Road Network Operations
& Intelligent Transport Systems
A guide for practitioners!

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Project Appraisal

Author Tom Worsley (Visiting Fellow, Insitute for Transport Studies, University of Leeds, UK)

Intelligent Transport System (ITS) investments vary hugely in terms of costs, scope and characteristics – and provide a wide variety of benefits, such as reduced accidents, less severe injuries, improvements in journey times, reduced congestion, greater productivity for transport operators and better environmental quality. These benefits have a value for the travelling public, professionals, communities, businesses and service providers. (See ITS Benefits)

Economic appraisal is used to demonstrate to decision-makers, the likely impacts of an ITS project – or of any other transport scheme that is intended to resolve a transport problem. Economic appraisal differs from financial appraisal because it takes into account impacts on all factors that the scheme may affect – such as changes in carbon emissions or in traffic accidents. It looks beyond the estimates of a project’s revenues and costs – which make up the project’s financial case. (See Finance and Contracts)

Appraisal is undertaken at the planning stage of an ITS scheme, in advance of implementation. A well-conducted economic appraisal enables decision-makers to understand the extent to which a project can be expected to deliver its objectives – and the scope of any other impacts, whether beneficial or detrimental. The evidence from the economic appraisal – as part of a wider consideration of stakeholder interests – can help a decision-maker to decide whether a project is worth implementing and how much priority should be given to it.

Ultimately, appraisal calls for a vantage point. The public sector is generally concerned to finance projects that will enhance social welfare – in which case socioeconomic factors will dominate any appraisal. This does not mean that financial viability can be ignored – because there has to be an available budget. In the case of a commercial investment in ITS, the financial appraisal should not overlook the economic aspects – but private investors will seek to achieve high returns – irrespective of the socioeconomic benefits. Both the economic and financial appraisal are important. Often this dynamic eludes project thinking.

Appraisal plays an important role in the formulation of transport policy. It can provide decision-makers with an assessment of the likely outcomes of a new policy initiative and help to optimise its effectiveness and mitigate adverse consequences. It can help policy makers understand the likely impacts of new options for dealing with traffic problems such as urban congestion charging.

The benefits and limitations of each option should be considered, as well as the costs, before a programme or project investment decision is made. Each roads manager must make an informed decision

Appraisal in Practice

The objective of ITS deployments is to make best use of available roadway capacity, often where there are conflicting user requirements – for example giving priority to public transport in urban areas, safer pedestrian crossings, or smoothing traffic flows on motorways. Traditional road building is frequently regarded as more immediately beneficial – but with a better understanding of ITS and more experience, many road authorities are adopting ITS solutions instead. ITS can bring:

  • operational benefits, such as improved traffic management – leading to relief of heavy traffic congestion in cities
  • benefits to safety and security – such as reduction of vehicle theft and hijacking (for example through GPS vehicle tracking)
  • increase of efficiency and reduction of time delays caused by administrative processes – for example at international border crossings

Appraisal is part of a cycle of decisions and actions. It begins with the road authority or road operator identifying a traffic-related problem and proposing an ITS solution and the scheme’s objectives. In many cases it is the government department with oversight of road traffic – or the highways administration – that begins the process. A series of options (not all of which will be based on ITS) are developed – to the level at which it is possible to assess how far each of them succeeds in reducing the problem identified, to improve conditions for road users and others in the community:

  • in some cases this requires the establishment of a transport model (See Traffic Models)
  • in other cases engineering judgement, based on evidence from similar schemes, will be sufficient

The performance of each option is assessed taking account of the ways in which transport users and transport providers respond to the changes in the network that each option provides. A forecast is made of the volumes of traffic that will use those parts of the network affected by the option.

The impacts of changes in the performance of the network are measured in terms of shorter travel times, fewer accidents, improved environmental quality or better journey time reliability. These constitute the benefits to transport users and others in the community. Economic assessment uses monetary values to express savings in travel times and accidents or improvements in reliability. A comparison of the costs and the benefits provides the basis for a “benefit to cost ratio” – which provides an indication of the strength of the case for a specific option:

  • in each case the performance of the option is compared with a “do-nothing” reference case, since the appraisal is concerned with the case for making the change;
  • a benefit–cost ratio is useful evidence for those responsible for making the decision – on whether to take action and, if so, which option to implement.

Economic appraisal goes further than providing an assessment of the extent to which a proposed ITS scheme will achieve its objectives:

  • a well specified process of economic appraisal will provide a comprehensive assessment of all of the impacts – including those that do not form part of the initial objectives of the project
  • some of the consequences of an ITS project might be detrimental to society – such as an increase in traffic noise following from an ITS project which improves traffic flow conditions

Economic appraisal is aimed at identifying both the positive and negative impacts – so is well suited for use with ITS schemes since they often impose costs on one group of transport users in exchange for a greater benefit to another group of users. For example, urban public transport priority schemes might delay some car users but reduce journey times for a much greater number of bus passengers as well as reducing bus operating costs.

Appraisal enables those involved in funding and deploying ITS to:

  • understand the impacts of the proposed ITS system or service
  • give confidence in the planned scheme
  • quantify the benefits and justify the expenditure

Evaluation

Evaluation is separate from appraisal and is carried out after the implementation of a scheme. It is concerned with assessing whether the ITS deployment has delivered the expected outcomes. It is important to record the lessons learned. Evidence about how an ITS scheme has performed in reality can inform assumptions made in designing the economic appraisal of subsequent ITS deployment. (See  Evaluation and Appraisal and Evaluation of Managed Motorways Technologies)

A commentary on cost variables and sources of benefit associated with some of the more common applications of ITS in Road Network Operations is provided in the tables below:

Traffic management And Network Monitoring

ITS Application

Capital Cost

Operating Costs

Benefit

Notes

Traffic management and network monitoring

This can range from a single monitoring installation on one access to a junction, to an extensive system covering an entire motorway/ freeway network. Includes telecommunications links.

Automatic monitoring linked to an automatic sign has low costs. Constant surveillance by an operations centre has high costs.

Less congestion and greater journey time reliability. Breakdown in traffic flows are often linked to stress points in the network or the response to incidents. Traffic monitoring can reduce the tailbacks caused by congestion or incidents.

Traffic monitoring ranges from ramp metering and ramp closures to lane management, speed control and emergency response.

Public transport signal priority

ITS Application

Capital Cost

Operating Costs

Benefit

Notes

Public transport signal priority at intersections

Needs systems for roadside equipment, signals and for the public transport fleet.

There are some ongoing maintenance costs, but little in the way of management costs.

Reduction in travel time for buses, trams etc.

Improves adherence to schedules.

Has the greatest impact where public transport crosses the main traffic flow, so would normally experience longer delays.

Also has high impact on corridors where signals are poorly coordinated.

Some systems give priority to public transport only when it is running late, letting the signals run an optimisation cycle at other times.

Parking management

ITS Application

Capital Cost

Operating Costs

Benefit

Notes

Parking management

These systems are common in urban areas. This makes the equipment relatively cheap (detectors, VMS, gates for access control) and the installation free from unknowns.

Automatic counts of car parking spaces provide the raw data; telecommunications, system operating and maintenance costs

Data feeds into Variable Message Signs. Better use of available parking spaces. Reduces the time searching for a parking space. This in turn has some congestion and environmental benefits.

Can become the basis for a wider ITS infrastructure. If ITS are new in a country or state, then starting with parking management systems puts highway managers and users on the learning curve.

Motorway Lane management

ITS Application

Capital Cost

Operating Costs

Benefit

Notes

Motorway lane management

Ranges from simple Variable Message Signs and gates for HOV lanes up to sensors in the road linking to dedicated lane control signals for each lane. Cost of installing gantries may be a major factor

Operating costs will vary inversely with the capital cost. If only VMS signs and cameras are used, then an operations centre has to monitor traffic. If road sensors do the monitoring, then staff costs are lower. Usually there will be enforcement costs.

Offers some of the highest benefits in ITS. Smoothes traffic flows, handles peak conditions, improves emergency response and prioritises access.

These are some of the most established and acceptable ITS. Includes HOV Lanes, reversible flow lanes and variable speed limits. Can also be used for road user charging (value pricing).

Traveller information systems

ITS Application

Capital Cost

Operating Costs

Benefit

Notes

Traveller information systems

Often telephone or internet based, or a part of in-vehicle systems. Costs include integration of information system with data sources, and hardware and software for dissemination of information.

Information has to be updated constantly. If this is done manually it is labour intensive and relatively costly compared with automatic systems. Automated systems have a cost advantage.

The individual traveller gets great benefit, so these can be commercial applications. The benefits in safety and congestion on a network are likely to be small.

Pre-trip information, en-route information and tourist and event information can save time and anxiety. A mobile phone will tell you what’s on at the cinema, find you the nearest taxi to take you home and order a pizza to be delivered when you get home. All these are journey related.

Real-time Traffic Information Services

ITS Application

Capital Cost

Operating Costs

Benefit

Notes

Real-time Information services for private and commercial traffic

‘Dynamic’ or ‘Variable’ Message Signs, that give information about conditions ahead, are expensive for a full network, but have a long life (20 years).

In-car systems mainly have a cost to the user.

Keeping information up to date requires constant monitoring, whether by people or by ITS systems. Also, there is significant investment in short-life equipment.

Depends on individual managers putting the information out in time for people to react to it. Depends also on the individual user’s capacity to react. Significant diversion to nearby available capacity can be achieved with appropriate driver response, which depends on drivers having confidence in the system.

Information system management is often criticised. Drivers complain that they sit in a queue for half an hour and then pass a sign warning them of the problem. Alternatively, drivers see signs warning them to slow down long after a problem has cleared. Confidence is highly dependent on the management of the system and the reliability of the information provided.

Real-time public transport Information

ITS Application

Capital Cost

Operating Costs

Benefit

Notes

Real-time Information for public transport

Involves equipment at stops, on vehicles and in control centres, and communications costs for transmitting data.

If the information is automated, then the management cost is relatively low. The equipment is in a public setting and may have high attrition rates.

One of the main factors in the decision to use public transport is user confidence in the system. Real time information gives a sense of reliability, reduces the anxiety during waiting times and makes passengers feel safer. The value of the system is highly dependent on its accuracy.

Real time public transport information is often installed as a sensible investment without economic analysis. The benefits have been proven and are now well accepted. Users will tolerate failure early on, but if the signs repeatedly give wrong arrival times then the ITS will damage confidence rather than improve it.

Electronic Payment Systems

ITS Application

Capital Cost

Operating Costs

Benefit

Notes

Electronic Payment Systems

These can range from tolls for a single bridge to a full road or transport network. It can be expensive to develop and implement payment systems for public transport or multimodal networks. Fare structures tend to be complicated, with thousands of potential point to point trips. Peak and off-peak fares double this number of transactions.

Maintenance and management for a simple system is very low cost. For a public transport or multimodal system, there are more points of information collection, but the technology is not expensive to replace and is relatively long-lived.

Electronic payment reduces staff costs, fraud and payment failure. It also gives users confidence in the system.

Multi-modal payment systems are expected to yield a shift from private car use to public transport use on congested links and at congested times. They can link with road user charging, to encourage travellers to optimise mode choice.

ITS can provide toll collection, transit payment, or multi-use payment. There is growing interest in payment systems which allow access by car and public transport. There are few systems in operation as they are complicated to develop and implement. More are being developed and some simple systems have been tested. Electronic payment is expected to play a significant role in achieving more sustainable travel over the next few decades.

Controlled access

ITS Application

Capital Cost

Operating Costs

Benefit

Notes

Controlled access

Roadside equipment and back-up and communications links. If the enforcement system is automatic, it must be type-approved to very high standards.

Enforcement requires an administration. The equipment is in public places and suffers a high attrition rate.

Vulnerable road users, environmental benefits in sensitive areas

Access control systems are increasingly being installed as part of a package of area-wide improvements in city centres to enhance the quality of life for residents, businesses and the city centre workforce.

Demand management

ITS Application

Capital Cost

Operating Costs

Benefit

Notes

Demand management for public transport / transit / taxi / rideshare / special needs transport.

Ride sharing and matching can be done through internet or telephone services, car clubs, or local information networks. At the highest end, these systems provide dynamic routeing and scheduling and service co-ordination, but this only reaches the ‘Medium’ cost bracket when fleets are equipped with real time monitoring sensors. A great deal is done by radio.

Most taxi firms and special needs transport operators employ this sort of demand management system with one or two operators in control. For an entire network, there may be more need for direct communication or for ITS links which need maintenance.

Individuals gain high benefits from improved coordination of services. These ITS enable many people to make journeys that they would not otherwise have been able to make. The social value is high. It is unlikely, though, that they will reduce overall traffic and congestion to a great extent. At the highest end, they may increase the frequency and reliability of public transport, which can have ridership and congestion benefits.

The initial take-up of liftshare or demand management services tends to be slow. It is, however, expected to form an increasing part of the public transport mix over the next few decades.

Enforcement APPLICATIONS

ITS Application

Capital Cost

Operating Costs

Benefit

Notes

Enforcement applications

Cameras and other roadside equipment and back-up and communications links must be type-approved to very high standards. If fines and penalties will be levied on the strength of the ITS, the system has to be robust.

Requires the ‘back office’ administration to follow up on non-compliance. The equipment is in public places and suffers a high attrition rate.

Enforcement of regulations such as speed, lane discipline, stop signs or signals, seatbelt wearing, road user charging and taxation. A wide range of safety benefits. Some congestion and environmental benefits.

Enforcing regulations through ITS is expensive – but it replaces enforcement by other means. The savings can be very significant. These savings are on top of the benefits of improved enforcement and a change in offending behaviour.

 

Reference sources

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