The South East Hampshire Bus Rapid Transit (BRT) is a high specification, sub regional public transport network designed to provide a viable alternative to the car and remove the transport barriers to economic growth and development of key sites. The scheme included an off-road busway in a disused railway line, new bus shelters with CCTV and real time passenger information and cycle parking, amongst other infrastructure measures. In addition, the private bus operator committed to providing a new high quality fleet and route-specific branding (Eclipse). Economic evaluation of the outturn costs and benefits shows that the scheme has delivered an economic return on investment at up to £6.94 for each £1 spent. The scheme has been successful at achieving levels of demand and revenues which exceeded forecasts, service reliability and service frequency have improved and passenger satisfaction ratings have gone up more than 20% on average. There is also evidence to suggest that the scheme has led to a reduction in traffic levels. The full case study can be accessed here.
Key Statistics
| Location: | South East Hampshire |
| Key Stakeholders: |
|
| Construction completion date: | April 2012 |
Sources of funding
Funder |
Value |
|---|---|
| DfT/DCLG (Community Infrastructure Fund): | £20m |
| Local Transport Plan allocations: | £5m |
Transport and the economy
Rationale for investment
Six key challenges were identified by South East Hampshire, as included in the Local Transport Plan 2006-2011, included:
- Economic underperformance
- Accessibility to services and employment
- Transport integration
- Public transport image
- Past and future development
- Environmental impacts of transport
Scheme objectives
The objectives of the project were to:
- Improve access to future and existing employment sites by public transport
- Improve access to public health services at both local and sub-regional levels by public transport
- Improve public transport access to tertiary education by public transport
- Improve public transport access to and from the North Fareham SDA to local employment, education and health services
- Improve the overall quality of public transport provision
- Assist in meeting the requirements of the Air Quality Management Areas (AQMAs) Plans.
Business case development
A full business case for the South East Hampshire BRT was submitted in 2008. This presented a BCR of 1.5, with a present value of benefits of £228 million and costs of £153 million (2002 prices) over a 60-year period. This BCR represents low to medium value for money.
Of the £228 million of benefits, 25% corresponded to user benefits, including both time savings and reductions in vehicle operating costs. A further 69% of benefits corresponded to additional revenue generated by the scheme for private sector providers. Non-user benefits included environmental benefits and a reduction in accidents (approximately 7% of total benefits).
Scheme costs consisted of investments costs, operating costs and revenue funding, with revenue funding accounting for 73% of costs.
The present value of benefits and costs is shown on the table below.
| Benefits and costs | Present value (2002 prices) (million) |
|---|---|
| User benefits | |
| Time savings | £28.0 |
| Vehicle operating costs savings | £28.9 |
| Non user benefits | |
| Greenhouse gases | £2.3 |
| Accidents | £13.2 |
| Private sector providers | |
| Revenue impacts | £156.9 |
| Operating costs | (£0.6) |
| Public accounts costs | |
| Investment costs (local government) | £6.0 |
| Investment costs (central government) | £15.5 |
| Operating costs | £4.7 |
| Revenue funding | £111.5 |
| Indirect tax revenues | £15.3 |
| Present value of benefits | £228.8 |
| Present value of costs | £153.0 |
| Benefit-Cost Ratio | 1.50 |
Evaluating the investment
An ex-post evaluation of the scheme indicates that the BCR of the project is likely to be significantly higher than initially forecasted. This is due to both significantly higher demand and the exclusion of quality benefits from the business case.
The table below shows a comparison of the ex-ante and ex-post business cases.
| Category | Ex-ante Business Case | Ex-post Business Case |
|---|---|---|
| Demand | Demand growth 2011-2026 – 26% | Demand growth of 48% after 2 years |
| Revenue | Revenue from patronage increase - £333,000 | Higher revenue than forecasted |
| Time savings | Time savings per person (AM peak) – 13.7 | Over 15 minute reduction in journey time variation. |
| Quality benefits | Not included | Likely to be significant |
| Capital costs | £25m | On budget |
| Value for money | Benefit-Cost Ratio – 1.5 (low to medium value for money) | High value for money |
Assuming revenue and costs have not varied from the figures reported in the ex-ante business case, the ex post business case evaluation shows a BCR of 1.9 indicating medium value for money – a slightly higher BCR than the ex-ante business case BCR of 1.5.
Removing the loss of parking revenues from the analysis uplifts the ex-post BCR to 6.94, and we would consider this to represent the top end of potential value for money. Whilst we would except that the loss of parking revenues may create a short term cost relative to the counterfactual, over the longer term it would be reasonable to expect that revenues for the finite supply of parking spaces would be driven by other sources of demand, or else land for parking would be reallocated and achieve an alternative source of revenue, and would not represent a cost over the full 60 year appraisal period. We would therefore expect the true BCR to fall between 1.9 and 6.9.
Process Evaluation
Timing of activity
The construction phase of the project was delayed due to a number of judicial reviews brought forward. It was intended to be completed by April 2011, but was delayed by a year and was officially opened by the then Transport Minister Norman Baker in April 2012.
Project delivery
The project was successfully delivered to the original budget of £25m with funding coming from the intended sources. Hampshire County Council identified the involvement of the contractor BAM Nuttall at an early stage of the design and specification of the project as a key contributing factor to the successful delivery of the project to budget. Early involvement resulted in feasibility issues regarding the specification being addressed at an early stage and the project was then delivered to specification without unexpected adjustments or costs.
From an operational perspective, the project revenues have exceeded forecasts. The arrangement between Hampshire CC and operators is such that rather than a flat usage fee, which operators were reluctant to agree to due to the uncertainty around the success of the scheme, a risk sharing agreement was set up whereby operator contributions are linked to the financial performance of the operator along the BRT route.
The agreement has meant that Hampshire has benefitted financially from the increase in patronage and commercial success of the project, which has allowed further investment in the BRT.
A key factor in the success of the project delivery was the focus on the customer and public transport objectives. This was achieved partly thanks to the creation of a steering group of public transport representatives to maintain the right focus. An example of customer focus was the branding and marketing, based on customer research.
Stakeholders and partnership working
A productive relationship between the operators and Hampshire CC was fostered by including operators on the BRT board from at an early stage and through collaborative working, which helped build trust between the parties. This was exemplified by the fact that FirstGroup allowed Hampshire CC to take the lead on the marketing of the project and the creation of a new brand, distinct from the national First brand.
In terms of other delivery relationships, the relationship with contractor BAM Nuttall was considered to have worked well with few issues of any significance through the delivery phase. This was in part attributed to the early engagement of the contractor and their involvement at the design and specification stage. However, some issues with sub-contractors have arisen related to the maintenance of bus shelters, which are still being resolved.
Unexpected outcomes
The success of the scheme has had both positive and negative unexpected outcomes:
- Displacement from other bus services: passengers were willing to walk further to travel on the Eclipse service.
- Journey times: the extension of the bus route to include Fareham train station and facilitate public transport integration has resulted in longer journey time for some passengers, although journey times at peak times have been shortened.
- Emissions: overall emissions have gone down despite increased bus service frequency than originally planned as a result of fuel efficient buses.
Improvements since opening
There have been some junctions and priority measures which have or are planned to be modified to ease the traffic flow at problem sections.
Summary
The South East Hampshire Bus Rapid Transit is a high specification, sub regional public transport network designed to provide a viable alternative to the car and remove the transport barriers to economic growth and development of key sites. Economic evaluation shows that the scheme has delivered an economic return on investment at up to £6.94 for each £1 spent.
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