In a follow up to last week’s article on the recommendations of a government taskforce that users should pay for all new toll roads and infrastructure financing, Alan Davies of Crikey.com also explored whether new freeways should be tolled.

Davies claims that the argument for tolls is straightforward – they provide the ultimate test of the relevance of a project – confirming whether users are prepared to pay the full cost of providing and operating the facility. If they are, the project is not only warranted in financial terms but generates a cash revenue stream.

This also allows the private sector to carry the risk instead of state governments who are concerned about their credit ratings. The private investor allows the project to take place, and wear the costs if the estimates are wrong – as in recent examples such as the Clem7 road tunnel in Brisbane, the Cross City Tunnel in Sydney, and both the Brisbane and Sydney airport rail services.

Tolling new roads also means state governments can reserve their spending for projects like public transport facilities that don’t usually generate the sorts of returns attractive to the private sector. Another benefit is that tolls effectively price road space (albeit imperfectly) and thus moderate demand for both the new facility and related parts of the overall network.

The report of the Infrastructure Finance Working Group not only advocates greater use of user-pays charges, it also recommends the Federal Government make infrastructure grants conditional on the states’ implementing initiatives like tolling and asset sales.

It appears that freeway tolling makes sense in every way. Key to getting it right, however, is balancing the demand for the infrastructure with the fee that people are prepared to pay. After all, it’s very expensive to build a state-of-the-art tunnel or freeway that no-one uses.

An article published in The Conversation this week provides a comprehensive assessment of the benefits and costs associated with state governments’ transport policies.

They claim that governments across Australia have been slow in investing in the areas that deliver maximum benefit for least cost. A recent example of this mismatch is the Victorian Government’s decision to stop funding the VicRoads Bicycle Program. Funding for the program (which averaged $15 million a year over the last three years) has effectively been abolished.

A recent scientific review of 16 economic valuations of transport infrastructure or policies reported a median benefit-cost ratio (BCR) of five for walking and cycling projects (that is, you get five dollars in benefits for every dollar spent).

In its place, the government plans to provide further subsidies for motor vehicle travel. In contrast to the favourable BCRs for bicycle infrastructure, many road construction projects struggle to break even. For some projects, the costs outweigh the benefits.

The benefit of cycling over road transport is based on some simple factors – the significantly reduced space required by a bicycle compared to a car, the much lower investment in construction costs for bicycle paths compared to roads, the faster travel time for short urban trips, and the health benefits of cycling.

Car parking facilities are also more costly than bicycle parking, with the real cost of ‘free’ parking borne by all citizens via business or government subsidies, regardless of whether they benefit from free parking.

The Conversation concludes with a call to action that “Investing in improved bicycle infrastructure makes economic, transport, health and environmental sense. It is time to correct our long-standing bias for investing in infrastructure aimed at moving cars. Healthy, productive, sustainable and liveable cities of the future will need to do a better job in meeting communities’ diverse transport needs.”

For anyone who missed it, you might want to watch a video we posted recently called Saga City, which explores the impact that holistic urban planning can have on the built environment. Watch more here.

Ohio State University has moved ahead with leasing their parking operations to Australian company QIC and US partner LAZ Parking, in a 50 year contract deal worth US $483 million.

According to the Star Tribune, the university pushed the plan as a way of providing cash flow at a time of declining public funding, with the aim of funding a wide range of services, from more faculty members to extra student financial aid. The contract caps annual parking rate increases at 5.5 per cent for the first 10 years, and after that at the lower of either 4 per cent, or the rate of inflation.

With interest, the $483 million will ultimately grow to about $8 billion over 50 years, which will provide $3.1 billion for priority areas including hiring more faculty staff, providing more student aid, supporting the arts and humanities and paying for the university's bus services.

Under the plan, the university will maintain ownership of its parking garages and spaces, which total more than 35,000 spaces.

A report published by the Infrastructure Finance Working Group, a Gillard government taskforce comprising of Treasury officials and experts from ANZ, KPMG, Royal Bank of Scotland, Alinta Energy and industry associations, has recommended a stronger push towards the user-pays approach to infrastructure financing used in toll roads.

According to the Australian Financial Review, charges such as road tolls were identified as a key way of increasing the funding pool for infrastructure projects, and may also have a positive impact on congestion and bottlenecks.

The report also recommends an examination of the current tolling system across the nation, with current road tolls levied on an ad-hoc basis, and more holistic planning of the entire road network.

In addition to the recommendations on road tolling, the report also recommends that the federal and state governments begin raising cash for investment in new infrastructure by selling key assets, such as national ports, water and roads, to superannuation funds and using the proceeds for new roads, rail and ports.

The plan is seen as more politically palatable than straight privatisations to retire public debt. It would also provide local investment opportunities for Australian superannuation funds, which like low-risk infrastructure assets and would mostly prefer to invest locally rather than overseas.

The Infrastructure and Transport Minister, Anthony Albanese, plans to publish the panel’s strategy within weeks. The report is expected to support NSW Premier Barry O’Farrell’s plans to privatise the state’s power stations to pay for new infrastructure.

The full report is available online and can be view on the Infrastructure Australia website here. 

Canberra Airport has unveiled plans to build a A$140 million high-speed rail facility next to its new airport terminal, in a bid to transform the gateway into a multi-modal hub and eliminate the need for a second Sydney airport.

According to AirportCities.com, a high speed rail link between the two cities would be cheaper than a second airport (with costs forecast at $10.9 billion), with the train journey lasting under an hour.

To support the high-speed rail link, Canberra Airport has unveiled plans for a multi-modal Airport facility, integrating the high-speed railway into Canberra Airport. The terminal is planned to be fully integrated into the aviation terminal, allowing for a seamless transition between the two modes of transport. The train platform itself will be elevated and built at the same level as the airline check-in desks and the aerobridges for direct boarding of aircraft, allowing passengers to transfer from arriving aircraft to train in under five minutes without baggage.

This project aims to make Canberra Airport a multi-modal hub for high-speed rail, domestic and international airlines, regional and local buses and onsite car parking.

A car sharing group in the UK will be the first in the country to exclusively use electric vehicles. The scheme, run by Sustainable Venture Development, will be piloted in north Oxfordshire.

According to BBC.co.uk, the cars will have dedicated bays on the street, beside which there will be specific fast-charging infrastructure installed, ensuring that the cars are kept charged. Users will be required to return the vehicles and plug them in on the conclusion of their short-term lease.

Following the ten-day traffic jam in China in 2010, Brazil recently notched up an ignominious record of their own: a traffic jam that stretched for 250km.

A strike by workers on Sao Paolo’s subway and commuter train system in late May forced 20 million commuters into cars, creating a traffic jam that authorities estimate covered up to 250km of roads and highways at its peak.

According to Reuters, angry drivers promised revenge, the tyres on stranded buses were punctured and protesters were sprayed with tear gas as Brazil's biggest city entangled itself. Police motorcycles had to clear the way for ambulances through the chaos.

Commuters sat in lines for more than three hours, as the strike prompted virtually any commuter with a car to venture out, a recipe for disaster in a metropolitan area of 20 million people where an expanding middle class means that more than 900 new vehicles hit the streets every day.

Despite Brazil's economic gains, government spending on roads, public transportation, airports, seaports and communications has failed to keep pace. Other large emerging markets such as China and India have also experienced agonizing traffic as millions join the middle class and acquire cars for the first time.

But Brazil has badly lagged its peers in upgrading its infrastructure, as overall investment only averaged about 17% of gross domestic product in recent years, compared to 44% in China, 38% in India and 24% in Russia, according to a Morgan Stanley report.

A secure cycle parking facility in the centre of Leicester has been reopened under new management after a year-long refurbishment programme. The Bike Park, which is located beneath Leicester Town Hall, incorporates showers, lockers and a bike shop as well as parking spaces for 110 bikes.

According to the BBC, the premises were refurbished at a cost of £200,000 jointly funded by the Department for Transport and Leicester City Council, which has awarded the lease to operate the facility to local bike shop, Future Cycles, whose directors also helped get the city’s first bike recycling scheme under way and provide cycle maintenance courses, among other things. They also plan to initiate a cycle hire scheme from the Bike Park.

According to the Leicester City Council, the number of people cycling has more than doubled in Leicester in the past five years, and the Bike Park is one of several initiatives to encourage more people to choose sustainable transport. Smart card ticketing will be introduced at the bike park, which the council hopes will act as a central hub for everything bike-related in the East Midlands city.

In a quick summary of other news from around the parking and traffic world this week, the press is once again taking aim at airports, this time comparing the cost of parking a car to the cost of parking a plane. The article compares the base rates for parking against each other (finding that it is indeed cheaper to park a plane in Brisbane, Adelaide, Perth and Darwin), but it does so without taking into account the other fees that the planes attract, including landing fees, aviation fees, runway charges and more. It is therefore a misleading and unreliable representation of the actual situation meant to create uncertainty in customers’ minds. More on News.com.au here.

In Brisbane, another Westfield centre is looking to implement paid parking. Westfield Carindale will commence charging customers from July 15, with the parking structure to offer free parking to shoppers for the first three hours. According to Fairfax Media, staff who work at shops in the centre will receive either a swipe card with a sum of money stored on it or be required to pay a flat rate of $3 per shift. The centre currently has 5,922 car spaces, of which 1,000 have been set aside for the centre’s staff, across four car parks.

Meanwhile, councillors in the Gold Coast are considering introducing free parking on vacant land, and registration for cyclists. According to GoldCoast.com.au, a report presented to the council by the Independent Drivers Association has recommended that cyclists choosing to ride on the road be charged an annual registration fee of between $5 and $20, with other key bicycle lanes being re-routed away from main roads.

Australian insurer Allianz has recently announced that Subaru models which carry the EyeSight driver assist system will receive a 20 per cent premium reduction on Comprehensive Motor Insurance. According to The AutoChannel, the EyeSight system, a standard feature on 2012 Liberty and Outback models, uses minute stereo cameras located in a single compact unit near the rear view mirror to recognise a variety of road hazards and alert the driver. The system features a range of functions, including pre-collision braking, throttle management, lane departure warnings, and adaptive cruise control, which maintains a safe distance from the car in front, irrespective of the varying speed of the vehicle.

The Victorian Government has announced reforms to car parking provisions that will be introduced into planning schemes via a state-wide amendment.

The initiative is designed to improve the planning system, with the aim of providing greater resources and cost efficiency while delivering clarity and certainty through more streamlined and informed decision making.

According to the Property Council of Australia, the key changes to the car parking provisions will include:

• Streamlined provisions.
• Clarification of when a permit is required.
• Simplified opportunities for councils to localise the standard car parking requirements.
• More transparent mapping of areas with special local car parking requirements.

The reform should go a long way to simplify the planning system and allowing for more innovative transport solutions to be achieved in residential and commercial development settings. The new provisions will also enable greater flexibility and innovative solutions such as car sharing schemes in buildings and municipalities, to be realised.

The new provisions reflect the recommendations made in 2011 by an independent Advisory Committee with the input of key public and private stakeholders.

The new provisions and a download of the Advisory Committee report are available on the Premier of Victoria’s site here, and you can download a PDF of the media release here.