Thursday, 23 April 2015

Cycling benefits?

So, would a new $156 million Christchurch cycleway really provide an 8:1 benefit to cost ratio? Here's Lois Cairns at The Press:
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 cycling 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. 
"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.
Boyle and Hill's paper is here. A couple fun bits:

  • The original cost-benefit analysis depended on a 40% increase in real fuel costs. Maybe that would happen if we had a large and sustained depreciation in the NZ dollar, but nobody's betting on that right now.
  • The time savings estimates amount to 6 seconds per trip, but those are aggregated up to being worth $316m; Boyle and Hill dismiss these as too small to matter. On this point, I'll thank Julie-Anne Genter for having pointed me to Metz last year.
I like this part of the executive summary:
The overall prognosis looks grim. Every Christchurch household is faced with an average bill of at least $1100 in present value terms for facilities that are predicted to attract only a relatively small and insignificant number of new cyclists, will result in more cyclist accidents and deaths, have at best zero impact on congestion, and yield highly uncertain health benefits. At current expected capital costs and cycleway uptake, it would be cheaper to provide every projected new cyclist with a Suzuki Alto.
I still would love to see a cycleway from New Brighton along the abandoned Avon River through to downtown, but not at any price.

For a contrary view on Boyle and Hill's work, Cairns has this:
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.
I tend to think that Christchurch could use a few more people willing to pick holes in shonky business cases.

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