In the case of urban transport, the 'top down' economic modelling applied to all infrastructure sectors was supplemented with 'bottom up' conventional transport modelling of the six largest Australian capital cities. This modelling allowed more detailed assessment of the DEC and transport delay costs in different parts of the six cities. It also enabled a detailed assessment of the capacity of the networks. The modelling was undertaken using a consistent process, to enable comparison of results across capital cities.
Results at an aggregate level for the two smaller capital cities, Hobart and Darwin, were estimated using top-down economic analysis, having regard to the local demographic and economic conditions in the two cities.
The DEC of urban transport is calculated on the basis that DEC = shadow toll (ST) minus input costs (I), where
■ ST is an estimate of the value a user derives from the use of transport infrastructure. This value is estimated through the cost a user is willing to incur to use a service. For roads, the shadow toll takes into account the value of travel time, tolls and vehicle operating costs. For public transport, the shadow toll takes into account the value of travel time and fares paid.
■ I = the input cost of providing the service. In the case of roads, this represents the cost of road maintenance plus vehicle operating cost. (In practical terms, this means that the vehicle operating costs cancel out.) In the case of public transport, the input cost equals operating expenses excluding labour costs.
The shadow toll includes a measure of the cost of delays due to congestion. The delay cost is measured as the difference between the time it takes to travel on a road link under congested conditions and uncongested conditions. This approach recognises that, although congestion and delay are undesirable, drivers nevertheless use the road in question, knowing that there is likely to be a delay. In other words, even though there may not be an uncongested choice, drivers are making a choice to use the road.
In the case of public transport, the modelling framework does not allow for the cost of public transport delays, e.g. delays resulting from being unable to board an overcrowded bus or train. This approach was adopted so that the model would show projected demand for these services. As a result, the estimates of DEC for public transport are conservative.