Smarter Travel Programmes– Financial impacts for Transport for London COLIN BUCHANAN .
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Transcript of Smarter Travel Programmes– Financial impacts for Transport for London COLIN BUCHANAN .
Smarter Travel Programmes–Financial impacts for Transport
for London
COLIN BUCHANAN
www.cbuchanan.es
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Structure Introduction Least Cost Planning Applying it to London
Impact of ST programmes Cost Issues ST programme financial impacts
Conclusions
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Introduction Main aim of ST is shifting trips from car to
more sustainable forms of transport: rail, bus, walking and cycling.
Economic benefits of Smarter Travel include: Environmental benefits Highway Congestion Relief Operating Cost savings Health and ambience benefits
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Introduction There are financial implications linked to
mode shift – revenues and costs. In London those fall on TfL
CB asked to look into the financial impacts for TfL of Smarter Travel programmes: School travel plans Workplace travel plans Area based schemes Car clubs Personalised travel planning Travel awareness and marketing
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Introduction
Could Smarter Travel
Reduce operating subsidy?
Reduce or delay capital expenditure? `
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Structure Introduction Least Cost Planning Applying it to London
Impact of ST programmes Cost Issues ST programme financial impacts
Conclusions
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Least Cost Planning Means taking a holistic view of costs and
revenues. Using demand management to eliminate or delay capital investment.
Businesses paying to persuade people to consume less of their product.
Can be soft (providing information on choices) or hard (paying for usage reductions). ST has elements of both.
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What Drives LCP?
Essentially when Marginal Cost > Marginal Revenue – applies mainly to industries where:
There is a constant increase in demand Costs are driven by peak usage High cost of capital investment
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Average & Marginal costs
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LCP and TfL?Applying LCP to TfL:
operating costs > revenues (eg London Buses) demand growth triggers need for capital
investment (eg peak period rail demand)
In both cases lower demand could lead to a financial gain/saving.
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LCP measures Information/marketing Financial incentives/subsidies Targeting measures at specific problems
(e.g: when and where demand is highest) Improve supply efficiency instead of new
infrastructure Promote efficiency by the end-user
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LCP Conclusions Spending £ to reduce demand is a perfectly
reasonable response, especially within networked industries.
Transport is not a “good” it’s a derived demand. More transport is not necessarily a good thing.
BUT transport does have important social, environmental and economic implications. Cost/subsidy minimisation not an optimal policy
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Structure Introduction Least Cost Planning Applying it to London
Impact of ST programmes Cost Issues ST programme financial impacts
Conclusions
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Impacts of ST programmes - method Looked at ST programmes and what their
impacts on mode shift had been
Data sources: i-trace, other TfL/DfT reports and projects and CB experience
Assumptions made on differential impacts by time period ( peak and offpeak) and location (Inner and Outer London)
More data needed!
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Annual impacts of ST programmes in trips (per £X spend)
* For STP, costs include wider infrastructure investment
Trips per annum
Workplace travel plans
School travel plans*
Personalised travel plans
Car clubs
Marketing and travelawareness
Area-based schemes
TLRN car rail bus cycle walk other car
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ST Programmes - Conclusions All focus on reducing car use. WTP most effective at that
and STP the least (half budget on engineering measures).
WTP/PTP generally transfer most people to rail/bus
Area-based schemes, STP, marketing and travel awareness have highest mode shift towards walking & cycling
Mode shift varies significantly by location and time of day
Analysis assumes (a) no change in total trip numbers – OK for STP but probably overestimates shift to other modes for other programmes(b) average distances per trip on all modes
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Structure Introduction Least Cost Planning Applying it to London
Impact of ST programmes Cost Issues ST programme financial impacts
Conclusions
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Cost Issues AC = TC/Demand MC = ∆TC/∆D
Marginal costs are most relevant to this study we want the financial impact of a change in demand
In general MC(bus) is close to AC(bus) whereas MC(rail) is very low until capital investment reqd.
Both average and marginal costs need to include the costs of capital investment
Revenues assumed to be constant (MR=AR) although vary by mode
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Costs & Revenues in LondonKey conclusions: Buses rarely cover full costs through
revenues – scope for some additional demand in off peak
Rail financial performance improved by new users until further capital spend required
Peak period, peak direction demand growth may be financially negative
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Structure Introduction Least Cost Planning Applying it to London
Impact of ST programmes Marginal Costs by mode ST programme financial impacts
Conclusions
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Financial ImpactsPurely based on the cost/revenue analysis:
WTP could be financially viable investment, quite apart from economic benefits from congestion relief
STP negative financial impacts because children do not pay bus fares. Extra costs & no revenues
Other programmes recoup between 20% and 80% of their costs in financial gains for TfL
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Structure Introduction Least Cost Planning Applying it to London
Impact of ST programmes Marginal Costs by mode ST programme financial impacts
Conclusions
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Financial conclusions Most gains in Outer London/off peak where
shift from car to rail & bus is financial gain because of spare capacity
In the peaks best to concentrate on shift to walk/cycle
Financial impacts vary widely by mode, time period and location. General conclusions will vary widely in particular case studies
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Conclusions1. ST programmes clearly generate significant
financial returns for TfL – these should be included in the economic case for ST
2. Financial returns vary widely between programmes and locations – but are significant
3. Returns are based on existing ST programmes focussed on reducing car use. Could be much higher if overall focus changed to shifting to walk/cycle
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Implications Targeting ST programmes on specific
issues could dramatically improve financial and economic case
Local ST programmes could reclaim some funds from bus/rail operators?
ST could focus on switching users to walk/cycle to avoid the need for additional buses?
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Thank You
Paul Buchanan
Buchanan Consultores
www.cbuchanan.es
T 91 781 8293 M 607 94 17 33