the need for a multi-faceted appraisal framework for major

Andrew Marsay Transport Economist"Aligning financial cost with real economic value"

“Theneedforamulti-facetedappraisalframeworkformajorpublictransport

investmentsinSouthAfrica ”

i-TransportUATPconferenceandexhibitionSandtonConventionCentre,20th June2018

Structureoftoday’spresentation

ReviewoftheconclusionsofmyUATP2017presentation

HowwehavemeasuredthevalueofPTinrecentyears

Whatstakeholderssaythattheywant frompublictransport

Whatparametersweneedtobeabletomeasurebetter

Someresearchproposalsforimprovingourevaluationtools

Conclusionsof2017presentation(1)

Lackofconsensusaboutourtransportinvestmentprioritiesmeansthatwehavecompetingvisionsofourfuturemetropolitanform:

– Unreformedrail+commuterbusesstillservingdiscriminatorystatusquo

– MBT,unpricedroads,e-hailing(‘Uber’)=gowiththeflow oflowdensity

– ModernPT+pricedroadstosupportahighdensity,highvaluefuture

Conclusionsof2017presentation(2)

Currenttransportpolicy,ase.g.inGauteng’sITMP25,appearstosupportthedevelopmentofthehighdensity/valueurbanfuture:

– Subsidizedhousingprovisionwithinurbancoreareas– Landusedensificationinsupportofpublictransport– Reinforcingthepassengerrailnetwork:‘Gautrain2’+(reformed!)PRASA– Integratedroad-basedpublictransportsystems– Provincialtraveldemandmanagementplan– Wellmanaged,sustainablyfunded*,highwaynetwork

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*Gautengreviewofhighwayfundingoptionsshowedthatwhilee-tollingwastheleastwanted option,itwasleastbadforthepoor!

Conclusionsof2017presentation(3)

Adecision-makingtoolisneededthatallowsstakeholderstoarriveataconsensusthatallcan‘own’,includingthefollowingcriteria:

– National/provincial/metropolicyalignment– Efficacyofatransportservice’sinstitutionaldeliverymodel– Statedpreferencesofabroad-basedcrosssectionofsociety– Publiccost(subsidy)perpassengerkmforeachinvestmenttype– Sustainability– theabilityofdifferentmodesoftransporttoactually

securepatronagelevelsneededtodelivertheagreedvision

2017‘proto-type’decision-makingmatrix

HowwehavemeasuredthevalueofPTinrecentyears– twocasestudies

The2004-2006SARCCRailplan:PriorityRailCorridors

TheCaseforGautrain‘1’:TheGautrainIntegrationReports

SARCC’sPriorityRailCorridors

SARCCaskedbyDOTtocomeupwithacommuterrailwaysplantostempassengerlossesandjustifyoperatingsubsidy

Threeoptionswereconsidered:– ‘BigBang’– massivecapitalinjectiontorestoreallinfrastructure– ‘Cuttothebone’– onlykeeplinesthathavecommercialpotential– ‘PriorityRailCorridors’– ranklinesbyfunctionalityvsothermodes

Testingrailfunctionalitycriteriabycorridor

Stakeholderworkshopsevaluatedlinesagainstagreedcriteria:

– National/Provincial/MetroITPPolicies– Currentpatronageandstateduserrequirements– Scopeforoffpeakservices– Scopeforbi-directionaloperationinpeaks– Traveldemandpatterns– allmodes– Spatialandnodalfeaturessupportiveofrail(density)– Infrastructure/topographysuitabilityforrail– Intensityofcompetitionfromothermodesbycorridor– Engineeringfeasibilityofenhancingrail– Operationalfeasibilityofenhancingrail

Corridorrankingbasedonstakeholderratings

OutcomesoftheCommuterRailplan

Mainoutcomehasbeenthehugeinvestmentinmanufactureofnewrollingstockandinfrastructurecurrentlyrollingout

ThefocusofinfrastructureinvestmentonPriorityCorridorsremainsattheheartofPRASA’sstrategy,inprincipleatleast

Butthereport’sconclusionthatanew,morecommerciallybased,operatingmodelwasneededwasnotimplemented

Asaresult,theprogrammeisunresponsivetochangingdemandpatterns;evenwhereneeded,theinvestmentscouldbewasted!

TheCaseforGautrain‘1’

CBAstudybasedontransferofroadtrafficfromN1;+bigeconomicimpactofconstructionandoperationalinvestment

TreasuryandnationalDOTnotconvinced- soinvestmentwasconditionalonintegrationwiththewidertransportnetwork

Hence,‘GautrainIntegrationReports’of2006and,expost,2010

The2006GautrainIntegrationReport

TheinitialissuewashowGautraincouldintegratewithothertransportsystems.Theanswerwasgivenatstrategiclevel:

TheGautrainnetworkfootprintwasshowntobewellalignedwithdensificationtrendsandnodalstructureintheProvince

TheGautraininvestmentwouldcomplementotherinvestments:SARCCRailplan,emergingBRTs,andthefreewaysprogramme

Thescopeforhighdensity,mixedusedevelopmentattransportinterchangeswashighlightedasamajorvalue-addopportunity

The2010GautrainIntegrationReport

AssessedGautrain’sstrategicintegrationrole,asacatalystto:

– Spatialintegrationinsteadofhistoricspatialdisintegration– Higherregionaleconomicgrowth– ‘agglomerationeconomies’– Thepotentialenergizationofthewholepublictransportsector– Transformationofpublicfundinginsupportofpublictransport– Thecreativityofpublicfundingcombinesprivatedeliveryskills

Gautrain’spositiveimpactonthePTmarket?

WhereGautrainisatnow...

Developmentimpactaroundkeynodesiswelldocumented;operationaleffectivenessisevident;usersappreciatevalue-add

Patronagegrowthgoodbutnotasexpectedbecauseforecastswerebasedonassumptionoftolledfreeways,inlinewithNLTA

Bettermeasuresofurbaneconomicimpactneeded,togetherwithimplementationofPTsupportivepoliciessuchasITMP25

Thecasefor‘Gautrain2’dependsonbuildinganewinformedconsensusaroundwhatsortofurbanfutureGautengerswant

Whatdifferentstakeholdersaresayingthattheywantfrompublictransport

Migrationtrendsshowthatpeoplevalueproximitytourbanjobopportunities;subsidisedlongdistancetravelis,atbest,aproxy

Accessibilityresearchshowsthatpeoplevalueavailabilityneartheirhomes,andreliabilityenroute,morethanspeedintransit

Publicpolicytranslatesthisintocommitmentstohigherquality,higherdensity,urbanismwithmorePT-richtransportstrategies

But,asindividuals,weprefertheimmediateaccesswithinlowdensityspatialrealitiesaffordedbycars,e-hailingandevenMBT

Implicationsofstakeholderviews

StopsubsidisinglongestdistancePTcommuting;prioritisethosePTmodestowhichpeoplehaveshowntheywillactuallytransfer

Acceptthatpublicpreferencesforconvenientmobilitywithinlowdensityurbanareasmustcontinuetobebecateredfor

Seektocommunicateinherentcontradictionsbetweendesireforhigherqualityurbanlivinganddemandsforpersonalaccess

Initiateongoing,broad-based,stakeholderconsultationsaroundtheurbanfuturewewantandtheinvestmentchoicesinvolved

Whatparametersweneedtobeabletomeasurebetterinfuture

Toassistthisbroad-basedindaba,transportprofessionalsandacademicresearchneedtoimprovemeasuresofthefollowing:

– Thevalue-addandhencetheproperroleoftransportsubsidisation– Thelongertermimpactsofroadsthatare‘freeatthepointofuse’– Whaturbanfuturepeoplewant- thenatureofthevision– Urbanagglomerationeconomies– thevalueofthevision– Thebesttransportinvestmentmix- torealisethevision– Therelativemeritsofdifferentpublictransportinstitutionalmodels

Thankyou!