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Guided Bus Benefits 'Exaggerated Four Times Over'

Date Issued: Wednesday 25th May 2005

County Council's fundamental modelling errors revealed in Government-backed report

A report obtained by CAST.IRON but withheld from the Guided Bus Public Inquiry reveals a basic 'input error' that has over-stated the scheme's benefits by more than four times.

'Sophisticated' modelling specifically referred to by the County Council's 'head of Delivery' for the Guided Bus scheme, Bob Menzies, as being one of the major elements in the preparation costs already expended used an incorrect category when assessing the value of journey time savings.

A report dated 18 February 2003 by the Transport Research Laboratory notes the error, pointing out that benefits had been based on journey time savings at the 'Employer's Business' rate (i.e. the cost of time lost during the working day) whereas almost all journeys would come under the heading of 'Other Purposes', for example getting to and from work or less-time critical shopping or leisure trips.

The figures were used to calculate the cost/benefit ratio for the scheme, a measure that must be significantly greater than 1 for the scheme to be effective.

"Amazingly, the County Council used this schoolboy error to calculate a cost/benefit ratio of 4.84", said Tim Phillips, Chairman of CAST.IRON. "The TRL report is scathing on this aspect."

The report states, '...the time savings for the scheme have been greatly over-estimated' and 'based on the submitted forecasts, the rate of return is more likely to be 1.2 than the 4.84 quoted in the submission'.

At the Inquiry, the council claimed it had done more modelling work that had raised the ratio to 2.2.

"This is a figure plucked out of the air", said Mr Phillips. "There was no significant change to the scheme at the Inquiry and there was no evidence that the further modelling had been scrutinised by anyone other than the council. In the light of their most basic of errors, there is nothing to suggest that 1.2 is not in fact the correct figure...which is at best marginal."

At the time of the TRL report, the council's assessment of the scheme's costs was £74 million. The cost being given in public is now £86.4 million but the Department for Transport's analysis estimates total costs of £106.3 million.

"Starting with the true cost/benefit ratio of 1.2 and applying the much higher capital costs revealed by government but withheld from the Inquiry, it is clear that the guided bus will provide no overall benefit whatsoever. Indeed, as the figure moves inexorably to less than one, the scheme's net effect will be negative which is of course what CAST.IRON has been saying all along."


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