Thames Bridge Cycle Pedestrain Economic Appraisal

8/8/2019 Thames Bridge Cycle Pedestrain Economic Appraisal

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Thames Cyc le and Pedestr ian Br idge

March 2007


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Tham es Cyc le and Pedest r ian Br idge

Project No: 124361

March 2007

Newcombe House

45 Notting Hill Gate,

London, W11 3PB

Telephone: 020 7309 7000

Fax: 020 7309 0906

Email : [email protected]

Prepared by: Approved by:

____________________________________________ ____________________________________________

FK PB

Status: Final Report Issue no: 1 Date: 15 March 2007

i:\12436x_thames cycle bridge appraisal\study\reports\final report\thames cycle and pedestrian bridge - appraisal report (15 march 2007).doc

(C) Copyright Colin Buchanan and Partners Limited. All rights reserved.

This report has been prepared for the exclusive use of the commissioning party and unless otherwise agreed in writing by ColinBuchanan and Partners Limited, no other party may copy, reproduce, distribute, make use of, or rely on the contents of the report.No liability is accepted by Colin Buchanan and Partners Limited for any use of this report, other than for the purposes for which itwas originally prepared and provided.

Opinions and information provided in this report are on the basis of Colin Buchanan and Partners Limited using due skill, care anddiligence in the preparation of the same and no explicit warranty is provided as to their accuracy. It should be noted and is expresslystated that no independent verification of any of the documents or information supplied to Colin Buchanan and Partners Limited hasbeen made


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Thames Cycle and Pedestrian Bridge

Contents Page

EXECUTIVE SUMMARY I1. INTRODUCTION 12. THE PROPOSED BRIDGES LOCATION AND COSTS 22.2 Construction and Maintenance Costs 23. POPULATION AND EMPLOYMENT 44. CURRENT DEMAND AND MODE SHARE 65. FORECAST DEMAND AND MODE SHARES 76. TRANSPORT BENEFITS 87. APPRAISAL 108. SENSITIVITY TEST 128.1 Introduction 128.2 Optimism Bias 128.3 Sustrans Benefits 128.4 Doubling the Value of Time 139. CONCLUSIONS 14

Tables Page

Table 2.1: Recent Bridge Construction Costs 3Table 3.1: LATS 2001 Household Survey 5Table 3.2: Primary Catchment Area Population Growth (2001-

2021) 5Table 3.3: Assumed Employment Growth at the Isle of Dogs 5Table 4.1: Existing Mode Share and Demand 6Table 4.2: Catchment Area Borough Mode Shares 6Table 5.1: Primary Catchments Demand Travel Pattern

Base Year 2007 7Table 5.2: Secondary Catchments Demand Base Year

2007 7Table 5.3: Tertiary Catchments Demand Base Year 2007 7Table 6.1: Surrey Docks Time Savings Bridge vs Other

Mode Shares 8


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Table 6.2: Rotherhithe Time Savings 8Table 6.3: Evelyn Time Savings 8Table 7.1: Demand and Annualised Benefits 10Table 7.2: Assumptions and Growth Factors 10Table 7.3: Reduction in Pollutants per Year 11Table 7.4: Project Standard Appraisal Results Base Case 11Table 8.1: Optimism Bias at 15% of The Scheme Costs 12Table 8.2: Optimism Bias at 66% of the Scheme Costs 12Table 8.3: Other Sustrans Benefits 13Table 8.4: Sensitivity Test: Standard Transport + Sustrans

Benefits 13

Figures Page

Figure 2.1:

Proposed Bridges Night View 2

Figure 2.2: Proposed Bridges View from the West 2Figure 3.1: Projects Catchment Areas 4


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Exec ut ive Summ ary

This report presents an economic appraisal of the proposed pedestrian and cycle bridgeover the River Thames linking Rotherhithe Peninsula to the Isle of Dogs.

The costs of the bridge are estimated to be 30M. The appraisal has allowed for 2%maintenance costs per annum and 44% optimism bias.

The demand forecast for the bridge is based on the current observed mode shares forLondon commuters by journey length. This is a robust approach that is used to forecast basedemand. The results suggest 1.17 million trips per year split between the primary andsecondary catchments areas of this analysis as shown in the table below. (Please refer tofigure 3.1 for details on the bridges assumed catchments areas).

The benefits are predominantly time savings and include an allowance for the quality ofjourney compared to current alternatives.

Also included were health benefits valued at 5.04 per trip for new walk/cycle user in linewith the forthcoming DfT guidance.

Benefits Million PV (60 Years)

Time Savings 46.8

Ferry Operating Costs Savings 6.2

Health Benefits 31.7

Total User Benefits 84.7

Benefits currently dont allow for wider economic impacts on the Isle of Dogs and

Rotherhithe Peninsula developments. Even so, user benefits are sufficient to generate aBenefit Cost Ratio of 1.3, which represents a positive finding. The appraisal results suggestthat the scheme is worth progressing further by reassessing the costs and mechanisms forraising finance.

Demand (Trips)Catchments Cycle Walk

Primary 48% 85%

Secondary 22% 15%

Tertiary 31% 0%

Total Trips 585 1082


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1. In t roduc t ion

1.1.1 This report presents an initial assessment of the economic case for a proposedfoot and cycle bridge across the River Thames between the Isle of Dogs andthe Rotherhithe Peninsula.

1.1.2 The following sections consider the proposed bridges location, its costs,demand and benefits and conclude with some sensitivity tests. The remainderof this introduction describes the bridges catchment area travel patterns andtravel to work mode shares.

1.1.3 The proposed cycle and pedestrian bridge would form a local link betweenRotherhithe Peninsula and Canary Wharf at Limehouse Reach. It would providewell segregated cycle and pedestrian paths with the design and form to bedetermined by a combination of aesthetic, physical and economic constraints ofthe area.

1.1.4 The bridge would provide an opportunity for those on the south bank to accessthe Isle of Dogs and beyond by walk and cycle modes. At present access iseither via the existing ferry (which is unable to operate at very low tides) or viathe Jubilee Line Extension (JLE) which is very crowded approaching the Isle ofDogs.

1.1.5 At present, the South bank comprises a combination of established residentialcommunities, physical dereliction and economic deprivation as well assignificant new riverfront developments. Thus the proposed bridge will link aresidential area with great potential for growth to Canary Wharf, the secondlargest financial district in Europe with employment estimates of 200,000 jobs

by 2021.

1.1.6 The construction of the bridge could contribute to the improvement of the areastransport network and environmental condition in a number of ways, including:

Better access to the Isle of Dogs; Reduction in road congestion and car dependency; Improvement in air quality and residents health; Relieving congestion on the JLE and DLR lines towards Canary Wharf at

peak hours; Enabling higher intensity development at key sites on the south bank at

Rotherhithe and surrounding Canada Water, Evelyn and Deptford areas;and

Create a new landmark in East London in the areas north and south ofthe river.


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2. The Proposed br idges loc at ion and

cos ts

2.1.1 The bridges exact location has yet to be determined, but it will connect the tipof Rotherhithe Peninsula to the northern bank between Limehouse Dock andWestferry Circus.

Figure 2.1: Proposed Bridges Night View

Figure 2.2: Proposed Bridges View from the West

2.1.2 The bridge will thus cross the Thames at the level of Limehouse Reach. Thiscrossing location offers the flexibility of 250 m of open public space on bothbanks with a well-used public route between Canary Wharf Pier to the north and

the much quieter walk at Columbia Wharf to the South.

2.2 Construc t i on and Maintenanc e Costs

2.2.1 For this assessment, the construction costs were estimated to be in the regionof 30m due to the bridge needing a lifting or swing element ( Reference- FinalReport - New Pedestrian and Cycle Bridge over the River Thames - Whitbybird10-Nov-06). This is in line with other recent foot bridges as shown below.


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Table 2.1: Recent Bridge Construction Costs

Name Construction Costs

Millennium Bridge 18m + 5m for modificationsGateshead Bridge 22mHungerford Bridges (2) 50m

2.2.2 The bridges maintenance costs include regular inspections to monitor thecondition of the structure and to replace major elements such as waterproofingof bridge decks and expansion joints. Annual maintenance costs are estimatedto be in the order of 2% of construction costs. The above construction costs are

un-discounted and based on resource prices and do not include allowance foroptimism bias. Given that little work has been done on assessing the physicalwork required, it is recommended that the upper range for standard civilengineering is used which is 44% over the scheme costs.


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3. Populat ion And Em ployment

3.1.1 The bridges primary catchment consists of the area to the north of theRotherhithe Peninsula. This area includes the three wards of Surrey Docks,Rotherhithe and Evelyn. This is the area where the bridge would have the mostsignificant impact on pedestrians and cyclists.

Figure 3.1: Projects Catchment Areas

3.1.2 Beyond this distance the attraction of the bridge will decrease as the timesaving benefits decline as a proportion of total journey costs.

3.1.3 The following table from the London Area Travel Survey illustrates this patternof travel to work mode share for London according to distance.


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Table 3.1: LATS 2001 Household Survey

Distance Of Trip(Banded, Km)


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4. Curr ent Dem and And Mode Share

4.1.1 Existing mode shares from the primary catchment area to the Isle of Dogsconsist of 66% via LUL, 13% for car/taxi and just 1.4% cycle and 2% walking.The existing ferry from the Hilton Hotel to the Isle of Dogs accounts for a 12.5%share from the primary catchment area. The 87 referred to by Other relate tothe existing ferry users working at the Isle of Dogs.

Table 4.1: Existing Mode Share and Demand

Primary Catchment Area - Mode Shares For Isle Of Dogs Employees 2001Primary Catchment

areas < 2kmSecondary Catchment

(Areas >25


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5. Forec ast Dem and And Mode Shares

5.1.1 With the bridge in place, the current mode share pattern, especially within theprimary catchment area will shift towards cycling and walking to take advantageof the new bridge.

5.1.2 Using changes in generalised costs it is estimated that walking would increasefrom 2% to 43% with the share of cycling increasing from 1.4% to 16% withinthe primary catchment area (for trips to the Isle of Dogs).

5.1.3 The effect of the bridge in place is to reduce the perceived and real distancefrom Rotherhithe Peninsula to the Isle of Dogs.

Table 5.1: Primary Catchments Demand Travel Pattern Base Year2007

Primary Catchment

< 2km

2ndary Catchment

(Areas >25


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6. Transpor t Benef i ts

6.1.1 The assessment of benefits is based on the comparison between the with andwithout bridge situations. That shows the benefits from introducing the bridge.Tables 6.1 to 6.3 describe the time savings produced (for the morning peakperiod) by comparing the Do-minimum scenario and the introduction of thebridge.

6.1.2 From Surrey Docks to the Isle of Dogs, average existing trips by JLE, the Ferryor through Rotherhithe Tunnel for pedestrians and cyclists take 28.6 minutes,27.7 minutes, 45 minutes and 25 minutes respectively.

6.1.3 With the bridge, these journeys were timed at 23.4 minutes and 15.3 minutesfor pedestrians and cyclists at an average walk time of 80 and 166meters/minute respectively.

6.1.4 The resulting Time Savings were annualised and used to extract potentialannual time savings benefits. We have assumed a non-work value of 5 perhour for all users.

6.1.5 For the secondary and tertiary catchments, time savings of 5 minutes and 2.5minutes were used for cyclists. While for pedestrians, half the above cycliststime savings were assumed reasonable within these same catchments areas.

Table 6.1: Surrey Docks Time Savings Bridge vs Other Mode Shares

Surrey DocksRotherhithe Tunnel Ferry JLE

Cycling 9 minutes - 13 minutesWalking 22 minutes 4 minutes 3 minutes

Table 6.2: Rotherhithe Time Savings

RotherhitheRotherhithe Tunnel Ferry JLE

Cycling 7 minutes - -

Walking 9 minutes - -

Table 6.3: Evelyn Time Savings

EvelynGreenwich Tunnel Ferry DLR - (CS-Wh)

Cycling 18 minutes - 35 minutes

Walking 1 8.5 minutes - 13 minutes

6.1.6 For the secondary and tertiary catchments areas the same average benefits forpedestrians and cyclists have been used as for the primary catchment.

6.1.7 Since analysis is carried out only for the morning peak period, it is necessary to

annualize the results to generate values for the entire year.


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6.1.8 The annualisation factors are 479 cyclists and 820 for pedestrians. The abovefactors represent the annual-to-peak period ratios for cyclists and pedestriancrossings on comparable bridges across the River Thames (Greenwich,Hungerford (North and South), Vauxhall and Millennium Bridges). Theannualisation factors therefore change the focus from morning peak commutingtrips to encompass leisure trips outside the peak periods.

6.1.9 In addition to the transport user benefits it is assumed that the bridge wouldeliminate the need for the current ferry services between Rotherhithe and theIsle of Dogs. That would result in an economic gain equivalent to the currentoperating costs of the ferry. It has not been possible to determine an accuratefigure for this but a modest assumed saving of 150,000 per annum has beenincluded in the benefits. It should be noted that the loss of fares to the ferryoperator is balanced out by the savings to the former ferry passengers leavingonly the operating cost saving as an economic gain.


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7. Appraisal

7.1.1 The appraisal is based on comparing the benefits of the scheme to the costs.The changes in revenues have been ignored in this simple appraisal. Faresavings are assumed to be offset by reductions in operating costs in the case ofthe ferry (the ferry would almost certainly close when faced with competitionfrom a free bridge). Revenue losses to LUL are assumed to be replaced fairlyquickly given excess demand to use JLE to Canary Wharf from the west.

7.1.2 The Value of Time used is 5 per hour in 2007. This is consistent with the DfTnational value of time for commuters (5.04) higher than the leisure value oftime (4.50) and lower than the In Work Time value of (35). This is a factorcost value of time. The Value of Time increases over time as earnings increaseand for the purpose of this analysis we have assumed this growth to be at

1.75% per annum for 2007-2068.7.1.3 Within standard transport appraisals the value of walk time is doubled, our

opinion is that this is appropriate for walking elements of public transport tripsbut less so for a project looking at wholly walk/cycle trips. For many leisurewalkers the walk is the point, not a cost that has to be borne to get somewhereelse. Chapter 8 shows the effect of doubling the value of time.

7.1.4 Discount rates of 3.5% for the first 30 years and 3% for the next years havebeen used. This is standard practice based on DfTs guidance for transportprojects appraisal.

Table 7.1: Demand and Annualised Benefits

Demand(Trips/AMPeak)

Annualised MonetisedBenefits (000)

Catchments AllUsers

Cyclists Pedestrians Cyclists Pedestrians

Primary 1202 278 924 123 190

Secondary 286 127 159 46 75

Tertiary 180 180 0 49 0

1,668 585 1,083 219 265

Table 7.2: Assumptions and Growth Factors

V0fT Growth Discount factor TimeHorizon

3.5% from Year 1 to Year 301.75%

3.0% from Year 31 to Year 60

60 Years

7.1.5 Mode share changes for car were used to determine the potential reduction intotal car passenger kilometres within the primary catchments area. This gavethe impact of the bridge on pollution reduction. A summary table of the totalreduction in pollutants is given for reference.


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Table 7.3: Reduction in Pollutants per Year

Pollutants TonnesCarbon Monoxide 0.35NO's 0.06Hydrocarbons 0.06Particulates 0.00CO

210.90

7.1.6 It should be noted that this report looks only at the transport appraisal; itspecifically does not include the impacts of the bridge on the wider benefits of:

Integration; Safety;

Accessibility; and Regeneration

7.1.7 Modest positive impacts on integration, accessibility and regeneration would beexpected. The effect of shifting people away from the safer modes of publictransport and cars onto the more dangerous walk and cycle modes wouldhowever be expected to increase accidents from a simple comparison ofaccident rates per kilometre. There are complications, depending on the extentof segregation from traffic of the walk and cycle routes to and from the bridgeand the amount of walking involved in previous public transport trips, but overallthe balance is still likely to be an increase in accidents.

7.1.8 This appraisal does not include valuations from public realm improvements.

There would be public realm improvements derived from the project, butproposals have not been developed to an appropriate level of detail yet. It isvery clear that the bridge would be a much more attractive route to use thaneither of the two existing tunnels. That gain is valued within the 5 minute penaltyassigned to use of either of the existing tunnels by pedestrians and/or cyclists.

7.1.9 Judged on time savings, health benefits and ferry operating costs savings, thebridge shows a Benefit Cost Ratio of 1.3

Table 7.4: Project Standard Appraisal Results Base Case

BenefitsTime

Savings

Boat

O/CSavings

Health

Benefits

Total

Benefits

Construction

Costs (+44%Opt. bias)

Maintenance

Costs (2%)

BCR

46.8 6.21 31.7 84.7 43.2 20.5 1.3

7.1.10 The above scenario reflects the present value of time saving benefits expectedfrom the bridge on a 60-year service. The time savings are derived from theassumed 1668 trips (base year) including 585 cycle and 1083 pedestrianjourneys during the morning peak period.


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8. Sensi t iv i t y Test

8.1 In t roduc t ion

8.1.1 A number of alternative scenarios have been considered. These comprise:

1. A sensitivity test of optimism bias at 15% and 66% of scheme costs2. Inclusion of the Sustrans amenity and absenteeism benefits and removal

of the health benefits entirely3. Double the value of time in line with standard transport appraisal

guidance

8.2 Opt im ism B ias

8.2.1 This test considers the effect of a 15% increase in the capital costs on theeconomic appraisal. Result decreases the costs from 63.7M (50.5M+13.2M) to 55M (50.5M + 4.5) and increases the BCR from 1.3 to 1.54.

Table 8.1: Optimism Bias at 15% of The Scheme Costs

BenefitsTimeSavings

BoatOp

CostsSavings

HealthBenefits

TotalUser

Benefits

ConstructionCosts (+15%

Optimismbias)

MaintenanceCosts

BCR

46.8 6.21 31.7 84.7 34.5 20.5 1.54

8.2.2 This test considers the effect of a 65% increase in the capital costs on theeconomic appraisal. Result increases the costs from 63.7M to 70M (50.5M+19.5M) and decreases the BCR from 1.3 to 1.2.

Table 8.2: Optimism Bias at 66% of the Scheme Costs

BenefitsTimeSavings

FerryOperating

Costs

Savings

HealthBenefits

TotalUser

Benefits

ConstructionCosts

(+66%

Optimismbias)

MaintenanceCosts

BCR

46.8 6.21 31.7 84.7 49.8 20.5 1.2

8.3 Sustrans Benef i t s

8.3.1 Values used under this scenario are taken from the Sustrans documentEconomic Appraisal of Local Walking and Cycling Routes Methodology. Thisdefines average benefits per user for reduced absenteeism, improvements injourney ambience and changes in accidents level. It should be noted that at thetime of the writing of this report, these values were not part of any official

appraisal guidelines from DfT or TfL.


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Table 8.3: Other Sustrans Benefits

Benefits Absenteeism Journey Ambience(/Trip) 0.0328 0.91

Table 8.4: Sensitivity Test: Standard Transport + Sustrans Benefits

Scenario Benefits ConstructionCosts

MaintenanceCosts

BCR

With all SustransBenefits

145.2 43.2M 20.5M 2.3

Excluding HealthBenefits

53M 43.2M 20.5M 0.8

8.3.2 With consideration of all Sustrans benefits, the scheme shows a higher BCR of2.3

8.3.3 A sensitivity test that excludes health benefits from the base case decreases

the BCR from 1.3 to 0.8.

8.4 Doubl ing the Value of T im e

8.4.1 Increases the benefits from 84.7M to 131.5M and the BCR from 1.3 to 2.1.


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9. Conclusions

9.1.1 This study was intended to prepare an outline economic appraisal of theproposed bridge in order to determine whether the scheme was worth pursuingfurther. That further work would need to encompass an engineering review ofthe scheme costs and a more detailed transport planning and demandforecasting study.

9.1.2 The following conclusions can be drawn from this work:

Demand forecasting for a new bridge is difficult and uncertain. CB haspresented a central case but it is recognised that there is a wide rangearound that central case. The key drivers of demand include: employmentgrowth on the Isle of Dogs, population growth on the RotherhithePeninsula, the proportion of people living in Rotherhithe and working on

the Isle of Dogs and the impact of the bridge on development rates anddensities.

On the narrow measure of transport user benefits against scheme coststhe scheme has a BCR of more than one. That is a very positive findinggiven that many of the benefits of the bridge are difficult to placemonetary values on.

There are credible alternative assumptions which would significantlyincrease the BCR. These relate largely to the demand forecasts anddevelopment assumptions, to doubling the value of time for walk andcycle trips and to the additional or wider benefits which the bridge wouldbe expected to deliver.

9.1.3 The initial priority should be a review of the costs, understanding the potentialfor lower cost alternatives and exploring the potential for private sectorcontributions towards the project.

9.1.4 The case for the proposed bridge would be enhanced by an understanding of itswider benefits. The bridge has the potential to increase local development bothon Rotherhithe and on the Isle of Dogs as well as delivering environmental andhealth benefits.

Documents

Thames Bridge Cycle Pedestrain Economic Appraisal