The Costs and the Benefits of Tif

Finding: The costs to society as a whole, are estimated at over 3 times the benefits.

 

The current proposals are just a list of proposals with no attempt to say if this is of net benefit to society as a whole. Using my costing experience, I have tried to detail these, with assumptions made. Some estimates will be wide of the mark, whilst other elements will be absent entirely. However,

 

  1. This is the only publicly available attempt to evaluate if the initiative is of net benefit to society as a whole.
  2. It provides a framework to compare and contrast various elements of the intiative.
  3. When better estimates are available, then the estimates can be updated.

 

 

 

The Costs and Benefits

 

When I did my degree in Economics it was Cost-Benefit analysis. Furthermore, I spend more of my salaried beancounting time on costs rather than benefits. So the costs come first, despite current coventions.

 

         
Costs and benefits of the Transport initiative in Manchester for Society as a whole.
All Costs in £m, unless otherwise stated
Costs
Note   £m
       
  A Investment cost 296   
         
  B Lost time – switchers 125   
         
  C Lost time – car users 56   
         
  D Subsidy Costs 350   
         
  E Congestion Charge 174   
         
  F Existing public transport users 80   
         
  G Switching to non-CO2 emitters 20   
         
  H Buying Hydro-electric 13   
         
    TOTAL COSTS 1,114 
Benefits
Note   £m
       
  M Existing public transport users 135   
         
  N Reduced pollution health benefits 50   
         
  P More Exercise health benefits 10   
         
  Q Reduced CO2 impact 10   
         
  R Conjestion Charge Net Revenue 143   
         
    TOTAL BENEFITS 348 
TOTAL COSTS OVER BENEFITS 766   

 

Notes on Costs 1 of 2
A Investment cost
Total Expenditure 2800        
  Less congestion Scheme -313        
  Net Expenditure   2487      
             
  Loan   1200      
             
  Annual repayment on loan   143      
      (Congestion charge income £174m less £31m operating costs)      
             
  Therefore, annual cost of           
       total capital expenditure   296      
             
B Lost time – switchers from cars to public transport
This is assuming that people moving from cars to      
  public transport will spend more time on their total journeys.    
             
  Average time per day of 15 minutes (normal service)      
  No of people switching assumed to be 200,000, travelling 200 days per year  
  (some 50,000 of whom are car passengers)        
  Extra time travelling – normal 10 million hours    
  Extra time travelling – unexpected 5 million hours    
  Time unpredicatability 5 million hours    
  Loss of convenience 5 million hours equivalent  
  (enduring the elements, antisocial behaviour, crowding etc.)    
  Cost at £5 per hour 125 £m      
             
  Lost time for increased unpredicatability of public transport    
  People will leave earlier due to the time inconsistancy of time, especially of buses.
  Also due to crowding at peak time of trams        
             
             
C Lost time – car users
Hours p.a.
  800,000 road users for 189 days, adding 3 minutes per day.   7,560,000
  150,000 car users spending 2 minutes a day to pay congestion charge 945,000
  Payment of fines is time consuming. 1.73m per year      
  30 minutes of lost time and 60 minutes for stress     2,595,000
             
      Total Hours per annum 11,100,000
      Total Cost £m @ £5 per hr 56

 

           
           
Notes on Costs 2 of 2
D  Subsidy Costs – additional
School Buses 30 600 at £50k per annum
  Buses new routes 100      
  Buses – Higher Spec 50      
  Buses – more buses 50      
  Tram system 50      
  Maint & Security 20      
  Ticketing Systems and PR 20      
  Trains – extra subsidy 30      
           
  TOTAL     350
F Existing public transport users – Costs
Increased costs for switching from Train to Tram    
  – 50,000 people a day for 200 days per year. Extra £1 day 10  
  Increased costs for switching from Bus to Tram 10  
  Increased costs for buses     50  
  Increased costs of trains     10  
      TOTAL 80
H Extra cost for Hydro over cheapest
Additional cost per kWh 0.03 £/kWh    
  Additional cost per MWh 30 £/MWh    
  Average load 50 MW    
  Cost per year £13.15 £m    
           

 

 

 

 

  Notes on Benefits
M Existing public transport users – Benefits
Time saved on journeys     Total Hours p.a. 25,000,000  
    Reduced time for unexpected delays   Total Hours p.a. 2,000,000  
          Total Cost @ £5 £135  
                 
  N Reduced pollution health benefits A guess        
  P More Exercise health benefits A guess        
  Q Environmental Benefit A guess        
                 
    Clearly there will be some health benefits from reducing pollution by getting    
    dirty buses off the road, from people walking further, and a lower net CO2    
    emissions.             
    Inituitively the health benefits of more exercise have to be offset against    
    the consquences catching colds & flu through being in crowded places and    
    enduring the worst of Manchester’s cool, damp climate.        
                 
  R Conjestion Charge Net Revenue
Total Revenue   £174        
    Operating Costs   -£31        
                 
    Net Revenue   £143        
                 
                 

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