pbs draft r is and associated doc mar 10

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PERFORMANCE BASEDSTANDARDS

DRAFT REGULATORY IMPACTSTATEMENT

March 2010

Prepared by

National Transport Commission


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National Transport Commission

Performance Based Standards - Draft Regulatory Impact Statement

Report Prepared by: NTC

ISBN:


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REPORT OUTLINE

Date: March 2010

ISBN:

Title: Performance Based Standards - Draft RegulatoryImpact Statement

Address: National Transport CommissionLevel 15/628 Bourke StreetMELBOURNE VIC 3000

E-mail: [email protected]: www.ntc.gov.au

Type of report: Draft Regulatory Impact Statement

Objectives: To detail options for the on going operation of thePerformance Based Standards heavy vehicle reform,including legislation, for consultation.

NTC Programs: Productivity

Key Milestones: Public consultation: March May 2010, ATCsubmission: November 2010

Abstract: This Draft Regulatory Impact Statement contains twoparts; the first part reviews and assesses options for

various PBS scheme frameworks, including thedevelopment of model legislation. Part two looks atoptions for enhancing how the scheme works withregards to assessment of vehicles to resolve cost andoperational flexibility issues.

Purpose: Public consultation

Key words: PBS, Performance Based Standards, road freight,productiviy

Comments by: 21st May 2010

Comments to be addressed to:

Chief ExecutiveNational Transport CommissionL15/628 Bourke StreetMELBOURNE VIC 3000
mailto:[email protected]:[email protected]://www.nrtc.gov.au/http://www.nrtc.gov.au/mailto:[email protected]


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HOW TO MAKE A SUBMISSION TO THE NTC

The NTC invites individual stakeholders and organisations to provide a written submission on this topic.

Who Can Make a Submission?

Any individual or organisation can make a submission to the NTC. There are no restrictions on

who can provide comment, e.g. individuals, community groups, private organisations andrepresentatives of government departments and agencies.

Structure of submissions

Please use the structured submission forms provided. Comment on matters you consider relevantto the topic. Where possible, you should provide evidence, such as data and documentation, tosupport your views.

If you are representing an organisation, please indicate your position in your organisation, and ifrelevant, specify at what level the submission has been authorised (branch, executive, president,sub-committee, executive committee, national body).

How to Submit OnlineOnline submissions are preferred. To make an online submission please follow these steps:

Step 1 On the NTC homepage (www.ntc.gov.au) select a Report Issued for Comment or clickon the link forwarded to you through a web alert.

Step 2 Select the Name of the NTC representative in the New Comments To column of theReport Issued for Comment table.

Step 3 Enter your NTC website login name and login password (you would have typed in thesedetails when you registered to receive NTC alerts. If you cannot remember these details orhave not registered then do so by selecting the Register button to register as a new user.

Step 4 On entry to the Respond to RFC Topics homepage enter any General Comments toaccompany your submission.

Step 5 Select Browse to upload your comments if they are contained in a separate document. If youare submitting an electronic version of your submission, it should be compatible withMicrosoft Word 2003 (.doc) or be in Adobe Portable Document File (.pdf) format.

Step 6 Enter your Document Author Details

Step 7 Select Save.

Once your submission has been saved it is automatically sent via email to the nominated NTC representative.

You will receive a confirmation email to your preferred address once the submission is received by the NTC.

Publication of Submissions

Unless submissions are made in confidence or accompanied by a request to delay release, allsubmissions will be published online. Copyright of received submissions, however, will reside withthe author(s), not with the National Transport Commission.

Important - Confidentiality

The NTC accepts confidential submissions. If you want to provide content not for public release, provide twocopies of your submission, one with the confidential content and the other with content suitable for publicrelease. You are encouraged to contact the NTC before submitting confidential material. If material is agreed

to be confidential it will be withdrawn. Note that access to confidential material is determined in accordancewith the Freedom of Information Act 1982. In the absence of any clear indication that a submission isconfidential, the NTC will treat the submission as non-confidential.


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FOREWORD

The National Transport Commission (NTC) is an independent body established under anAct and intergovernmental agreement to provide independent advice to transport ministerson regulatory and operational reforms. The NTC undertakes these reforms across road, railand intermodal transport to improve safety, productivity and environmental outcomes.

Road freight productivity affects all Australians. The costs of goods and services, from theprice of milk at the local supermarket to the iron ore exported through our ports, aredirectly impacted by the cost and efficiency of transport. Other benefits to the communityflow from reducing the number of trips required to service a freight task leading to lessvehicles on the road, fewer kilometres travelled, less exhaust emissions and reduced fuelusage. Productivity improvements drive better safety outcomes for the transport industryand the broader community, deliver environmental improvements and reduce urbancongestion improving urban liveability.

To allow industry to implement and benefit from improvements to road freightproductivity, without sacrificing road safety, the Australian Transport Council (ATC)supported the development of a performance based approach to heavy vehicle regulation asan alternative regulatory system to the current prescriptive regulations. It approved thePerformance Based Standards (PBS) package in October 2007.

Significant challenges remain to ensure this important national productivity reform,endorsed by the Council of Australian Governments and the Productivity Commission,delivers on its true productivity and safety potential.

In general industry has been very positive about the concept of performance basedregulation for innovative or higher productivity vehicles. However, the accessarrangements have been inconsistent and lead to poor uptake of the scheme. This draftregulatory impact statement investigates ways in which the robustness of the scheme can

be improved, including utilising the recently agreed National Heavy Vehicle Regulator toprovide a nationally consistent framework for applicants and access determination.

Extensive consultation has been undertaken between the NTC and representatives of allCommonwealth, state and territory transport agencies, industry, the community and otherrelevant stakeholders, in order to identify issues with the current PBS scheme and identifysome possible directions for further development.

NTC is seeking public comment on this draft regulatory impact statement and the proposedoptions for the future of the PBS scheme. Feedback will be used to review and refine theoptions which will be presented in a final regulatory impact statement and will besubmitted to ATC for vote in 2010.


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The NTC acknowledges the work of Kristian Cook, George Konstandakos, Julian DelBeato, Jose Arredondo, Marcus Coleman and Meena Naidu, in preparing this report, andthe work of Associate Professor Kim Hassall from Melbourne University and the IndustrialLogistics Institute for the preparation of the cost benefit analysis.

Greg MartinChairman

Mail Comments to: Chief ExecutiveNational Transport CommissionL15/628 Bourke StreetMELBOURNE VIC 3000

Telephone: (03) 9236 5000Facsimile: (03) 9642 8922

Email: [email protected]: www.ntc.gov.au
mailto:[email protected]://www.nrtc.gov.au/http://www.nrtc.gov.au/mailto:[email protected]


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Performance Based Standards - Draft Regulatory Impact Statement Page i

EXECUTIVE SUMMARY

The national freight task is projected to double in size over a twenty year period1. With ahigh proportion of freight being non-contestable by alternative modes such as rail and sea,road transport is expected to increase its share of freight by six per cent over a twenty year

period. This increase in freight demand is occurring at the same time as significantpopulation growth in Australian cities, both of which will lead to greater levels of urbancongestion, road trauma, increased fuel usage and associated emissions.

Australia is heavily reliant on road transport because of its low population density and thelong distance between markets. With trucks currently moving around 80 per cent of thefreight task and buses carrying around 62 per cent of total public passenger trips, a safe,sustainable and efficient road transport industry is vital to the Australian nation.

Productivity improvements are critical to Australias economic growth. Productivityimprovements should result in less trucks on the road, fewer trips and better use ofinfrastructure and freight routes. This leads to better safety, environmental and efficientoutcomes.

The Performance Based Standards (PBS) scheme is one tool available to governments toimprove the productivity of the transport industry, through better matching of freightvehicles to the freight task.

PBS allows industry to innovate to increase productivity of vehicles while meetingsustainability and safety goals. The key feature of the PBS scheme is that it focuses on howwell the vehicle behaves on the road, rather than prescriptive dimensions and mass limits.

In February 2006, COAG recognised the potential of the PBS reform and agreed that2:

Performance Based Standards is seen as an important element in a regulatory approach

to road transport which will enable continuous productivity gains and technological

improvement, whilst meeting reasonable safety, road asset protection and environmental

standards.

In July 2009, the NTC delivered its review of the operation of the PBS scheme. Thescheme had been in operation under administrative arrangements within roads authoritiesin states and territories since October 2007.

The review concluded that while PBS has had limited success in improved productivity forsome operators, many industry members have been discouraged from participating in the

scheme due to the uncertainty around obtaining the desired road network access.In addition industry participation has been subdued due to the limited flexibility and highcost of participation in the scheme. NTC found that while ATC formally adopted the PBSscheme in 2007, in practice, states and territories have failed to implement the reform in aconsistent manner.

From this review it was determined that some improvements need to be made to thescheme to improve industry take up. This regulatory impact statement sets out the desiredimprovements. It contains two parts; the first part reviews and assesses options for various

1 National Transport Commission, Twice the Task - A Review of Australia's Freight Transport Tasks,February 2006, available at: http://www.ntc.gov.au/DocView.aspx?page=A02312400400570020.2 Council of Australian Governments Meeting (attachments), 10 February 2006, available athttp://www.coag.gov.au/coag_meeting_outcomes/2006-02-10/docs/attachments_a-h.pdf.


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Page ii Performance Based Standards - Draft Regulatory Impact Statement

PBS scheme frameworks, including the development of model legislation. Part two looksat options for enhancing how the scheme works with regard to assessment of vehicles toresolve cost and operational flexibility issues.

PART 1 PBS ASSESSMENT AND ACCESS FRAMEWORKS

Problem statement

PBS provides an access framework for SMART3 trucks and buses, which can carry morefreight and passengers, to operate safely on the road. The end result is fewer trucks on theroad for the same freight task, improved road safety, less transport emissions and a morecompetitive domestic economy.

The key deficiency of the current PBS scheme is in the granting of road access to approvedvehicles. Once the PBS Review Panel has assessed and approved the vehicle, it is then upto state and territory governments to provide a class 3 permit to operate the vehicle. At this

point there is no compulsion for the state or territory road authority to issue a permit and as

such operators have been left with fully approved vehicles which are unable to access thedesired network.

Of the 75 PBS Review Panel approved vehicles, access has been denied to 4 per cent ofvehicles and additional operating conditions have been applied to 17 per cent of vehiclesover what was prescribed by the Panel.

As many of the vehicles built using the PBS process are unable to be used outside of thescheme, the failure to gain access represents significant losses to the owners of thevehicles, not only in vehicle costs which may run into hundreds of thousands of dollars butalso in wasted time and PBS assessment and certification fees. Many fleet operators who

have been through the scheme have indicated that they would not be willing to use it in thefuture.

Objectives

To deliver on the COAG requirements, the key objectives of the PBS scheme are:

improved freight productivity

reduced impact on the environment with regard to vehicle emissions and CO2, and

reduced impact on society with regard to reductions in road trauma and congestion.

To achieve these objectives, the scheme must deliver on a number of principles in order to

attract the participation required for a meaningful outcome. Through stakeholderconsultation, the following principles need to be met to deliver the required results:

certainty of access for approved SMART trucks and buses

national consistency in operating and access conditions

improved operational flexibility of PBS vehicles

reduced compliance cost, and

improved industry participation.

3 SMART is the public name for Performance Based Standards compliant vehicles


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Performance Based Standards - Draft Regulatory Impact Statement Page iii

Options

As with any access framework, there are two components which may either be national orstate based. These are:

vehicle assessment (against the PBS standards), and

network access arrangements (which are currently administered by state class 3permits).

The options which may be adopted for these two elements are:

Option 1 Maintain the status quo by keeping the current administrative scheme in placein which PBS acts as a national assessment system requiring state-based permits for roadnetwork access.

Option 2 Move to a state-based assessment and access system to provide high levels offlexibility and better single state access assurance.

Option 3 Move to a national assessment and access framework utilising the nationalheavy vehicle law and national heavy vehicle regulator to improve national consistencyand certainty of access.

Figure 1. National assessment and access framework concept

PBS

Appl icant

RM1 RM2 RM3

Road Managers (Incl. Local Governments)

Assesseddesign &

access request

Addi tional accessarrangement and

conditions agreedwith road managers.

Class 2 Permit ornotice issued

National Heavy

Vehicle Regulator

National PBS Maps

PBS Review Panel

Design approvalApply operating condit ions

ConfirmedPBS accessadded to maps

RM4 RM5 RMn


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Page iv Performance Based Standards - Draft Regulatory Impact Statement

Impact analysis

Table 1 is a summary of the expected impacts of each option on the key criteria. All data issourced from Hassall 2009, Forecasting the Benefits of Performance Based Standards forthe Australian Road Transport Industry, 2011 to 2030 (Appendix 1 of this document).

Table 1. Summary of option impact against objectives

Option 1 Option 2 Option 3

Improved industry participationLow Medium High

Improve freight sector productivityMedium Medium High

Reduced impact on the environmentMedium Medium High

Reduced impact on society (road trauma)Medium Medium High

Certainty of access

Low High HighNational consistencyMedium Low High

Reduced compliance costLow Medium Medium

The success of PBS is reliant on two key factors, the take-up rate of more productivevehicles and the amount of additional productivity each PBS vehicle can deliver. Whilesmaller vehicles will provide benefits in urban environments, larger combinationstravelling interstate routes provide the most potential for savings. Option 3 delivers boththe best take-up rate and national access is shown to deliver the highest benefits.

Table 2. Summary of financial, social and environmental benefits by option

Selected PBS Metrics Option 1 Option 2 Option 3

1. Fatality Savings to 2030 23.8 20.4 87.3

1A, Fatality Savings ($ nominal) $0.083B $0.071B $0.305B

2. Total CO2 Savings Million tonnes 0.99Mt 0.72Mt 3.75 Mt

2A. Total CO2 Savings ($ nominal) $0.023B $0.017B $0.086B

3.PBS Kilometre Savings 2011 - 2030 1.06 kms 0.95 B kms 3.7 B kms

3A. Direct Financial Savings 2011 2030 ($ nominal) $1.79B $1.74B $5.45B 2.

Total Savings (1A+2A+3A) Nominal $1.90B $1.83B $5.84B

4. Compliance Costs ($ Nominal) $-0.084B $-0.136B $-0.112B5. Administration Costs ($ Nominal) -$0.011B $-0.029B $-0.016B

Total Costs (4+5) Nominal $-0.095B $-0.165B -$0.128B

Net Direct Savings PBS 2011 -2030 (Nominal) $1.805B $1.665B $5.712B


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Performance Based Standards - Draft Regulatory Impact Statement Page v

Key benefits of the vehicle take-up rate (figure 2) are in the areas of economic (figure 3),environmental (figure 4) and social (figure 5) outcomes of each of the options.

Figure 2. Vehicle take-up Figure 3. Economic outcomes

PBS Vehicles at 2030

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

1 2 3

Option

TotalNumber

Financial Benefi ts ($B) 2011 - 2030

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

1 2 3

Option

$B

Figure 4. Environmental outcomes Figure 5. Social outcomes

Total CO2 Savings (M illion Tonne s)

0

0.5

1

1.5

2

2.5

3

3.5

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1 2 3

Option

Milliontonn

esofCO2saved

Fatality Reduction (2011 - 2030)

0

10

20

3040

50

60

70

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90

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1 2 3

Option

Livessaved


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Page vi Performance Based Standards - Draft Regulatory Impact Statement

Sensitivity analysis was undertaken to understand the range of possible outcomes for Option3, the overall range of financial benefits are shown on figure 6. A detailed description is

presented in Appendix 6 of the cost benefit analysis.

Figure 6. Sensit ivi ty Analysis

Sensitivity Analysis - Financial Benefits for Option 3

0

1

2

3

4

5

6

7

8

Low Median 1 High

$B

Costs

The key benefit of the PBS system is that additional productivity may be realised by betterutilisation of existing road infrastructure assets. The infrastructure requirements have beenapproved by ATC to ensure that the impacts of PBS vehicles are equivalent to prescriptiveheavy vehicles.

Future expansions of PBS networks are expected to occur progressively based on governmentland transport planning schemes such as the national AusLink approach and state and

territory transport planning schemes such as Victorias Freight Futures network strategy.

Compliance costs consist of the administrative, compliance and business time costs. Forcomparison purposes and to ensure that figures are conservative the costs below utilise thehighest cost case for each option.

Table 3. Compliance cost per annum by opt ion

Cost Option 1 Option 2 Option 3Compliance cost ($/year) $3,120,000 $5,044,000 $4,152,000

Administrative cost ($/year) $419,600 $1,100,000 $580,800

Total Costs ($/year) $3,539,600 $6,144,000 $4,732,800


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Performance Based Standards - Draft Regulatory Impact Statement Page vii

Net Present Value of Benefits

A Net Present Value evaluation of the options was conducted using a general inflation valueof 3% per annum and a nominal discount rate of 7% per annum (resulting in a real discountrate of 4%).

To derive a financial estimate of fatality reduction the statistical cost of life, estimated by theOffice of Best Practice Regulation at $3.5 Million per life was applied. The savings in CO2were evaluated at a cost per tonne of $23 escalated by a risk free long term bond yield of 7%

per annum, as per the average long term bond yield since July 1990.

Table 4. Net Present Value by option

Selected PBS Metrics Option 1 Option 2 Option 3

NPV Value Fatality Savings ( $ NPV) $0.06B $0.05B $0.22B

NPV Value CO2 Savings (NPV) $0.023B $0.017B $0.086B

Direct Financial Savings ($) 2011 2030 (NPV) $1.01B $0.97B $3.09B

Total Costs (Compliance and administration) NPV -$0.0505B -$0.0876B -$0.0675B

Net Direct Savings PBS 2011 -2030 (NPV) $1.04B $0.95B $3.33B

Figure 7. Reform direct Net Present Value by opt ion

Net Present Value by Option

0

0.5

1

1.5

2

2.5

3

3.5

Option 1 Option 2 Option 3

$B


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Page viii Performance Based Standards - Draft Regulatory Impact Statement

Implementation

Implementation of the reform is to be delivered and measured against milestones set out in anational implementation plan. The NTC will work with the individual state and territorygovernments to develop the plan following ATC vote on the preferred option. This processwill reflect the two stage implementation planning process recommended in the NTC Reviewand endorsed by ATC.

The preferred option of PBS legislation (option 3) is intended to be incorporated into theproposed National Heavy Vehicle Law and administered by the National Heavy VehicleRegulator (agreed at ATC May 2009). This arrangement will provide the best environment forPBS to deliver a clear, nationally consistent scheme for delivering improvements in the roadfreight industry.

Operation of the National Heavy Vehicle Regulator is proposed to commence from July 2011.It is intended that the scheme would continue to be administered in its current form until thenational regulator is able to take over the function, at which point the scheme would swap tothe national assessment and access model.

Should option 3 be pursued a set of national access and operating conditions will bedeveloped to ensure that risks inherent with a particular vehicle design are adequatelycontrolled. NTC will develop these requirements in cooperation with governments, industryand vehicle development and safety experts.

Regardless of the options chosen for the PBS scheme, the mapping of networks (in particularwhere local council road assets are included) will remain a key component of a successfulimplementation. Governments are encouraged to work with local councils to facilitate theaccurate sharing of information on the PBS system and to work towards providing viable PBS

networks which include the last mile.The national implementation plan will include a comprehensive communications strategy toengage councils and address perception issues around high productivity vehicle use.


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Performance Based Standards - Draft Regulatory Impact Statement Page ix

PART 2 PBS SCHEME ENHANCEMENTS

Problem statement

In addition to the options for implementing the PBS scheme, the review noted that some

changes are required to assist the scheme in delivering a more cost effective and flexiblesystem for vehicle operators.

Two key changes identified in the PBS review and supported by industry are:

modular assessment of vehicles (allowing prime movers to be assessed independentof the trailers used), and

removing the reliance on scarce third party engineering resources by allowing self-certification and wider vehicle manufacturer participation.

This draft regulatory impact statement seeks to gain agreement to pursue the development ofthese concepts within the PBS framework.

Objective

The objective of the changes to the assessment of vehicles in PBS is to allow operators to usePBS approved equipment in a more flexible manner by being able to assemble compliant PBScombinations from pre-assessed components. The current system can only approve a singlevehicle which cannot be broken down or have modules such as compatible prime moversswapped, for example when a prime mover is out of service or unavailable for any reason.

The secondary purpose is to encourage more vehicle manufacturers to be involved in theassessment and sale of PBS compliant vehicles to the market so as to reduce the cost tooperators of more productive vehicles.

OptionsThe two key elements of improving flexibility and reducing the cost of the PBS system are:

the concepts of manufacturer assessment and certification, and

modular assessment of PBS combination vehicles.

The options presented are to accept and pursue the development of these concepts or maintainthe current processes.

Impact analysis

PBS vehicle compliance costs typically include the cost of assessment of the vehicle against

the PBS standards and the cost to certify that the vehicle, as built, meets the requirements ofthe design approval (vehicle assessment).

As it is difficult to define a typical transport operator, it is just as difficult to develop a typicalcost of compliance for the PBS scheme. To study the relative compliance costs between theoptions presented in this paper, a test case which is similar to a small PBS vehicle operatorhas been assessed. In this case the operator runs two PBS combination types, (a Super B-double and a quad axle semi-trailer) each with four complete combination vehicles.

Under the current system, costs are borne almost exclusively by fleet operators. Shouldmodular certification and self certification be implemented, it is expected that the compliancecosts would in general be borne by the manufacturer of SMART vehicles and such costs may

be amortised over the full production run of the vehicle component.Table 5 compares the current costs to expected costs with these process improvements.


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Page x Performance Based Standards - Draft Regulatory Impact Statement

Table 5. Comparative compliance costs per opt ion for a given fleet

Sample fleet compliance cost Cost to change prime mover

Current system $56,000 $17,000

With Part 2 enhancements $16,000 $500

Recommendation

NTC recommends that both self certification and modular assessment be agreed for inclusionin the PBS business and assessment rules.

Implementation

Technical work to confirm that the concept of modular certification is robust is currentlybeing conducted by approved PBS assessors. Successful implementation will require that asystem for identifying compatible vehicle modules for the purposes of operation and

compliance monitoring is developed and robust. This work is expected to be led by the NTCwith input from governments and industry should modular assessment be approved.

To implement self-certification, in particular the auditing requirements, the PBS ReviewPanel secretariat would need to be sufficiently resourced and staffed with individualsexperienced in, and capable of, carrying out technical audits. This may be accomplishedthrough utilisation of the resources of the National Heavy Vehicle Regulator.


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CONTENTS

1. INTRODUCTION ..................................................................................................1

2. THE HISTORY OF PERFORMANCE BASED STANDARDS (PBS) ...................3

3. INTENT OF REGULATORY IMPACT STATEMENT............................................6

PART 1 PBS ASSESSMENT AND ACCESS FRAMEWORKS...............................7

4. PROBLEM STATEMENT .....................................................................................74.1 PBS addressing the growing freight task...........................................................7

5. CURRENT REGULATORY ENVIRONMENT .......................................................95.1 What types of vehicle use PBS? .......................................................................95.2 Access frameworks .........................................................................................115.3 Prescriptive regulations ...................................................................................125.4 The permit system...........................................................................................12

5.5 Networks made available to PBS compliant vehicles......................................175.6 Matching vehicles and operating environment risks........................................195.7 Conclusion.......................................................................................................20

6. OBJECTIVES .....................................................................................................21

7. REGULATORY CHANGE ..................................................................................22

8. OPTION 1 MAINTAIN THE STATUS QUO .....................................................258.1 Description of option........................................................................................258.2 Legislative changes.........................................................................................268.3 Positive aspects...............................................................................................268.4 Negative aspects.............................................................................................27

8.5 Costs ...............................................................................................................288.6 Benefits............................................................................................................28 8.7 Risks................................................................................................................28

9. OPTION 2 STATE-BASED ASSESSMENT AND ACCESSARRANGEMENTS .............................................................................................309.1 Description of option........................................................................................309.2 Positive aspects...............................................................................................319.3 Negative aspects.............................................................................................329.4 Benefits............................................................................................................32 9.5 Costs ...............................................................................................................339.6 Risks................................................................................................................33

10.OPTION 3 NATIONAL ASSESSMENT AND ACCESSFRAMEWORK....................................................................................................3410.1 Description of option........................................................................................3410.2 Vehicle assessment and approval...................................................................3410.3 Access arrangements......................................................................................3410.4 Network classification......................................................................................3510.5 Operating conditions........................................................................................3510.6 Legislative changes.........................................................................................3510.7 Model law ........................................................................................................3610.8 Positive aspects...............................................................................................3610.9 Negative aspects.............................................................................................3610.10 Benefits............................................................................................................37 10.11 Costs ...............................................................................................................3710.12 Risks................................................................................................................37


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11. IMPACT ASSESSMENT.....................................................................................3911.1 Improved industry participation ....................................................................... 3911.2 Improved freight sector productivity ................................................................ 4111.3 Reduced impact on the environment ..............................................................4511.4 Reduced impact on society (road trauma) ...................................................... 47

11.5 National consistency ....................................................................................... 4811.6 Certainty of access..........................................................................................4811.7 Industry compliance cost.................................................................................4811.8 Additional business costs ................................................................................5111.9 Administrative costs ........................................................................................5211.10 Network Costs.................................................................................................5311.11 Summary of benefits by option........................................................................54

12. CONSULTATION................................................................................................55

13. RECOMMENDED OPTION.................................................................................55

14. IMPLEMENTION AND REVIEW.........................................................................56

14.1 Legislation - National Heavy Vehicle Law and Regulator ...............................5614.2 Communication ............................................................................................... 5814.3 Mapping .......................................................................................................... 5814.4 Operating conditions .......................................................................................5914.5 Review ............................................................................................................ 59

PART 2 PBS SCHEME ENHANCEMENTS...........................................................60

1. MODULAR ASSESSMENT AND USE ...............................................................601.1 Background.....................................................................................................60 1.2 Problem...........................................................................................................60 1.3 Objectives ....................................................................................................... 611.4 Options............................................................................................................61 1.5 Impact analysis ............................................................................................... 621.6 Recommended option.....................................................................................641.7 Implementation................................................................................................64

2. SELF-ASSESSMENT AND CERTIFICATION....................................................652.1 Background.....................................................................................................65 2.2 Problem assessment and certification resources.........................................652.3 Objectives ....................................................................................................... 672.4 Options............................................................................................................67 2.5 Impact analysis ............................................................................................... 672.6 Recommended option.....................................................................................692.7 Implementation................................................................................................70

APPENDIX 1 - Forecasting the benefi ts of Performance Based Standards forthe Australian road transport industry

APPENDIX 2 - Model Law on Performance Based Standards for heavyVehicles


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LIST OF TABLES

Table 1. Summary of opt ion impact against objectives .................................iv

Table 2. Summary of financial, social and environmental benefits by

option ...................................................................................................iv

Table 3. Compliance cost per annum by option .............................................vi

Table 4. Net Present Value by option..............................................................vii

Table 5. Comparative compliance costs per opt ion for a given fleet.............x

Table 6. Performance Based Standards - road network length l imits .........17

Table 7. Network level access by state and terr itory.....................................18

Table 8. Options for assessment and access ................................................23

Table 9. Summary of opt ion impact against objectives ................................39

Table 10. Fatal Crash and Fatali ties rates by vehicle type..............................47

Table 11. Summary of financial, social and environmental benefits byoption ..................................................................................................54

LIST OF FIGURES

Figure 1. National assessment and access framework concept.....................ii i

Figure 2. Vehic le take-up .....................................................................................5

Figure 3. Economic outcomes ............................................................................5

Figure 4. Environmental outcomes ....................................................................5

Figure 5. Social outcomes...................................................................................5

Figure 6. Sensitivity Analysis.............................................................................vi

Figure 7. Reform direct Net Present Value by opt ion .....................................vi i

Figure 8. Timeline of PBS developments ...........................................................4

Figure 9. Projected growth and distribution of the domestic freight task8,. ...7

Figure 10. Heavy vehicle types approved under the PBS scheme to date .....10

Figure 11. Breakdown of approved vehicles by combination units ................10


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Figure 12. Appl icabi li ty of PBS to the vehicle fleet ...........................................11

Figure 13. PBS approvals by vehicle level .........................................................15

Figure 14. Assessment and access effects on vehicle suitabi lit y ...................23

Figure 15. Total PBS vehicles by 2030 by option ..............................................40

Figure 16. PBS vehicles as a percentage of the f leet in 2030 by opt ion ..........40

Figure 17. Vehicle take-up by by opt ion .............................................................41

Figure 18. Expected kilometre savings by deploying PBS vehicles byoption ..................................................................................................42

Figure 19. Expected kilometre savings per vehicle (2011-2030) by option .....42

Figure 20. Expected fuel savings by deploying PBS vehicles by option ........43

Figure 21. Expected financial benefits (2030 real dollars) by deploying PBSvehicles by option ..............................................................................43

Figure 22. Sensit ivity analysis for opt ion 3........................................................44

Figure 23. Total CO2 savings by 2030 by option................................................45

Figure 24. Number of vehicles saved at 2030 by opt ion ...................................46

Figure 25. Total lives saved by 2030 by option..................................................47

Figure 26. Industry compl iance costs per annum by option ............................49

Figure 27. Per vehicle compliance cost by option ............................................50

Figure 28. Business time cost by opt ion............................................................51

Figure 29. Regulatory impact statement milestones.........................................56

Figure 30. PBS process as administered by the National Heavy Vehicle

Regulator.............................................................................................57

Figure 31. Modular certif ication concept............................................................62

Figure 32. Number of approved assessors and certifiers by jur isdiction .......66


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Performance Based Standards - Draft Regulatory Impact Statement Page 1

1. INTRODUCTION

Summary

The Performance Based Standards (PBS) scheme is a voluntary alternative toexisting prescriptive regimes that mandate the size and mass of a heavy vehicle.

PBS provides a nationally approved heavy vehicle assessment method.

PBS governs what a vehicle can do, not what it should look like.

The design flexibility offered by PBS allows vehicles to be better suited to theirfreight task which provides freight productivity gains.

Improved efficiency and productivity of road freight can deliver economic, socialand environmental benefits.

The Performance Based Standard (PBS) scheme is a voluntary scheme which is tailored toproviding road network access to higher productivity vehicles by directly assessing theirsuitability for use in different environments. The key focus is on how the vehicle behaves onthe road, rather than its dimensions and mass (prescriptive limits), through a set of safety andinfrastructure standards. This ensures that a vehicles performance is matched to its level ofroad network access.

The OECD report Performance-Based Standards for the Road Sector4 noted While mostregulations for heavy vehicles remain prescriptive, performance-based approaches to

regulation have been the focus of regulation reforms internationally in recent years. This has

been to ensure:

Governments only intervene when there is a need for them to do so.

The performance that needs to be regulated is transparent.

Regulations are subject to an ongoing process of evaluation.

Consistency is achieved across jurisdiction boundaries.

Innovation and take-up of new technologies and approaches is encouraged byregulations that do not create unnecessary inflexibilities for those who have to comply

with them.

This approach to regulation has been adopted internationally in other sectors, such as

occupational health and safety and food standards and is now well established as the approach

preferred for effective and efficient regulation.5

PBS is primarily concerned with providing vehicle designers and operators greater flexibilitywith respect to the mass, dimensions and possible vehicle combinations (trucks carrying one ormore trailers) than is available under prescriptive mass and dimension schemes such as theAustralian Design Rules (ADRs).

4 OECD, Performance-Based Standards For The Road Sector, 2005, Page 185 OECD, Performance-Based Standards For The Road Sector, 2005, Page 17


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Page 2 Performance Based Standards - Draft Regulatory Impact Statement

PBS sets minimum vehicle safety and infrastructure standards to ensure heavy vehicles arestable on the road, can turn, stop and accelerate safely and cause no additional infrastructuredamage than other heavy vehicles. In other words, PBS governs what a vehicle can do, notwhat it should look like. PBS approved vehicles have been promoted as SMART6 trucks and

buses because they have been intelligently designed to best fit the task for which they are

intended.

Applicants can obtain an independent engineering assessment of their SMART truck or busdesign, typically using computer simulations, to determine whether the vehicle meets thestandards. This gives regulators confidence in the vehicles safety. Vehicles are matched tosuitable road networks according to their on-road performance. The better the vehicles

performance, the better its level of access to the road network.

Using a purpose-built SMART heavy vehicle to do a particular task can deliver significantefficiency gains. Productivity benefits could include a small increase in trailer length (usingsteering axles, which use less road space on turns); more axles and better load distribution tocarry more weight; or modular trailer designs for improved flexibility.

Improved freight productivity has effects on the cost of transport and thus the direct cost ofgoods and services. It also has flow-on benefits by allowing organisations to adjust warehouseand inventory requirements, and reduce their costs, which leads to further productivity gains.

There are also non-financial benefits to be derived from improvements in road freightproductivity, including reducing the number of trips required to service a freight task, leadingto less vehicles on the road (for the same task), fewer kilometres travelled, less exhaustemissions, reduced fuel usage. Road safety is also improved as less vehicles on the roadreduces the chances of vehicle to vehicle, single vehicle or pedestrian impacts, less tripsrequired to move a task can lead to improved driver hours and reduced fatigue.

Improved road freight can enhance and provide productivity improvements to other forms oftransport such as rail. Intermodal transport is dependent on reliable and timely supply of freightin order to be effective and efficient. Road congestion degrades the reliability and performanceof carriers, shippers, and terminal operators. Improved road freight productivity can alleviatecongestion around intermodal hubs and improve the viability of intermodal services.

PBS is one of the few tools available to governments that can be used to improve road freightproductivity without requiring investment in road network infrastructure, as it attempts toderive the maximum benefit from the assets already in place.

The benefits of the PBS system are; Ability to design and operate a smart efficient vehicle that you wouldnt normally

be able to under prescriptive guidelines

Allows the ability to tailor build a vehicle to suit a customers logistic requirements Allows greater productivity Allows safer vehicles

Robert Blanchard CEO Blanchard Haula e SMART vehicle o erator

6 SMART is the public name for Performance Based Standards compliant vehicles


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2. THE HISTORY OF PERFORMANCE BASED STANDARDS (PBS)

Heavy vehicle productivity has been on the reform agenda of governments for decades. Thekey driver for reform has been the increasing demand for, and Australias reliance on, land-

based freight transport. Since the early 1960s, the national freight task has increased from under

20 billion-tonne-kilometres (btks) to about 200 btks today.

Due to Australias low population density and dispersed major population centres, road freightconstitutes a large component of the total freight task, with many movements unable to beserviced by other means, such as rail, due to infrastructure limitations. Likewise, bus transportis a key part of the public transport network which contributes significantly to facilitating themovement of people to and from work and around cities and urban communities. Improvedtransport productivity can therefore reduce the cost of moving people and freight, which has a

positive effect on the cost of goods and services.

Early efforts to increase productivity were focussed on relaxing prescriptive regulations

through mass and dimension growth (known as mass and dimension creep). For example,between the 1970s and the 1990s, the permissible gross mass of a semi-trailer and prime-moverincreased from around 35 to 42.5 tonnes. The maximum length increased from 16 to 19 metres.

Further gains were achieved by the introduction of B-double combinations in the early 1990s,which substantially replaced the use of semi-trailers on line haul routes.

The ability to continue mass and dimension creep of prescriptive vehicles for general access(unrestricted access) can be limited by the existing infrastructure. The prescriptive standardsare thereby limited by the worst performing vehicles that may comply with them.

As mass and dimension creep became unsustainable, states and territories began to offerconcessions and exemptions for better-performing vehicle designs, or those with special needs(e.g. when transporting an over-dimensional load).

The utilisation of permit and general notice schemes has continued to grow in size, to the pointwhere road agencies had difficulty in keeping pace with demand and the administrative load.This has resulted in differing approaches being taken by states and territories that haveinhibited cross border freight flows. For example, where 53 metre long road trains have beengranted access to a substantial proportion of the road networks of Western Australia and the

Northern Territory, only B-doubles up to 26 metres long are granted significant access toVictorian roads.

In response to these pressures, the PBS concept was conceived in 1998. It had an objective ofapplying nationally uniform assessment methods for vehicles, while allowing for differentconstraints of state and territory road networks.


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Figure 8. Timeline of PBS developments

Evolution of Performance Based Standards

Performance Based

Standards c oncept

conceived

ATC endorsed policy

framework for

development of PB S

approach

AT C approved adoptio n ofPBS

First m eeting of t he Interim

Review Panel

COAG recognised the

potential of PB S

ATC approved a refined

PB S package / First PB S

Review Panel meeting

PB S discussio n paper

published

PB S review document

published

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

In May 2001, the Australian Transport Council (ATC) endorsed the policy framework for thedevelopment of a performance-based approach to heavy vehicle regulation and, in December2003, voted to adopt the Performance Based Standards.

The PBS project was divided into six phases. They were:

Phase A: Performance Measures and Standards identifying the appropriateperformance measures and standards and surveying the performance ofthe current heavy vehicle fleet.

Phase B: Regulatory and Compliance Processes establishing a regulatory systemin which Performance Based Standards can operate as a seamless nationalalternative to existing prescriptive regulations including national complianceand enforcement arrangements.

Phase C: Guidelines preparing guidelines detailing the procedures and processesfor the consistent application of Performance Based Standards.

Phase D: Legislation developing the legislative arrangements for Performance

Based Standards to operate as an alternative to prescriptive regulations.

Phase E: Case Studies assembling work previously conducted and demonstratingthe practical application of Performance Based Standards to nationallyagreed priorities.

Phase F: Implementation putting in place the necessary legislative andadministrative systems to allow Performance Based Standards to operatenationally and providing the training and information to support thesechanges.

Most of these phases represented ongoing tasks and were to be addressed concurrently. At thetime of writing, these tasks have been completed with the exceptions being Phases D(Legislation) and F (Implementation).


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During the final stages of reform development, the PBS Interim Review Panel was establishedin April 2005 to road test the reform by reviewing case study applications. While notempowered to approve access for SMART vehicles, it could make recommendations to roadagencies on whether to grant a permit. In total, the PBS Interim Review Panel reviewed

27 SMART vehicle designs.

In February 2006, COAG recognised the potential of the reform and agreed that7:

Performance Based Standards is seen as an important element in a regulatory approach to

road transport which will enable continuous productivity gains and technological

improvement, whilst meeting reasonable safety, road asset protection and environmental

standards.

In October 2007, ATC approved a refined PBS package, including further developed vehicle

standards and assessment rules, business rules governing administration of the scheme andnetwork classification guidelines. This package represented a significant step towards thedevelopment of a nationally agreed, robust and autonomous scheme.

Under the revised administrative scheme, the responsibility for reviewing PBS applicationsshifted from the Interim Review Panel to the PBS Review Panel, which continues to operatetoday. It was agreed that the PBS scheme would be reviewed after 12 months of operation, witha view to developing legislation.

In July 2009, the NTC delivered its review of the operation of the PBS scheme which had beenin operation via administrative arrangements within roads authorities since October 2007. The

review concluded that while PBS has had limited success in improving road productivity forsome operators, the majority of industry members have disregarded the scheme, largely

because approved vehicles have not realised the desired network access.

NTC found that while ATC formally adopted the PBS scheme in 2007, in practice, jurisdictionshave not implemented the reform in a consistent manner. Some jurisdictions feel that the PBSscheme, while able to assess the technical suitability of a vehicle to a road, is not able toadequately deal with perception issues and community acceptance of higher productivityvehicles.

In addition to this jurisdictions have also struggled to find adequate resources to conduct the

road and bridge assessments necessary to publish robust PBS network maps. This has led todelays in the publication of maps and the exercising of discretional authority over grantingaccess to PBS vehicles, which may have already been approved by the PBS Review Panel. Thelack of uniformity and certainty of road and bridge access for compliant vehicles has created amajor impediment to PBS take-up in the freight community.

NTC suggested a number of improvements to the scheme and prioritised recommendations tore-establish national consistency improve transparency in network access approvals andstreamline the vehicle approval processes while improving flexibility of operation of SMARTvehicles.

7 Council of Australian Governments Meeting (attachments), 10 February 2006, available athttp://www.coag.gov.au/coag_meeting_outcomes/2006-02-10/docs/attachments_a-h.pdf.


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A key recommendation made in the review of the PBS scheme was to develop a regulatoryimpact statement, in accordance with Phase D of the ATC agreement of December 2003. Thisdraft regulatory impact statement will draw on the experience of PBS up to now and provide adiscussion and assessment of the merits of either:

continuing the scheme as it is currently administered as a national assessment withstate-based access permits

changing the scheme to a national assessment and access framework, or

assessing the capacity for greater improvement in freight productivity through state orregional assessment and access schemes, given the significant differences in operatingenvironments, community attitudes and existing infrastructure in each state.

It was recognised during the review that, along with assessing how the scheme is administered,additional process-based improvements and clarifications would be required to deliver on the

productivity increases envisaged in the establishment of the scheme, and these improvements

are therefore to be developed and reviewed through this draft regulatory impact statementprocess.

Should there be sufficient support for the concept of a national access framework, the NTCrecommends that the required legislation could be enacted through the National Heavy VehicleLaw and administered by the National Heavy Vehicle Regulator. The National Heavy VehicleRegulator is expected to be established and administerig national law by 2012.

3. INTENT OF REGULATORY IMPACT STATEMENT

This regulatory impact statement contains two parts:

Part 1: Review and assessment of various PBS scheme framework options,

Part 2: Options for additional measures to enhance how the scheme works with regardto assessment of vehicles.

The key deficiency of the current PBS scheme is in the granting of access for approvedvehicles. Access has been denied to 21 per cent of approved vehicles to date. Additionaloperating conditions have been applied to 11 per cent of vehicles over what was prescribed by

the Panel. This regulatory impact statement considers alternative arrangements which maydeliver more robust network access for approved compliant vehicles.

In addition to the options for implementing the PBS scheme, the review of PBS noted thatsome changes may assist the PBS scheme in delivering the productivity, social andinfrastructure benefits requested by COAG.

Two key changes identified in the review and supported by industry are modular assessment ofvehicles (allowing prime movers to be assessed independently of the trailers used) andremoving the reliance on scarce third party engineering resources by allowing self certificationand wider vehicle manufacturer participation.

This regulatory impact statement seeks to gain agreement to pursue the development of theseconcepts within the PBS framework.


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PART 1 PBS ASSESSMENT AND ACCESS FRAMEWORKS

4. PROBLEM STATEMENT

Summary

Road freight task is projected to double every 20 years.

The capacity to build infrastructure is limited particularly in urban environments.

Improved efficiency and productivity will have to be delivered through better use ofexisting road network assets and vehicles better suited to specific freight tasks.

4.1 PBS addressing the growing freight taskThe Twice the Task8 report shows that the national freight task will double in size over a twentyyear period. With a high proportion of freight being non-contestable by alternative modessuch as rail and sea, road transport is expected to increase its share of freight by 6 per cent overa twenty year period. This increase in freight demand is occurring at the same time assignificant population growth in Australian cities, both of which lead to greater levels of urbancongestion, road trauma, increased fuel usage and associated emissions.

Figure 9. Projected growth and distribution of the domestic freight task8,9.

NTC estimated that not addressing these issues in a meaningful way would result inapproximately another 50,000 trucks on Australian roads, with one in four vehicles in citiescarrying freight.

8 National Transport Commission, Twice the Task - A Review of Australia's Freight Transport Tasks, February2006, available at: http://www.ntc.gov.au/DocView.aspx?page=A02312400400570020.9 Billion Tonne Kilometres (Btks) is a freight measure describing the mass of freight and the distance it is moved.


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The impact of freight growth will be greatest in urban areas, particularly around ports, inter-modal terminals and distribution centres. As the majority of the population in Australia live inurban areas and the bulk of both domestic and imported industrial production is delivered tothese areas, the result is an increased demand for urban freight transport. Furthermore, as urbanfreight transport deals primarily with the distribution of goods at the end of the supply chain,

many deliveries tend to be made in small loads and in frequent trips, thus resulting in manyvehicle kilometres. The following factors can also be attributed to the growth in freight task:

the consumption of more products and services on-shelf availability is driving smaller order sizes and more frequent deliveries lower logistics costs driving the consolidation of production facilities increasing global markets with extended supply chains increases in resource demand for minerals and agricultural production, and the substitution and growth of imports.

In such environments traffic infrastructure and the possibilities for its extension are bothlimited and unsustainable. This disparity between demand and limitations of the urbanenvironment has resulted in significant problems associated with urban freight transport. Themost commonly mentioned are congestion, pollution, safety, noise and carbon creation. Thecombined effects of these problems are both economic and societal, in that they not only reducethe efficiency and effectiveness of urban freight transport and logistics operations but alsoimpact on quality of life through detrimental effects on health. 10

Unlocking constraints on freight productivity has been identified by government and industryalike as necessary for maintaining downward pressure on the price of goods, as well ascontributing to improved road safety and meeting targets for reduced levels of greenhouse

gases produced by the transport sector.

Improved freight vehicle design, which better matches the type of vehicle used to the freighttask and operating environment, has been identified globally as a key method of reducing thenumber of vehicles which will be needed to service the growing freight task.

Delivering improved freight productivity through existing prescriptive regulations has becomeincreasingly difficult. For many years, NTC has been working on productivity reforms to aligntruck-trailer mass limits; increase axle mass limits for twin-steer prime mover and semi-trailercombinations; increase axle mass limits for quad axle semi-trailers and B-doubles; and developa wider road network for B-triples with limited success.

It has become clear that governments are looking to schemes such as PBS to deliver thoseproductivity gains safely, particularly for combination vehicles, where performance can varydepending on the equipment used.

10European Communities, Urban Freight Transport and Logistics - An overview of the European research andpolicy, 2006.


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5. CURRENT REGULATORY ENVIRONMENT

Summary

PBS is the only nationally recognised scheme for assessing the suitability of

non-standard vehicles. PBS vehicle designs span the spectrum of heavy vehicle and bus design from light

rigid vehicles to multi-combination vehicles.

PBS vehicles are currently treated as Class 3 restricted access vehicles withstate-based permits required to be issued to allow use of the vehicle.

Current access arrangements are not national and may not be suitable for theactual types of vehicles utilising the scheme.

Network mapping by jurisdictions is currently inconsistent, and in some areas

incomplete. Access to local council roads is currently problematic due to issues of assessing

infrastructure and non-technical issues such as community perception andacceptance of higher productivity vehicles.

Risk factors may differ between locations and this is difficult to adequately addresssimply through geometric road classification.

5.1 What types of vehicle use PBS?

PBS is intended to provide an alternative compliance scheme for vehicles that do not fit withinthe existing (prescriptive) heavy vehicle access schemes. When considering the assessment andaccess arrangements for PBS vehicles, it is important to understand the range of vehicle typeswhich may utilise the scheme. This may range from the highly innovative vehicle type with avery specific freight task to generic vehicle types (with subtle changes to improve productivity)which have a much broader freight task.

Current experience with PBS has shown that the majority of applications for PBS approvalhave been for more standard vehicles with slight changes to improve productivity. However, itis expected that if the scheme gains acceptance, more routes will be mapped for longer

combinations and with greater access certainty, applications for these types of vehicles mayincrease.


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Figure 10. Heavy vehic le types approved under the PBS scheme to date

PBS Approvals by Type

A-double, 6%

B-triple, 6%

Bus, 10%

Super B-double, 8%

Rigid Truck, 2%Semi Trailer, 27%

Truck Trailer, 43%

Figure 11. Breakdown of approved vehicles by combination units

PBS Applications by Combination Units

Quad trailers

0%

Single trailer

68%

Double trailers

14%

Triple trailers6%

Rigid

12%

The key learning from the current operation of the PBS scheme is that it is being used forindustry to gain productivity improvements across the range of possible freight vehicles and


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buses, with most of the focus on smaller, more flexible vehicles, rather than larger vehicles.The access arrangements that were put in place at the commencement of the scheme, whichrightly expected most of the PBS fleet to be larger combinations requiring specific accessassessments by state authorities, should be reviewed with this in mind.

Figure 12. Appl icabil ity of PBS to the vehicle fleet

Highly innovative

vehicles

Off the shelf vehicles

Fleet Volume

Innovation

Perceived PBS focus

PBS has the capacity to service all

non standard vehicles

Generic high

productivity vehicles

Other Class 3 permit vehicles Current prescriptive

regulations

5.2 Access frameworks

Under national model legislation, heavy vehicles are categorised in the following fourclassifications:

General access vehicles, which are those complying with the vehicle standards andmass and loading regulations (e.g. rigid trucks, semi-trailers, standard type trucktrailers).

Class 1 vehicles are engaged in special purpose transport operations, which includeoversize and over mass, agricultural and mobile plant vehicles (e.g. low loaders,concrete mixer trucks).

Class 2 vehicles are specific types and combinations, which are compliant withapplicable model regulations. As a result of their size and/or mass they are subject torestricted access (e.g. B-doubles, road trains and long buses).

Class 3 vehicles are non-standard heavy vehicles11 which do not fall within the class 1or 2 categories. These are typically higher productivity vehicles which operate underconcessional access/permit schemes or under the PBS scheme (e.g. super B-doubles andunder existing legislation, all PBS vehicles). Their access to the road network is eitherrestricted or in accordance with the PBS access levels.

11Non-standard heavy vehicles refers to those that do not comply with applicable vehicle standards and/or massand loading regulations, and therefore, do not qualify for as of right access to the road network.


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The classes are divided based on the freight task, taking into consideration the demands onpayload mass and volume, as well as the extent of access required.

In classes 1 to 3, a risk-based approach is applied to prescriptive standards in order to strike abalance between allowing the productivity concession and maintaining an adequate level of

safety and protection of road infrastructure.In the case of state and territory specific permit schemes, variations with corresponding state,territory or national schemes may sometimes account for specific local circumstances.However, they often tend to also reflect more subjective differences, such as in the judgment ofroad agency staff. It is between these schemes that the greatest degree of variation betweenstates and territories exists. PBS is currently the only nationally recognised scheme forassessing the suitability of new or non-standard vehicle types against a common set of criteriaand acceptance values for vehicle performance.

5.3 Prescriptive regulations

Heavy vehicle access regulations are formed in two broad ways:

As national model regulations, developed by the NTC in collaboration with roadagencies and approved by ATC.

As state or territory regulations. These may complement national model regulations, orsubstitute for them (where a state or territory has not accepted the model regulations).

National model regulations, developed by the NTC, must account for and balance the needs ofall states and territories. They are approved by ATC and made available for implementation in

state and territory transport legislation.

Conversely, state and territory specific regulations are developed within a given state orterritory and approved under the applicable legislative process.

Prescriptive regulations, such as the Australian Vehicle Standards Rules, have beenimplemented by states and territories in a broadly uniform manner. However, they do not offerthe flexibility to be utilised for the regulation of higher productivity vehicles.

A variation on prescriptive regulations is gazettal notices. These allow road agencies todesignate prescriptive standards for heavy vehicles, much in the same way as for prescriptiveregulations. A key difference is that, as they do not represent regulations, road agencies may

vary the conditions of such notices with relatively greater discretion. Some states, notablyQueensland, have made extensive use of gazettal notices in regulating access for higher

productivity vehicles.

5.4 The permit system

In addition to prescriptive regulations, all states and territories administer permit systems thatmay allow, under certain conditions, restricted access to the road network for non-standardheavy vehicles (i.e. those not complying with prescriptive standards, including notices).

A key point of distinction between permits and regulations is the greater degree of individual

assessment for permit applications. Permits cater particularly for vehicles that cannotpractically comply with prescriptive regulations but may be permitted access to the road


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network under the discretional approval of road agency staff. The most common types ofpermit vehicles are special purpose (class 1) vehicles (to which PBS does not apply).

The continued pressure for freight productivity gains has led to an increase in the use of thepermit system for approving higher productivity vehicles. Generally, the more productive a

heavy vehicle, the more likely it is to be regulated under a permit regime.Road agencies have indicated the need to reduce the heavy resource burden imposed by thecurrent permit system. Although this was part of the rationale for the PBS schemes conception,under current PBS scheme arrangements, SMART vehicles are still processed as permitapplications. An important distinction is that their assessment is wholly (or predominantly)undertaken by third parties (accredited PBS assessor and certifier).

5.4.1 PBS permit access issues

Class 3 permit access has traditionally been a method by which jurisdictions provide restrictedaccess to vehicles which do not fully comply with existing legislation or vehicle notices. This

arrangement has been generally suitable for larger and heavier vehicles which are restricted dueto their size and mass and/or have bridge compliance issues. This arrangement is not as suitablefor interstate operations or for smaller PBS level 1 General Access vehicle types such as rigidtrucks, slightly longer semi-trailers and truck trailer combinations that are deployed to manydifferent locations on a day to day basis rather than running a single route.

Operators of national PBS fleets are required to obtain permits from each jurisdiction and insome cases, permission from each local area council in which they wish to operate. PBSoperators have commented that this is often a time-consuming process which offers noguarantee of access.

In summary, the PBS is a good process that is available to the industry whereby we canthink outside the square, however having to deal with the individual state jurisdictionsshould be simplified. For a small operator to have to deal with five different state

jurisdictions, and in some states, any local council where we operate in their region to gainfull access to the network is complex and time consuming.

SMART Vehicle Operator

Local government permissions (discussed in detail in section 5.5.1) have been a particular issuefor PBS applicants who frequently operate off state-based road networks. This has deterredsome operators from using PBS vehicles, instead opting for less efficient standard vehicles (see

Kirowin case study).


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In an Australian Financial Review article published in May 2008, Mr Taylor said hesubsequently purchased another truck, but this time opted to comply with prescriptiveregulations to avoid the red tape associated with negotiating road access.

Some were good and some just didn't want to know, he told Australasian Transport

News.

Hopefully Performance Based Standards will get up to a stage where once the truck goesthrough the NTCs Review Panel it's able to get on the road.

He approached the 15 local councils armed with his Performance Based Standardsassessment and state government support, but found many were unaware of the reform.

The Performance Based Standards reform allowed Mr Taylor to get the truck assessedagainst performance standards to prove its safe and wont damage bridges and it is nowup and running on a permit.

The truck can be broken up its modular. The front half is used for deliveries to farms andsites where access is poor. The rear trailer can be unhooked and used as a storage tank. Anextra 6 tonne payload also helps absorb cost increases and stay viable.

Rick Taylor is an owner-driver who carries fuel to farms and businesses in centralQueensland. He had a good idea for a better vehicle design.

Kirowin Case Study: Local road access

The NTC has received feedback from a number of operators that the process of applying tosome road agencies and local governments for network access pre-approval (prior to submitting

a formal PBS application) has proven frustrating and lacks transparency. A contributing factoris that PBS approval is not yet a one stop shop and requires applicants to negotiate with arange of road agency permit officers and local governments, as well as the PBS Review Panel.One operator reported to the NTC that he had waited almost two years for a route (bridge)assessment to be completed and was yet to receive a response.

The current administrative PBS scheme does not have a dispute resolution process or a way inwhich vehicle access and network classification decisions may be reviewed. This can leaveoperators with fully compliant SMART vehicles without a means to contest adverse accessdecisions.

5.4.2 Application of access and operating condi tions

The PBS scheme has been designed as a nationally consistent method for assessing vehiclesand providing road network access based on the agreement of the PBS Review Panel. To beeffective, it is important that each state implements the reform in a manner which aims todeliver a consistent outcome, so far this has not been the case.

Some states and territories have applied additional (and in some cases conflicting) requirementson SMART vehicles by way of access conditions and unapproved infrastructurerequirements, without reference to controlling a particular risk. These additional requirementsrange from design requirements such as the fitting of side underrun protection devices tomeeting additional pavement vertical loading standards. This has led to fragmented regulation

of PBS vehicles, effectively reducing the capacity for vehicle developers to provide improvedvehicles on a national basis. This drives a scheme which is more geared towards regionaloperators instead of manufacturers who may have greater experience and knowledge of vehicle


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design and certification of fully compliant vehicles to national customers in the same way asprescriptive vehicles. It is in the interest of the industry to have the manufacturers primarilyinvolved with the development and assessment of supplied components so that operators, whomay know little about vehicle design and testing, can concentrate on the business of runningefficient fleets.

So far a number of operators have utilised the scheme to realise productivity benefits,particularly with smaller combinations such as truck trailers and semi-trailers. This is reflectedin the number of approvals for different levels of vehicles. Figure 13 shows that only 10% ofapplications are for larger combinations. While this may partly be driven by a lack of mappednetworks for these larger vehicles it is also an indication that these vehicles which are typicallyused for line haul and interstate operations have not been able to realise consistent accessconditions across state borders (see following case study).

Figure 13. PBS approvals by vehicle level

Approvals by Vehicle Level

0%

10%

20%

30%

40%

50%

60%

Level 1 Level 2 Level 3 Level 4


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SMART vehicle operator

Jurisdiction 1o Applied for in-principle approval mid December 2008o In-principle approval granted early February 2009o Road authority advised I would need to have vehicle inspected by Heavy

Vehicle Inspection Station to ensure it was built to design and state/territorystandards. I had advised that an independent engineer had certified thesevehicles for PBS and questioned the need for this process.

o PBS permit issued early April 2009 for PBS design loading of 48.5 tonneso No road restrictions, general access at full weighto Not able to operate vehicle with extendible trailer extended to full 48.5

tonnes at present 43.5 tonnes still applies

Jurisdiction 2o Contacted jurisdiction in late May 2009 regarding process to operate vehicle

in that particular state/territoryo Reply received on the same dayo Permit to operate at PBS approved combination 20m issued less than two

weeks latero No road restrictions, general access at full weighto Advised that combination could also operate when extended > 20m at full

48.5 tonnes as per OD guidelines Jurisdiction 3

o Contact made with jurisdiction by email late May 09 regarding process tooperate in that particular state/territory

o Advised it is not automatic approval to operate in that state/territory eventhough PBS Review Panel has approved the design

o Road authority advised that the vehicle design would need to go to bridgeengineers, and then local councils need to give approval to operate on theirroads

o Informed that local councils have not agreed to twin steer prime moverso Full PBS approved design load of 48.5 tonnes would only be allowed on

B-double routeso Contacted road authority regarding the typical locations including

approximately 15 local council areas that these vehicles may operate in. Alsonoted that customers require drop-offs to various work sites, which can not be

planned. Outlined requirement also for use of extendible trailer extended ableto operate at same PBS assessed mass

o Road authority advised that separate council approvals would be needed foreach area in which the vehicle is to operate

Jurisdiction 4o Jurisdiction advised that an Overmass / Overweight permit would need to be

applied foro Have requested forms to be sent however no further contact has been made.

Example of jurisdiction access inconsistency for the same PBS approved vehicle

A PBS customer who operates a general access, PBS approved vehicle in a number of stateshas found that the process and operating conditions of the vehicle is not currently nationally

consistent in the way PBS was designed and agreed.


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PBS applicants require clearly defined rules regarding the application of operating and accessconditions upfront, as these can significantly affect the application. The PBS operatingcondition guidelines state: an operating condition should not be imposed on a vehicle unlessthe imposition of the condition will eliminate or significantly reduce a significant risk or harmthat might arise from the operation of the vehicle.

National consistency for approved SMART vehicles is important for reducing regulatoryburden and improving the productivity of interstate freight movements. A system whichsupports manufacturer-led PBS assessments would allow for the development of national PBSvehicle designs. This requires a single set of nationally consistent requirements which willallow for increased participation, thus improving the quality of vehicles offered to market andreducing the cost to operators.

5.5 Networks made available to PBS compliant vehicles

A key objective in developing the PBS scheme was to develop a system that would matchvehicles to appropriate road networks. As a result, a stratified road network classification wasdevised which became known as PBS road network levels.

Currently there are four network levels, referred to by numbers one through to four. These fourlevels roughly equate to existing networks for prescriptive vehicles, in ascending order, forgeneral access, B-double routes, and type I and type II road trains (see table 6).

Jurisdictions acknowledged that it would be difficult to immediately assess road networks forlonger vehicles. A transition path was agreed where A networks for shorter vehicles wouldinitially be mapped for each level whilst eventually assessing and developing the B networks

for longer combinations.

Table 6. Performance Based Standards - road network length limi ts

Network Access by Vehicle Length, L (m)VehiclePerformance

Level Access Class A

Access Class BPrevious class

Level 1 L 20 General Access*

Level 2L 26 26 < L 30

B- doubles

Level 3L 36.5 36.5 < L 42

Road train type I

Level 4L 53.5 53.5 < L 60

Road train type II

General Access is subject to a 50 tonne gross mass limit, posted local restrictions and restrictions or limitationsspecified by the jurisdiction (for example under the Higher Mass Limits scheme).

In approving the development of a PBS scheme under administrative arrangements the Councilof Australian Governments (COAG) directed jurisdictions to develop and publish PBS Alevel networks by the end of 2007, and to also develop expanded B level networks. Table 7

lists the networks that have been made available in each state and territory as of August 2009.In general most A level, state owned road networks have now been mapped. B level access


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has typically not been mapped and is available by individual route assessment or only availablein special trial area

pbs draft r is and associated doc mar 10

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