Showing posts with label finance. Show all posts
Showing posts with label finance. Show all posts

Monday, 27 June 2011

Cycling infrastructure is cheaper to build than not to build

I've often written before about the growing network of inter-city cycling superhighways in the Netherlands.

Sometimes people wonder how the country can afford to build such infrastructure for cyclists. However, given the benefits which accumulate to the country from increased cycle usage, cycling should never be seen as a cost so much as as a benefit.

A new report from the Fietsberaad spells this out for the superhighways:

The proceeds that can be attributed to bicycle highways considerably outweigh the costs. The next couple of years approximately €100 million will be invested in bicycle highways in the Netherlands. That will lead to future annual profits of at least €144 million in travel time gained, better health and environmental benefits.
plaatje
Goudappel Coffeng consultants has calculated this by means of a traffic model. It employed two different scenarios: one involving the construction of 675 km of bicycle highways and another one with the additional assumption that by 2020 half of all cyclists will employ an electric bicycle.
The number of car journeys will fall by 0.7% in the first scenario and if the electric bicycle continues its advance, by 1.6%. The number of journeys by public transport falls more: by 0.9% and 2.7% respectively. The number of bicycle journeys increases by 1.3 and 3.3% respectively.
Goudappel also studied the mobility effects for the region Rotterdam/Den Haag in particular. There car use decreases by 1.4 and 2.3% respectively and public transport by 2.3 and 3.9% respectively. The number of bicycle journeys increases there by 2.2 and 3.8% respectively.
For the entire country, improved bicycle provisions will cause travel times by car to fall by 3.8 million hours, as a result of less congestion, and 9.4 million hours due to increased use of electric bikes respectively. Assuming a value of € 10 for an hour’s travel by car, this will yield approximately € 40 million a year in the case with only bicycle highways, growing to €100 million with bicycle highways in combination with an increased use of electric bicycles. Health effects will contribute another €250 million to the ‘electric scenario’ according to the model calculation, as well as €8 million thanks to the CO2 reduction. Overall this leads to a profit of €358 million. For the scenario without electric bicycles Goudappel calculates proceeds of €144 million annually.

While it's normally quicker to cycle than to drive in the Netherlands, it's also worth reflecting on that cycle infrastructure makes journeys better for drivers too.

Thursday, 24 June 2010

Cycle paths are "too expensive"

A few posts ago I pointed out that the Netherlands spends around 487 million euros per year on cycling infrastructure. That is what is spent in this country of 16 million people. The world's best cycling infrastructure costs: 30 euros per person per year.

It perhaps sounds like a lot - especially in these days of "austerity". British people, and those from the USA, Australia and other countries with little cycling, often claim that a lack of money is the reason why proper cycling infrastructure cannot be built. It's not true, of course. It's just one of many excuses.

By the standards of most government expenditure, this is actually not such a huge amount of money.

Britain's budget, just announced, is full of cuts to services. However, while 4 billion pounds has been cut from the transport budget, that still leaves 22 billion pounds allocated to transport.

There was no increase in the cost of fuel for motor vehicles. Such an increase may come later due to the rising cost of oil, but the British government is trying to minimise its effect on drivers by keeping the price of motor fuel down.

Meanwhile, cycling will be expected to continue on virtually no funding at all. Around 0.3% of the transport budget in the UK is spent on cycling. This continued under-investment is what has lead to the hostile environment for cyclists, and the bad safety record of cycling in the UK.

However, even now, investment in cycling should not be seen as a cost. Cycling has many benefits for society as a whole. If people cycle, this helps the economy by reducing the requirement to import oil and has many health benefits. Encouraging cycling is good economics. It's been shown that even in the UK, investing one pound in cycling brings four pounds of benefits.
In 1949, British people travelled 23.6 billion kilometres by bicycle vs. only 20.3 billion kilometres by car and taxi combined. In the Netherlands now, people cover about a tenth of the kilometres each year by bicycle that they cover by motor vehicle.
Instead of trying to keep the cost of motoring down, Britain's drivers could instead be helped by reducing their dependency on cars. British people were not always so dependent on cars. Rather, over the last 60 years the British public has been forced to drive for an increasing proportion of journeys due to there being few other good options (i.e. options which are attractive, offer direct journeys, have a high status and good subjective safety). If it were made easier for people to make a choice other than the private car, more could / would cycle.

Yes, I know people make other excuses, but mostly the concerns are simply about safe conditions for cycling. I've dealt with most of the common excuses before.

Of course, even when we're supposedly short of money, some things are immune to budget cuts. While there is "not enough money" for proper infrastructure, other more "important" things continue to have plenty of funding.

For instance, Britain may be heavily in debt, but the country is still keeping its nuclear deterrent, upgrading of which is expected to cost 65 billion pounds over the next few years.

I also recently learnt that Britain's adventures in Iraq and Afghanistan have cost 20 billion pounds over the last 9 years. That amount is in addition to the usual defence budget (around 40 billion a year, and not being cut with the budget), and does not include either troops' salaries or care for the wounded. This alone comes to 37 pounds per person per year for that period - a larger amount than the Dutch spend on cycling infrastructure.

I'm not even slightly convinced that the wars in Iraq and Afghanistan are justified. In 2003 I marched in in London together with a million other people and all our voices were ignored. It's part of the reason I grew disillusioned with the UK. The reason given for starting the war in Iraq was bogus, and obviously so from the beginning, the cost in human lives has been enormous, and it seems that violence simply continues to escalate in Afghanistan. So what exactly is the point ?

If money is short, which is the best use of it ? Destroying another country's infrastructure and killing hundreds of thousands of people, storing up hate for the future, or building up ones own infrastructure and saving lives in the process ?

For more cycling, what Britain, and the other countries with little cycling, need is very simple. More decent quality cycle paths.

Update May 2014
Quite apart from all the wasted lives, resources and political good-will, we now know that the failed wars in Iraq and Afghanistan have cost 30 billion pounds. i.e. enough to fund cycling at Dutch levels for at least 25 years. Well managed, that could have been enough to catch up with the Netherlands.

Of course, to talk about cycling as a cost at all is actually short-sighted. The Dutch have repeatedly shown that GOOD cycling infrastructure is cheaper to build than not to build. What's more, cycling has been shown again and again to have many positive effects both in society and even for business, all of which lead to cycling having an overall positive effect on the economy.

Britain isn't alone in spending more than it can afford on the military. I made a comparison of several countries a little while back.

Monday, 31 May 2010

487 million euros for cycling

€30 per person year every year (based
on 2010 prices) is enough to build the
world's best cycling infrastructure but
only if it is spent as an integral part
of highway engineering, not on separate
"catch up" projects and not used for
other items such as cycle training
The Fietsberaad reports that Dutch government expenditure on cycling has now reached an annual level of 487 million euros per year. Given the Dutch population of around 16 million people, that's approximately 30 euros per person per year, over the entire country, all cities, towns and villages, and out in the countryside.

Much money is now being spent on improving regional routes, for longer distance commuters (I've covered this before), which leads to higher rates of cycling to work. Improvements of cycle parking around business areas should be done by business themselves.

To catch up with The Netherlands other countries must spend more for a short time in order to progress quickly and then drop to the same rate as The Netherlands or spend the same amount and wait a long time (quality will then approach what The Netherlands has asymptotically, fast progress initially followed by a long period of catchup up). No country can "catch up" by spending less.

Britain, with it's population of around 65 million people, needs to spend the equivalent of about €2 billion per year to match Dutch expenditure. The USA needs to spend approximately €10 billion per year.

These figures may seem large, but it has been shown within The Netherlands that cycling actually saves Dutch companies considerably more than is spent on infrastructure each year. This is quite apart from health effects and the benefit to the economy of importing less oil and lower wear and tear on the road network. Also it has been shown that when all things are considered, building cycling infrastructure works out cheaper than not building it, even when we consider just long distance relatively rarely used cycle-paths.

Update September 2013
Apparently a British politician today claimed that the Dutch government spends just €3 per person per year on cycling. This is clearly a misuse of figures.

The article linked from the top of this story refers to the total investment in cycling by and through all government departments put together in 2010 of €487 million. €77 M of this total comes from the "bikes for business ruling" (itself a government initiative) leaving €410 M from government itself. This sum breaks down as follows:
  1. €306 M spent by through local government.
  2. €7.6 M spent by the water boards
  3. €3.4 M spent by city regions
  4. €58.5 M spent by provinces
  5. €34.7 M spent by the central government
However, this can also be looked at in a different way as different levels of government cross-subsidize each other. €85 M of the total spent by local government came indirectly from city regions and provinces and €15.7 M came indirectly from central government. The same document offers the same figures arranged in a different way:
  1. €207 M spent by through local government.
  2. €7 M spent by the water boards
  3. €50 M spent by city regions
  4. €97 M spent by provinces
  5. €49 M spent by the central government
In fact, of course, this is just one of many different ways that the figures could be re-arranged depending on what point one wanted to make. A lot of the funds spent by local, city of provincial governments was itself originally collected and distributed by central government. How this is sliced and diced is immaterial. It is rarely, if ever, possible to find exact equivalence between different countries for how they arrange their budgets because there are so many different ways to do it.

€487 Million per year is not the real total
In any case, this headline figure of €487M per year in the Netherlands is acknowledged not to be nearly the total amount spent on cycling. This is not only because such things as workplace parking and secure residential cycle-parking (a legal requirement) are considered to be expenditures for employers and housing developers but also because of how things are accounted for elsewhere. The break down document quoted from above included a couple of interesting paragraphs at the bottom which translate as follows:
The small amount of direct expenditure from city regions is due to the fact that these regions don't manage the roads and cycle-paths themselves.

This is another reason why direct national government expenditure is low. National government also doesn't manage roads and cycle-paths directly.
The estimate of €406M is on the low side. This is because all levels of government include cycling components in other projects. Cycling costs are therefore often invisible. It should also be noted that cycling infrastructure which is part of new developments is paid for by the builders of those developments.

Note the acknowledged to be "invisible" cycling costs. All developments and plans include cycling and it's not usually considered to be something additional to the basic plan. Only where something exceptional is needed do the funds come from the cycling budget. That is why building an excellent traffic light junction for cycling in the Netherlands cost less than a tenth the sum charged to cycling of building a very bad one in the UK. Cycling funding in the Netherlands is not only at a far higher level than in the UK but it is also spent far more efficiently than in the UK.

Also note the required investment by developers. We see benefits from this locally. The excellent infrastructure inside, to give access to, and to provide for recreational and commuting routes reaching several kilometres outwards from the newest suburb of Assen, for example, cost nothing from the cycling budget. These are also reflections of government policy. In order to get planning permission, developers in the Netherlands must present designs which work well for bicycles.

Dishonesty
The difference in expenditure between the UK and the Netherlands is vast. It cannot be reduced to a single figure because there is no equivalent figure to be found. It simply won't do for a British politician at no less a level than Parliamentary Under Secretary of State to make out that Britain's astonishingly low rate of expenditure on cycling is anything close to what is spent in the Netherlands. An attempt has been made to equate two entirely different things and to find an equivalence which does not actually exist. IMO, Norman Baker has used figures in a way which is dishonest.

It doesn't matter what channels the money might be diverted through in either country. What matters is that it is spent and spent well. In the Netherlands the expenditure is at a very much higher level than in the UK and this money is also spent far more efficiently than in the UK. These are the facts. The results speak for themselves.

What is Norman Baker actually comparing with, and a challenge.
Norman Baker's comparison of total UK funds for cycling with the funds directly allocated by Dutch central government are interesting because they are so obviously a comparison of apples with oranges.

The published Dutch figures which Norman Baker referred to are funds are for very specific uses. In 2013 these particular funds were overwhelmingly used for just one purpose - expansion of railway station cycle parking facilities. This one item is allocated €38M out of a total of €44 M.

Norman Baker is comparing a fund which is almost entirely for expansion of cycle parking at Dutch railway stations with the total government expenditure on cycling in the UK.

Let's make this into a more honest comparison. Perhaps Norman Baker would be so kind as to let us know how much the British government is spending on railway station cycle parking in 2013.



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Monday, 29 March 2010

The state of walking and cycling in the USA

"Over one-third of the U.S. population is under age 16 (cannot legally drive) or over age 65. Streets designed just to move cars are leaving behind the most vulnerable road users, often making them prisoners in their homes or completely reliant on others to drive them around. Less than half of states and major U.S. cities have adopted complete streets policies that require that roadways be designed and built with all users in mind." - So says the Alliance for Biking and Walking 2010 Benchmarking Report.

Cycling rates correlate well with rates of investment in cycling, not only within the USA, but also internationally. The success of the Netherlands has come due to investing in the needed facilities - and the facilities really are needed:

"States with the lowest levels of biking and walking have, on average, the highest rates of obesity, diabetes, and high blood pressure. In contrast states with the highest levels of biking and walking have, on average, the lowest rates of obesity, diabetes, and high blood pressure. In addition, where rates of biking and walking are greater, more of the adult population is likely to achieve the 150 minutes of weekly moderate-intensity aerobic activity recommended by the Centers for Disease Control and Prevention (CDC). According to CDC, physical activity can reduce your risk of dying early from the leading causes of death, like heart disease and some cancers."

2015 update
Progress is only possible with continued funding. Sadly, the Cycling Embassy of Denmark reports that funding for cycling in Denmark has been cut. There is no country on earth which can expect cycling to grow organically without support and that includes Denmark and the Netherlands.

The graph shows comparative figures for several cities giving an indication of how funding of cycling is linked to the resulting modal share. Amsterdam spends $39 per person per year and has a 35% modal share, Copenhagen spends $13 and achieves a 20% modal share, Berlin spends $6 for a 10% modal share, Portland spends #3.50 for a 4% modal share, the USA as a whole spends $1.50 for a 1% modal share (cycling and walking combined). Thanks to The Fietsberaad for the pointer to this report

Sunday, 29 November 2009

A good through road transformed into an excellent through road. Costings of improvements for cyclists

Before
In 2007, when we moved to Assen, this road, Groningerstraat was being redeveloped. It is a popular route for cyclists as it provides the most direct route possible to the city centre from the North of the city.

The road was dug up to a considerable depth, all the way from the front gardens on one side of the street to the front gardens on the opposite side of the street. Then everything in between was replaced. A complete new road was built for pedestrians, cyclists and drivers.

While the road was dug up, the electricity, gas, telephone, sewage and other services were updated at the same time. This is the normal way of organising things in the Netherlands because it prevents wrecking the new surface in order to do maintenance.

After
The new road was then constructed, including very much upgraded cycle facilities as you can see from these before and after photographs. The new cycle path is 2.5 m wide on each side of the road (each side is unidirectional), has a completely smooth surface (an upgrade from the old tiled surface) and provides much better segregation from motor vehicles. The cycle path has priority over every side road.

We were surprised not only at the quality of this work, but also at the price. A budget document from the city shows that the cost of this work for a 0.4 km section (both sides of the road so 0.8 km of cycle path) was just €200K (see the item on the second page: "fietspaden langs Groningerstraat, tussen Thorbeckelaan en Kanaal, verbreding fietspaden naar ca 2,5 m, rood asfalteren, voorrang bij de kruispunten, € 200.000"). That compares very well with costings I've seen for cycle paths of a much lower quality in the UK.

And not only is the amount taken from the cycling budget for this piece of work low by UK standards, but the total budget for cycling in the city is extraordinarily large by UK standards.

The budget for the two years covered by that document is arranged under different headings. Each heading has its own budget. These come to a total of over € 5.7 M to be spent on cycling in Assen over the two years covered by the budget. That works out as a cycling budget of 43 euros per resident per year over these two years.

The combination of low cost and high budget is what makes it possible to get things done so quickly.

The junctions were also renewed, including a simultaneous green junction shown in another blog post, which cost just €32000 (the first item in the budget document)


Before
Some more photos. One extra "before" and three "after" photos.

Note that there are children in several of the shots. It's quite normal here for children to travel right to the centre of the city on their own bikes. This is perhaps the ultimate expression of parents feeling confident in the safety of the cycling environment.

After
This level of subjective safety is vital to achieve a high cycling rate including all demographic groups.

Note also in this photo how on-road car parking was preserved for residents. It's important that residents concerns about car parking were also addressed when the new work was done. Not taking care of this can result in conflict between cyclists and residents, or cars being parked on the cycle path.

Also you'll see how it's possible for friends to ride beside one another, and how everything is possible while motor vehicles are kept at a distance.

The cycling rate in Assen is now 41% of all journeys. While it's not the highest rate in the Netherlands (Groningen has a higher cycling rate), that's still a higher rate than any city in other European countries. More journeys are made by bike here than are made by car. Infrastructure like this is has made this possible.

I've featured this road twice on this blog as a comparison with Gilbert Road in Cambridge, a road near where we used to live in the UK, which is much the same width and had much the same budget for cycle infrastructure, but which received far inferior reconstruction for about the same price.

It was also featured to show how secondary school children cycle along this street as part of their route to get to school from villages outside the city.

Also see a newer blog post which illustrates why "dooring" is not a problem on this road.


The explanatory captions on this video are only visible when you play it on a computer and not on a mobile device.

The photos were taken on Saturday afternoon when there were quite a lot of people about. I made this video on Sunday morning when the shops were shut and very few people were doing anything. However, the video shows the infrastructure of the entire length of the new part of Groningerstraat. This quality of cycle path makes for efficient as well as safe cycling.

Several other blog posts cover other aspects of this street's highly successful design cycling. Please click here.

The "before" photos come from an official document of the local government of Assen, and the bike that I rode to make the video is a Sinner Mango velomobile.

Wednesday, 25 February 2009

Cycling and the economy

How often do cycling campaigners get told that providing decent infrastructure for cyclists is "too expensive" ? Or that it's simply a waste of money ? In many countries cycling gets a pittance compared with other modes of transport.

There is clearly a lot of muddled thinking going on. Cycling is not a problem, but is part of the solution so far as reducing dependency on foreign oil, improving people's health (which makes companies more profitable) and leads to a happier society. What's more, encouraging cycling simply makes good financial sense.

A few weeks ago I came across a graph showing the "Current Account Balance" (it's explained at that link) of various different countries. It actually explains itself as "a country's net trade in goods and services, plus net earnings from rents, interest, profits, and dividends, and net transfer payments (such as pension funds and worker remittances) to and from the rest of the world during the period specified."

Green shows a positive balance, red shows a negative balance, or rate of increase in debt. The length of the line shows the size of this trade balance.

Let's look down the list of the top ten nations.

China of course gains its wealth these days due to its incredible level of exports of manufactured goods. It is famous for having a lot of bikes (though sadly cycle usage is dropping), Japan also has a lot more cycling than average. Germany has around 10% of journeys by bike. Saudi Arabia and Russia have oil and gas. Switzerland has about 6% of journeys despite being a mountainous country. The Netherlands has around 27% of all journeys by bike, and leads the world. Norway earns its position in the list due to being an oil exporting country as only 4% of trips are by bicycle there, Kuwait also has oil, and Singapore is another big trading nation with high public transport use.

Now let's consider the three countries which come in behind the Netherlands for the cycling rate. Denmark, where 18% of all journeys by bike, has a small population so is disadvantaged for a position in this list but is still positive at position 38, Similarly Finland and Sweden take 3rd and 4th place for cycling with 11% and 10%, and both of these are also positive. So, the top four countries for cycling are all in the green, doing well financially, and they also have good social policies.

If we look at the other end of the scale, the countries with the fastest growing debts, we find this collection. Not one country at this end of the chart has a high cycling rate.

The USA, UK and Australia have amongst the lowest cycling rates in the world at around 1% of journeys. Italy and France are at 3%. Perhaps the worst position of a country with a reasonably high rate of cycling is India at 11th from bottom. However, that is a country where cycling is associated with poverty and people cycle predominantly because the have to. Mind you, they're still doing better than the bottom ten are.

Of course, correlation isn't causation. I'm not saying that these countries are at this end of the list purely because people who live there are reluctant to cycle. However, it is perhaps interesting to reflect upon the way that the Dutch sometimes refer to their cycling policy as a fiscal measure. Getting people to cycle means spending less on road maintenance, less on imported oil, less on fixing diseases which are caused by a sedentary lifestyle and makes workers more productive.

I've mentioned it before, but the top four countries for cycling, all of whom have positive balances in this comparison, are also the top four for childhood happiness. Is it not worth trying to copy such a success ?

Tuesday, 27 January 2009

Cyclists are ill less often - Dutch companies gain competitive advantage

A new report from the Dutch Research and Testing organisation the TNO says that every 1% increase in the number of employees that cycle to work saves their employers €27M per year due to lower sickness costs. The research was carried on behalf of Tineke Huizinga, the deputy minister for traffic and works.

The article says that employees who regularly cycle to work take on average one day less sick leave per year than their non-cycling colleagues. If employers encourage employees to cycle to work more, then they can save more.

Across the Netherlands, 26% of all commuting journeys and 10% of business trips are already made by bike, though of course in some locations these figures are somewhat higher. The TNO suggests in the article that employers should be trying to increase these figures, but already that €27 M for 26% of commuters adds up to a total of 702 M Euros per year saved by Dutch employers due to their employees cycling.

The main reason given by those who currently cycle is that it is good for health, while for those who don't cycle the main reasons are the distance that they live from work, the weather, that they will sweat and the journey time.

The ministry of traffic and works is shortly to start a test of financial incentives for cycle commuting also in order to increase this percentage.

The Dutch spend more money on cycling infrastructure than any other country in the world, but even that amount is less than they are saving for businesses by having such a high cycling modal share.

Oh, and that figure is for the small Dutch population of 16M. If it scales, then a 1% difference in the UK is worth about 95 million British pounds, or in the US about 2/3rds of a billion US dollars - that's just for a one percent rise. If Britain could achieve the level of cycling seen in the Netherlands, it could save employers nearly 2 and a half billion pounds per year. For the USA it could be over $17 billion per year.

That's enough to pay for a lot of cycling infrastructure.

The Netherlands is one of a select group of nations which has
an overall positive current account balance. Being the world's
leading cycling nation has clearly not harmed the economy.
I have seen cycling organisations make similar claims when I lived in the UK, but it is something else for a government department to be behind this. The commuting statistics come from this document, which is well worth seeing for it's wonderful photographs apart from anything else.