Section A
Describe the Environment priority in the GPS
- land transport systems should reduce GHG emissions + meet Paris agreement -should reduce impact on local environment -supports mode shift to low emission modes -recognizes the benefit to Public health by doing this -recognizes the importance of urban form in liveable cities which encourage low emission modes
What are changes to the latest GPS
- local govt must integrate with central govt to deliver infrastructure that meets current + future needs in cost effective way -priorities reduced emissions -bigger focus on PT and rapid transit by creating new funding categories for rail + rapid transit. - reduced spending on statehighways
What happens to the supply vs demand curve if we add more lanes ie increase supply
- supply line moves to the right so the cost is less ie travel cost/congestion decreases
Draw the effect of terrain on congestion ie % time following and explain
-% following time indicates congestion because people arent travelling at their desired speed -level terrain = longer sight distances so there is smaller difference between 100-0% sight distance so less %following time= less congested -mountainous terrain = shorter sight distance so greater difference in 100- 0% sight distance = more % following time
What actions were taken in the UN decade of action
-10% of the network that carried the highest volumes were identified and road safety was bench marked using star rating. -UN produced a world report on road and traffic injury prevention which most countries endorsed -report guides how to implement comprehsnive approach to improving road safety -in 2015, WHO released global status report on road safety
Describe the trend between age and crashes
-15-29 years is the most vulnerable group because learning to drive,inexperienced and taking risks.
Describe the global trend in road safety
-Asia Pacific region has highest % of fatalities. -HMC make up 60% of the world's vehicles but only cause 14% of fatalities while Asia PAcfici have only 14% of network and 44% of world's fatalities = poor network -Sweden/European countries best performing -globally the death rate is plateuing -western pacific region has most number of ped/cyclist crashes
What is the purpose of the GPS
-GPS sets out priorities for funding across all -sectors in NZ -GPS for land transport sets out the funding for the NLTF for the next 10 years but only the first 3 years are fixed funding -sets funding allocations for different activites eg PT, W+C, maintenance, SH -GPS is updated every 3 years and with every govt change.
What is the IAF and what are the 3 factors used to assess proposals
-IAF is the investment assessment framework used to assess how well activities meet Govt investment strategy 1) Strategic Fit - qualitative 2) Effectiveness - how well it solves the problem - qualitative 3) BCA - benefit cost appraisal - quantitiative
What were the key findings from the Global Status Report
-LI/MI have twice as high road fatalities compared to HI countries -90% of road fatalities in LI/MI despite only having 48% of vehicles -in HI, death decreasing/plateauing -50% of deaths involve vulnerable road users
Why do larger projects that have low BCR still get funded
-Larger projects tend to have low BCR because they have high costs. -However, they still get funded because they may have high strategic alignment eg Waterview Tunnel had low BCR but was the last connection in state highway network = high strategic alignment so strategic fit + effectiveness very important
Why is it important to consider lifecycle assessment, not just capital costs
-Life cycle costs include construction costs + maintenance + operation, refurbishing and disposal -Capital Costs only make up a small portion of the life cycle costs so need to consider full lifecycle.
Where does the money for the NLTF come from
-NLTF is limited -money is allocated based on GPS and competing against other sectors for money -actual money comes from fuel tax, motor registrations, road user charges and other revenue
What is the National land Transport Programme + NLTF
-NLTP is a list of activities/project that will be funded over the next 3 years set by NZTA -NLTF is the fund that pays for the activities in the NLTP -Activities include maintenance of arterial roads, road policing, PT, W+C, SH, local roads
How does price changes affect how people travel
-affects number of trips, type of vehicle used, mode of transport, destination, route choice -small price changes can have a large effect on travel patterns esp if there are lot of competitive options eg fuel tax
Why is there a duty of care to help developing countries improve their road safety
-as developing countries develop, their mobility + # of vehicles increase so more fatalities if nothing changes - drives the need for safety improvements so HMC should help developing countries. -it is easier to make big changes in LI/MI countries and see more benefits because they are very unsafe so global trend will improve
How does congestion affect VOC,
-as the V/C increases, more congested so more time idle = higher VOC -Up to V/C =0.5, effect of congestion is minimal but beyond that, cost increases -HCV more affected by congestion than LCV
Describe the historical trend in road safety
-average 1.25million crashes per year -similar death rate to war and drug use -high income developed countries death rate decreasing but slowing down -developing countries, death rate increasing -over time, crashes increase because number of vehicles on the road increase and historical network not designed to today's standards. -the risk of death by medical causes reducing but not by roading crashes
Even if the BCR of an option is greater than 1, what is the funding dependent on?
-because funding is limited, just because BCR >1 doesn't mean it will get funded -depends on amount of money available, cost of other projects and strategic alignment
Define intangibles
-benefits or costs that cannot be expressed in monetary terms eg environmental benefits, noise, pollution -should be qualitatively assessed in the AEE. -should include the social cost of retention of environmental amenities
What are the benefits of using a business case approach
-better value for money -more likely to achieve desired outcomes -more confident in investment with improved allocation of resources -strategic fit - targeted to govt priorities -better and earlier decisions for funding
Draw the graph of operating costs vs time for the do-min vs do something, and explain the graph
-by upgrading a road, there will be initial capital costs but it will reduce the maintenance costs over time -if do nothing, the maintenance costs will increase over time -eventually the cost of maintenance will be greater than the initial capital cost to upgrade
Describe Internal Rate of Return
-calculates the interest rate (i) required for the NPV to be 0 ie no investment required today -the interest rate is the IRR for marginal investment ie additional investment required to replace Road A with Road B using NPV method -if i > standard 6% discount rate, Option B is more economical than Option A -higher i = less costs today
Define externalities
-costs / benefits that are not within the domain of the funding authority but should still be considered in the BCA -typically benefits/costs to other sections eg crash cost savings are not directly carried by RCA but by police/health sector but are still a major benefit to projects so include in BCA
how does the hierarchy of the road affect its funding
-depending on hierarchy of road = different levels of funding -less movement it provides less funding eg local roads funded by rate payers, arteria road = part subsidy and state highway = full subsidy.
What is the purpose of simplified procedures in the EEM and when can we use them?
-doing a full BCA is time consuming and complex so simplified procedures reduce the time + money required to do economic evaluation -used when the cost of project <5million undiscounted or road renewal no limit on cost b/c it is routine -otherwise have to do full procedure
Why is NZ transport system always gonna be land based
-due to NZ large land area and small population it is too expensive and don't have the money for other modes especially outside town centres -therefore spend lots of money on roading -hard to get BCR > 1 in rural areas because low volumes -in urban areas where the population density is high, can invest in PT + alternative modes
how does the IAF rank proposals
-each factor is given a low, med, high. -if strategic fit or effectiveness is < M, project doesn't get funded regardless of BCR -if BCR < 1 - no rating + not funded -if BCR 1-2.9 = low -if BCR 3 -4.9 = med -if BCR > 5 = high -proposals are ranked in the NLTP
what are some benefits of transportation
-enables mobility and access to services (cyclic relationship between land use and transport) -supports economic growth and productivity -enables social and economic transactions
What does appendix 12 tell us
-gives us the update factors to multiply the costs by to get it to days values. -costs are evaluated based on a particular time period and not updated each year so need to multiply by the factor
Draw a supply and demand curve for transport
-if there is limited space, cost of travel is high -if cost is free, demand will exceed supply -supply is constant
What is the EEM
-it is an industry wide standard used to economically evaluate land transport projects used by RCA. -provides consistency and standardized assumption to ensure appropriate data collection -helps to prepare the funding application to NZTA -uses Benefit Cost Analysis + takes into account national viewpt ie wider community -used for publicly funded projects -live manual ie costs are updated
How does population growth relate to investment expenditure
-it is more economical to invest in infrastructure where there are lots of ppl + growing regions eg AKl, Waikato, Tauranga -in the past 15 years not much increase in veh-km across nz regions but significant increase in Auckland. -by 2031 38% of ppl expected to live in akl, therefore auckland requires lots of investment
Describe the Safety priority in the GPS
-land transport system should deliver a safe system free of death + serious injury -provide safety improvements to high risk links eg speed management -committed to a new road safety strategy in NZ -focus on safety for all road users eg ped
Describe the Access priority in the GPS
-land transport system should improve access to social and economic opportunities esp in urban areas -improve resilience -provide more transport choices by improving access -reduce the need for private vehicles by integrating land use and transport in urban areas
Describe bus use in Auckland
-make up 2.5% of vehicles but carry 30% of people so space efficient -challenges the traditional role of road corridors because PT is more efficient at moving people -in peak hour PT more reliable ie less variability but in off peak travel time may be greater -significant increase in PT usage over the past 10 years in AKL even though veh-km travelled remained fairly constant, suggests there is demand for PT
Define trade off
-making decision between the budget and time available and what people want -decision reflects the options available, needs and preferences
What does a high discount factor mean
-means that the value of money depreciates quickly so future investments are easier to do today -discount rate is set by treasury not MoT and all sectors use the same one. discount rate has large impact on costs/benefits -higher discount factor = stable economy because need less money upfront saved (good for costs) -but means that benefit costs devalue faster
What are crown appropriations
-money from other sectors that are added to the GPS on land transport for funding for transport projects -govt recognizes the benefits that transport can provide to other sections + overall community
Define time value of money
-money is worth more now than in the future because we can invest it to make more money = earning potential of money -so need less money now to pay for things in the future -when comparing different costs at different times in the future, need to discount it to present day before they can be compared
Discuss why WHO named 2011-2020 UN decade of Action
-more than 1.2million ppl die on road each year and 50million ppl injuryed. -over 90% of deaths in LI/MI countries and death rate is increasing in LI/MI. -similar death rate to drug use and war -Decade of Action to address the road toll.
Describe BCR Method
-most common in NZ -used over 40 year period BCR = NPV Options Benefit - NPV Do min benefits / NPV net costs
What are the differences in the LCV and HCV in terms of the base VOC cost
-most of the costs comes from oil + fuel -LCV depreciates faster than HCV but HCV requires more maintenance costs -costs more to run HCV than LCV
Describe FYRR
-only considers the benefits/costs in the first year so don't need to be discounted -simplified approach
Why is it hard to predict future travel demand and the related travel patterns
-previously there is a link between the economy and veh-km travelled (demand) eg as economy grows, demand increases -in the past 10 years, there has been a decoupling so harder to predict travel demand -between 2004-2012 veh-km plateaued but beginning to increase again.
Describe the Value for Money priority in the GPS
-projects should deliver the right infrastructure at the right level to the best cost -maximise the value for money spent to achieve govt priorities -transparency on decision making and better reporting of outcomes eg publish bcr -consider benefits + costs over life cycle and account for uncertainty + future changes
Describe how transport proposals are appraised for their viability
-proposals are analysed by comparing the lifecycle costs with the expected returns -if the returns > costs, then project appears justified but because funding is limited, need to have large margin of benefits to cost before it will be funded -proposals are ranked by BCR until no more funding remaining.
How does speed change cycles affect VOC
-speed change includes both the slow down and speed up -when vehicles slow down and speed up it uses more fuel = higher VOC. -the cost is due to geometric delay only, not congestion
What does the base VOC savings depend on
-speed: different types of vehicles are more efficient at different speeds eg PV most efficient at 60km/h. -gradient : steeper grade = higher VOC. HCV more affected by gradient -
What does appendix A4.1 tell us
-tells us the base travel time cost for each vehicle class and trip purpose -the work cost is based on hourly wages but could be argued that it should be higher b/c it also costs the business -commute cost is less because it doesn't cost any money -if there is congestion need to add on incremental congestion value CRV
What does appendix A2.2 tell us
-tells us the definition of each road type in NZ. -urban arterial = arterial carring > 7000 veh/d in urban area -urban other = arterial carrying < 7000 veh/d -rural strategic = rural road connecting towns with > 2500 veh/h eg state highways -rural other
What does Appendix A2.1 tell us
-tells us the definition of each vehicle class in NZ eg passenger car, LCV, MCV, HCV1, HCV2, Bus -LCV = 3.5 tonnes, MCV > 3.5 tonnes with 2 axles, HCV1 = 3-4 axles, HCV2 = 5+ axles -need to consider the benefits for each type of vehicle eg changing the gradient will have more benefits for HCV than LV.
What does appendix A1 provide and what are the different discount factors used for
-tells us the discount factors to use to multiply the costs by instead of using the equations -SPPWF - used to discount a single payment to PV -USPWF - used to discount uniform series eg annual payments back to PV eg maintenance -AGPWF - takes into account the growth rate because as population increase, benefits increase. -Multiply the AGPWF by growth rate and then multiply by costs
What does Appendix A2.3 tell us
-tells us the traffic composition for each time period. -should group similar time periods together eg weekday, holiday, sunday etc -for urban arterial, need to consider daily fluctuations eg morning peak, interpeak, evening peak. -for non-urban arterial, dont care about daily fluctuations
What does Appendix A2.4 tell us
-tells us the vehicle occupancy and % of people travelling for different purposes for each road type + time period -trip purpose is split into work, commute, other -work = business trip eg freight and commute = getting to work - HCV have lower occupancy but more work trips -work trips more in inter peak and commute trips in peak
What happens to the supply vs demand curve if we manage the demand better
-the demand curve shifts down so the existing supply is enough to cope with the demand
What are the guidelines for target IBCR
-the minimum IBCR is 1 to ensure that a higher cost option is more efficient than the lower cost option -if preferred BCR is 2-4, target BCR = 2. if preferred BCR > 4, target BCR = 4
How does the roughness of the road affect VOC
-the rougher the road, the more vehicle suspension required so higher VOC -new roads usually are smooth so no additional roughness cost but as road wears, roughness cost increases -rural roads more rough than urban
Why do we need to consider future proofing in proposals?
-transport projects take a long time from planning to implementation and mobility may have changed in the future especially with technology eg ITS, smart cities and electric roads
Describe NPV Method
-used to compare two options ie the NPV cost to replace all road A by road B -the cost of each option is calculated using discounted cash flow method -if NPV is positive, then Option B more economical than Option A
What is an incremental BCR used for and draw the graph of incremental BCR.
-used when there are two or more mutually exclusive options so they can be compared to each other -normal BCR compares option to do min -IBCR = incremental benefits/ incremental costs
Why is non-work time difficult to express in monetary terms
-work time is easy to express because we know the average hourly wage that people are wasting -the price of non-work time is different depending on what people are doing eg shopping, socialising -instead we assume that the cost of non-work time is a proportion of cost of work time
What are the components of VOC savings
1) Base Running cost - depends on speed and gradient 2) roughness cost - rougher road = higher cost 3) road surface texture cost - larger macrotexture = more rolling resistance = higher cost 4) bottle neck costs 5) congestion costs 6) speed change cycle costs - costs due to changing speed 7) pavement elastic deflection cost - flexible pavement = more rolling resistance = higher cost
Describe the components of travel time
1) Base Travel Time - time it takes for a vehicle to travel the section 2) Geometric Delay - additional time required for geometric features eg intersections, curves (speed change) 3) Queuing Delay - additional travel time due to congestion
Describe the components of VOC
1) Base running cost - cost to run a vehicle along the section. Depends on speed, gradient, type of vehicle 2) Idle Running cost - additional cost to run a vehicle when idle (related to queuing delay) 3) Roughness Cost - additional cost to run a vehicle over rough surface vs smooth 4) Congestion Cost - additional cost to run a vehicle when congested because travelling slower 5) CO2 Cost - cost of vehicle emissions on the environment
Draw the 3 levels of benefits and costs used in the EEM and describe them
1) Market Benefits = tangible benefits that have standard market value eg VOC, cost of travel time 2) Non-Market Benefits are intangibles - two types: 2A) Standardized Non-Market benefits - intangibles but can be indirectly expressed in monetary terms eg CO2 values, non-work time 2B) Non-standardized non market benefits - intangibles that cant be expressed in monetary values eg visual impact, ecological impact
Describe the 3 factors in crashes
1) Road user - issues related to ppl using the road eg inattention, alcohol, kids playing on the road, inexperience. Almost all (93%) of crashes involve road user factor. 2) Vehicle factors - issues related to the vehicle eg faulty brakes, poor maintenance of parts. -safety improvements in vehicles over past decade has helped to reduce crashes -makes up the smallest proportion of crashes (13%) 3) Road Environment factors - issues related to road infrastructure eg alignment, slippery. -makes up 34% of crashes have little control over vehicle factors and road user, but can address road enviro factors.
What are the 4 strategic priorities of the 2018 GPS
1) Safety - key 2) Access - key 3) Value for Money - supporting 4) Environment -supporting Each strategic priority has associated objectives that set out how these should be achieved and the expected outcomes -Previously value for money was a key priority because it supports economic growth but now focused on safety
Describe how value for money is defined for each of the IAF factors
1) Strategic fit - doing the right thing to meet the priorities eg if priority is sustainability should invest in PT. 2) Effectiveness - doing the thing in the right way eg construction or procurement method 3) BCA - doing the thing at the right time and price eg cost of doing it now vs in the future
What is the purpose of economic evaluation / What are the reasons for doing economic evaluation
1) provides evidence in decision making about whether investments should be made 2) provides consistent framework in analysing decisions across transport projects 3) improves resource allocation 4) determine feasibility 5) determine priority for impreovement 6) compare alternative locations 7) to allocate responsibility of costs between users and non users
What are the key objectives of the WHO global status report in 2015
1) to assess status of road safety using safety indicators and standardized methodology 2) identify gap in road safety 3) help countries identify key priorities that need intervention to simulate road safety activities at national level -provides a benchmark to compare between countries and a baseline to compare progress
What are the _ methods for finding the value of money of the project
1. FYRR 2. Discounted cash flow 3. NPV Method 4. Internal Rate of Return 5. BCR
What does appendix A4.2 and A4.3 tell us
A4.2 = base travel time cost for freight. A4.3 = base travel time cost for all vehicle classes for different road types and time periods
What is Business Case Approach and how does it work?
BCA is a structured process that integrates best practice decision making, programme management and investment assurance tools. 3 steps; 1) identify the core problem 2) identify the consequences of not solving the problem 3) identify the benefits of solving the problem
What is the 3 level economic appraisal process used in NZ/AUS
Business Case development process: 1) Strategic Merit Test - used to initially determine if there are any benefits and worth moving forward. 2) Rapid Appraisal - more detailed business case 3) Detailed appraisal - full business case used for larger projects
Give some examples of road improvements and their effects + benefits
Effects are qualitative and benefits are quantitative eg pavement resurface Effect: Improved rider quality, less maintenance Benefits: VOC, CCS, TTS eg improved road alignment Effect: higher design speed, safer route, flatter grades Benefit: TTS, CCS eg new bridge Effect: improved alignment Benefit: VOC, CCS, TTS
Draw the flowchart linking the different land transport documents
Flowchart 1
What are the key themes of 2018 GPS
Key themes: -mode neutral ie no favoritism for roading -incorporate tech + innovation into design -integrate land use + planning
What is included under roading/transport costs, and road user costs
Roading costs -capital construction cost -maintenance and operation costs, -loan repayments -land purchase Road User Costs: -VOC -On road time -CCS
What is the main framework that governs investment in the land transport network? Describe its structure
The Land Transport Management Act governs investment in land transport. Under it are 3 plans: 1) GPS produced by MoT 2) National Land Transport Programme (NLTP) by NZTA 3) Regional Land Transport Plan (RLTP) by regional councils eg AT
What are the components of travel time savings (A4)
Travel Time Savings is the difference between travel time in option vs do min 1) Base travel time savings = travel time based on speed+ distance with no other constraints + 2) Travel Time benefits due to reduced congestion + 3) benefits due to improved trip reliability
When individuals make decision, they are trying to maximise the benefits to themselves eg max profit. -When government makes decision, trying to max benefits to the community because transport is a public good so benefits should be equitable across all groups -govt not trying to make a profit
What is the difference between individual decision making and the government decision making (public)
For non-road based projects that are greater than 5 million, what should be done?
a) evaluate the project in more detail (full procedure) b) provide additional information c) undertake composite evaluation for travel behavior
Describe Discounted Cash Flow Method
all the costs and benefits associated with the project (now and in the future) are discounted to present value using compound interest -the NPV is the NPV of the benefits - NPV of the costs -if NPV > 0 , good project
Define demand
amount and type of goods consumers choose to use under specific conditions
Why do HCV get charged more road user charges?
because they cause more damage to the pavement
How does economic evaluation improve resource allocation?
by ensuring: 1) projects are STRATEGICALLY ALIGNED with the govt priorities/goals 2) value for money by using BCR to justify cost vs benefits 3) consistency across all transport modes eg car vs bus
What is a marginal decision
decision that is at the margin between alternative options -small price change may affect the consumption decision -represents the elastic behaviour of decision making
What are the two solutions to congestion
demand management - eg tolls, congestion charging, reducing car usage, reducing car ownership -provide additional supply - eg more lanes, roads -different solutions for cities of economic scale compared to smaller cities like auckland because less demand
What does Appendix A2.5 tell us
growth rate for different regions in new zealand and urban and rural areas
What is an example of double counting?
improved road access will reduce road user costs as well as increase land value -want to avoid double counting
What law do people follow when making decisions and how does it apply to transport
individual decisions are variable but generally follow the law of demand -law of demand = when the price increases, consumption decreases -in transport, the price is travel time, comfort, safety etc. When these increase, mobility decreases -dont want mobility decrease too much that it affects the economy or disadvantages certain groups
What is the purpose of an investment framework
investment framework doesn't make the investment decisions -it provides the data, process and tools to help decision making
What do we need to be careful about with technological transport modes
need to be careful that technologically advanced transportation is not isolated to the wealthy and that it is accessible + beneficial to all groups
Define price
perceived direct cost for the user to consume the good -can be monetary cost or non-monetary eg time/comfort -changing the price changes the consumption decision eg increase price, less likely to buy
What happens to the supply vs demand curve if we apply road pricing
road pricing causes the demand to contract so the demand goes up the demand line and the existing supply is enough.
What are the 3 main economic savings used in the EEM and other minor savings
travel time savings VOC savings crash cost savings Trip reliability increase in rider comfort decrease in environmental impact
