Stephen Rees's blog

Translink released the CH2M Hill Burnaby Mountain Business Case report (dated October 2011) yesterday. And the story got picked up quickly by Atlantic Cities.

It seems to me to illustrate what has been going wrong with public investment decisions in recent years. In terms of its Benefit Cost Ratio this project ought to rise high in any comparative analysis of potential transportation projects. There is always a long list of projects that could be done, but not all of them will turn out to be positive. Often the local environmental impact of a major transportation project – or the the cost of its mitigation – will outweigh the benefits – usually travel time savings, especially if all the costs and benefits are measured objectively. In this case, while local residents have objected loudly object the anticipated impact on them, the overall benefits are significantly higher than the costs.

• 1.5 million hours of saved travel time for current riders and an estimated 500,000 of auto travel time savings as commuters switch to the more efficient service;
• Fewer transit service interruptions due to snowy conditions on the winding roads up to SFU;
• Over 26 million in fewer vehicle kilometres traveled annually, which translates into savings on gas, collisions and an overall reduction in greenhouse gas emissions of about 7,000 tons annually.

“The total value of these benefits, over the 25-year life-cycle, totaled more than $500 million, creating a benefit-cost ratio (BCR) of 3.6,” the report notes, adding that a BCR of greater than 1.0 indicates that benefits surpass costs.

In a world where governments are concerned about such things, even though there may not be enough revenue to cover the costs, a BCR of 3.6 would be significant enough to make a case for public sector (taxpayer) support. Social benefits – or what economists call an overall welfare benefit – are worth paying for, even if the market does not have a mechanism to produce that. But these days governments in general have abandoned ideas of social welfare, and espoused the notion that somehow government is just another business and it is only the financial case that matters. Government expenditure is held to be necessarily wasteful and inefficient – unless it is spent on projects like huge weapons or prisons (which have no discernible  benefits at all, just high private sector profits).

Translink currently cannot finance any new projects beyond the Evergreen Line, since its financial resources are restricted by the province. So there is no way to cover the projected $120m in capital costs or the $10m extra in operating costs. Buses are cheaper. And cheapness, it seems, when it comes to public service, is all that matters. Travel time savings, lower emissions (local pollutants and greenhouse gases) and greater reliability are not worth paying for. Well, not when you have already shot billions on highway projects that will not achieve any of those benefits. Of course, in the case of BC, the assessment process ensured that the highway project would be built anyway and the case for it would never be effectively questioned. Its environmental costs would be ignored, and the case would be based on time savings that ignore induced travel that will quickly overwhelm the short term travel time savings.

I cannot say I like the Atlantic’s use of stock photography. Here is another of my Peak2Peak gondola shots – since that was a favoured technology for SFU at one time

Peak2Peak centre span - my photo on flickr