Projects With No Benefit – Rotherhithe Bridge and HS2

When evaluating capital projects, it is wise to estimate the benefit/cost ratio (“BCR”), i.e. the likely value attached to the benefits divided by the overall costs. That is the best way to evaluate differing projects so one can pick the best ones. Those with a negative ratio are clearly not worth doing.

The DfT’s “Value for Money” guidance says a project will generally be regarded as “medium” value if the BCR is between 1.5 and 2; and “high” if it is above 2. The Eddington transport study of 2006 said the BCR for trunk roads was 4.66, local roads 4.23 and light rail schemes a measly 2.14. When there are so many possible projects that give high benefit/cost ratios, why bother with lesser ones? It’s just a misuse of public money to do so.

Transport for London (TfL) have published their response to the results of their public consultation on the proposed new Rotherhithe/Canary Wharf river crossing. This is a vanity project of the latest Mayor, rather like Boris’s “garden bridge” – it was covered in a previous blog post here: https://abdlondon.wordpress.com/2017/11/11/new-thames-river-crossing-at-rotherhithe/

This bridge would only be useable by cyclists and pedestrians and the favourite plan now is for a bridge rather than a tunnel or a ferry. However the bridge would need to have a lifting section to allow for river traffic. How the bridge might be funded is still not clear (possible costs of well over £300 million for a “navigable” bridge was previously estimated including discounted running costs over the life of the bridge). The latest report simply says they are investigating a number of funding options.

More information on costs is given in this document: https://consultations.tfl.gov.uk/rivercrossings/rotherhithe-canarywharf/user_uploads/r2cw—background-to-consultation-report.pdf

When it comes to the benefit/cost ratio for the proposed bridge it is estimated to be between 0.7:1 to 1.97:1. In other words, it might actually be negative and will be unlikely to be a “high” return project. Even those figures assume very high usage of the bridge by cyclists and pedestrians but it is justified on the encouragement to cycling and walking that it would provide – and hence is consistent with the Mayor’s “healthy streets” policy.

In summary, this bridge is not justifiable in relation to other transport projects and knowing the Mayor’s budget problems it is simply unaffordable anyway. Time to kick it into the long grass surely before more money is wasted on it?

The latest report on this project from TfL is present here: https://consultations.tfl.gov.uk/rivercrossings/rotherhithe-canarywharf/

HS2

In comparison to the aforementioned bridge, the HS2 high-speed rail line is a mega-project of the first order. Likely cost is now more than £80 billion with major disruption in London and many other parts of the country. Local Transport Today (LTT) have published details of a leaked report by Paul Mansell, a Government-appointed advisor. It’s a very damning assessment of the value of the project. It seems his report was not shown to Government ministers before Parliament voted to proceed with the project.

Back in 2013, the benefit/cost ratio of HS2 was calculated by the Government to be 2.3. What it is now, after a major escalation in costs, is not at all clear. But it seems that the only justification for continuing with it is the possible boost to the economy that might be needed if a “hard” Brexit is the outcome.

Surely this is another project that should be canned sooner rather than later, simply because there are better things to spend the money on – and that includes not just railway lines.

It is of course fortunate that we have some benefit/cost information on the above two projects. TfL (and the Mayor of London) now often fail to provide such information. Figuring out whether the ULEZ scheme is worth doing for example is not easy. But in reality it’s wildly negative – see http://www.freedomfordrivers.org/Cost-of-the-ULEZ.pdf

It is unfortunately a symptom of the modern trend to make major public policy decisions on irrational grounds. They just need to sound appealing to a few segments of the population (preferably those who might vote for the politicians backing the proposals), when economics should be the key decision basis.

Roger Lawson

Twitter: https://twitter.com/Drivers_London

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More Money For Cycling

Sadiq Khan, Mayor of London, has announced a commitment to spend £142 million on new cycle routes. He claims this will benefit cyclists and pedestrians, but why the latter is not clear.

These are the routes where money will be spent:

  • Lea Bridge to Dalston – This 3km route would link the City and Waltham Forest by filling the gap between Lea Bridge Road and Cycle Superhighway 1 at Dalston
  • Ilford to Barking Riverside – This 8km route would link two bustling outer London town centres and a major growth area with up to 10,800 new homes and a new London Overground connection – while enhancing access to the Elizabeth line and London Overground services
  • Hackney to the Isle of Dogs – This 8km route would stretch from Hackney to the Isle of Dogs via Canary Wharf, Mile End and Victoria Park
  • Rotherhithe to Peckham – This 4km route would link Peckham with key and growing destinations such as Canada Water and Surrey Quays, and connect up other cycling routes such as Quietway 1 and the proposed Cycle Superhighway 4
  • Tottenham Hale to Camden – This 8km route would connect major town centres and will cover seven junctions identified as being among the 73 with the worst safety records
  • Wembley to Willesden Junction – This 5km route would be north-west London’s first major cycle route, connecting Wembley, Stonebridge Park and Willesden Junction. Future sections will connect to planned infrastructure in west London such as CS9 and CS10.

The Mayor has also committed to providing a new river crossing between Rotherhithe and Canary Wharf for pedestrians and cyclists. Note that we commented on this project previously here: https://abdlondon.wordpress.com/2017/11/11/new-thames-river-crossing-at-rotherhithe/ . It is surely a financially unjustifiable project, but needless to say the Mayor says the initial analysis of the consultation results shows substantial support – surely a case of folks voting in favour of something when they think they don’t have to bear the cost.

Note that the Mayor has committed to spend similar sums on cycling, if not more, over the next 5 years – an average of £169 million per year. Meanwhile budgets for road maintenance have been cut and projects put forward by local boroughs are being cut back. As usual these days, there is no cost/benefit justification provided for this expenditure.

It is not clear what the nature of these cycle routes will be. Will they be fully segregated as are the Cycle Superhighways or simply minor improvements such as blue paint and junction improvements. It seems some of the routes may be partly on “Quietways” (i.e. back roads with little traffic).

But one thing is for sure from past experience of similar projects. Road space will be removed from motorised traffic and traffic congestion will increase as a result.

Roger Lawson

Twitter: https://twitter.com/Drivers_London

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