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New Zealand seeks comprehensive CBA framework

First publishedin ITS International
September October 2016
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Auckland Harbour Bridge
Auckland Harbour Bridge; better incident data is needed for the management of strategic infrastructure

New report highlights how assessing the financial benefit of deploying ITS is an involved and evolving calculation

Following a global search, five key action areas have emerged from the New Zealand Transport Agency’s recent scoping of a more comprehensive cost–benefit analysis framework for evaluating planned ITS deployments. A report commissioned from engineering consultancy Aecom New Zealand sets out the groundwork for more closely-defined assessments that will convincingly support public-sector policy making. Specifically, it identifies bottleneck delay management, journey planning, pre-trip commuter information, bus service reliability and crash reduction technologies as ITS application areas in need of upgraded assessment procedures.

The current reference for these is the Agency’s ‘Economic Evaluation Manual’ (EEM), the latest edition of which appeared in January 2016 (scoping is about to get under way for the next review). While this already covers all the application areas listed, the Agency had detected that, given the typically high new-technology content of ITS projects, the EEM was not fully identifying and quantifying all of the expected benefits. This was because it was not necessarily satisfactorily capturing the full benefits of the ‘potentially distinct contributions’ of ITS project components, or enabling effective comparison of the non-monetised as well as the monetised impacts of their deployment. With traffic delays due to bottlenecks on the network, for example, the EEM already includes the methodology for assessing the resulting costs. But in the case of an incident such as a crash, of the three inputs needed, only two - traffic volume and road capacity – are readily available in the country. The third – the duration of the incident causing the delays – currently has to be assumed or derived from historical data.

Sources outside New Zealand indicate that early detection and management of incidents can reduce traffic impacts by between 40% and 60%. But there is a lack of local data, notably for elements of strategic infrastructure such as Auckland Harbour Bridge.

Similarly, while world literature sources indicate that information displayed on VMS can deliver travel time savings of up
to 20%, New Zealand currently has very little local data available to enable a realistic assessment of the benefits resulting from an installation programme.

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South Korea's ITS priorities
South Korea's ITS priorities are more comparable to New Zealand's than to those of larger nations

There are also specific issues with traveller information services that make their financial benefit difficult to assess using values contained in the current EEM. For example, there are no clear guidelines on how to assess whether travellers receive the information, to what extent they act on it, and whether they gain the benefits that they expect.

With regard to pre-trip commuter travel information, surveys carried out in other countries have shown that up to 60% of people make use of the websites of highway and service operators and public authorities.

Many travellers say that they find the information valuable and deploy it to good effect. Given growing smartphone and app use, however, the report suggests investigating which sources are the most popular, the quality of their information and their levels of uptake – preferably at whole-of-route level.

In the public transport sector, the global average reduction in bus delays at intersections, resulting from traffic signal pre-emption, is calculated at five seconds per vehicle per intersection saving in bus travel time, consistent with a trip time reliability improvement of 60%. As pre-emption is one of a batch of relevant technologies – others include automated vehicle location and dispatch, and real-time pre-trip information - the report stresses the need for local research on the relative values of each contributing source to inform future evaluations.

The EEM already deals extensively with crash analysis and the cost savings that can be achieved by reductions in the numbers and severity of collisions, using ITS-based applications such as integrated traveller information, ramp metering and/or incident management. But, the report says, the amount of crash reduction that can be expected from each of these applications is not well determined. Global figures range from 2% fewer injuries resulting from the use of traveller information to a 50% reduction in crashes as vehicles merge into freeway traffic streams due to the installation of traffic signal-based ramp metering.

Local research on the sources of the crash reduction, the type of crash affected and the magnitude of the reduction associated with each source would greatly contribute to the fuller evaluation of ITS based solutions, says Aecom.

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Editor Dr Meng Lu
Editor Dr Meng Lu

Finally, the report identifies an existing knowledge gap in the economic theory underpinning ITS benefits. Specifically, it recommends fresh research to explore whether willingness to pay or willingness to accept is the most appropriate methodology for assessment.

Willingness to pay, quantified as the maximum amount an individual is willing to hand over for a service, could be measured by asking passengers how much more they would be prepared to pay in fares to enable provision of real-time at-stop arrival information.

Willingness to accept, an index of compensation for abandoning a service or lowering its quality, could be measured by asking bus passengers whether they would be happy with lower fares if this this meant less certain arrival times. In both instances, says the report, the answers would give a useful indication of the monetary value of the installation of a technology, but more research is needed to understand how this relates to realised benefits.

For its study, Aecom NZ trawled the world for available sources of statistical information relevant for comparison with the country’s present ITS capabilities. In one interesting conclusion, it notes a lack of agreement at international level on which are the most beneficial ITS components, given the distinct mobility and physical development priorities of sharply varying land areas and populations.

It contrasts, for example, the US’ emphasis on freeway and arterial mobility with South Korea’s on urban non-motorway travel, which it finds closer to New Zealand’s own needs (see table). Such structured differentiation of priorities could point the way to more realistic appreciations of the contribution ITS can make to individual economies.


 Priority  US  South Korea
 New Zealand
 Freeway management
 Adaptive traffic signal control
 Advanced traveller infromation
 Incident management
 Real-time traffic information
 Traffic control and management
 Arterial management
 Public transport management
 Public transport management
 Emergency management
 Speed violation enforcement
 Speed/red-light violation enforcement

  • About the author: David Crawford has spent 20 years writing about and researching ITS and is a Contributing Editor on ITS International.

New ITS evaluation guide

Being launched at the 2016 ITS World Congress in Melbourne is the International Benefits Evaluation Community’s (IBEC) new 'Evaluation of Intelligent Road Transport Systems: Methods and Results' handbook gives ITS decision makers throughout the world vital factual support. Published by the Institution of Engineering and Technology, it goes on to commit IBEC to building systematically on this foundation in order to create a truly global level of effective evaluation data exchange.

Ertico-ITS Europe CEO Hermann Meyer says the manual is an ‘excellent job’, complementing the role of the EU-funded ITS Observatory database as an information resource. The editor, IBEC vice-chair Dr Meng Lu, who is strategic innovation manager at Netherlands-HQ'd Dynnic, has orchestrated global content from expert contributors and institutional sources including 32 national ITS associations. 

The handbook commends pioneering the work of established authorities. The EU's Urban ITS Expert Group, for example, has developed well-sectionalised evaluation guidelines, which have served a sequence of multinational projects. Across the Atlantic, the US DoT’s Joint Programme Office has created a knowledge resource that now contain more than 1,750 summaries of evaluations from around the world. 

The manual then highlights what it sees as the core problem for a global industry. ITS evaluations from different countries and world regions are not being systematically published or made readily accessible, structured for comparability of content, or presented with a view to wider applicability. As a result, it tasks IBEC, as an international forum, with playing a ‘significant role’ in enabling data exchanges between relevant stakeholders working in varying geographical and political contexts – working closely with partners including the national ITS associations.

Companies in this article

New Zealand Transport Agency
The Institution of Engineering and Technology

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