Evaluating Transport Projects

through a Focus on Creating Jobs

US Experience & Applicability Elsewhere

Glen Weisbrod

Economic Development Research Group, Inc.

Boston, Massachusetts, USA www.edrgroup.com

NSW Transport Infrastructure Summit

Sydney, 7-8 August, 2012

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Is it Good for Infrastructure to Decay ?

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Agenda

1. Evaluation: Considerations and Issues

2. Behaviour: The Transport-Economy Connection

3. Motivations: Case Examples Motivating Transport Plans

4. Decisions: Using Economic Impact Measurements

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Broader Evaluation Considerations

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Environment

Economic

Social

Movement of

People & Freight

Emerging Economic Impact Issues

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Wider economic benefits

relate to jobs, business

productivity and economic

competitiveness

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Economy-Transport Connection

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There are three inputs to business operations and hence job/ income

generation. Transport affects the cost & characteristics of all three.

Impact Process: Measurement

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Traditional Traveler Benefit

• Travel time

• Travel cost

• Safety

Expanded User Benefit

• Reliability

• Logistics

• Cross-modal

Wider Transport Benefits

• Accessibility

• Mobility

• Connectivity

Wider Economic Benefits

• Productivity from market access

• Supply chain efficiency

Local Effects

• Economic Competitiveness

• Business Location

User Benefits Transport System Economic Effects

Graphic © Economic Development Research Group, 2012

• Business Scheduling

– reduced PM, more early AM delivery

– earlier worker shifts, more overtime

– shrinking window of time, more concentration

– cost of “rescue drivers”, “relief drivers”

• Freight and Service Delivery

– reliability, frequency, area served

– service to distant markets

Business Operation: Congestion Effects

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• Business Operations

– Inventory stocking & control

– Labour Requirements

• Worker Travel

– commuting - labor time cost

– worker schedule reliability (uncertainty)

• Business Location Issues

– dispersion of locations (regionally & overseas)

Business Operation: Congestion Effects (2)

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Examples of Economic

Motivations for

Transportation Plans

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Border Facilities

Vancouver: Market Access to Gateways

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To Trans Can Hwy

To US Border

Connecting Key Nodes – Strategic Plan

Access: Labour & Delivery Market Areas

Transport conditions can expanding or contracting access to

markets, effective market scale and agglomeration economies :

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Same Day Delivery Market

– Portland , OR (3 hr. trip) Labour Market - Chicago

(40 min commute area)

Denver: Supporting High Tech Clusters

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Reduction in

Labor Market

Area if Transit is

not Increased

Toronto: Regional Long-Range Plan Toronto Metrolinx / Durham Region Transit

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Inter-City Access: Shrinking Time/Space Linking Financial, R&D, Manufacturing Centres

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The US Midwest: Travel Time from Chicago via Rail

Amtrak Current Schedule With 240 km/hr avg (150 mph avg)

Inter-City Access: Shrinking Time/Space Australia

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Hours of Travel Current Road With HSR

Sydney – Brisbane 10 3

Sydney – Canberra 3 1

Sydney – Melbourne 5 3

Measuring &

Communicating Economic

Impacts

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Why Measure Economic Impact?

1. Improve public understanding – Flow of money in the economy (Where does it go?) – Breadth of impact (among businesses & households)

2. Justify public financial support – Economic Stimulus Effect (Jobs) – Economic Competitiveness Effect (Productivity)

3. Show consistency with public policy – Congestion growth – Land development – ‘Equity

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Driving Factors that Affect Productivity

• Household cost savings • Business delivery savings from reduced congestion • Worker productivity due to more reliable arrivals • Market access enlarged: o Labor market for business, Job options for workers

• Business cluster or agglomeration economies: o clustering of complementary activities,

enabled by public transport & terminal facilities

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TRESIS - TREDIS Tools: Use for NSW Transport-Household & Business /Economic Relationships

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TRESIS (Transport & Environment

Impact Simulator) Effects on Home & Work Locations, Vehicle Ownership & Use, Trip Behavior

TREDIS (Transportation Economic

Development Impact System) Effects on: Supply Chains, Labour & Business Markets, Worker Productivity, Competitiveness

Transport Investment & Policy Changes

Environment

Jobs, Income,

Output Generated

Time, Expense Access,

Reliability

ITLS, Univ. of Sydney and Economic Development Research Group

% of Projects by Stated Motivation

* Excluding Passenger and Freight Intermodal

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Example of Benefit from Commuter Rail Line North Extension of Boston-Manchester

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Vehicle Operating Costs

32%

Business Productivity

7%

Time Savings - Commute

27%

Time Savings - Personal

21%

Safety 10%

Environment 3%

Decisions:

Using Economic Impact

Measurements

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Economic Factors in Multi-Criteria Analysis

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CBA MCA Rating Appraisal

Rating Criteria USDOT OH WI MO KS DfT Scot

Traveller Benefit and Environment

Efficiency: Travel time, cost, level of service X X X X X X X

Safety (accident rate) X X X - X X X

Pollution emissions/air quality/greenhouse gas X X X X - X X

Transportation Drivers of Business Productivity

Intermodal facilities, access & interchange (x) X (a) X (a) X X

Reduce localized congestion bottlenecks (x) X X X X (b) (b)

Connectivity to key corridors or global gateways (x) - X X (a) - -

Labour market access (x) - (a) - (a) (a) (a)

Reliability of travel times (x) - (a) - (a) X (b)

Truck freight route, supply chain impact (x) X (a) X X - -

Localized Outcomes

Location: regeneration of distressed area - X - X - X X

Land use: supports cluster or in-fill development - X - X X X X

Econ Policy: support target industry growth - - - X X - -

Local public support - - X - X - -

Leveraging private investment - X - - - - -

Macroeconomic Outcomes

Productivity X - - - - X X

Jobs(support job growth/reduce unemployment) - X X - - - -

Gross Regional Product or Value Added - - - - X - -

Investment Priorities

Operators

Users External Parties Govt. /

Financiers

Public (Economy)

Matching Impact Measures to Audiences

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3 Ways to Wreck Access (Passively)

1. Let Infrastructure / Service Get Clogged by congestion

2. Let Infrastructure / Service Degrade condition & performance

3. Let Infrastructure / Service Become Less Useful to meet changing needs (fail to upgrade technology)

To People (& Businesses) this effectively means… Less Capacity for Access

Less Speed of Access

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Maintaining Performance Standards

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Actual Photo of UFO Landing Zone on the A27 Highway in the Netherlands

Technology: Looking to the Future

Reports on the Economic Impact of

Transport Investment

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www.edrgroup.com/library/transportation