No light at the end of this tunnel - reflecting on failed infrastructure

The big risk and high cost of thinking big.
I flagged a concern in the last post about the fiscal and productivity impacts of projects that don’t stack up economically. The risk is that the post-Covid recovery leads to indiscriminate infrastructure spending which would compound the already severe fiscal effect of essential deficit spending on public health, household incomes, and business support .

Given their dismal track record here and overseas, it is likely that large infrastructure and especially transport projects will dig the fiscal hole deeper without delivering the benefits that might help the country climb out of it. We know that the Think Big energy projects of the early 1980s precipitated a foreign exchange crisis.  Had they been economically sound the ten hard years of economic restructuring that followed may have been moderated. 

Looking back to go forward
There is no sense in trying to replicate the past.  But it does make sense to learn from it.

In this case, it seems the lesson was not learned. I posted several critiques of Auckland’s Central Rail project back in 2011 and 2012. Today we can see just how big a cost ignoring past infrastructure failures has imposed - so far - in the case of the CRL if only to temper a new found enthusiasm for thinking big.

Auckland’s Central Rail Link, 25c in the dollar?
How ever long it takes to finish and however much it gets used, Auckland's CRL is an economic disaster.

The first cost estimate for the tunnel was $2.3bn, released by Auckland Council in 2011. That did not account for the prior expenditure of $500m on electrification to make the tunnel environmentally acceptable, or the consequential costs of purchasing new rolling stock, extending and updating existing stations, and compensating business owners badly impacted by prolonged civil engineering works. 

Even with those omissions, though, the project was deemed unworthy of government support by Transport Minister Brownlee, with “a decidedly weak benefit:cost ratio of just 44 cents in the dollar”. 

In any case, the estimated tunnel benefit:cost ratio turns out to have been on the high side.  That the project was under-specified is evident in the 2018 announcement that platforms had to be lengthened, adding around $250m to the costs. 

And it was under-costed.  By April 2019 the cost estimate was up to $4.4bn.  This covered construction cost increases of $327m, “non-direct costs” of $130m, and a new provision for escalation and contingencies of $310m.

Converting the original budget and additional costs to December 2019 dollars (using the price index for construction inputs) reveals an over-run of around $1.7bn, 70% ahead of the original budget after accounting for inflation.  Given that there has been no suggestion that the projected benefits will increase, the potential economic return now sits at around 25c in the dollar.

We can expect further cost escalation given that completion date (prior to Covid19) was pushed out from 2021 to 2024. This is likely to be extended further by pandemic-related constraints including disruption to contractors, labour, and supply chains, and by increased competition from local and international “shovel-ready projects”. That's more bad news for those central city businesses that have seen revenues plummet in the face of ongoing disruption by the prolonged street works.

Strong growth rates are misleading
Let's consider potential benefits in light of the past ten years' public transport performance.  The introduction of electric units in 2014 and station and service improvements across the network saw strong relative growth in rail patronage. It seems the benefits of improved service levels on the network are already being reaped without the $4.4+bn CRL.

However, this needs to be kept put in perspective. While rail boardings almost tripled over the ten years to February 2020, the real gains were in bus use (70% of the total):

     Source: https://at.govt.nz/about-us/reports-publications/at-metro-patronage-report/

Significantly, 87% of gains in bus patronage were in “frequent, connector, local, targeted” services according to Auckland Transport.  This strengthens the argument for flexible bus services rather than high cost, fixed route rail. 

It is also likely that gains to rail included a transfer of some passengers from buses so that the impact on car use and the increase in public transport use will be less than indicated by increased trips by rail. 

How important is rail to central city commuting?
According to the 2018 Census, a relatively low 55% of work trips by the 159,000 people working in the Waitemata Local Board Area were by private or company vehicle. Of those, 6% of were made by passengers.  Company vehicles accounted for 11% of the total. As these vehicles are most likely required for work purposes their occupants are unlikely to transfer to PT. 

This means that the market for improved rail and bus services is just 46% of possible commuter trips .  Public transport already has a high penetration rate of 29% of commuters working in Waitemata.  However, less than a third of these were by rail, despite the relative growth in numbers. The prospects of getting many of the remaining private car users to shift to rail are low. Rail patronage may have to grow mainly through trips transferring from buses.

Narrowing the focus , there were 18,000 commuters to the inner city in 2018. Only 19% relied on a private or company vehicle (between 3,100 and 3,200 vehicles) in 2018. The likelihood of getting a significant reduction in this number is slim. 

A surprisingly high 50% said they walked to work, while 22% used public transport (only a fifth of those by rail).  The strategy of getting more inner city workers living there seems to be working. Ironically, it’s a success that raises questions over expectations that investment in the CRL will influence travel in the inner city. 

Will CRL even deliver a significant mode shift?
The Council wants people out of cars.  Whether or not that's achievable - or even reasonable  - was the CRL the way to achieve it?

Apart from the fact that the project is uneconomic and fiscally damaging, the fact is that over three quarters of Auckland’s labour force works outside Waitemata Local Board area, with 77% of them relying on private or company vehicles to get to work.  

Even if the billions invested into the CRL were to effect a significant lift in public transport patronage, it is a spend that could have been much more effectively directed towards offering  more flexible bus-based transit serving the wider urban area.

And that was before Covid19.
Today, the lack of flexibility of rail comes into even sharper focus in light of the potential changes in working practices, the diminished appeal of high density living, commuting, and working, possible land use changes, and the imposition of social distancing for the foreseeable future. These prospects, along with post-Covid19 delays in constriction, mean that the CRL is likely to fall even further short of helping to achieve “Government’s plans for higher economic productivity and the Auckland Plan vision of being the world’s most liveable city” (City Rail Link, Business Case 2015).

Spending $4.4bn (and climbing) on lifting the capacity of rail patronage by building the  CRL tunnel looks like an economic and and fiscal fail. It is also looking like a major policy fail.

Which brings us to the even bigger white elephant in the room, Auckland's proposed light rail. This is the subject of my next post.

Driving Blind – Driverless Cars Ramp up the Risks for Rail Transit

In a brief radio interview yesterday I was asked about the possible consequences of driverless cars for Auckland’s planned big spend on its rail transit system.  My sound bite wasn’t too coherent, so here are some follow-up thoughts.

Driverless cars are coming

The driverless car is with us today, and its working.  The Minister of Transport’s expectation that it is “moving closer” is in line with international expectations and experience.[1]

In fact, the fully autonomous vehicle is just a further step – admittedly a big one – in the progressive reduction in the driver’s role in vehicle operation.  Automated train systems have operated since the 1960s.  Even aircraft today perform most operations automatically, and we are well on the way to the technology where they even interact to manage air traffic movements.

We can look forward to driverless road vehicles within the foreseeable future.  We are already well on the way.  Consider gains over the past 30 years by way of automatic transmission, power steering, automatic braking systems, electronic stability control, backing sensors, and most recently automated parking.  These innovations, while taking time to diffuse, reduce driver-related accidents and lift the efficiency of vehicle operation. 

Throw in the gains readily available from enhanced traffic management technologies, the use of GPS for better route planning and of GPS-derived Floating Car Data for real time traffic management and we have the promise of ongoing gains in efficiency in on-road vehicles and the prospect of a revolution in personal mobility.  And that’s on top of the promise of further gains in fuel efficiency following the 25% lift recorded by the US EPA between 2004 and 2014 and the impact of alternative fuels.

What are the consequences?

The Rand Corporation recently published a comprehensive study on Autonomous Vehicle Technology that is worth a look.

From this and my take some of the gains we might expect from driverless cars include: 

• The costs of travel will diminish as drivers are frees up to engage in other tasks and as greater travel efficiencies are realised;
• Lower accident costs because there will be fewer of them;
• Vehicle efficiency will improve as a result of: the capacity to use lighter materials; easier uptake of alternative fuels; smoother acceleration and deceleration;
• Development of more efficient parking facilities;
• Network productivity gains from higher vehicle densities and fewer disruptive events. 

This may not mean less congestion.  Numbers on the road may increase as people currently transport disadvantaged find it easier to access and operate motor vehicles.  Cost reductions are likely to boost car use.  And such gains may encourage more long-distance commuting.

On the other hand, the use of driverless vehicles is part of a convergence changing the environmental impact of motoring.  Together with the shift to smart cars for urban travel and to alternative fuels, driverless cars will contribute to a fall in the emission of particulates and CO₂ .

A new mode of public transport?

Driverless cars offer a new take on public transport by providing for shared vehicles that respond to individual demands.  They may be held in private pools; widely accessible vehicles may be in public ownership, or vehicles may held and maintained by a variety of organisations, including specialist operators (equivalent to today’s taxi or rental companies), bodies corporate on behalf of residents of apartments, or businesses on behalf of employees.  

Such arrangements will support the higher densities favoured by urban planners, reduce the costs of car ownership, and maintain efficient point-to-point travel.  In addition, vehicle pooling may encourage more trip sharing, lifting car occupancies.

Supporting fixed route public transport

So what will the consequences be for buses and trains?  Buses should benefit, both in terms of enhanced vehicle flow and, in due course, through adoption of the technology.  This could lead to smaller, more flexible buses with variable routing better meeting demand.  In other words, buses will be part of the revolution in personal mobility resulting from autonomous vehicle development.

Rail is a different matter.  In increasingly fragmented cities, fixed route transit is at a distinct disadvantage, especially when it is based on a limited network.  For rail to penetrate in Auckland it requires either effective feeder road access to park-and-ride facilities or the clustering of high density dwellings and jobs around already busy stations. 

Driverless cars could contribute to both of these.  The intensity of local cross-commuting required to support park-and-ride facilities may be eased by use of driverless cars.  The heightened congestion associated with higher densities in the inner city and on arterial roads targeted by the Auckland plan might be similarly eased by their adoption by residents as well as commuters.

But will driverless cars save rail?

While the adoption of driverless cars might marginally improve the effectiveness of rail transit, this will still be constrained by the intrinsic limits of rail .  Unlike rail, personal vehicles do not run empty for much of the time.  They operate from point to point and largely avoid the high time costs of transfers.  There may be some waiting time in accessing shared cars, but the inconvenience is a lot less than that associated with fixed timetables.  And with technical gains the externalities associated with car use will continue to fall.

Traffic flows should improve, costs fall, and convenience increase for car users.  Car-based transport will be more accessible, reducing the numbers dependent on traditional public transport.  Buses will also be more effective.  None of these positive outcomes bode well for rail with its high capital costs, the lumpy nature of investment, and high operating, maintenance, and depreciation costs.  What they do is increase the fiscal risk associated with Auckland’s plans for an inner city rail loop or extensions to the airport or North Shore as the alternative of road-based transport becomes that much more attractive.

The risk profile of rail investment is already high.  The prospect of driverless cars raises it higher.

Driving a revolution?

In just 25 years we have seen revolutions that have fundamentally changed the ways in which we deal with information, communicate, work, socialise and recreate.  There is every reason to expect the advent of driverless cars to signal a similar revolution in personal mobility. 

Who today would buy a typewriter, a telex machine, or a floppy disk?  So why buy a railway?

 

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[1]              See for example recent articles in The Scotsman and Forbes Magazine.

 

Do density and public transport resolve congestion?

(First Published January 2013)

The compact city/transit answer to the urban sustainability question

Expensive – and usually loss-making – public transit is enjoying a resurgence in the face of uncertainty over the supply and price of oil, concerns about the proliferation of private vehicles and greenhouse gas emissions, and  questions over the sustainability of our cities.

Transit is generally promoted as part of a programme to increase city densities.  In Auckland, for example, the plan is to recreate a compact city in order to get people out of cars.  A commitment to increasing the capacity of rail-based public transport is intended to support residential densities and justify concentrating public investment in the CBD.

I have addressed some of the issues this raises in earlier blogs.   (E.g., Rethink the Link, Five More Reasons, Thin Edge of the Tunnel Wedge, Derailing Auckland)

Exploring the relationship – the data

Using the Tom Tom international congestion index it is possible to explore the association between congestion and city density.  I analysed Q2/2012 morning congestion figures for 25 North American and 51 European cities covered by the index.  The index is based on the real time experience of drivers in areas of high usage of Tom Tom car navigation systems.  Congestion is measured as the deviation in travel time on individual routes at peak times compared with when they are flowing freely (generally at night).  The higher the deviation, the greater the congestion.

I looked for relationships between morning peak hour congestion and city size, population, and density using the Demographia July 2012 compendium of world urban areas data.   

Here are some summary figures for the second quarter, 2012:

Source: Tom Tom, 2012; Demographia, 2012 Congestion is additional peak hour travel time compared with free flow travel over the same routes.   (Out of interest, the comparable density figures for Auckland, Hamilton, Wellington and Christchurch are 2,400. 2,200, 1,900, and 2,000 respectively). 



Note the greater range of congestion figures among European compared with North American cities, and their significantly higher high and median figures.
 
The North American evidence:  higher density = more congestion?
I undertook simple and multiple regressions in each case to establish how far differences in congestion depend on the physical size of cities, how far on their populations, and how far on residential densities.
 

Among the North American cities only population density was statistically significant, explaining 52% of the differences in morning congestion among cities.  By and large, as densities increase, so does congestion (Figure 1).  The inference is that transport efficiency is no better among more compact cities, and may be worse.

Figure 1: The relationship between density and congestion, North American Cities

Does transit help?

It would take more comprehensive evaluation to establish how far transit systems might modify this relationship between density and congestion. The US News website provides a ranking of the top ten US transit systems based on ridership, safety, and government spending.  Only five are in the Tom Tom sample. 

Figure 2 orders the cities from worst to best performing on the ground of the difference between congestion that would be expected on density grounds alone (as predicted by the regression equation in Figure 1) and the actual congestion recorded.  Hence, Boston has higher levels of congestion (48%) than predicted (27%) on the basis of its density (just 800 persons per square km). And like poorly performing Seattle, it has one of the top ten transit systems as ranked by US News (4^th and 9^th respectively).  

Figure 2: Congestion performance, North American cities

The other poor performers based on this analysis include both high density Montreal, Ottawa, and Vancouver, and low density Atlanta. 

This is not a definitive analysis.  Rather, it suggests propositions for further consideration.  Among these, higher densities do not necessarily mean less congestion – more likely the opposite.  And leading edge transit does not necessarily fix the problem. 

The European Evidence: there is no evidence

The results for European cities were completely different, adding weight to the argument that context matters: what works in one setting will not necessarily work in another.  Across the 52 cities there is no relationship between density and congestion.  (There is, however, a weak relationship with cities’ physical size, r²=0.25). 

Figure 3 plots morning congestion as a deviation from the median for the 51 cities and includes a plot of densities.  It isn’t easy to read. In summary, the poor performers are Warsaw (density 3,100), Marseilles (1,300), Istanbul (9,700), Toulouse (1,100), Rome (3,400) and Brussels (2,600).  The better performers include the smaller cities of Malmo (density 3,600), Zagreb (5,700), Valencia (3,000), Seville (5,600) and Bern (2,300).

Figure 3: Congestion Performance, European cities

Does transit help?
A listing of the world’s top ten transit systems in 2011 included only four from the European sample (and only the New York subway from North America).  The London Underground comes in third, but London Metro Area comes in at a low 39^th on the European congestion rankings.  The Paris Metro is rated fifth , but Paris sits at 46^th among the 51 European cities for congestion.  The Berlin U-Bahn sits at 9^th place and the city's congestion 21^st in Europe.  Copenhagen is 10^th in the world transit stakes and 16^th in congestion ranking.

While the results are quite different from the North American analysis, the European evidence also offers no grounds for suggesting that density is a prerequisite either to better commuting conditions or that congestion reflects the quality of transit systems.

(A contrarian might argue, of course, that transit creates a commitment to a land use pattern that promotes congestion, delaying or distorting the decentralisation of employment that might otherwise occur in a well-connected city). 

Pursuing poorly performing precedents

If nothing else, the analysis raises issues which deserve much closer analysis, especially in Auckland where they do not support plans for a high cost transit system to support a compact city.

While planning – and planners – in Auckland have a tendency to cite overseas precedent to support expanded rail-based transit and higher residential densities, the variability of overseas experience suggests that this is a highly risky strategy.  Context really does matter – not only here but also among the precedent cities our planners love to cite. This is especially the case when poor performers on the congestion scale like Vancouver and Seattle in North America and London and Paris in Europe are touted as paragons of integrated land use and transport planning. 

So why do our planners and politicians continue to gamble the city's fiscal future on an economically flawed project which overseas data suggests has limited prospect of meeting its objectives?       

 

At Least Five More Reasons not to build the Central City Rail Link

Second Thoughts

So some Auckland councillors think that the Inner City Rail Link is unaffordable without central funding.  Perhaps they will do away with the latter qualification once they have heard  the budget later this week – at this time and place, it’s just unaffordable regardless of whether we throw ratepayer or taxpayer funds at it. 

Not only that – it doesn’t make a lot of sense.  Here are some reasons. (There are others - I have dealt with demand issues elsewhere).

1.       Its inflexible

Rail corridors are fixed, inflexible, and vulnerable.  Even with an Inner City Link Auckland rail will have minimal redundancy built into it.  Any service disruption will have widespread impacts – even when the cause lies elsewhere.  

Rail is vulnerable to severe weather, floods, or geotechnical disruption – washouts, landslides, earthquakes, events that usually occur when transport corridors become most critical.  How useful would rail have been in the Christchurch earthquake? That’s hypothetical, of course.  But think of Wellington’s rail system and the potentially devastating impact of an earthquake on that.  And think of the impact of extreme weather on rail in downtown Auckland or on the eastern corridor.

2.       Stations have limited accessibility and will generate congestion

Rail is difficult to access for the majority of the city’s residents who live or work more than a kilometre from a station.  Park and ride, integrated PT ticketing, and dedicated cycleways serving the stations might improve accessibility. But there comes a point when the additional time and costs discourage commuters.

And nodes will be further compromised by congestion associated with creating high density development around stations to try to boost patronage.  Even for those living close to a station, the majority of trips –shopping, entertainment, socialising, personal business, education, and recreation - are taken by a mode other than rail.  So travel demand by many more local residents combined with park and ride or feeder bus systems will require major investment in roads and around stations to maintain their accessibility.  Is this budgeted into the rapid rail dream?

3.    An irrational option in the face of peak oil?

If (who knows when?) peak oil really bites by pushing fuel prices to prohibitive levels or through an outright shortage travel behaviour will change.  Two responses seem plausible. 

First, many more people will come to rely on public transport.  But the majority will not be able to access a rail-based system without personal transport.  And if that problem can be solved, and quite apart from issues of inflexibility and vulnerability, rail is inevitably capacity-capped. It just won't be up to the job.

Second, people will travel less.  Part of that may be more ride sharing and more multi-purpose trips, more patronage of local services, more  local employment, more localised village life.  How will a fixed line, long-haul passenger system help with that?

In any case there is a solution to the threat of peak oil in place already: a road network on which public transport can operate to every corner of the region.  When people start leaving their cars at home, it will have plenty of capacity for efficient, fast, and  flexible public transport.

And the mode – who knows?  Probably buses of various configurations capable of moving people quickly throughout the region.  Quite possibly light rail will play a part, perhaps even automated personal transport networks.

4.     It’s the geography, stupid

Auckland is on an isthmus – within which sits another densely occupied isthmus. The result is a stretched out city with a big heart – all confined by hill and water. 

This distinctive physical geography shapes a city already lauded as one of the most liveable in the world.  We have a network of corridors by way of state highways and motorways which reflect this geography, and a regional and local road system tuned to it. 

Auckland - city on an isthmus

And we have inherited a heavy railway that responds to our geography with links to cities to the north and south.  What our rail system might be able to do is make dispersal a greater reality, supporting satellites north (and north west) and south of the city.  Transforming it into a version of the London Tube, the Paris Metro, or the Singapore MRT, though, is a stretch too far.

London - City on a plain

5.    Keeping Auckland Liveable

Rhetoric about transforming Auckland into the world’s most liveable city has its place.  Given that it’s already considered highly liveable, it’s interesting that this is not stopping the outflow of New Zealanders to Sydney, Brisbane, and beyond, though.

So let’s try something different.  How about being a smart city?  Or at least a city that makes smart decisions.  We could start by addressing the risks to our current liveability.

The failure to provide sufficient greenfield capacity for growth is an obvious one. Desperate intensification threatening the green and blue spaces that give character to the city is another.  The ageing of existing infrastructure highlighted by the increasing vulnerability of our underground services is yet another,one which Think Big rail plans threaten to deprive of funding .   

Oh, yes, a sixth reason

Right now the gathering fiscal clouds are perhaps the greatest threat to a liveable Auckland.  It is no doubt this that is unsettling councillors.  It will unsettle residents, too, if foolhardy spending is translated into ongoing increases in property rates and charges for services – like public transport - that fail to address the needs of the majority of resident or business ratepayers in the city (or taxpayers outside it) compromise liveablity, and limit choices in the future.