Still cheaper than trains!

The Press reports:

A $156-million Christchurch cycleway plan is under attack from two economists, who say the city council could buy new cars for every convert to for the same amount of money.

University of Canterbury finance professor Glenn Boyle and PhD student James Hill have analysed the Christchurch City Council’s business case for the major cycleways programme and say it is “excessively optimistic”.

Boyle said the 18,000 increase in cycling trips expected as a result of the new cycleway network roughly translated into an additional 9000 people cycling. For $156m, the council could buy all those people brand new Suzuki Altos. 

That’s still cheaper than the rail proposal a few years ago in Wellington that cost over $100 million and would have reduced peak time cars by only 90 a day. In that case, you could have got each person a helicopter!

“Every Christchurch household is faced with an average bill of at least $1100 in present value terms for facilities that are predicted to only attract a relatively small number of cyclists, will result in more cyclist accidents and deaths, have at best zero impact on congestion, and yield highly uncertain health benefits,” the pair said.

The cost of building Christchurch’s proposed major cycleway network has jumped in price from an original estimate of $69m to $156m but a business case presented by the council earlier this year claimed every dollar invested would give a $5 to $8 return. 

Boyle and Hill studied the assumptions those figures were based on and have concluded the likely return was almost certainly less than $2 and probably less than $1.

I’m a fan of cycleways,but they need to make economic sense. The 120% or so increase in costs obviously makes it a less economic proposition.

“It’s estimated that the cycleway network will save more than $300m in travel time for vehicle commuters due to lower traffic congestion. But this figure turns out to be based on average savings of just six seconds per trip, which realistically, has an economic value of zero. It takes no account of the time costs imposed on motorists by the priority given to cycleway commuters at some intersections so the true time savings are certainly less than six seconds and probably negative,” the pair said.

Fair point.

The business case for the cycleways programme had been prepared by consultants QTP, in accordance with the New Zealand Transport Agency’s economic appraisal manual. It had been peer reviewed and accepted by NZTA for the council’s funding assistance requests.

“As much as people want these facilities and there is an obligation on the council to provide options for people to get around, we must also ensure we make wise investments,” Clearwater said.

University of Canterbury geography professor Simon Kingham said he had read Boyle and Hill’s research and believed they had gone into it determined to pick holes in the business case.

The benefit-cost ratio (BCR) in the council’s business case was entirely consistent with other studies around the world,while Boyle’s BCR figure was totally inconsistent, he said.

I don’t think it is a bad think to have someone pick holes in a business case. We should welcome that. And rather than dismiss the criticism, a point by point analysis would be better.

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