays was $3.50. This year it’s $6. Combined with the above change, some weekend travel has jumped around 70% in price.

It’s unclear if this has had an impact on weekend travel.

Tram in Bourke Street Mall

Free tram rides in the CBD — from 1/1/2015

From this coming January, all trams in the CBD will become free.

Obviously the impact is likely to be that CBD trams — already often crowded — will become even more crowded.

I’ll leave it to then-Premier Joan Kirner to explain who benefits from this one, in this Age article from just before the 1992 state election:

Joan Kirner on free CBD trams, The Age, 11/9/1992

In 1992 the Kennett government was voted in, and arguably (thankfully) back-pedalled a little, introducing the free City Circle tram, rather than making all CBD trams free.

I’m with Joan on this. The major beneficiaries are motorists — the very last people who should be benefiting — though tourists and CBD residents will also gain.

But most public transport users don’t benefit at all, because their fare to and from work already includes all day travel in the CBD. As I’ve already noted, Alanis Morissette might have said of this: It’s a free ride when you’ve already paid.

Indeed, last week I was surveyed by PTV about the change. I honestly said that if this makes trams more crowded, I’ll be using them less. In that case, the freeloaders will win at the expense of paying public transport users.

Thankfully the CBD congestion levy area (that’s a tax on inner-city carparks, which anecdotally is working in discouraging motorists into the CBD, and may even be convincing car park owners to redevelop their properties into something more profitable) is bigger than the free tram area, so we hopefully won’t see people driving to the city-fringe where they can jump on a free tram to work, though you don’t know what a price signal like this might do.

Zone 1 to cover all of Melbourne — from 1/1/2015

Also from January the most you’ll pay within the current zone 1 and 2 area is a zone 1 fare. This includes all of metropolitan Melbourne, and regional areas as far away as Lara, Wallan and Bacchus Marsh.

One wonders how this will affect crowding, particularly on trains (both Metro and V/Line), but also on Doncaster area buses, which have a lot of two-zone trips.

Obviously this benefits outer-suburban passengers who travel into zone 1 regularly — provided of course they have a decent service they can access. For many, railway stations may remain too far to walk, nearby parking scarce, and connecting buses poor (as noted in an Auditor General report released last week).

Those who currently just travel across a zone boundary will obviously be happy. The current huge jump is pretty hard to bear if you’re only going an extra stop or two.

In a way this puts all of Melbourne on an equal footing in terms of fare cost, though it also means a huge disparity in the cost per kilometre.

The government estimated that this change and free CBD tram rides will cost about $100 million per year. (To be precise, the budget put it at $390 million over 4 years.)

Long term, the real danger is upward pressure on the standard zone 1 fare, as seen in Adelaide with their single fare zone, and in Melbourne after zone 3 was merged with zone 2.

Fares up by CPI plus 2.5% — 1/1/2015 and 1/1/2016

While they’re cutting the two-zone fare, the government did announce in December that there would be CPI+2.5% rises two years in a row, in 2015 and 2016. So it seems while the cost of two-zone trips drop, single zone trips will start to creep up.

Still unconfirmed

Still unconfirmed but strongly rumoured: Removal of the Earlybird fare. Once again, it’s unclear how much revenue this would pull in, remembering that the original impetus was to save money that would otherwise need to be spent providing extra train capacity in morning peak.

And while Labor has said they’d go ahead with the two-zone price cut and free CBD trams, they haven’t said anything about rolling back the 2-hour change, nor about the CPI+2.5% rises.

Conclusion

It’s a real mixed bag of reforms that the government has announced — giving with one hand, taking away with the other.

Revenue is going to be up and down, all over the place. It’s really hard to see this as anything more than a grab bag of politically-motivated changes, rather than a well-planned, thoughtful strategy to make fares fairer.

They’re obviously courting outer-suburban voters with the zone changes.

They may not care much (or haven’t thought about) about the impact on people with limited incomes trying to squeeze the most they can out of a 2-hour fare.

Free CBD tram rides… well, I’m not sure it’ll convince many residents in the state seat of Melbourne to vote for them (it’s really a Labor/Greens contest), but those who drive their cars into the city and like free rides at lunchtime will certainly be happy… if they can squeeze onto a tram.

The huge numbers of people living and travelling in zone 1 won’t get the benefit of a price cut, and will see fares jump by CPI+5% over two years — so expect to see the base fare creep towards $4, and be under even more pressure to rise to make up for foregone revenue.

It’s a bit like GST. Nobody likes paying it, but if they were to reduce its scope, and make it a flat amount for some higher value transactions, it’s obvious the rate would eventually go up to cover it.

I’ll leave you with the full Age article quoting Joan Kirner… it touches on a number of interesting topics going into the 1992 election, including promises to extend the rail network (Craigieburn was eventually done in 2007, South Morang 2012, Sunbury 2012, Baxter still isn’t done), the prospect of cuts to station staff and conductors under Kennett (which happened, and resulted in the Metcard ticket system), and extra bus services (nothing really happened until two Smartbuses were implemented ten years later, then little more until after 2006).

Kirner promises to extended railway, The Age, 11/9/1992