Travel behaviour change guidance handbook

Print version: Travel behaviour change guidance handbook (PDF, 1.29 MB, 87 pages)

4.   Evaluation and assessment

• 4.1   Land Transport NZ allocation process
  • 4.1.1   Assessment requirements for TBhC proposals
• 4.2   Economic evaluation process
  • 4.2.1   Is an investigation and design phase required?
  • 4.2.2   Do the TBhC projected costs exceed $200,000?
  • 4.2.3   Does the package contain non-TBhC components?
  • 4.2.4   Proposals “failing” the evaluation
• 4.3   Elements of the TBhC evaluation procedure
  • 4.3.1   Overview
  • 4.3.2   Basic assumptions
  • 4.3.3   Project description templates
• 4.4   Worked example

4.1   Land Transport NZ allocation process

Each year through the National Land Transport Programme, Land Transport NZ allocates resources from the National Land Transport Account to approved organisations (including Transit New Zealand, regional councils and territorial authorities) for activities forming part of their own land transport programmes. For TBhC projects, the relevant activity class (for 2005/06) is “TDM, Rail and Barging”.

Land Transport NZ has developed an allocation process for preparing the National Land Transport Programme that takes account of the New Zealand Transport Strategy (2002) and the requirements placed on Land Transport NZ under the Land Transport Management Act 2003. The Allocation Process consists of six stages:

• Formulation
• Assessment
• Prioritisation
• Programming
• Approval
• Monitoring.

The economic evaluation of a TBhC proposal, using the TBhC evaluation procedure, is a key input to the “Assessment” stage of the Allocation Process, along with other information regarding the overall strategic context of the proposal. The inputs required for the Assessment stage of the Allocation Process are discussed further in the following section.

Project proponents seeking further details about the National Land Transport Programme, other land transport programmes, or other stages of the Land Transport NZ Allocation Process, are referred to the extensive documentation available on Land Transport NZ’s website.

4.1.1   Assessment requirements for TBhC proposals

As part of the assessment framework in the Land Transport NZ Allocation Process, project proponents are required submit information describing and rating the project’s:

• Seriousness and urgency in terms of the issue or problem being addressed by the TBhC programme
• Effectiveness in contributing to Land Transport NZ’s objectives and the outcomes of the Land Transport Management Act 2003
• Economic efficiency in terms of costs, benefits and rate of return and whether the proposal represents value for money in terms of the overall monetised and non-monetised benefits achieved. The TBhC evaluation procedure will provide this information.

Land Transport NZ has differing information requirements for what it classifies as generic, standard and complex proposals. In the future, it is expected that various types of TBhC projects will be categorised as generic activities, meaning that it would not be necessary for project proponents to provide a detailed assessment and justification of each proposal against the requirements of the Land Transport Management Act, since this would be covered by a generic assessment. Rather, only the economic efficiency information would need to be reported for each proposal.

However, Land Transport NZ has decided that until such time as sufficient information is gathered to confidently develop generic frameworks, TBhC proposals will be treated as standard or complex projects and a detailed assessment of each proposal’s seriousness and urgency, effectiveness and economic efficiency will be required. To facilitate reporting by project proponents, Land Transport NZ is developing an on-line information system for submitting proposals for all project types forming part of a Land Transport Programme. The completed evaluation using the TBhC evaluation procedure is one of the supporting documents submitted to Land Transport NZ as part of the funding request, along with details (including costing) of the proposed monitoring programme.

The on-line reporting requirements relevant to TBhC proposals include:

• Project description
  • Project outline
  • Location
  • Supporting documents
• Problem seriousness and urgency
  • Problem definition
• Development context
  • National strategic context
  • Regional and local context
  • Consultation
  • Funding (relevant sections only)
• Effectiveness
  • All sections
• Efficiency
  • Monetised costs and benefits
• Project phase

Appendix A provides detailed guidance on completing the project information requirements for TBhC proposals. In completing the strategic assessment form, Land Transport NZ encourages project proponents to be as succinct as possible – provide key points, particularly highlighting any that are unique to their individual project or situation, and avoid lengthy discussions of factors that are obvious and likely to be common to all TBhC projects.

Funding applications will be via the new Land Transport Programme online system, either by entering the data directly to the database or by downloading a spreadsheet template from the Land Transport NZ web site, completing the information and submitting it to Land Transport NZ.

4.2   Economic evaluation process

Given that there are a variety of TBhC project types, as well as the possibility of “packages” either combining various TBhC components or being combinations of TBhC initiatives and walking, cycling, or road-related infrastructure or passenger transport service components, it is not surprising to find that there are various factors affecting how an economic evaluation of a TBhC proposal is carried out, as illustrated in Figure 4.1.

These three factors can be thought of in terms of answering three questions:

1. Does the proposal require funding for an “investigation and design” phase (as is commonly the case with workplace and school travel plans)?
2. Do the estimated total proposal costs exceed $200,000?
3. Does the proposal include non-TBhC components?

Each of these inter-related factors is discussed separately below.

4.2.1   Is an investigation and design phase required?

Land Transport NZ accepts that TBhC proposals involving workplace and school travel plans will generally consist of two stages:

• Investigation and design, where the output will be the travel plan document
• Implementation, where the actions within the travel plan will be funded and carried out

Given this, Land Transport NZ has established a two-stage funding process for such activities, wherein an indicative evaluation is carried out for these projects based on assumed typical components and costs to determine eligibility for investigation and design funding, and the evaluation is subsequently revised / confirmed based on actual plan components and costs to obtain implementation funding. The initial investigation and design funding evaluation could either be for each school or workplace individually or for a cluster of workplaces or schools in close proximity to each other.

Proponents are expected to complete the appropriate project description template and, based on their knowledge of the areas and organisations involved, select the appropriate diversion rate and composite benefit value to calculate an indicative benefit cost ratio. The proposal shall be submitted, like any other, via the Land Transport Programme on-line system.

Proposals that are accepted (based on the submitted information and indicative benefit cost ratio) will be funded for detailed project development, i.e. consultation and detailed development of the components of a school or workplace travel plan. Once the project has been designed and refined and a plan developed, the indicative evaluation is reviewed and revised (if necessary) to confirm eligibility for second stage (implementation) funding. A different evaluation method may be necessary if the total implementation costs for the travel plan are found to exceed $200,000 and it is a composite package (a mixture of TBhC initiatives and non-TBhC components). This is discussed further in Section 4.2.2 and Section 4.2.3.

Stage one (the investigation and design) of the school or workplace travel plan could be completed without financial assistance from Land Transport NZ if a project proponent chooses. In this case, the completed travel plan would be evaluated like any other TBhC project or package, using the appropriate evaluation process.

If a project proponent considers that another type of TBhC project would benefit from adopting the two-stage approach for funding, they should contact Land Transport NZ to discuss the situation before proceeding with an indicative evaluation. Many TBhC proposals will not require a distinct investigation and design phase prior to being submitted for funding to Land Transport NZ. This is not to say that such projects will not require preparation, but that the project focus, content and implementation processes will be well-established, as is the case for many types of household- and community-based initiatives.

Figure 4.1: Evaluation decision-making process

4.2.2   Do the TBhC projected costs exceed $200,000?

If the costs of the TBhC proposal are greater than $200,000, proponents will have to identify whether or not the proposal contains significant infrastructure or passenger transport service improvement costs or if it is a “pure” TBhC proposal (i.e., containing only TBhC components). If the proposal is a composite package involving significant infrastructure or passenger transport service improvement components, a composite evaluation will be required, as explained in Section 4.2.3.

A “pure” TBhC proposal is evaluated using the Interim TBhC Evaluation Procedures, regardless of the total overall costs.

Proposals that have total costs of less than $200,000, regardless of whether they are “pure” TBhC projects or composite packages involving (relatively low value) non-TBhC elements, may be evaluated using the TBhC evaluation procedure, and if they are considered economically worthwhile, be submitted for funding through the appropriate Land Transport Programme. Where the total cost of a composite package is less than $200,000 and non-TBhC components are included, the project proponent may choose to undertake a composite evaluation. This may be worthwhile if the non-TBhC components account for a large proportion of the estimated package cost and the project benefit/cost ratio is unsatisfactory when using the Interim TBhC Procedures alone.

4.2.3   Does the package contain non-TBhC components?

As indicated in the preceding section, if a TBhC package contains solely TBhC components, regardless of the total projected costs, proponents undertake the evaluation using the Interim TBhC Procedures.

If the projected costs of the TBhC package exceed $200,000 and a significant component of these costs is for (roading, cycling or walking) infrastructure or new or improved passenger transport services, a “composite evaluation” incorporating other Land Transport NZ evaluation procedures is required to calculate the benefits for the proposal. In recognition of the synergies generated by combining related or complementary projects, the benefits of the different components are generally treated as being additive (i.e. they are added to the benefits calculated for the TBhC components of the package).

Where the TBhC proposal involves one or more primary school travel plans and the second stage (implementation) project costs are less than $200,000 (per travel plan): if the proposal contains infrastructure components, no matter how much they cost, project proponents may wish to undertake a composite evaluation to include the wider community benefits of the proposed initiative.

Calculation of benefits and costs

Irrespective of the TBhC package composition, the total costs for all components are included in the denominator of the benefit cost ratio. Where a new or improved passenger transport service is involved, the costs included are the “funding gap”, that is the cost that needs to be funded by local and central government if the proposal is to proceed.

For the TBhC components in a package, the appropriate composite benefit value in the Interim TBhC Procedures is used to calculate the “new user” benefits for the TBhC target population / area.

Table 4.1 provides guidance as to the appropriate procedure and methods to calculate benefits, for all existing users and for new users from the population outside the TBhC target population / area, from:

• new or improved passenger transport services
• walking or cycling facilities
• roading infrastructure of various types

The numerator of the benefit cost ratio for a composite TBhC package is the sum of the TBhC benefits and the non-TBhC benefits.

Table 4.1: Treatment of non-TBhC benefits in TBhC composite evaluations

Non-TBhC component	Benefits to existing users and non-TBhC target population new users	Comments
New or improved passenger transport service	Use Patronage Funding benefits assessment or passenger transport ATR procedures as appropriate to: 1. Calculate existing user benefits (for all existing users whether inside or outside TBhC target population area) 2. Calculate new user and associated externality (remaining road user) benefits for population located outside TBhC target population area	• Serious potential for double counting of new user benefits – care must be taken not to count TBhC target population twice • If the PT improvement component is small, would normally use Patronage Funding procedures • Where improvements are more substantial, it may be more appropriate to use ATR procedures
Cycle infrastructure	Use Walking and Cycling Simplified Procedure to: 1. Calculate existing user / externality benefits (for all existing users whether inside or outside TBhC target population area) 2. Calculate new user / externality (remaining road user) benefits for population located outside TBhC target population area
Walking infrastructure	• TBhC procedures should be treated as the primary evaluation • If project proponent thinks more walking trips will be created than is allowed for in TBhC evaluation diversion rates, the Walking and Cycling Simplified Procedure can be used to estimate the additional benefits associated with the extra trips	• Serious potential for double counting of new user benefits
Roading • Bus priority lane high occupancy vehicle lane • Road capacity improvement • Minor safety works • Traffic calming (30 or 40 km/h zones)	Use relevant Project Evaluation Manual procedure to 1. Calculate all benefits associated with roading project	• Minor road safety works includes improvements such as intersection treatment, parking changes, road crossing • Potential for double counting new user benefits where bus priority lane is proposed – see “improvements to passenger transport services” above for guidance

If future monitoring programmes reveal that total diversion rates associated with implementing the combined TBhC / infrastructure / services project do not occur, then Land Transport NZ may adjust the “treatment of benefits” calculations in Table 4.1.

4.2.4   Proposals “failing” the evaluation

If the evaluation of a TBhC proposal produces an unsatisfactory benefit cost ratio, proponents have the option to refine the proposal and re-evaluate it, or to abandon it.

Note that Land Transport NZ has not established a funding cut off ratio for TBhC proposals. Land Transport NZ intends to fund as many proposals with a benefit cost ratio greater than 1.0 as is feasible, given budgetary constraints in each year.

4.3   Elements of the TBhC evaluation procedure

4.3.1   Overview

The TBhC evaluation procedure is comprised of five worksheets, namely:

• Worksheet 1   —   Project name and summary
• Worksheet 2   —   Project description profile
• Worksheet 3   —   Costs of the project
• Worksheet 4   —   Expected diversion rate
• Worksheet 5   —   Benefits of the project.

An “explanation sheet” which outlines the information and processes required to complete the Worksheet itself accompanies each Worksheet. The sections below highlight some elements of the evaluation.

4.3.2   Basic assumptions

There are a number of basic assumptions that project proponents may wish to be aware of when completing a TBhC project assessment using the Interim TBhC Procedures.

Benefit cost ratio

The benefit cost ratio has been adopted as the value-for-money measure for TBhC proposals, given the absence of service provider revenue charges, as are found in Alternative to Roading proposals. The benefit cost ratio reflects all of the benefits and disbenefits associated with mode switching and trip change:

• Numerator - net direct and indirect benefits and disbenefits to all mode switchers, other transport system users affected by the project, and all other external effects
• Denominator - net costs of the TBhC proposal to government (i.e. Land Transport NZ and other government entities, including councils)

Diversion rates

Diversion rates for the main TBhC project categories have been derived based on a thorough analysis of international experience with TBhC projects to late 2004. Details about this analysis are found in section 4 of the TBhC Technical Report, obtainable from Land Transport NZ.

Costs

The project costs shall include all costs to government entities, including central government and local and regional authorities.

Where a “Stage 1” evaluation of workplace or school travel plans is being undertaken, the indicative evaluation can assume typical plan components and costs. This could either be for each school or workplace individually or for a number aggregated together. At Stage 2, actual project costs shall be used in the denominator of the benefit cost ratio.

Benefits

The calculation of benefits is based on the composite benefit values that have been derived for the main TBhC project types (workplace and school travel plans and household - or community-based initiatives). The composite benefit values include the benefits to people changing their travel behaviour as well as benefits to remaining road users and the general community, such as reduced health costs and accident risk, decongestion and environmental benefits. The exact components contained within the composite benefit value depend on what type of TBhC project is being proposed.

The composite benefit value also incorporates the default diversion rate assumptions for each TBhC project type as well as the average trip length for each mode affected by the project.

Where a different type of TBhC project is proposed than the standard types covered by composite benefit values, project proponents are asked to select the most appropriate benefit value, based on the nature of the project, or obtain from Land Transport NZ a spreadsheet programme to compute a suitable value.

Sustainability of benefits

Workplace and school travel plans are assumed to incur regular on-going “maintenance” costs in order to maintain the project benefits over the 10-year evaluation period. Household- and community-based initiatives are assumed to maintain their benefits without incurring regular maintenance costs. Hence, unless the household- or community-based TBhC proposal contains specific plans for follow-up measures, maintenance costs are set at zero.

Distribution of benefits

The number of days per year that the benefits apply, as well as the proportion of the benefits attributable to the peak periods (rather than occurring in the off-peak), varies by the type of TBhC initiative being implemented. These parameters are set out in Table 4.2.

Table 4.2: Distribution of benefits - days per year and proportion occurring in peak

TBhC initiative	Number of days per year that benefits apply	Proportion of behaviour change occurring during peak hours
Workplace travel plans	230	100%
Primary / intermediate / secondary school travel plans	190	55%
Household- or community-based initiatives	365	15%

These assumptions have been incorporated into the calculation of the composite benefit values.

Evaluation period

A 10-year evaluation period has been adopted for TBhC projects, given the assumption that benefits are sustainable largely without maintenance, and the absence of experience with the durability of benefits beyond about five years. This could be reviewed in future in the light of ongoing monitoring of projects undertaken in early years.

Where a project includes significant items of infrastructure, the evaluation for the infrastructure is generally separate to the TBhC project and should adopt the standard 25-year period.

Discount rate

The discount rate is 10 percent per annum, consistent with all other Land Transport NZ evaluation procedures. This is a rate established by The Treasury to be used on all public sector project evaluations.

Trip growth rate

After the initial increase in alternative mode use following project implementation, additional growth is assumed to be underlying growth that would have occurred anyway in the base case and is not directly attributable to the TBhC project. The additional trip growth could only be attributed to the TBhC project if the project was being repeated each year and “diverting” the usual proportion of the growth in car trips. This assumption allows the use of a uniform series discounting factor when calculating the present value of future years benefits.

Monitoring programme

A detailed monitoring programme must accompany funding applications. Requirements for the main types of TBhC projects are provided in Section 5.0.

4.3.3   Project description templates

The Interim TBhC Procedures include project description templates for workplace-, school-, and household- or community-based initiatives. These templates supply background descriptive information for the TBhC proposal, as well as providing the basis for the selection of the appropriate diversion rates in Worksheet 4.

While there is insufficient evidence to prove links between the characteristics sought in the project description templates and the desired project outcomes, ensuring the presence of many of these factors will facilitate the successful implementation or completion of a TBhC project. Land Transport NZ anticipates that the TBhC monitoring programme outlined in Section 5.0 will provide the evidence required to confirm or modify the information gathered in these templates.

Where the proposed TBhC project is a different type to the three for which templates are provided, project proponents are asked to select the most applicable template and record the relevant information, or to use these templates as a guide and record corresponding information on a separate sheet.

4.4   Worked example

Appendix B provides a worked example to illustrate how the TBhC evaluation procedure is applied to TBhC projects.

 

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Page created: 20 October 2008