Marion Terrill: Congestion buster

Marion Terrill is an economist with the Melbourne-based think-tank, the Grattan Institute. She set up and now runs its transport program with the support of two other researchers. You would have heard her name after the October 2019 release of the institute’s report calling for a congestion charge in the Sydney and Melbourne CBDs.

What do you do and what are you working on now?

As the Transport and Cities Program Director at Melbourne’s Grattan Institute, I research policy questions that are important to the country. We publish that research and use it to persuade governments to reform for the benefit of all Australians. We take those messages to the media, events, bureaucrats, politicians and more. Bringing high quality evidence to the debate is helpful.

The hot topic on my desk now is looking at government proposals for fast passenger rail either connecting east coast cities or connecting regional cities to their state capital. We haven’t published this work yet.

How did you gravitate to studying/working in the mobility field?

I’d never worked in the transport or cities fields until opportunity knocked at the Grattan Institute about five years ago. I’m interested in many things in policy and transport is such a rich, diverse, complex and multi-disciplinary area of policy. Transport and cities can cover almost anything. There’s a lot of government and private sector action in this field and an awful lot of money at stake. It’s very relevant to people’s everyday lives and I feel we don’t do as well as we could.

Where (else) have you studied/worked?

Thinking about the past 10 years, I’m an economist and have worked in the Commonwealth Treasury. That’s been an extremely useful background for working in transport.

I’ve also worked in the Department of Finance on a big negotiation culminating in what’s now the MyGov account. (She actually led its design and development.) That experience taught me patience because we had to negotiate over a sustained period with people who didn’t always welcome the prospect of change.

The Commonwealth Government, the Business Council of Australia and the Australian National University have tapped into my expertise and advice on labour market policy, too.

What’s the one transport project you’d undertake that would have a quick, appreciable impact with an unlimited budget and timeframe?

Definitely a congestion charge for the CBDs in Sydney and Melbourne. When we see too much congestion on our roads, our response has been to build more roads and add more public transport, but that strategy has put us in the state we’re in today.

Governments in the eastern states are spending enormous sums of money on transport infrastructure. We should use that investment wisely and that means finding a way to encourage people to consider their impact on others when they decide to enter a stream of traffic in peak hour.

Congestion charging around the world has proven very effective. The technology has improved enough to make it more viable than used to be the case. We propose the use of Automatic Number Plates Recognition technology to implement the system.

The best place to start is to draw a cordon around the CBDs of Sydney and Melbourne and charge vehicles who enter this zone in the morning peak, a fee of $5 to enter and another $5 to leave in the afternoon peak. And for the half hour to an hour around those peaks, there should be a shoulder charge of $3. It would be free out of those hours.

The charge wouldn’t raise a lot of money: we estimate $84 million in Sydney and $124 million in Melbourne. The fact that it doesn’t raise all that much revenue is a feature, not a bugbear. A congestion charge can be very effective without slugging motorists. There would be 40% fewer cars entering CBD streets each morning peak.

We did a high-level cost-benefit analysis for Sydney and it would deliver $13 million per year in value to the community. That’s travel time savings, more reliable trips. That also takes into account the series of costs to set up and run the scheme. Some drivers who currently drive would be deterred by that charge.

The Melbourne net benefit would be $38 million. This is more than in Sydney: the cities are different and there’s no one-size-fits-all.

We’re grateful to Veitch Lister Consulting, who did the transport modelling that underpins this project. Their modelling indicated that there would be an 11% increase in the average speeds in the Sydney CBD in the morning peak. For the Melbourne CBD, it would be 16% faster.

Is your hypothetical different if you had a limited or unlimited budget?

No, not really.

What work/projects are you most proud of?

I did an analysis of cost overruns on transport infrastructure projects in 2016 that, for the first time in Australia, looked at all of the projects – 836 of them – that had been promised or built in the 15 years to 2015. I’m thinking of doing a follow-up analysis.

I found the overruns typically cost an average of 24% more than the cost when those projects were initially promised.

There’s a combination of reasons why. Partly, it’s the politicisation – those who make the initial cost promise are often politicians who say they’ll build a project for an amount without having done their due diligence.

As well, often estimators don’t have good technical information on which to base their estimates. That’s because Australia doesn’t publish information about completed projects so people can learn from history. That’s not changing despite these projects being about public money, so it’s not commercial in confidence.

Other than what you’re doing now and what you’ve previously done, is there something new, perhaps even a new field for you entirely, that you’d like to take on?

There’s a huge number of interesting policy questions on transport and cities that I’d like to explore.

In the next three-to-five years, what in transport/smart city/etc technology are you most interested in?

I come back to the prospect of a congestion charge. My observation of how my reports have been received suggests that the public mood is shifting. It’s a hard reform, in a political sense, but if people think the problem of congestion is bad enough, this is an effective way to address it.

Regarding iMOVE’s Transport of Tomorrow conference, funding infrastructure change has never been easy. With the multitude of changes and huge transit costs ahead as we transition to smart mobility, how do we find a way to finance this future infrastructure?

Well, it won’t be a congestion charge.

There are only two ways to fund public infrastructure – fares that you charge or taxpayer funds or a mix of the two. We should always aim to fund transport infrastructure in the most efficient and fairest way.

Is it the best short-term instrument of change we have in the battle against congestion?

Yes for both the short-term and long-term. You don’t make a decision for the next 10 years about where you’ll drive. You decide every morning if you’ll drive, take the train or whatever to get to and from work, and exactly when to leave. It’s a day-by-day decision.

Our analysis has found that once you introduce a congestion charge, there’d be an increase in public transport use. Not a huge one, though. Even when that happens, the patronage will still be above seated capacity, but well below crush capacity.

What’s your role with iMOVE’s Transport of Tomorrow 2020 conference?

I’m on a panel about sustainable funding of transport. I anticipate we’ll talk about the balance of funding that should come from users and taxpayers. We’ll probably also talk about not only how to assure the funding, but also about how to ensure we spend that funding wisely.