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Advancement of Conventional Cost Benefit For Selection of Truly Sustainable Infrastructure Alternatives
Advancement of Conventional Cost Benefit For Selection of Truly Sustainable Infrastructure Alternatives
ABSTRACT: In the 21st century, selection of a best infrastructure alternative became prom
inent for all public sector projects. Initially, such selection was using the well-established for
assessment of most profitable private investments, the cost-benefit approach. Criticized for
insufficient inclusion of project social and ecological effects, this approach was later replaced
with variety of multi-criteria-based methods. An overview of both approaches identifies their
advantages and potential burdens for fair assessment of economical, social, and ecological
effects. All analyses are supported by world-wide practical examples with emphasis on histor
ical tunnelling projects from Greater Toronto (Canada). Relying on some findings by Canad
ian and Australian scholars and the results of their own research, the authors develop an
enhancement to the conventional cost-benefit approach to ensure selection of fact-proven
most sustainable alternatives. As demonstrated, application of this methodology can reduce
infrastructure planning timeline, also working toward its better sustainability and helping
with achievement of the United Nations’ Sustainable Development Goals.
1 INTRODUCTION
According to (European Union, 2017), sustainable development should meet “the needs of the
present without compromising the ability of future generations to meet their own needs”. Sus
tainable development can be only achieved via the most sustainable infrastructure options
selected following the principles of sustainability formed on the three pillars of economy, soci
ety, and ecology. However, the current, world-wide popular infrastructure selection methods
for selection of best alternatives are focused on financial profitability and social and ecological
feasibilities, which may not always correspond to the most sustainable alternatives. In add
ition, as per recent findings by Canadian and United Kingdom scholars (Saxe et al., 2021), the
average pre-construction timeline on 26 historical Toronto and London public transportation
projects accounts for 28 years, which is almost 4.5 times longer than their average construc
tion of about 6 years. Unfortunately, any prolongation of a pre-delivery (pre-construction
and construction) timeline always corresponds with additional natural resources, delayed
essential to the public services and thus, postponed regional economic growth. However, the
constantly extending pre-delivery timeline of public sector infrastructure projects is not yet
recognized as a negative long-term sustainability factor. By fairly acknowledging the above,
the focus on optimization of pre-delivery timelines becomes evident. As such, this study
focuses on improvement of the existing infrastructure selection methodology that would allow
coherent selection of the financially best and technologically most sustainable options signifi
cantly optimizing their pre-delivery timelines. The authors believe that the study’s results will
improve each infrastructure long-term sustainability leading toward more sustainable future
development.
DOI: 10.1201/9781003348030-13
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2 POPULAR APPROACHES FOR SELECTION OF BEST INFRASCTRUCTURE
ALTERNATIVES
Table 1. Cost-benefit major factors in different countries and for different projects.
Canada Ontario United Kingdom
Recommended values US Transportation Infrastructure Transportation Transportation
The CBBM greatest benefit is its well-structured procedure that allows direct comparison of
the quantified B and C. Complete quantification of B and C makes this approach non-
subjective and transparent for potential auditing. Although, this method is criticized for its
inability to deal with i) macro-economic and ii) larger-areal impacts assessment (AECOM Ltd.,
2012), and for iii) inconsistent applications around the globe (Couture et al., 2016). Inaccuracy
of the cost-benefit approach for more inclusive and cumulative environmental and social
impacts, particularly on large scale transportation projects (Laird et al., 2014), is under ongoing
improvements. Likewise, the tremendous effort of a well-recognized transportation expert Todd
Litman over his entire career aims to enhance the cost-benefit with more reliable and better
quantifiable C and B accounts (Litman, 2021).
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The main disadvantage of this methodology comes from its individual, project-customized
application, with the assessment results generally being incompatible with other projects, and
previous assessments are, thus, hard to audit. More precisely, the multi-criteria/accounts
methodology is criticized for the opportunity for small social groups and individual stake
holders to influence the selection process with the choices benefiting those small groups rather
than the society as a whole and leading to not overly sustainable options (Figure 1). More
over, the multi-criteria methodology (Wickens, 2020) is named as one of the main reasons for
Toronto’s subway soaring costs.
The detailed guidelines introduced by the public sector, such as by the Greater Toronto’s
regional transportation planning agency, Metrolinx’s Business Case Guidance (Metrolinx,
2021), aim to improve the multi-criteria approach for more consistent and comparable results.
However, this guidance requires completion of the four progressive project-phase aligned
(conceptual planning, preliminary design, detailed design, and post in-service) Business Case
Analyses (BCAs) on each proposed public transit project in Greater Toronto and Hamilton
Area (GTHA). With increasing the number of BCAs from one to four, the project’s timeline
will extend, likely causing negative effects on overall long-term sustainability.
The database of all historical and soon-to-open subway and rapid transit projects in Greater
Toronto was compiled using different open sources, including Toronto Transit Commission’s
website (www.transittoronto.ca), dissertations and reports (Alcock, 2021; Levy, 2014; Schabas,
2013; Young, 2012). All historical costs expressed in Canadian dollars were adjusted to 2022
values using the Bank of Canada inflation calculator (www.bankofcanada.ca/rates/related/infla
tion-calculator). The database was analyzed relatively to each project’s lifespan split between
pre-construction, construction, and operation. Also, each project was analyzed relatively to its
construction cost excluding the cost of fleet. Results of the analyses are summarized in Figure 2.
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For easy comparison, all costs are expressed in Linear Unit Cost ($CAD 2022 million/km)
obtained from each project capital cost divided by its length (kilometers). Each project is
marked with the rounded number of the constructed kilometers and the year-in-service, which
allows tracking its brief scope and the pre-delivery historical timeline, including its pre-
construction (planning and approval) and construction (design, field investigations, construc
tion, and commissioning) periods. As seen, Linear Unit Cost around $100 million/km was
pretty much stable on all projects in 20th century rising in the 21st century. Its maximum of
$433 million/km was reached on the Toronto-York-Spadina subway line delivered in 2017 as
the first subway extension outside of the City of Toronto municipal boundaries into the
Greater Toronto area (Municipality of York Region). Interestingly, there is a visible correl
ation between the cost rising trend and duration of pre-delivery (pre-construction and con
struction) timelines. The pre-delivery timelines on most projects in 20th century varied from 5
to 8 years. They have significantly grown in 21st century reaching 15.5 years on average. This
finding is consistent with the previously stated hypothesis that any optimization on a project
pre-delivery timeline can improve its long-term sustainability, particularly as demonstrated by
this example, through reduction of its capital cost.
3.1 Eglinton Crosstown light rail transit and scarborough subway extension
Selection of the Eglinton Crosstown best alternative (labelled 19 km 2022 in Figure 2) was
accompanied with two progressive Benefits Case Analysis Reports (Steer Davies Gleave, 2009,
2012). As a result, the Light Rail Transit technology with 25 passenger stations constructed
over 10 km by “mechanized tunnelling” and 9 km by “at-grade” constructions was selected.
The 9 km “at-grade” section was justified with its relatively lower construction cost and higher
construction pace to offset the more expensive and comprehensive underground tunnelling
along the 10 km stretch. To-date, the tunnelling section was completed in less than four years
(2012-2016) and “at-grade” constructions are still ongoing. Given multiple construction delays
including the Covid-19 pandemic response, the current capital cost has grown by 65% (Alcock,
2021; Metrolinx, 2022). Unfortunately, such cost rise and extension to more than 10 years con
struction time were not accounted as part of the multi-criteria assessments’ stress testing and/or
sensitivity analyses, which proper allocation could lead to different selection results.
Following the first edition of the Business Case Guidance (Metrolinx, 2021), the second
Business Case Analysis (BCA) aligned with preliminary design was filed on the Scarborough
Subway Extension in 2020 (Metrolinx Infrastructure Ontario, 2020). The first BCA (Toronto
Transit Commission, 2016) did not identify the 7.9 km subway with 3 new passenger stations
as the best alternative. However, this alternative was moved forward for more detailed ana
lysis in the second BCA. As stated in both BCAs, upon subway completion, the existing at-
grade rail tracks (labeled as 7 km 1985 in Figure 2) within the fully segregated transit corridor
will be demolished. Replacement of at-grade transit line with underground subway (to be tun
neled) will end its operation lasting for only 37 years. With most Toronto subway lines built
underground outlasting this at-grade line, their better long-term sustainability is quite evident.
For instance, first Toronto subway (1954 in Figure 2), in March 2022, has celebrated its 68
years in service while remaining the busiest route in Toronto.
These two projects demonstrate a perfect example on the inconsistency of the multi-criteria
produced results: 1) preference of 9 km “at-grade” along the busiest in Toronto, Eglinton
Street, conflicts with 2) replacement of the existing “at-grade” fully segregated transit corridor
with a subway. Evidently, an improvement to the infrastructure selection methodology is
necessary to produce better comparable and consistently justifiable selection results.
4 SUSTAINABILITY
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economy, society, and ecology. Sustainable development, according to (Cepeliauskaite, 2020)
is understood as a long-term economically and environmentally stable system, which is impossible
without integration of social, economic, and environmental elements into the decision-making
process. As discussed, the public sector reliance on the multi-criteria/accounts methodology
may be a step away from more sustainable development. The focus on the fully quantifiable
cost-benefit methodology enhanced with more criteria that would allow selection of truly
sustainable infrastructure options is imperative to support sustainable infrastructures and
sustainable future development.
Figure 3. Environmental assessment and construction durations versus excavated soils on Greater Tor
onto’s tunnelling projects (1990-2020).
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assessment of public transit long-term sustainability. The methodology was subsequently
tested for selection of the most sustainable alternative for the Vancouver Broadway Cor
ridor project. As part of the exercise, it was revealed that, unfortunately, not all 29 indi
cators could be reliably quantified due to existing data shortages. However, even with
application of 10 indicators, the obtained sustainability results demonstrated less than
1% (within potential error) difference between the proposed “underground subway” and
“subway and LRT combo” alternatives. Applying 15 indicators, this method was suc
cessfully tested by Australian scholars (de Gruyter et al., 2016) for sustainability assess
ment of the existing public transportation systems across eight world-wide regions with
emphasis on 26 Asian and Middle Eastern cities.
Ecology
E1 Energy consumed (including fuel) Mj
E2 Mass of total pollutants/emissions Kt
E3 Surface area consumed m2
E4 Volume of all removals (soils, rocks, water, trees, concrete, pipes, structures etc.) m3
E5 Volume of all recycling and natural restorations m3
E6 Permanent loss by nature m3
Economy
EC1 Total cost (Planning, Approval, Design, Construction, Monitoring, Commission, financing) $, B
EC2 Total fleet cost (same as in above) $, B
EC3 Long-term operational cost $, B
EC4 Long-term ridership revenues $, B
EC5 Construction growth (# of new jobs, new businesses, new residents) #
EC6 Long-term growth (same as above) #
Society
S1 Daily money savings (car versus transit) per person $
S2 Daily time savings (car versus transit) per person min
S3 Daily deaths #
S4 Daily accidents #
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Table 3. Selection of most sustainable UTM rapid transit alternative.
6.5 m
Indicator Cut and cover Score At grade Score EPBM Score 13 m EPBM Score
5 CONCLUSIONS
Infrastructure pre-construction timelines on public sector projects are lengthy. They keep
rising, particularly in the 21st century with the requirement for selection of the best (financially
and technically) alternative and introduction of more focused environmental assessment
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regulations. Often, they exceed the construction timelines. Pre-construction durations depend
on effectiveness of project planning and approval inclusive to selection of its best alternatives
and completion of environmental assessments.
As demonstrated, the existing infrastructure selection methods have negative implications
on the pre-construction timelines, and they do not support selection of truly sustainable alter
natives. Introduction of a novel harmonized methodology strictly following the three funda
mental sustainability dimensions: ecology, economy, and society would allow selection of the
most sustainable and thus, the most environmentally friendly infrastructure options. As
a result, lengthy environmental assessments can be excluded, as a duplicative approval step,
reducing the pre-construction timelines by about 3-5 years. Moreover, utilizing the best prac
tices of the cost-benefit methodology, the new harmonized selection methodology, being fully
quantifiable and thus not-subjective, well-structured, and easy to audit procedure, will provide
an imperative step toward more sustainable infrastructure, leading to truly sustainable future
development.
REFERENCES
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Steer Davies Gleave. (2012). EGLINTON CROSSTOWN RAPID TRANSIT BENEFITS CASE
UPDATE.
Toronto Transit Commission. (2016). Scarborough Subway Extension Initial Business Case.
Treasury Board of Canada Secretariat. (2007). Canadian Cost-Benefit Analysis Guide. In Treasury Board
of Canada. Treasury Board of Canada.
US Department of Transportation. (2018). Benefit-Cost Analysis Guidance for Discretionary Grant Pro
grams. In Office of the Secretary U.S. Department of Transportation. Office of the Secretary U.S.
Department of Transportation.
Wickens, S. (2020). STATION TO STATION Why Subway-building Costs Have Soared in the Toronto
Region.
Young, J. (2012). SEARCHING FOR A BETTER WAY: SUBWAY LIFE AND METROPOLITAN
GROWTH IN TORONTO, 1942-1978. York University.
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