Response to Cost Benefit Analysis for Chesterton Bridge FOI 7177

The following comments are based on the Cost Benefit Analysis for Chesterton Bridge  and released under FOI 7177 made by Chris Smith on 14/11/16.  The report is dated 6/10/16 conducted by WYG in October 2016. This has not been listed on the council website, but is published here :  foi_7177_app1-cost-benefit-report  There is also a covering letter (FOI_7177_RESPONSE foi_7177_res-council-response).

The Cost-Benefit Modelling as presented appears to have used incorrect figures and underestimated costs and overestimated benefits.

The model itself appears unsuitable under Treasury Green Book guidance, since no allowance is made for environmental impacts nor for a QRA.

Nevertheless the model – even including the most optimistic parameters and non-economic “health” and “ambience” benefits – still shows the scheme costs far more to build than the benefits ever are – close to 40 to 1 – costs to benefits i.e. spend £40 get £1 back.  We think in reality the ratios will be far worse.  The benefits for congestion are minimal.

Due to the adverse effects caused by the scheme on the environment and landscape, the scheme would need to demonstrate both sustainability and overriding public benefit to proceed. We do not believe that this is the case, and that the scheme is unsustainably economically and environmentally.

1. Incorrect figures entered into the Cost-Benefit Analysis

i. Incorrect costs

The analysis does not include maintenance costs for the bridge and associated structures over the 20 year lifespan as per Webtag or COBA (e.g. drainage, street lighting, fencing, grass cutting, repainting lines etc).

The costs of the bridge as entered do not include allowance for a Quantitative Risk Appraisal (QRA) for likely project overspend as set out in Webtag guidance.  A Quantified Risk Assessment (QRA) “allows an expected value (defined as the average of all possible outcomes, taking account of the different probabilities of those outcomes occurring) of the cost of the scheme to be calculated. This expected value should form the ‘risk -adjusted cost estimate’.”  This is required for all transport projects with a cost greater £5m, and is “encouraged” for smaller schemes, to adjust the base cost upwards for identifiable risks. At £4.5m, the scheme lies very close to £5m and with the inclusion of the Chisholm Trail vastly exceeds it.

Given massive recent overspends on other transport schemes in the city and issues with Hills Road scheme, the costs are unlikely to arrive within budget.  We also note that the design of the bridge has increased from 80 to 120 tonnes during the planning application, which indicate already likely cost increases.

ii. Incorrect user numbers

Under the “Do Something” scenario, the figures from the Greater Cambridge Cycle City bid are used, rather than those from the forecast.

The forecast figures are disputed as the approach to the bridge is not lit, in a remote area and via a narrow walkway, which will not be widened under the scheme.  Its attractiness for people switching from other bridges, especially during winter evenings is therefore debatable. They are therefore highly optimistic.

This notwithstanding, the modelled figures show future use will be 1132 daily cycle trips ( all journey purposes ) and 458 daily pedestrian trips.  This differs markedly from the 2401 and 891 trips in the proforma.

We can add to the projected modal switch  to the baseline to get the future usage under “do nothing”.  The logic behind the modal shift is not transparent, simply that the new route is “more attractive”. We would dispute as neither based on reality, but also as being overly optimistic.

We have inserted the modelled figures into the proforma.

iii. Incorrect estimate of benefits

The correct estimate should be based on the total length of cycleway improved for the cost invested.  There are no improvements to connecting paths from this scheme and the costs of the Chisholm Trail are not included.  This should therefore strictly speaking be the length of the bridge.

However let us assume that the bridge “opens up” new potential routes.  We need to identify which routes being used in the “do nothing” are accessible by a better route in the “do something”.

To the south of the river, all “do nothing” routes to get to the Green Dragon bridge are off-road across Ditton Meadows or Stourbridge Common.  There is therefore no net gain in “journey ambience”.

To the north of the river, there is a short section of “Do nothing” to get to and from the Green Dragon Bridge There is a potential improved section along Water Street where there is a small section of on-road cycling in a quiet cul-de-sac followed by access to a segregated lane.  If we assume though that everyone using the new bridge is travelling east-west to the station and has switched from the Green Dragon Bridge, the best case gain would be all the users not having to cross at the Green Dragon Bridge and then cycling along the southern off-road cycleways instead.

We estimate the benefit therefore to be a MAXIMUM of 4p per km ( comparing segregated on-road to off road [7.03 – 2.99] ). It could be argued that the Water Lane section is completely off the carriageway and effectively off road.  The southern routes are also not lit, remote and linked to the bridge via a narrow walkway.  In reality the “ambience” benefit is probably less for a lot less people.

We multiply 4p by length at Water Lane [429m] divided by total route [5km ] : 4p x 429 / 5000 = 0.3432p

We estimate that there are no ambience benefits for pedestrians, since the existing walk via Green Dragon bridge is pleasant and well lit. However we will use the 1.5p provided by the original costs benefit.

iv. The modelled results

Based on these assumptions the Benefit-Cost ration is 0.23, but this is based largely on Journey Quality (“Ambience”) and Health Benefits. See here for full results in Excel :active-mode-appraisal-toolkit-chesterton-bridge

Once these are stripped out, the tangible economic benefits are £99 000 against costs of £4.5 million, a ratio of 1:46 i.e. for every £ invested there is a return of about 2p.

2. The unsuitability of the model

The model used focuses on the benefits to users and does not capture the negative impacts of the scheme on others ( e.g. amenity value to residents ) and on the environment.  For instance no value is attached to the degrading of the landscape of Ditton Meadows Conservation Area nor to the loss of BAP habitat such as fen and floodplain grassland nor the effects on populations of otters, water voles and bats.

Furthermore the model is not agile enough to include “project creep” and longer term impacts such as pressure for lighting and additional development, which appear inevitable once the initial scheme has been granted.

It is clear that the model contains perverse incentives to deliberately target green space and sensitive wildlife sites because these achieve greater “ambience” benefits. This is contrary to government and international policy on sustainable development.

3. Lack of consideration of risks associated with overspend

The scheme does not appear to have undergone Quantitative Risk Appraisal and we believe that an overspend is very likely.  Any overspend will have to be met from other Cambridgeshire County Council budgets, since the bridge cannot use City Deal money.

References

Department for Transport COBA Cost benefits analysis: user manual, number 11 https://www.gov.uk/government/publications/coba-11-user-manual

Webtag TAG UNIT A1.2 Scheme Costs January 2014 Department for Transport Transport Analysis Guidance (TAG) https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/370867/TAG_Unit_A1.2_-_Scheme_Costs_January2014.pdf

Cambridge News Oct 11 Oct 2016 “‘Lessons need to be learned’ after controversial Hills Road redevelopment, councillors told”  http://www.cambridge-news.co.uk/news/cambridge-news/lessons-need-learned-after-controversial-12008437

Cambridgeshire County Council FOI_7177_RESPONSE to request dated 14/11/16 regarding: Chisholm Trail and Chesterton Bridge Cost-Benefit Analysis. [ The report is dated 6/10/16. This has not been listed on the council website, but is published here : foi_7177_res-council-response


Modelled results with correct parameters

Analysis of monetised costs and benefits

( in £’000) %
Noise 0.64 0%
Local Air Quality 0 0%
Greenhouse gases 2.11 0%
Journey Quality 275.42 27%
Physical activity 656.32 64%
Accidents 9.63 1%
Decongestion 99.18 10%
Indirect taxation -12.45 -1%
Present value of benefits 1030.85 100%  
       
Total costs 4539   Not risk adjusted
Benefits to cost ratio 0.227    
0.3432p Benefits per km for cycling
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