FOR the first time in human history, more people live in cities than rural areas - the planet passed the 50% point in 2009 - and urban population is predicted to grow from 3.5 billion today to 4.7 billion by 2030. Cities account for around 80% of global economic output, but with companies and people increasingly able to relocate, cities need to be as attractive and competitive as possible. The need for urban areas to develop efficient and effective transport systems is therefore becoming more urgent.
However, cities often lack the funds or fail to make the case for investment in public transport. "Mayors often ask us how to justify investing in a metro line, and whether we have any studies which demonstrate the benefits that they can use to make the case," says Mr Roland Busch, CEO of the Infrastructure and Cities division of Siemens.
This is the background to a study commissioned by Siemens and conducted by Credo Business Consulting, Britain, into the state of public transport in 35 major cities around the world where the number of commuters is expected to increase by more than 40% by 2030. The objective of the study was to establish the economic cost of inefficient transport and the potential economic benefits of investing in public transport.
"This is an independent study with a level of detail to make it credible," Mr Chris Molloy, a partner with Credo, said at the launch of the study in Singapore. "We thought the study was a decent challenge, but we underestimated it."
Molloy and his team soon discovered that up-to-date information is not readily available in a consistent form in one location which meant they had to use a variety of sources to obtain sufficient data. Nevertheless, Molloy says this is the first time such comprehensive data has been put together.
According to Credo, the study is unique in seeking to put an economic value on the cost of inefficient transport and relating it to the economy of a city while in turn seeking to evaluate the economic benefits from investing in public transport.
The study sets out to evaluate the true cost of commuting taking account of journey time, the value of time, fares, crowding, ease of use, and reliability. A generalised journey time is established to get a true picture of the length of a journey and the speed and efficiency with which it can be made. This breaks the trip down into four stages: the journey from home to the station or bus stop, waiting time, travel time by bus or train, and the journey from the end station or bus stop to final destination. It compares the theoretical time with reality to produce the generalised journey time. This information is used to determine the annual cost to a commuter as percentage of GDP to allow comparison between cities.
The longer commuters have to travel within a city to reach their place of work the less time they have for productive work, which equates to an economic cost. So if a city invests to improve its public transport, people will spend less time travelling and more time working which is an economic benefit. Therefore cities which invest adequately in transport will reduce their economic costs and drive economic growth.
The study cites Paris as an example of large scale investment with its plans to build another 200km of metro lines. This investment, the study says, will cut the economic cost of transport in Paris from 14% to 13% and generate $US 2.7bn of annual economic benefits, which means it would take 10 years to pay back the $US 27bn investment, and generate an economic benefit of $US 55bn over 30 years.
The 35 cities in the study fall into three categories:
• well-established cities in North America, Europe and Australia where the need is to upgrade and supplement existing infrastructure, most of which was built a long time ago
• high-density compact centres comprising cities on the Arabian peninsula, China, Korea and Japan, plus Singapore, where the infrastructure is relatively modern but demand is growing rapidly, and
• less-wealthy emerging cities in Asia, Africa, Mexico and South America where population is growing rapidly and investment in infrastructure is relatively recent.
The study estimates the economic cost of transport at between 8.6% and 10.8% in the best performing city from each category, namely Copenhagen, Singapore and Santiago, to about 28% in Lagos, the worst performing city (see table). "You have a lot of advantages if you are a small wealthy city like Copenhagen or Vienna," Molloy says. "But it is not an insurmountable challenge for other cities. Madrid is a good example of a bigger city which has invested and is reaping the benefit."
The study says all cities can realise economic benefits, but the value varies. The cost of inefficient transport is higher in wealthy cities so it is easier for them to justify large high-cost projects such as Crossrail in London. Credo says less wealthy cities should focus on making incremental improvements and using low-cost options to increase capacity. Use of technology, such as converting a metro line to driverless operation with CBTC which will increase capacity by up to 30%, is a cost-effective way to add capacity and improve reliability. Credo says the most efficient public transport networks use a wide range of solutions.
The leading cities in the study have common attributes. They provide efficient transport networks with sufficient capacity to minimise crowding and broad coverage to ensure convenience. Modern rolling stock and infrastructure aids reliability. Full integration means passengers can plan trips using several modes with one means of payment. These cities have clear plans to address future needs.
The study says all the leading cities use rail, as the high initial investment is often justified by the benefits. "Once you reach a certain point there is no substitute for investing in rail," Molloy says. "Those cities which remain with a road-based transport system will struggle to realise the economic benefits."
In Copenhagen, the best performing city overall, the continuing expansion of the metro will ensure that the cost of transport does not increase by 2030 even with higher demand. Singapore is doubling the size of its metro to create high capacity and has good governance to ensure the plans are delivered. Santiago has expanded its metro during the last 20 years and renewed its ageing bus fleet to create an integrated network.
For cities with insufficient investment planned to meet growing demand by 2030, transport costs will consume an increasingly large proportion of economic output. While Paris will see a reduction in the economic cost of transport because of its extensive investment plans, the cost of transport in New York is predicted to increase from 15% of GDP per capita to 18% because current plans are deemed insufficient to meet demand.
The study estimates that if all the cities invested to make their transport networks as efficient as the top three, the annual economic benefit would be $US 119bn, and with increasing population, more jobs, and greater wealth the economic benefit could reach $US 238bn annually by 2030. Extrapolating this to 470 cities with populations in excess of 750,000, the potential economic opportunity of investing in public transport could be $US 786bn or 1% of global GDP. "These gains are material and justify large investment in public transport," Molloy says. "The largest opportunities will be in emerging countries, particularly China, where the potential benefit will be over $US 300bn."
The study acknowledges that the lead times for investment are lengthy so cities must invest now to meet the challenge of 2030 and unlock the benefits, but integrated governance and planning are vital to achieve success.