Appendix A Inter-relationships between initiatives

The features of individual initiatives and the relationships between initiatives can significantly affect the appraisal process and its results. Before appraisal commences, initiatives should be clearly specified, and key relationships between individual initiatives should be identified. Initiatives can be independent, complementary or substitutable.

The same knowledge about inter-relationship between modes, or different parts of a network, is also important for a proper understanding of problems and their causes (Step 2).

6.1 Independence

Two initiatives are classified as independent when the implementation of one has no effect on the benefits or costs of the other. Physical separation (e.g. an initiative in an urban area and an initiative in a rural area) is often (but not always) a good indicator of independence.

Initiatives are frequently treated as independent in the system planning process if relationships with other initiatives are weak. This is a reasonable approach because the degree of dependence may be impossible to estimate accurately or estimation may require excessive resources.

Despite physical separation, apparently unrelated parts of the transport system may be dependent. For example, proposed initiatives at two widely separated ports may be related if they cater for the same traffic (i.e. movements between the two ports) or the same markets (e.g. export grain).

Dependence between initiatives can involve complementarity or substitutability.

6.2 Complementarity

Complementarity exists when implementing one initiative increases the benefits or reduces the costs of another initiative. In other words, implementation of one initiative will increase the need for the other initiative. This can occur where one initiative is upstream or downstream of the other.

Complementary relationships are common in transport. For example, a highway upgrade that generates new traffic may increase traffic along other sections of the same highway, increasing the benefits of subsequent upgrading on those sections. Similarly, upgrading a rail line may result in greater truck traffic along roads leading to rail terminals, increasing the benefits from initiatives to upgrade feeder roads. There can also be complementarity between regulation and infrastructure provision (e.g. increases in gross vehicle mass limits and associated requirements for bridge strengthening).

The most extreme cases of complementary relationships occur when the benefits from one initiative are zero unless a complementary initiative is implemented. For example, an initiative to raise bridge clearances on a route will provide benefits to rail traffic only if the clearances are raised on all bridges on the route. Similarly, all passing loops on a rail route must be lengthened for the benefits to be achieved. In these circumstances, it is often preferable to bundle the initiatives together and treat them as a single initiative.

6.3 Substitutability

Substitutability exists when implementing one initiative reduces the benefits or increases the costs of another initiative. In other words, the existence of one initiative reduces the need for the other initiative.

This can occur if one initiative is on an alternative route or involves an alternative mode. For example, a railway upgrade that causes freight to shift from road to rail will reduce the benefits of, and delay the need for, upgrading of the road.

Non-infrastructure proposals that reduce the demand for transport reduce the benefits for upstream and downstream infrastructure initiatives. However, they may increase the benefits of other initiatives when freight is diverted to alternative routes or modes, which may then require upgrading.

6.4 Identifying the relationships

It is important to have a structured approach to identifying significant relationships between initiatives.

For example, the Sydney–Brisbane corridor has two road routes, the Pacific Highway and the New England Highway, and one rail route, the interstate mainline. A corridor study identifies a series of investment and demand management initiatives for both modes along the corridor. Options can be identified via deficiency analysis, with reference to network objectives and from consultation with stakeholders.

On the demand side, there is a requirement for information about the corridor users and their origins and destinations. Ideally, data would be obtained for origin–destination matrixes for cars and different types of freight. Demand equations could be derived, or inferred, incorporating assumptions about how much traffic would shift from one route or mode to another in response to changes in costs, trip times, reliability and other indicators of service quality[1]. Sensitivity analysis should then be undertaken to determine the combination of proposals, and their timing sequence, that would best achieve objectives within long-term funding constraints.

[1] See NGTSM06 Volume 5 for details of how to estimate demand shift between modes.