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Standing Committee on Infrastructure, Transport and Cities
07/03/2016
Role of transport connectivity in stimulating development and economic activity

APPS, Mr Michael, Executive Director, Bus Industry Confederation of Australia

STANLEY, Professor John, Bus Industry Confederation of Australia

[14:54]

CHAIR: I welcome representatives of the Bus Industry Confederation of Australia. Although the committee does not require you to give evidence under oath, I should advise you that this hearing is a legal proceeding of the parliament and therefore has the same standing as proceedings of the House. I invite you to make an opening statement if you wish, then we will proceed to discussion.

Mr Apps : Thank you, Chair. John and I will do a dog and pony introduction. He is the trick pony and I am the yappy dog. The Bus Industry Confederation is the peak body for the bus and coach industry in Australia, both operators, representing about 90 per cent of the fleet on the road, and manufacturers and suppliers. For the past decade BIC has taken a strong policy focus on how we move people, which has largely been a modally agnostic approach to things. We do not think it is about the mode that people travel by, but how we make the transport network and the system work most effectively.

Within that context, we obviously have a strong focus on public transport infrastructure and services, but if the investment by state governments or federal government in the future is in light rail or heavy rail, the result ultimately is that the bus industry has to service those trunk route lines.

Our work has to have a strong focus on land-use management, planning and integrated transport. In our view, up until where we are at the moment state and local governments have not done very well, and our cities are not running or functioning efficiently, or livable. They are still good, but if we look to a 20-, 30- or 40-year horizon and keep doing the same things we are doing now, we are not going to be in a good position.

Innovative funding and financing mechanisms has been part of our policy focus. Value capture has been one of the mechanisms that the industry has put forward as an option for the future way we fund and finance infrastructure. That has been done in the context of the large infrastructure backlog that exists in Australia, which has already been recognised, but also the challenges that we face in the context of future funding, when we are clear that we are going to see a drop in fuel excise, for example, as we move to electric cars. We are also seeing lower vehicle kilometres of travel per capita by Australians. I will hand over to John and then we will take some questions.

Prof. Stanley : I want to talk briefly about how we shape our cities to make them more productive, more inclusive and more livable, and how the value that is generated through that process can be monetised to help fund the initiatives that are going to generate those sorts of outcomes for us. Some research we have been doing over the last few years at the Bus Industry Confederation builds on some work that I have done. I am an adviser to the Victorian planning minister on Melbourne's long-term planning and have been for the last five years.

There are a few key elements in terms of structuring our cities that we need to focus on if we want them to be highly productive, socially inclusive and with a low footprint. Strong CBDs are really important in terms of the agglomeration benefits that they generate. We also need a small number of high-tech, knowledge-based hubs throughout our middle suburbs. We will talk a little more about that in a moment. I am talking about places like Parramatta and Monash University in Melbourne—places where there is already the beginning of a knowledge-based economy, but where you can get self-sustaining growth that can generate the sort of productivity benefits that we see in the CBD, with the added benefit that it is more accessible to people living in the outer suburbs.

Thirdly, we need to focus on large urban regeneration opportunity sites, the way London has done. There has been a bit of focus on that in the paper today with the article by Bob Birrell about housing affordability that received quite a bit of press. An area that has not been focused on sufficiently in this country is the notion of transit corridors. In the previous presentation we heard about concentration of development around railway stations. Vancouver—this is probably the best example around the world—has over half of its population growth happening in major transit corridors, not just around stations but through those whole corridors. In that process you are actually setting up a city that is going to function more efficiently and be more productive as well. It is not something that we have done well in Australia.

In BIC we have also talked about the idea of setting up our cities as a series of 20-minutes cities, where most of the things that you need to do on a daily basis are accessible within 20 minutes by walking, cycling or public transport. That is already the case in the inner suburbs and most of the middle suburbs, but it is certainly not the case in the outer suburbs. This notion of getting densities up a bit in the outer suburbs, focusing growth more into transit corridors and concentrating on building our cities as polycentric cities is the way we can generate the most value from our cities. The transport initiatives that sit behind that are the sorts of things that are going to generate the value that you are seeking to capture and that you have been looking at in the inquiry.

For example, the CBD and these clusters in the middle suburbs, together with the transit corridors where we need to get densities up, will be the areas that you need to focus on for value capture. The CBD, a few of these clusters in the middle suburbs that are built around knowledge-based activities—that is where the high productivity growth is—and at the transit corridors. The transit corridors need to collect those up and connect them to the CBD and to where the growth suburbs are on the fringes of our cities. They should form the fundamental building blocks. That is the sort of stuff that we should be seeing in the land-use and transport strategies for our cities. It is probably the thing that Infrastructure Australia missed most in the report they put out a week or so ago. Essentially, they talked about the need for a compact city, but they did not talk adequately about the sort of transport infrastructure that is going to drive that sort of urban form and, in particular, the role of transport corridors. These are very important, but they are not really known or understood or part of the urban development debate in Australia.

If you look at rail projects as a source of value uplift, the research suggests that the median value is about eight per cent. My sources must be different from the previous submission, which talked about 12 per cent. The evidence that I have seen from metastudies is that rail generates about eight per cent. I certainly agree that about a kilometre away is where that drops off. Interestingly, very close to the line you often get value drops because of the noise effects. For bus rapid transit it is slightly lower, but about three to seven per cent along the corridor seems to be the value uplift opportunity there.

Our submission talks about a range of the mechanisms that you have been talking about in your previous presentations or previous submissions, so I will not go into those now other to say that we have talked about big projects of the kind of the Northern Line extension in London, which will be 100 per cent funded by value capture at a cost of one billion pounds. We also talked about some of the smaller-end stuff, which is a bit more like what the Gold Coast is doing, and that great city of Halifax, Nova Scotia, where they use local rating, depending on where you live, as a contribution towards public transport there. You can expand a wide range of low-value, small contributions ongoing to big negotiated contributions around major projects. You have talked about Crossrail already and the Northern Line extensions and others. That is probably all I would like to say by way of introduction.

CHAIR: Thank you for that. When we look at our rail systems, do I understand correctly that you are looking at buses to connect across? Often the rail goes out like that and you are completing the picture.

Prof. Stanley : Absolutely. That is really forming a web network. If there is an adequate radial rail system, high-capacity, high-speed buses connecting in a circumferential way is a way to form a good web. If you do not have rail in the radial network, bus rapid transit can play that role.

CHAIR: So it needs to be integrated.

Prof. Stanley : Absolutely.

CHAIR: I have had several comments today that rail and road ministries are often separate to others and should be combined.

Prof. Stanley : Yes.

CHAIR: Would you say that, in the development of the city, when a bus corridor gets to a certain critical mass it is more efficient to move that to a light rail corridor and the buses move their web further out?

Prof. Stanley : I do not think you can answer that in an abstract sense. You need to look at particular situations and circumstances, the cost of putting the facilities in and the potential patronage that will be generated in those circumstances. I would not be happy providing an answer. It really needs to be looked at on a case-by-case basis.

CHAIR: With autonomously-controlled, battery-powered buses—and cars for that matter—would those controls bring bus technology up to being more competitive and quieter, with less impact on the environment, than some rail systems?

Prof. Stanley : It would certainly make it quieter. In terms of making it more competitive, essentially the competition is about the speed of the service, the frequency that is provided and the span of hours that it operates. Those sorts of technological changes do not affect that. They affect more the nature of the way the vehicle operates. You can have lower emissions, for example. You have no particulates if you move away from diesel to electric energy, and you have a reduction in NOx emissions as well. You have a quieter situation, so in terms of environmental impact that is obviously a desirable way to go from a longer term point of view.

Mr Apps : The technology is heading to firstly, diesel-electric hybrids, and then probably electric once we get the technology in the battery capacities right. One of the things that is misunderstood about bus rapid transit is that it is already competitive with light rail in many senses in the context of its capacity. It all depends on how it is done. A lot of the discussion I have seen in relation to this inquiry and in some of the Hansards has been talking about the uplift from light rail and heavy rail. Certainly that exists, but there is only a little bit of research about what happens in the context of bus rapid transit uplift. What it does show is that as long as the corridor is retained and the corridor is perceived as having permanency, which often the laid-down track of the rail does, it then attracts the same type of value added.

The bus system in Brisbane, which is a completely dedicated right-of-way bus system, has seen significant uplift along its operations. That is a goldplated bus rapid transit system, I would have to say. It has involved tunnelling and a whole range of factors which are not necessarily required to deliver a bus rapid transit system. In simple terms, a bus rapid transit system effectively has the same characteristics as light rail except that it is rubber wheeled and it can go on and off the dedicated corridor. It is an interesting discussion that seems to be missing in the ether.

The other benefit of bus rapid transit is that once that corridor is retained, bus rapid transit can easily be morphed into light rail if there is a view that it can increase capacity. However, if you look at the Brisbane busways, their daily patronage figures are way better than a lot of heavy rail and light rail around the world, based on the way that they can manage their time frames and leeways between vehicles.

CHAIR: For the sake of the exercise, we are looking at what you refer to as rail impacts on uplift of property values and the opportunity following for value capture. Would we be better served to use a generic term for mass transport that might include bus rapid transit or future technologies? So we would not be so prescriptive, but acknowledge that mass transport, public transport with efficiency, capacity and speed are the essential ingredients to uplift property values and to allow for a better master planning of cities that are dependent on being able to transport large numbers of people efficiently, quickly and with minimal environmental impact and other factors?

Prof. Stanley : Absolutely. Depending on how big the central area of the city is, there would be a logical answer that says that it is heavy rail or light rail or BRT.

CHAIR: Are you aware of the bus system that operates in Houston, Texas?

Prof. Stanley : No.

Mr Apps : Rapid transit is the term, we believe. You have your traditional trunk route mass transit, which has a lot of stops and a lot of things happening, then you have rapid transit, which can be bus rapid transit or light rail, and they are operating more in an express type arrangement along a specific route that is moving people more quickly between major activity centres, with some stops along the way. But, as I said, both have exactly the same characteristics if you are passenger.

CHAIR: What are the most advanced bus systems that are available anywhere else that we do not have here?

Mr Apps : The French are operating quite a number of guided buses which are effectively being built to be driverless. There is an issue with passengers not feeling too comfortable but they operate on a dedicated guided road which is effectively painted red but the vehicle can traverse it and operate itself.

Mr ZIMMERMAN: It is like a driverless autobahn?

Mr Apps : Yes, exactly. There are biarticulated and triarticulated buses that are operating that, for all intents and purposes when you are looking at it, you would think that it was light rail. It has exactly the same type of attraction. Las Vegas has an interesting set-up with the design and the shape of their vehicles, which are three carriages long and run on very regular frequencies in between and through casinos.

CHAIR: I am glad you raise that because I think the attending members of the committee should immediately go to Las Vegas to investigate that!

Mr Apps : We had to do that ourselves two years ago.

CHAIR: It is dedication because often people work long into the night!

Mr Apps : Just in that context we did a report for Infrastructure Australia which they commissioned. We did a study tour of the US and Canada and looked at rapid transit systems, both light rail and BRT, and what was operating in different places and why. We provided an analysis of the types of decision making processes you might go to, to determine which one best suits a precinct or an area at particular times based on its densities, based on its travel times, based on passenger requirements.

CHAIR: Could you provide us with some of that information regarding the French buses. As I understand it, the Houston bus system is a high quality, high experience bus service that operates on their highways, so it is utilising their highways to get people out of cars and into mass transit. They are utilising their assets. But there is the understanding that autonomous vehicles will give us far greater capacity for cars on the road, that they would probably liberate electronic and such controlled buses to have a far greater capacity also and that is probably something that we should be keeping our eye on in our mass transit planning value capturing concept.

Mr Apps : I can provide that and I will find the information about the Houston bus service. I am not familiar with that one particularly myself.

CHAIR: That would be most helpful.

Mr ZIMMERMAN: In relation to the economic uplift arising from BRT systems, you mentioned in your submission some work that has been done in relation to the transit ways in Sydney but you just verbally mentioned the impact of the BRTs in Brisbane: Do you have any figures on those that you can provide to the committee or is it more anecdotal?

Mr Apps : The Brisbane busways stuff is more anecdotal although we did manage to get Queensland Transport and Main Roads to develop what they had. They recognise that they did not pay much attention to that as a focus of the development of that major project. They have been able to go back and review what has happened in the real estate market, so I can provide that report. Professor Corinne Mulley, at the University of Sydney, who works with John, has done the work based on Sydney transport.

Prof. Stanley : Corinne has done work on Sydney, yes.

Mr Apps : It has been quite significant I think for the Liverpool to Parramatta T-way.

Mr VAN MANEN: With Brisbane, though, you have got a couple of different models because the South East Busway, at least at Eight Mile Plains, is a dedicated busway whereas some of the others are on-road—they are not necessarily dedicated as well as the South East Busway. The other interesting thing about the South East Busway is that it is my understanding that it is designed to be converted to light rail if that is so desired at some point in the future.

Prof. Stanley : That makes sense.

Mr Apps : That is correct. The topography of Brisbane drove a lot of those bus rapid transport decisions. The reality is that corridors cannot always be found, but bus rapid transit also gives you that capacity to be on and off and so you can have some dedicated bits and then back onto the general traffic and then back out of it, so it provides some flexibility when there are no other options. Our criticism is that there seems to be a love affair at the moment with light rail—it is seemingly the only solution—and even projects put up to Infrastructure Australia are not looking at the broader range of options, from BRT, which could be dedicated to advance bus priority and enhance services, to just improving their existing network. Many jurisdictions seem to jump to light rail as the Holy Grail, whereas building bus rapid transit, according to British and other statistics, is four to 10 times cheaper. Brisbane busways is not a good example because it went into tunnelling and a whole range of things. From a cost perspective and a flexibility perspective, it actually provides a very good solution and a stepping stone to light and heavy rail, if that is where you want to go.

Mr ZIMMERMAN: My other question is about that study that found there was a buffer on each side of the transitway where there was actually a decline in property values. Do you think any value capture system has to take into account that fact and effectively have a zone where you could have a reverse value capture system—I suppose it is almost compensation. In terms of equity, do you think that any scheme needs to build in a reflection of whether it drops property values as well?

Prof. Stanley : The fundamental point about value capture is that it is an attempt to extract part of the unearned benefit—

Mr ZIMMERMAN: But if you had, say, a Committee for Sydney approach where you effectively just had a flat residential levy—

Prof. Stanley : In a sense, that takes it into account because, if your property value goes down, your levy would drop.

Mr ZIMMERMAN: True.

Prof. Stanley : There is built-in protection there. I think the thing that I would like to draw your attention to is that value capture is very much a discussion about projects, but if you do not do your land-use planning properly, you are not going to get the right projects. We are not really all that good at doing our land-use transport planning in Australian cities at the moment. In consequence, some of the projects that are being put up are probably not the projects you would think are the best ones for those cities if you really were to take an integrated approach to the planning. The Commonwealth government really has an interest in this because you actually get a lot of the benefits from a more productive economy, and that is the reason you need to be at the table. You get 30 per cent every time anybody sneezes! Essentially, there are national benefits from this process of our cities working better, and the federal government needs to be involved in the process at the strategic level of how we identify the priorities for our cities not only in terms of the shape but also in the major projects that are going to be built in that process. Then there need to be funding agreements that cover them. I recommend you have a look at the Stockholm agreement. It is a really interesting way of lining up the national, county and local governments across funding of major infrastructure initiatives. It is a really interesting model.

Mr Apps : The only thing I would add is that one of our criticisms of Infrastructure Australia is its project-by-project approach to stuff. They say, 'It is $100 million, and you can put in your bid.' There is a gap, in that we believe that state governments could possibly look at, say, eight small projects that total $100 million or less across the public transport network that actually could make a substantial difference to a trunk corridor or to a PT system within a particular suburb or whatever. Value uplift, whilst it tends to be focused on large projects, may actually have some scope in other places, particularly at the local council level, where substantial network enhancements—a series of six, seven or eight small projects—would make a significant difference to passenger travel time.

CHAIR: Do you have anything else you would like to add?

Mr Apps : No. We will get that information to you.

CHAIR: Thank you very much for attending today's hearing. The secretariat will send you a draft transcript of proceedings so requests can be to correct any errors of transcription. It would be helpful if you could send the secretariat any additional material that you have undertaken to provide. Thank you.