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Chapter 2: Melbourne, Victoria

Victoria is a relatively small state geographically, representing just three percent of Australia’s landmass, but it is Australia’s second most populous state, with 4.8 million people (24 percent of the country’s population). Just over 70 percent of these 4.8 million live in the Melbourne metropolitan area. Victoria has more than 3.3 million licensed drivers driving 4.1 million vehicles, one-third of Australia’s motor vehicle fleet. Victoria also handles one-quarter of Australia’s road freight (or as the Australians call it, "road freight task"). Victoria has a long history of being at the cutting edge of transportation policy and planning, including the use of performance measures, which is why the scan team visited the state.

Governmental Context

Two agencies in particular are important actors in transportation planning and decision-making in Victoria. VicRoads, the state road and traffic management authority, has five goals: 1) assist economic and regional development by improving the effectiveness and efficiency of the transport system; 2) assist the efficient movement of people and freight, and improve access to services for all transport system users; 3) achieve a substantial reduction in the number and severity of road crashes and the resultant cost of road trauma; 4) be sensitive to the environment through responsible management of the transport network; and 5) provide efficient, effective, nationally consistent, customer-oriented driver licensing, vehicle registration, revenue collection, and driver and vehicle information services. The chief executive of VicRoads reports to the Minister of Transport. Four core businesses have been defined for VicRoads —road system management, road safety, traffic and transport integration, and registration and licensing.

The Department of Infrastructure ( DOI ) is responsible for essential infrastructure in Victoria, including transport, major development, information and communication technology, energy and security. DOI ’s primary objectives are 1) linking the transport system of road, rail, air, and sea channels to promote economic and social development through increased mobility and access, and a more cost-effective freight and logistics sector; 2) promoting efficient and integrated transport services across different modes while managing road and freight traffic growth to address the needs of the traveling public and industry; 3) delivering the government's major transport infrastructure investments; 4) providing strategic policy advice, analysis, and support to government, stakeholders, and communities on energy policy, information and communication technologies, and transport systems; and 5) delivering a wide range of other major projects on behalf of government departments and agencies.

Use of Performance Indicators

The Victorian government has adopted a performance-based approach to government delivery of services. Government policy is intended to drive state agency strategic planning (known as corporate planning), which, in turn, drives the business or shorter-term output planning. Figure 18 shows how DOI views the relationship among these three levels of decision-making. Note the relative location in this pyramid of both outcomes and outputs. Investments in infrastructure, according to DOI officials, are driven by performance indicators and system performance gaps determined through a continual monitoring of these indicators.

Role of performance measurement in corporate planning in Victoria

Figure 18. Role of performance measurement in corporate planning in Victoria.

Government policy stands at the apex of the pyramid in figure 18. For Melbourne, two such policies provide important guidance to infrastructure planning and decision-making—Growing Victoria Together, a statement of desired future directions for Victoria, and Melbourne 2030, a land use/transport plan developed by Victoria’s Department of Sustainability and Environment. The DOI corporate plan includes modal investment strategies aimed at meeting government policy targets. The government has set targets as part of a public process, to some extent supported by technical analysis. Although these targets are considered aspirational, they reflect government leaders’ understanding that they are based on some level of assessment of technical and political feasibility.

The key targets for transport include the following:

Of these three targets, achieving the 20 percent mode share for public transport appears to be the most ambitious and challenging. As noted by some VicRoads officials, quantifying the costs of congestion for travelers, for the freight sector, and on the economy is considered key in convincing government leaders that the potentially most controversial strategies might be necessary. To achieve such a share would most likely require some type of congestion pricing scheme, similar to that implemented in London.

DOI transportation-related performance indicators include the following:

Public Safety and Security

Infrastructure Delivery and Management

Access and Mobility

-  Percentage of motorized trips in Melbourne

-  Compliance with law requiring access to the public transport system and vehicles for disabled persons

-  Response times for taxis for the disabled

-  Reliability of service provision and customer services (level of fully operating ticketing machines)

-  Customer satisfaction

-  Network average speed for trams and buses

Rural and Regional Development

-   Reliability of service provision

-   Customer satisfaction

-   Compliance with law requiring access to the public transport system and vehicles for disabled persons

Seamless Freight and Logistics System

-       Freight productivity

-        Share of freight tonnage transported to and from Victoria’s commercial ports by rail

-        Freight rates for containers by road and rail

-        Freight rates for specified commodities

-        Container movements to and from freight terminals (percent empty vehicles and percent empty container slots on vehicles)

-       Freight Infrastructure

-        Percentage of travel undertaken on "smooth" roads

-        Rail track condition (network temporary speed restrictions)

-        Percentage of arterial road network accessible to legal freight vehicles

-        Traffic delays because of congestion on urban arterial roads

Organizational Capability Building

Several performance indicators are different from those found in other locations, mainly because of DOI ’s unique role in Victoria’s government. DOI was the only agency the scan team visited that attempted to incorporate infrastructure security into its performance management framework. The issue of security has been a complicated one from the perspective of performance measurement in that it is not clear how security can be measured. The DOI indicator is simply the degree to which agencies are in compliance with their risk management plans, certainly not a measure of actual security, but rather a measure of preparedness for potential incidents.

The emphasis on mobility and vehicle access needs of disabled persons was also an unusual performance measure, compared to other scan sites. This emphasis was provided for both urban and rural areas of Victoria.

The focus on rural areas was another interesting characteristic of the DOI performance indicators. In addition to mobility opportunities for disabled persons, rural emphasis was also given to road development and provision of transit services for the general public.

Another interesting set of performance indicators is seen in the category for freight and logistics. Although other jurisdictions had freight-related measures, DOI had a much higher level of detailed indicators (except possibly those found in Queensland), again reflecting the unique role of DOI and the government in freight infrastructure. The concern about freight reflected both the issue of economic competitiveness (e.g., freight rates) and the environmental consequences associated with freight movement (mode share to commercial ports).

The final category emphasized the organization’s capability to deliver promised services and products. The team observed concern about training and professional development in other cases, but the focus on participation rates for women in professional development programs was unique.

Figure 19 illustrates DOI reporting of key performance indicators.

DOI became involved in another performance-related application when the tram and passenger rail system was privatized in 1999. Because a significant reduction of the transit agency’s size in the 1990s affected its performance and a transit strike disrupted transportation in Melbourne, the government decided to privatize the rail systems serving metropolitan Melbourne. Five franchises were awarded to three companies, with fairly stringent patronage, revenue, cost, and subsidy forecasts (and thus economic justifications) incorporated into 10- to 15-year contracts. The philosophy at the time was to transfer as much risk as possible to the franchisees. Minimum service levels were specified, financial incentives were provided to improve reliability, and franchisees were required to own or lease the infrastructure. The franchisees were required to maintain the infrastructure in good long-term condition, and to purchase AU$1.5 billion (US$1.1 billion) in new vehicles. Although service performance improved under the franchise agreements, revenue expectations did not materialize, leading one franchisee operating three systems to withdraw from its contract. In response, the government re franchised the rail system with new conditions.

What to include in the new agreements became an important part of the negotiations with the franchisees. Many considerations became performance requirements in the new franchise agreement. Because performance-based service contracts are an important means of institutionalizing performance measures, it interesting to note the reasoning behind the inclusion or exclusion of these measures in the franchise agreement.

DOI performance indicators in Victoria

Figure 19. Illustrative reporting of key DOI performance indicators in Victoria.
Performance Indicator Rationale

Passenger growth incentive

At specific thresholds of fare box growth the franchisee would be required to invest in strategies to increase services. Because of uncertainties associated with future fare box revenues, this indicator was not used in the agreement.

Operational performance regime

Rewards or penalties would be assessed based on the degree to which actual service conformed to the schedule. By informing the public of delays, any penalty would be reduced by 50 percent. This indicator was retained in the new franchise agreements with $12 million set aside for bonuses associated with improved schedule reliability.

Speed

Reducing travel times (increasing speeds) would be rewarded with bonuses. VicRoads agreed to spend AU$15 million (US$11 million) a year for two to four years for bottleneck removals. With increased ridership, and thus increased fare revenues and savings in operating costs, the franchisee would pay VicRoads AU$3.6 million (US$2.6 million) a year for each 1 km/h average speed increase on trams. This indicator was retained in the agreements

Service growth incentive

Reductions in total weighted wait time for passengers was to be rewarded up to an annual capped amount. This indicator was kept in the agreements

Customer satisfaction index

Given the vagaries of the cause-and-effect relationship between organizational action and user perceptions of service quality, this indicator was not recommended as a contractual element, although its monitoring will continue

Key performance indicators

Indicators for security, safety, and service quality would be monitored, but no incentives provided because these were considered something the franchisee would want to do anyway to foster ridership

VicRoads has its own performance management framework that links high-level policy outcomes with day-to-day operations of the agency. Three types of management efforts constitute this framework—strategic planning, business planning, and performance planning and management (see figure 20). The strategic planning activities establish desired outcomes based on statutory obligations and government policy statements, such as Growing Victoria Together, Victorian Freight and Logistics Strategy, Metropolitan Strategy, and arrive alive! The Road Safety Strategy. The corporate plan identifies the key outcomes and objectives that VicRoads targets as part of its mission. For example, the 2002-2004 corporate plan identified four key action areas—listening to the community, working with others, getting things done, and improving its capabilities. Actions were defined for each of these areas. Progress in implementing these actions is reported monthly to the executive management committee and yearly in an annual report, and is part of employee performance evaluations.

Performance-based management activities at VicRoads

Figure 20. Performance-based management activities at VicRoads .

The business-planning component of the performance management framework consists of two major efforts, developing the program and creating business plans. Core business areas in VicRoads develop a three-year rolling strategic plan for their areas of responsibility. In the context of these strategic plans, a program of projects is developed for the desired performance indicators established by VicRoads . Core business plans are approved by the Minister of Transport, as well by the government’s Economic Review Committee for projects over AU$10 million (US$7.3 million).

Based on the approved core programs, business plans are developed that outline the many capabilities necessary to deliver the program (see figure 21). The executive management committee reviews these business plans to ensure they conform to agency budget targets.

Business plan development for VicRoads

Figure 21. Business plan development for VicRoads .

Performance planning and management, the third component of the performance management framework, represents the feedback loop for the corporate decision-making process. The basis for this reporting is a set of performance measures based on those reported to Austroads, DOI, and the government, as well as VicRoads ’ own measures to manage its program. These measures include the following:

External
Road system
Programmed project delivery
Program effectiveness
Customer service
Internal
Business efficiency
Business unit profitability ( VicRoads has developed an affiliated technical consulting group that works internationally on a competitive basis.)
Team and individual capability and performance
Workforce productivity, health, and safety

Several performance management systems are used to collect the data to support this framework. An asset management system collects data on road and bridge conditions, a traffic management system collects data on traffic flows, and a customer service management system keeps track of customer service characteristics.

Safety

The scan team observed perhaps the most impressive application of a performance-based planning and decision-making process of any site visited in Victoria’s road safety program. The program has existed for many years, providing the opportunity to identify through absolute numbers and trends what impact it has had in achieving safety goals. The specific characteristics of Victoria’s safety program are so impressive (by U. S. standards) that they are described in more detail in the chapter on safety.

As noted previously, VicRoads monitors a large number of performance measures on road safety, classifying these measures by total amount and rate of incidence, user type, and fatality-related causal factors (e.g., illegal blood-alcohol concentrations). Victoria’s road safety strategy—called arrive alive!—represents a five-year plan to improve road safety in the state. Three government ministers have supported the plan, which in essence becomes the guiding strategy for all road safety-related agencies in the government. The government has established a 2007 target of a 20 percent reduction in fatalities and serious injuries, and has created a ministerial coordinating group to oversee the program.

Figure 22 shows the status of road safety in Victoria and the goals established. VicRoads has been designated the lead agency in coordinating the activities of various agencies to achieve these outcomes. In conjunction with achieving these outcomes, VicRoads is also involved with 17 safety challenges outlined in arrive alive! (See table 9.)

VicRoads' safety targets

Figure 22. VicRoads ’ safety targets.

Table 9. Seventeen safety challenges for VicRoads .

An important foundation for safety performance monitoring efforts is a database and data analysis system that provides VicRoads and others with, in their terms, "knowledge." To support the safety-related planning and decision-making process, data are collected from VicRoads, Victoria Police, Transport Accident Commission, Department of Justice, Institute of Forensic Medicine, hospitals, research agencies, and a limited number of local governments. To be useful in the VicRoads performance framework, crash data must have associated with it a large number of attributes (e.g., location details, participant characteristics, prevailing conditions, vehicle characteristics, etc.). In addition, this data must be input into a data management system called the Road Crash Information System ( RCIS ), which provides numerous crash reports to VicRoads . The director general, for example, gets daily updates on fatalities, with a one-day turnaround for data from the originating authority to arrive on the director general’s desk. RCIS is also used to establish priorities, understand types of crashes and their locations (e.g., run-off-the-road crashes), allow the public to conduct its own analysis of crash data, and benchmark different communities in Victoria.

The performance measures discussed above are reported primarily to the VicRoads leadership and, through VicRoads, to the public and elected representatives. A Ministerial Council for Road Safety—consisting of the Ministers of Transport, Police/Emergency Services, and the Transport Accident Commission—has a much higher-level perspective on performance measures and includes additional measures of concern. For example, the council monitors the number of hours of actual operation for mobile blood-testing laboratories compared to required hours of operation during expected high-risk times (e.g., holidays). This is really more an output measure than one focusing on outcomes, but something that the council believes it can control.

Another output-oriented measure relates to a VicRoads -led partnership with local governments, Victoria Police, Transport Accident Commission, Municipal Association of Victoria, and Royal Automobile Club of Victoria. Called the Saferoads Partnership, the program encourages (with $5,000 and a required one-to-one match) development of local road safety strategies, such as older driver safety programs, child restraints, land use planning, young driver safety education, and motorcycle safety. The VicRoads ’ performance measures associated with this program include the following:

A similar program for 24 Community Road Safety Councils (CSRCs), in which each council is eligible to receive up to AU$35,000 (US$25,620), has the following types of performance measures: number of programs that target key issues and have sustained effort, number of programs that support statewide initiatives, and number of joint programs involving CSRS, local government, and schools.

Freight

As noted above, the Victoria government has incorporated a policy concern for freight movement into the DOI performance indicators. The corporate plans for both VicRoads and DOI include references to government policies that encompass freight issues, such as Growing Victoria Together, Victorian Freight and Logistics Strategy, and Metropolitan Road and Traffic Management Strategy. With an expected 70 percent increase in freight movement over the next 20 years, Victoria will face significant bottlenecks in its rail and road logistics network unless this network is, in VicRoads ’ terms, "optimized." Such optimization includes managing congestion, facilitating freight in the existing transportation system, giving priority to freight and public transport on transportation networks, and adopting a full societal cost recovery pricing scheme.

Besides DOI and Austroads performance indicators, the Victorian Road Freight Advisory Council, an advisory group to the Minister of Transport, publishes a set of indicators every three years relating to road freight efficiency, road safety, regulatory compliance, industry trends, and environmental quality. These indicators, however, are simply reported and not used by VicRoads in management decision-making.

Congestion

VicRoads was one of the major proponents for developing Austroads’ National Performance Indicators, so Austroads’ indicators on road network performance serve as the core measures for VicRoads ’ efforts. These indicators include urban and rural average travel time and road use for people (person-kilometers) and freight (ton-kilometers). These indicators are determined for seven road categories: freeways; divided and undivided arterials and undivided arterials with trams for an inner area; and freeways, divided arterials, and undivided arterials in the outer areas of Melbourne. For each road category, a representative sample of at least 15 percent of total travel and network length is used for data collection. Data are collected twice a year in each direction for three time periods and for each weekday. Four indicators are calculated from this data—actual travel time (minutes per kilometer), nominal travel time (min/km), congestion (min/km) and variability of travel time (percentage). Figure 23a shows a typical reporting of this information.

VicRoads operates a traffic management center ( TMC ) that serves as a major source of data for performance indicators. The center operates 24 hours a day, seven days per week, and requires 12 staff members working 12-hour shifts. TMC connects to 2,500 SCATS -controlled traffic signals, and uses 170 surveillance cameras, with access to another 240 cameras on the regional toll road network. Freeways have loops every 500 meters (1,640 feet), 320 in all, that collect data on vehicle speeds, volumes, and lane occupancy. This data is updated every 20 seconds. Speed cameras are used throughout the region to enforce speed limits. VicRoads is also developing an approach to track trucks on Victoria roads and to equip all buses and taxis with global positioning system ( GPS ) units that, in essence, would turn them into probe vehicles. All of these ITS applications will provide VicRoads with a strong data collection capability to support its performance measurement efforts.

VicRoads has developed a performance monitoring system for the freeway system that relies on data collected from loop detectors. The data are blocked into 15-minute time intervals, with performance reporting on crash rates, speeds, volumes, free-flow speed, travel times, hours of delay, all per segment or, in the case of crash rates, per 100 million vehicle-kilometers traveled and per kilometer (see figure 23b). The next version of this system will allow a lane-by-lane analysis. VicRoads ’ officials stated that this performance monitoring system strongly influenced investment priorities by providing for the first time a systems view of trouble spots. Before this, the use of the traffic management center as a data input to such prioritization naturally focused attention on the specific locations monitored. It was clear to the scan team that VicRoads is using ITS applications most effectively as a source of data for performance indicators, and is developing additional applications that could be important in the future.

Figure 23. Examples of congestion reporting in Victoria.

System performance measurements

Figure 23a. System performance measurements.

Freeway performance measurements

Figure 23b. Freeway performance measurements.

Multimodal Transportation

Melbourne is one of the most multimodal cities in the world. With an extensive tram system (third largest in the world) and a large bus network, public transport plays an important role in providing mobility to city residents (90 million boardings per year representing 9 percent of total motorized trips). As noted earlier, the government has established a target of 20 percent public mode split by 2020. Operations measures used to monitor service delivery include tram and bus travel time (targets are 25 percent reduction for trams and 10 percent reduction for buses). The transit agency collects data on service reliability, while VicRoads monitors travel time variability for roads carrying transit vehicles.

The government’s transportation policy also includes a commitment to enhance the bicycle network in the state. Bicycle projects will be provided as part of major road projects, with a target value of one kilometer of off-road bike lanes per 1,000 population. The types of performance indicators developed for this program include level of program expenditure, number of kilometers in place, bicycle as a mode for work travel, bicycle as a mode for recreational and sport activities, crashes, and hospital admissions.

Road System Management

One of the most important core businesses in VicRoads is the Road System Management ( RSM ) group, the unit responsible for the strategic development of the road network. Besides DOI and other indicators described previously, the RSM unit has its own set of core performance indictors, several of which are benchmarked against other Australian states. These indicators include the following:

Road maintenance effectiveness

Smooth travel exposure

Return on construction expenditure

Achievement index

A review of the achievement index suggests that the benefit-cost analysis in recent years has been a valid exercise in estimating what will actually occur (based on a sample of 80 projects out of about 1,200 per year).

VicRoads uses a road asset system ( RAS ) to collect data on the condition of road assets. Data collected include bridge condition and risk rating, pavement surface condition (updated yearly), and pavement roughness (or what is called "smooth travel exposure"). Other data sources used for performance measurement include results from regional models, census data, public input, land use, and traffic surveys. VicRoads officials stated that for asset management, priorities are driven by pavement condition modeling, reducing roughness, preventive maintenance treatments, resurfacing low skid resistance sites, bridge conditions, and roadside inventory problems.

Internal Monitoring of VicRoads ’ Program

  •          Financial progress against forecast
  •          Physical works against program
  •          Initial versus final project cost
  •          Post project evaluation for major improvements
  •          Environmental impact

Source: VicRoads

VicRoads is undertaking several initiatives to enhance program delivery. For example, new legislation has been introduced to clarify the responsibility for managing arterial roads. VicRoads is also evolving to a triple bottom line approach to project evaluation, defining new indicators that are more relevant to decision-making, and introducing a new risk management framework for benefit and cost estimation. In addition, VicRoads is making efforts to develop new indicators for social and environmental concerns, use new data collection methods, and create multimodal evaluation methodologies.

In response to questions posed by the scan team, VicRoads officials stated that the key barriers to a performance-oriented decision-making process are that 1) many indicators are not understood by those outside of VicRoads, and 2) supporting data are difficult (and expensive) to collect for some indicators. Inherent conflicts also exist between several performance categories. For example, reducing speeds for safety purposes could conflict with desired higher speeds for improved regional accessibility, or enhancing freight access could conflict with community preservation desires. Key lessons for others engaged in performance measurement include assuring that performance indicators can be readily and cost effectively obtained, are closely tied to program and investment decisions, and are outcome-oriented.

Observations

The scan team’s most more important observations from the visit to Victoria are as follows:

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