3.7 - Costs of TDM programmes

Introduction

Costs of TDM projects and programmes are the costs to government (Land Transport NZ and local government) and the service provider costs (where a service provider is involved).

Note: Increases in costs to consumers are defined as disbenefits in this manual.

Costs of a TDM package depend on whether additional system capacity is required, such as additional road space, parking space, or additional public transport vehicles or infrastructure. This often depends on whether the additional trips occur during peak periods (when there is no additional capacity) or off-peak periods (when additional capacity is available).

Project costs

Project costs include the costs of:

• investigation and design
• implementation/construction (including property and supervision)
• promotion and education
• maintenance
• operating
• monitoring.

The estimated costs for project development (investigation and design) should be identified separately from those for implementation. Cost estimates for initial indicative evaluations for TDM project development funding can be obtained from past experience or judgement. The implementation cost estimate will be refined and the evaluation reconfirmed based on the completed plan before implementation funding is approved.

The cost of annual expenditure required to maintain the benefits of the TDM package over the evaluation period following completion of the project should be estimated based on local experience and knowledge.

Project operating cost is the cost of operating the new (or improved) facility or service. This is the cost to government plus the cost to the service provider - refer to chapter 6.

The cost of monitoring a TDM programme is not included in the cost benefit evaluation of a proposal, except where an initial survey is an integral part of the proposal and then it should be costed as such.

The marginal cost of car pooling is nearly zero if a vehicle has an extra seat that would otherwise travel empty (there is a small increase in fuel consumption and emissions). The incremental cost increases if the ride share vehicle must drive out of its way to pick up riders, or if a larger vehicle (eg a van) is purchased just to carry passengers.

Similarly, if a public transport system has excess capacity, shifts from driving to public transport may have minimal incremental cost. If peak travel results in increased operating costs (including extra vehicles), then the net cost to government of this must be assessed.

Notes:

• The impact on mode choice of any increase in fare resulting from purchase of extra vehicles must also be evaluated.
• If increased patronage results in uncomfortably crowded vehicles, then this disbenefit should be included in the evaluation.

Road capital, maintenance and operating cost savings

Reduced private vehicle travel can reduce the need to add roadway capacity, reduce some roadway operations and maintenance costs, and reduce some traffic service costs, such as policing and emergency response.

Shifts from private vehicle to bus transport may increase some road maintenance costs (heavy vehicles tend to cause high levels of road wear).

Parking cost savings to government

Reduced private vehicle may result in a reduction in the demand for parking facilities. The parking cost savings of park and ride is the difference in cost between a parking space at the worksite and at the urban fringe.

The parking cost saving to government is the net cost to government. This is the service provider costs minus service provider revenue - refer to chapter 6. Usually this cost will be zero unless government is providing subsidised parking.

The timing of any parking cost saving must be carefully assessed. Reductions in private vehicle trips may provide little parking cost savings in the short-run if there is abundant parking supply. However, over the long term, the excess parking spaces or their land can be used for other purposes.