Explain transportation projects using a cost-benefit analysis approach in the case (700 words)

https://sites.google.com/site/benefitcostanalysis/case-studies/public-transport

Description of Project In 1999 the city of Helsinki, Finland, implemented a public transport telematics system incorporating real-time passenger information, bus and train priorities at traffic signals, and schedule monitoring. A bus line and a tram line were selected as test cases for the new system. Purpose of Project The project was intended to enhance transit operations for the two test lines by reducing delays in public transportation services, improving the regularity and punctuality of the service, and providing enhanced information. The primary recipients of these benefits were the users of the bus line and tram line. The transit agency benefited from an increase in efficiency of the two transit lines. The pilot system made it possible to remove a bus from the bus line while keeping the same schedule. Uses of Results The results of the analysis can be used to evaluate future ITS strategies in public transportation. As the pilot system was implemented on only two transit lines, the study could help transportation decision makers select other transit lines for ITS applications. Agency Perspective The Ministry of Transport and Communications in Finland has set a goal to increase public transport's market share in urban areas. A public transportation Intelligent Transportation System provides a step towards that goal. Base Case The base case considered was the operation of the two transit lines without the pilot Intelligent Transportation System. Alternatives Considered The only alternative considered was the operation of the two transit lines with the pilot Intelligent Transportation System. This is the case that was actually implemented in 1999. Therefore, this benefit-cost analysis is comparing the current case to the previous case. Type of Analysis A benefit-cost ratio was used to compare the benefits and costs between the two cases. Geographic Scope The project is located in Helsinki, Finland. The analysis considered users of the two transit lines for user benefits. The environmental benefits analyzed would involve the regions surrounding the two transit lines. Time Period for Analysis This study considered a time period of 10 years of operation for the pilot ITS beginning in 1999. Benefits, Magnitude, and Value Using a $3.70/h value of time, the total annual time cost savings were estimated to be $375,000. This time savings is due largely to signal prioritization along the two transit lines. Per-kilometer operating costs of a bus in Helsinki were estimated at $1.00/km. Using this figure, the annual savings in operating costs were calculated at $14,000 per year. The time savings on the bus line also allowed operators to remove a bus from the line while maintaining the same schedule. The theoretical savings in bus use was found to be 0.5 buses for this line, so 1/2 the vehicle-related costs of one bus were saved: a savings of $17,000 per year. Emissions-related savings were found to be approximately $200 annually, which was considered insignificant for the analysis. Total benefits for a 10-year period were found to be $2,600,000. Costs The costs of implementing the system were approximately $790,000, distributed as follows: Displays at stops - $174,000 In-vehicle systems - $245,000 Signal devices and the priority system - $103,000 Management system with the radio network - $270,000 Maintenance and operation costs of the system were estimated at 8% of the investment. Analysis B/C = 3.3 Sensitivity Analysis Performed No sensitivity analysis was performed. Models Used Because the system is already in use, the numbers used for transit ridership were based on empirical data. Critique Strengths and Weaknesses This analysis provided a fairly comprehensive list of benefits and costs for the pilot public transportation Intelligent Transportation System. The delay imposed upon cross-traffic drivers due to the signal priority system was not calculated. Therefore, it is unknown how this delay would affect the benefits of the project. However, the decrease in delay of drivers at intersections along the transit routes could offset it. Also, some benefits of the project were not economically quantifiable. For example, ridership increased on both transit lines in this study, with half coming from other modes. Although this change does not lead towards large economic gains, it does represent a step towards the Ministry's goal of increasing transit's market share in urban areas.