Planning Canberras Light Rail R J Nairn BE

Planning Canberra’s Light Rail R J Nairn BE, Bec, FIEAust

Feasibility Planning Understand your objectives Define the problem (if there is one) Understand the cause Can we fix the cause? If not can we fix the Symptom? • Derive all options for the fix • Option design and feasibility testing • Economic and financial testing • •

Planning objectives People choose to live in urban areas so that they can enjoy proximity to employment, education, health services, shopping, sporting and entertainment facilities and community functions. The frequency with which they travel is an indicator of their participation and enjoyment and the social & economic “health” of the city. The transport planners objective is to help them travel and thus participate at minimum travel cost.

The Urban Plan • Canberra is planned as an “Urban Village” with an Hierarchy to provide easy access to frequently visited destinations and greater variety further away. • Local centres have IGA or Coles or Woolworths, a Post Office, Baker, Church and a Restaurant. • Group Centres have several convenience stores (Coles, Woolworths and ALDI), Banks, Travel Agent and some speciality stores. • Regional Centres have comparative stores (Myers and David Jones), theatres and all the above. • The Central Business District has Government and Head Office Employment with all the above.

Urban Planning Influence on Travel • There is ample concrete evidence that this hierarchy, which closely integrates travel destinations with residential areas, reduces travel costs and increases urban participation. • The problem is that Gungahlin has the least proportion of jobs to population of all districts in Canberra and it is planned to get worse. • This generates excess costly travel out of Gungahlin.

The Planning Problem Future Change in Regional Employment/Population Ratios Source: Ta. MS District Gungahlin Belconnen North Canberra South Canberra Woden Tuggeranong Molonglo All Canberra Employment/Population Ratio 2011 2016 2021 26. 1% 19. 8% 20. 2% 29. 8% 30. 3% 30. 9% 145. 6% 149. 2% 147. 5% 191. 6% 187. 8% 176. 8% 49. 3% 50. 8% 51. 8% 21. 0% 23. 2% 24. 5% 16. 0% 23. 6% 57. 1% 56. 6% 56. 1% The same is true of Regional Retailing and Education /Population Ratios despite the younger population in Gungahlin The real problem is in Land-use Planning

The Stated Problem It is stated that the main arterials roads from Gungahlin are heavily congested in the peak hours. All queues at the two busiest intersections on Northbourne Avenue clear every cycle (except right turns) which is an acceptable Level-of. Service. In fact Gundaroo Drive has greater delays.

Why is there a land-use problem? Probably the greatest single factor is the rapid unplanned growth of employment and retailing at the Airport. The ACT Government cannot control this or match the incentives – free land. Gradual loss of impetus in professional planning probably due to lack of understanding and emphasis on basic planning principles (embedded in the Y plan) in favor of shortterm political needs.

What options? Create incentives to reduce travel or increase costs This contradicts basic planning principles. Adjust the future land-use planning. This presents a series of problems of its own. 1. Governments have limited control to implement planning decisions; and 2. Short-term financial issues tend to overshadow effective investment policies. It is easier to sell developable land than attract employment industry, which costs incentives. Increase transport system capacity.

Adjust the future land-use planning The districts most in need of employment and other planning reinforcement are Gungahlin, Molonglo and Tuggeranong. The districts most in need of population are North and South Canberra. Governments can raise money by building and selling shopping centres (Belconnen Mall) Adding more high-rise residential to Northbourne Avenue will increase congestion.

Increase transport system capacity. Options Increase ACTION capacity and operations; Improve road capacity; Introduce Light Rail; or Investigate other Mode options.

Increase ACTION capacity ACTION’s capacity can be improved by more frequent services but this is costly. Criterion ACTION Bus Car Passengers per Vehicle 9. 774 1. 236 Expenditure per Passenger-Km $0. 395 $0. 316 Fuel per Passenger-Km (Litres) 0. 195 0. 081 Buses in Canberra cost more than cars on an all-day basis and use more fuel per passenger-Km so the justification for subsidizing bus travel is based on social not on efficiency or environmental issues. It is questionable whether added services are useful but improving existing services is a preferred priority.

Increase ACTION capacity ACTION services can be improved by the provision of exclusive lanes on Canberra’s streets, which can be implemented in several ways as follows: – Providing exclusive lanes for buses, taxis and emergency vehicles, particularly at intersections; or – Limiting existing lanes for buses and High Occupancy Vehicles (HOV). These can be implemented either by: – Changing existing lanes by line marking and signs, or – Road or intersection widening. These measures reduce time and help reliability

Increase road capacity Part of Flemington Road needs to be completed to 4 lanes. Northbourne Avenue intersections can be improved at relatively little cost. There are many other areas in Canberra where road or intersection improvements could improve bus services. They improve car travel as well.

Introduce Light Rail Light rail services carry more people than buses if the demand is present and use electric power rather than fossil fuels. We do not yet know the source of this electric power in Canberra. If implemented in their own right-of -way they are less influenced by street congestion than buses but still need to stop at intersections. They cost more to operate than buses.

Investigate other Mode options Elevated modes do not have to stop at intersections and are therefore faster but stop less frequently and require bigger stations which usually develop as commercial opportunities and can be used to pay for the service and to reinforce planning objectives. Track costs are comparable with Light Rail but do not need land resumption or service relocation. They are usually quieter than Light Rail and much safer.

Feasibility testing Option definition – Preliminary alignment & service relocation – Preliminary costing – Preliminary environmental check (Above depends on mode selection as an Elevated mode avoids service relocation but possibly higher track and station cost) Estimate patronage, rolling stock requirements and other impacts using simulative modeling

Feasibility testing Gungahlin Line Belconnen Line Triangle Loop Airport Line Woden Line Tuggeranong Line Queanbeyan Line As any first transit line is unlikely to be viable economically, but further line additions add to its viability, it is necessary to establish how large a network needs to be viable if at all. Testing needs to build up this minimum network stage by stage and then establish which stage should come first to optimize the outcome.

Feasibility testing The travel simulation model consists of: • a suite of software, that controls operations of the model and performs calculations; • a network database, describing the road and public transport infrastructure and its characteristics; • land-use files, containing forecasts of travel-related land use variables; and, • a set of files describing the travel characteristics of Canberra residents obtained from household interviews

Economic Criteria • Benefit-to-Cost Ratio – this needs to be well over 1. 0 and usually needs to be about 2. 5 to be funded. • Net Present Value – is the net value of the project discounted over 30 years (usually). • Internal Rate of Return – This is the investment yield rate of the project. It should be well over 5% and nearer 12% to 15%.

Economic feasibility testing Detailed results for the Gungahlin line System Mass Transit System Item Track & Station Rolling Stock Op Cost Construction Maintenance Highway system Accidents savings Veh Op Cost Parking Time cost Fleet ACTION savings Op cost Time Property Benefits Environment Consumer Net Present Value @ 5% Gungahlin $ 767. 99 $ 21. 09 $ 270. 89 $ 3. 19 $ 3. 39 $ 23. 75 $ 121. 16 $ 0. 99 $ 51. 14 $ 2. 03 $ 47. 03 $ 354. 56 $ 13. 22 $ 0. 56 $ 48. 44 -$ 340. 13

Include Induced development? • Most economists will not accept induced landuse development as a benefit. Northbourne Avenue redevelopment should not be attributed to Light Rail. • Property price effects do occur but they are small. • However, there is research which shows a probable causal relationship between access and density not just a tautology.

Economic feasibility testing Economic result of each line Road improvement Benefit to Cost Ratio projects in Canberra Transit Line @ 5% usually have a Gungahlin-City 0. 57 Benefit/Cost Ratio of at Belconnen-City 0. 85 least 2. 5 and this is an Woden-City investment cut-off level 0. 47 required by most Road Tuggeranong-City 0. 26 Authorities. Airport-City 0. 38 Queanbeyan-City 0. 45 This allows for risk and National Triangle Loop that many of the 0. 27 benefits are intangibles. All lines 1. 85

Staging sequence Testing various staging options Option 1 2 3 4 5 6 Transit Lines 8 Belconnen-City-Gungahlin Belconnen-City-Woden Gungahlin-City-Woden Belconnen-City-Airport Gungahlin-City-Airport Belconnen-City-Airport Plus City-Tuggeranong Gungahlin-City-Airport Plus City-Tuggeranong Belconnen-City-Airport + Gungahlin-City-Tuggeranong 9 All lines combined 7 Discount Rate 5% 1. 28 0. 51 0. 41 1. 60 0. 68 1. 64 1. 60 1. 75 1. 85

The optimal staging sequence Stage Transit Lines Discount Rate 5% 1 Belconnen-City 0. 85 2 City-Airport 0. 90 3 City-Tuggeranong 1. 64 4 Gungahlin-City 1. 75 5 City-Loop-Queanbeyan 1. 85

Effect of Improved land-use Effect on travel Criteria Trip Participation rate Mode Split Highway trip cost Transit trip cost Road accident costs Year 2021 0. 36% 0. 69% -6. 20% -5. 53% -0. 32% Effect on economic results Stage 1 2 3 4 5 Transit Lines Belconnen-City-Airport City-Tuggeranong Gungahlin-City-Loop-Queanbeyan No Land-use With Land. Change use Change 0. 85 0. 93 0. 90 1. 13 1. 64 1. 82 1. 75 1. 88 1. 85 1. 94

Results for the Elevated mode Effect on network peak patronage System Type Surface Elevated 2021 9, 784 10, 733 2031 20, 639 23, 634 Effect on economic result Transit Line Land-use Gungahlin-City Belconnen-City Woden-City Tuggeranong-City Airport-City Queanbeyan-City National Triangle Loop All lines Surface System Elevated System No Change change 0. 57 0. 81 0. 63 0. 99 0. 85 0. 93 0. 86 1. 24 0. 47 0. 83 0. 73 1. 17 0. 26 0. 37 0. 56 0. 79 0. 38 0. 73 0. 42 0. 88 0. 45 0. 61 0. 39 0. 43 0. 27 0. 41 0. 30 0. 79 1. 85 1. 94 2. 43 2. 64

Sensitivity & Risk assessment Sensitivity testing Sensitivity Test No Change 20% increase in Track/Station Costs 20% increase in Vehicle Costs Double Operating Costs Half savings in ACTION Op Cost Half savings in ACTION fleet Half improved Mode Choice No Land-use Change 20% Increase in MTS fares Internal Rate of Return Surface Elevated 14. 5% 23. 2% 11. 8% 18. 9% 14. 3% 23. 0% 13. 5% 22. 3% 14. 4% 23. 1% 13. 0% 22. 1% 14. 2% 22. 3% 13. 6% 19. 8% 13. 8% 17. 7% Risk assessment System Probable Risk-adapted IRR Probable Maximum Range Surface 10. 5% 7. 7% to 13. 3% Elevated 17. 0% 12. 4% to 21. 6%

Financial assessment The financial evaluation differs from the economic evaluation in that the latter concerns the national economy as a whole, not the individual affairs of a particular identity, in this case the ACT Government. The financial analysis assumed that the ACT Government will borrow all funds needed to provide the track, stations and rolling stock at 5% interest and repay the loan funds over 15 years. The analysis is for a period of 30 years

Financial assessment The financial analysis shows that the project is not viable on these assumptions at current fare levels returning an Internal Rate of Return of -4. 41%. • The ACT Government would need to contribute 39% of the Capital costs, or $156 millions each year, from annual revenue. • A higher fare sufficiently reduced the patronage and fare revenue and the savings from the ACTION system, that the financial result was worse with an Internal Rate of Return of -4. 78%.

Financial assessment - Elevated With an elevated mode the result was improved with an IRR of -0. 18% but the ACT Government would still need to contribute 16% of the Capital costs, or $64 millions, from annual revenue. The higher fare test produced an IRR of -1. 46%. With a risk-sharing PPP arrangement, and the private partner expecting a return of 9% on capital invested, ACT Government would have to contribute 48% of the capital from revenue or $192 millions from annual revenue (and 28% from loan funds) to achieve an IRR of 0. 02%.

Conclusions • The land-use system is the problem but is hard to fix. • The transport system is adequate - not the problem. • There has been inadequate planning so far leading to the Gungahlin Light Rail project. • A mass transit system for Canberra can be economically viable eventually. • Gungahlin is not the right place to start. • Light Rail is not the best mode. • Further development must take place before a Mass Transport System can be financially viable and attractive for a PPP partner to invest.