How transport appraisal misses the local realities
8 August 2016 | Author: Jim Steer, Director, Steer Davies Gleave

It is a mistake to assume travel patterns are largely fixed, unchanged by infrastructure investment. Our thinking seems to be conditioned by demand models that presume low demand elasticities, and which treat induced demand (rather than that diverted from other routes or transport modes) with deep suspicion.

A desire for appraisal consistency, so that all investment cases can be treated equally, further shapes and narrows our outlook. The result is that real-world travel behaviour and economic effects, which are often parochial, get ignored, and we are then shocked to see them at work. The aim currently is to get at "real economic" effects (rather than those "narrow" transport benefits). But these will be peculiar to each locality.

Some examples from Scotland shed light on these issues. Take the Borders railway. The decision to re-open the Borders Railway from Edinburgh to Galashiels/Tweedbank, places remote from the national rail network, was judged by many to be "brave". Existing bus and car traffic volumes over a 55km route with little in the way of intermediate demand didn't look that promising. The prospect of housebuilding on the Edinburgh fringes could be a safer bet, with the opportunity for lower house prices and new regular, if shorter distance, rail commuters. So what's happened in practice?

Overall, demand is 22% above the model forecasts – a comforting position for scheme promoter Transport Scotland, no doubt. But against the Year 1 forecasts, it isn't the new housing springing up on the Edinburgh fringes that is producing the passengers: here rail usage is much less than expected. No, it's in remote Galashiels and Tweedbank that demand has exceeded expectations – and by huge margins business travel for sure, but a large part of it induced demand, travel that just wasn't observable before the railway re-opened.

There may be many so-called "triallists", but some may pick up the habit. It's too early to be definitive, and these patterns may well evolve over the next few years, but they are nothing like the models suggested.

Remote places make good case studies, not because their experiences are likely to foreshadow what will happen more widely, but because their connectivity is less complex, easier to analyse, almost binary. Post-project evaluations of the Skye Bridge, for example, suggest benefits (over 60 years) will exceed costs by about 4:1, a much better result than anticipated. Why? Again, it is induced demand that was seriously under-estimated. The previous option of a ferry meant "casual" journeys just didn't happen.

In Norway, where there are many mainland-ferry island crossings with options for bridges or causeways, inconvenience costs of ferry use (time wasted at the piers) are taken into account in appraisals, and this should help estimate induced demand too.

Or take the apparently simple case of the bridge from the larger island of Harris to the small (but relatively densely populated) island of Scalpay. Here you can look at case history on whether the "centre" (well, Stornoway) or the periphery gains from transformational transport connectivity. The bridge replaced a ferry, and 10,000 annual car trips became 126,000 using Post-project evaluations of the Skye Bridge suggest benefits are much higher than anticipated the bridge within a few years of its opening in 1997. A huge amount of induced traffic again.

So why did the population of Scalpay fall by 9% during the years 2001-2011 over the same period that Scottish Islands' populations as a whole grew by 4%? Well, probably because the fish processing facility, built soon after the bridge opened with a plan to create over 100 jobs, only lasted from 2001 to 2005. It wouldn't have been located there without the bridge, but the bridge had nothing to do with its downfall. Even when transport supports economic development, other bigger factors will remain as a risk.

Has the bridge helped Scalpay's development? Ready access to school on the main island helps those with young families. A community purchase of the whole island in 2012 will probably do much to create a positive outlook. And the most recent encouraging plan is for a modest yachting marina to fill a gap between Stornoway and Lochmaddy in the Hebridean chain. Real-world factors that can't appear in codified forecasting and appraisal systems.

And there is another feature to mention. The Skye Bridge was funded through an early application of PFI – with super-high tolls to repay the outlay (since ended by the Scottish Government). The new transport interchange at Galashiels benefited from a £1.8m European Regional Development Fund contribution. The bridge to Scalpay was co-funded by the EU, as have been virtually all the major transport investments in the remoter parts of Scotland. And in the referendum, Scottish voters, of course, voted remain. But in remote parts of England with a lot of EU funding such as Cornwall, sadly they didn't.

Reference: Transport Times, July 2016 Issue

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