Action for Public Transport (N.S.W.) Inc.

ATAP Steering CommitteeP O Box K606
Department of Infrastructure and Regional DevelopmentHaymarket NSW 1240
Canberra8 August 2017
email: ATAP@infrastructure.gov.au

Optimism Bias

Submission on draft ATAP guidlines

Who we are

Action for Public Transport (NSW) ("APTNSW") is a transport advocacy group active in Sydney since 1974. We promote the interests of beneficiaries of public transport; both passengers, and the wider community.


APTNSW is aware of the phenomenon of "optimism bias", and we appreciate that there is good reason for the Transport and Assessment Council to pay close attention to it.

We suggest however that the conception of optimism bias in transport planning used in the draft guidelines is too narrow. Optimism bias is said to concern "costs tending to be underestimated and demand (and hence benefits) over-estimated". Perhaps for this reason, the draft guidelines identify only two areas of concern:

  1. Overestimation of patronage in relation to public transport projects;
  2. Overestimation of numbers of users of toll roads.
In our view, the most glaring instances of optimism bias in transport assessment lies in the overestimation of the benefit of urban motorways (including toll roads): reduced traffic congestion. This is quite distinct from the overestimation of toll road usage, and it is not addressed in the draft guidelines. We hope to see this rectified as soon as possible.

Circular reasoning and self-fulfilling prophecies

The conventional approach to transport planning (or more correctly, road planning) can be described as "predict and provide".

Transport modelling is based on projected population growth, from which growth in travel is assumed. Past patterns of mode share, adjusted for committed transport projects (few of which are public transport projects), are then projected forward as "forecasts". If motor vehicle travel demand is projected to grow in excess of supply, standard modelling leads inexorably to the proposition that more road space should be constructed to accommodate it.

Induced traffic

The central problem with the "predict and provide" approach is its persistent failure to acknowledge the reality of induced traffic, a phenomenon that has been empirically established over many years. Traffic is not like water; it is a fundamental mistake to apply hydraulic principles to transport planning. Trying to "widen the pipes" to accommodate increased flows is a misconceived endeavour. There is some initial relief, but over the longer term what is usually achieved in the urban context is to move bottlenecks from one point to another.

It can for example be stated with a high degree of confidence that the Westconnex "new" M5 will induce more traffic to occupy the extra road space it will create. The Project Overview itself contains empirical evidence that this is what should be expected. It notes (p.9) that the "old" M5 was congested within just six months of its opening in 2001, and now experiences the slowest typical travel speeds of any of Sydney's main motorways.

The only caveat is that if tolls are set at a level that deters sufficient potential users, we may see an example of "optimism bias".

Cost-benefit analysis

The central focus of cost-benefit analysis (or benefit-cost analysis) is time lost to traffic congestion, seen as a cause of reduced productivity.

If an assumption that additional capacity will reduce congestion is uncritically factored in, cost-benefit analysis fails to see the obvious: existing urban motorways built on the basis that they would reduce traffic congestion (and travel time) have done no such thing.

Doing the same thing over and over again in the expectation of a different outcome shows a deplorable lack of interest in evaluating the outcome of previous urban motorway projects. Stubborn attachment to an approach that empirically does not work can only lead to a monumental waste of public money.

Accidental demand management

Infrastructure Australia has noted that 72% of forecast population growth to 2031 is projected to be in the four largest capitals - Sydney, Melbourne, Brisbane and Perth. In total, these four cities are projected to grow by 5.9 million people, or 46 per cent, to 18.6 million in 2031.

The standard "predict and provide" approach is clearly untenable in the face of such strong population growth. The Westconnex M5 EIS for example rests on the forecast (Vol.1A, p.4-12) that "72 per cent of journeys in 2031 will be made on the road network each weekday by vehicle, equal to an additional 4.3 million new trips compared to current traffic movements".

To provide the amount of additional road space "required" would entail the demolition of large swathes of the existing cities. Tunnels are not the solution; they must emerge in multiple locations where they require large amounts of land for entry and exit portals, interchanges and approach ramps.

To some extent demand management is now seen as an alternative strategy. Indeed, shortfalls in users of toll roads could be seen as the outcome of accidental demand management (if tolls deter usage). In the case of the airport rail link, a notorious example of "optimism bias", accidental demand management led to the underutilisation of an excellent piece of public transport infrastructure (although its fortunes have improved greatly due to the residential construction at Green Square and Wolli Creek).

It was reportedly expected (using conventional analyses) that removal of the $2.60 "station access fee" for passengers using Mascot and Green Square stations would increase patronage by around 15-17%. Instead, patronage jumped 70% in a year ("Ticket sales rocket on airport line as prices plunge" SMH June 9, 2011). We repeat, 70%.

Even allowing for an underlying rise in patronage (around 20% in the estimation of the Airport Link company) this is stunning evidence that high fares (due to station access fees) sabotaged patronage on the T2 Airport/Macarthur line. What is seen as "optimism bias" could in some cases be more accurately attributed to a failure to understand price sensitivity.


APTNSW thanks ATAP for the opportunity to comment on this document, and for the extension of time for us to do so.


Action for Public Transport (NSW) 2014, Submission to Senate Committee inquiry on role of public transport in delivering productivity outcomes http://www.aptnsw.org.au/documents/role_of_P_T.html

Action for Public Transport (NSW) 2015, Submission in response to Draft Parramatta Rd Urban Renewal Strategy http://www.aptnsw.org.au/documents/parra_rd_URS.html

Action for Public Transport (NSW) 2014 Submission in response to draft Leppington Precinct Plan http://www.aptnsw.org.au/documents/leppingtonDCP.html

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Schwartz Samuel I. 2015, Street Smart published by Public Affairs

Tourism Task Force November 2014 Better Public Transport. Better Productivity. The economic return on public transport investment http://www.ttf.org.au/Content/bprreport181114.aspx

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Auditor-General NSW 2014, Westconnex: Assurance to the Government Report to Parliament

Sydney Motorway Corporation, 2015, Westconnex: the New M5 Project Overview http://www.westconnex.com.au/

Sydney Motorway Corporation 2015, Westconnex: New M5 EIS http://majorprojects.planning.nsw.gov.au/index.pl?action=view_job&job_id=6788

UK Government Trunk Roads and the Generation of Traffic: The SACTRA Report" - U.K. 1994, http://assets.dft.gov.uk/

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