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SCOTTISH STRATEGIC RAIL STUDY: Working Paper 7 - Medium Resource Scenario

6. Demand Forecasts SensitivityTests

6.1 This section presents the results of the sensitivity tests upon journey time, fares and service quality undertaken for MRS. The results as presented are incremental upon the core 2010 MRS results.

6.2 The sensitivities presented here are defined as follows:

Results With 'Quality/Comfort' Factors

6.3 The results presented thus far have not taken account of the potential increase in demand due to investment in new rolling stock and station upgrades. Such investment would be expected to have an impact upon passenger demand, through an improvement in the overall 'passenger experience'. Measures that will improve the passenger experience include better integration, information provision and rolling stock quality.

6.4 The forecasting methodology used to model the impact of these changes is fairly high-level and generic in nature, and reflects an across the board improvement in the passenger experience. It has been assumed that the overall quality improvement is perceived by passengers as being equivalent to a 5% reduction in fares - this is based upon PDFH recommendations that such quality improvements are worth anywhere between 3% and 10% of fares. The resultant demand increase has been calculated using a fare elasticity of -1.0 for non-urban flows and -0.7 for urban flows.

6.5 Table 6.1 shows the forecast effect of this investment upon passenger volumes and revenue within the study area. It can be seen that fare revenue in 2010 is increased by 6.6 million (4%) relative to the core medium resource scenario, and passenger journeys by 2.9 million (4%).

Table 6.1 Summary Of Passenger Miles And Journeys Within The Study Area With And Without Comfort Factors (000S)

6.6 This service quality enhancement test improves the PV of the benefits by approximately 191m. This indicates that these quality improvements, which are important in terms of the planning objectives for the SSRS, would be worth pursuing in value for money terms if they can be delivered for around 150m in present value terms (or approximately 10% of the combined capital and operating cost of the MRS).

6.7 More detailed results on this sensitivity can be found in Appendix C.

15% Average Fares Reduction on Long Distance Inter-Regional Movements

6.8 The following tables present the potential effect of a 15% average fares reduction across the study area. It can be seen that if implemented in 2010 this is forecast to increase overall patronage by 373,000 or 33.3 million passenger miles. The overall incremental PV of benefits for this sensitivity is estimated to be 38 million, discounted at 6% to 2000 prices.. Note that the results here are dependant on the fares elasticity selected from the PDFH. In the case of Inter-Urban flows the PDFH recommends a fares elasticity of -1.0, which means that this sensitivity is revenue neutral.

Table 6.2 15% Reduction in Average Fares on long distance inter-urban flows - Incremental Journeys over MRS (000s)

Table 6.3 15% Reduction in Average Fares on long distance inter-urban flows - Incremental Passenger-Miles over MRS (000s)

6.9 As a variation on this sensitivity, a lower fares elasticity of -0.5 has been tested to reflect the fact that a 15% fare reduction is fairly considerable, and some user groups may be less responsive to such a change than others. It can be seen with this assumption the fares reduction is forecast to increase overall patronage relative to the core MRS by 170,000 or 15.4 million passenger miles, whilst reducing revenue by 1.6 million. The overall incremental PV of benefits for this sensitivity is estimated to be 38 million, discounted at 6% to 2000 prices.

Table 6.4 15% Reduction in Average Fares on long distance inter-urban flows - Incremental Journeys over MRS (000s)

Table 6.5 15% Reduction in Average Fares on long distance inter-urban flows - Incremental Revenue over MRS (000s)

Table 6.6 15% Reduction in Average Fares on long distance inter-urban flows - Incremental passenger miles over MRS (000s)

5% Average Fares Increase Across the Study Area

6.10 The following tables present the potential effect of a 5% average fares increase across the study area. It can be seen that if implemented in 2010 this is forecast to increase annual fares revenue by 1.3 million per year. However, this would also lead to large reductions in journeys (-2.5 million) and passenger miles (-49 million), therefore the overall incremental PV of benefits for this sensitivity is estimated to be -48 million.

Table 6.7 5% Increase in Average Fares - Incremental Journeys over MRS (000s)

Table 6.8 5% Increase in Average Fares - Incremental Revenue over MRS (000s)

Table 6.9 5% Increase in average fares - Incremental Passenger-Miles over MRS (000s)

15% Reduction in Journey Times on Long distance Inter-Regional Movements

6.11 The following tables present the potential effect of a 15% reduction in journey times on long-distance movements. It can be seen that if implemented in 2010 this is forecast to increase annual fares revenue by 2.0 million per year, and add almost 200,000 long distance trips to the network. The overall incremental PV of benefits for this sensitivity is estimated to be 82 million.

Table 6.10 15% Reduction in Long Distance Inter - Regional Journey Times - Incremental Journeys over MRS (000s)

Table 6.11 15% Reduction in Long Distance Inter-Regional Journey Times - Incremental Revenue over MRS (000s)

Table 6.12 15% Reduction in Long Distance Inter-Regional Journey Times - Incremental Passenger-Miles over MRS (000s)

10% reduction in journey times on intra-SESTRAN and intra-SPT and between SESTRAN and SPT

6.12 The following tables present the potential effect of a 10% reduction in journey times on intra-SESTRAN and intra-SPT movements and flows between SESTRAN and SPT. It can be seen that if implemented in 2010 this is forecast to increase annual fares revenue by 4.2 million per year, and add 1.8 million trips to the network. The overall incremental PV of benefits for this sensitivity is estimated to be 105 million.

Table 6.13 10% Reduction in intra-SESTRAN, intra-SPT and between SESTRAN and SPT Journey Times - Incremental Journeys over MRS (000s)

Table 6.14 10% Reduction in intra-SESTRAN, intra-SPT and between SESTRAN and SPT Journey Times - Incremental Revenue over MRS (000s)

Table 6.15 10% Reduction in intra-SESTRAN, intra-SPT and between SESTRAN and SPT Journey Times - Incremental Passenger-Miles over MRS (000s)

A lower journey time elasticity for the core MRS test

6.13 This sensitivity identifies the effect of using a lower journey time elasticity of -0.7 rather than -0.9 within the network model. Note that this sensitivity only affects those flows which have been modelled using the elasticity approach, as opposed to those on new lines or new stations which have been modelled using existing external models or new analysis. Tables 6.16 - 6.18 show that this sensitivity reduces 2010 demand by 1.2 million journeys and revenue by 2.0 million relative to the core MRS. The overall reduction in the PV of benefits for this sensitivity is estimated to be 51 million.

Table 6.16 Lower Journey Time Elasticity - Incremental Journeys over MRS (000s)

Table 6.17 Lower Journey Time Elasticity - Incremental Revenue over MRS (000s)

Table 6.18 Lower Journey Time Elasticity - Incremental Passenger-Miles over MRS (000s)

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