Faculdade de Engenharia da Universidade do Porto A Decision Support System for Investments in Public Transport Infrastructure Marcos Paulo Schlickmann Submitted in partial fulfilment of the requirements for the degree of Ph.D. in Transportation Systems Supervisors: Doctor Luís Miguel Garrido Martínez Prof Doctor Jorge Manuel Pinho de Sousa May 2018 © Marcos Paulo Schlickmann, 2018 ii This thesis is dedicated to Sofia, Gabriel and Rodrigo. iii ABSTRACT When public authorities face the need to improve a transportation system, they normally have to make a difficult choice among a set of technological and operational alternatives. To help the correct evaluation of each alternative and its impacts, costs and benefits, it would be useful to have a decision support system (DSS) based on approaches such as Multi-Criteria Decision Analysis (MCDA) and/or Cost Benefit Analysis (CBA). Among the many impacts caused by a public transportation system, typically those on the land use are not adequately considered in the decision-making processes, mainly because they are hard to monetize, they are often considered as value transfer instead of value creation, and they are too complex to be assessed by traditional transport modeling tools. To overcome these weaknesses, the objectives of this research are to identify and measure the impacts of transit systems on land use and accessibility, and to consider those impacts in decision-making processes, along with more traditional financial and transport related impacts. For this purpose, a DSS, combining a land use and transport model with a MCDA model, was developed. This system was assessed in a small case study, where Bus Rapid Transit (BRT) and Light Rail Transit (LRT) projects are presented, and in a real case study, the Green Line extension project in Boston, the USA. The DSS incorporates a range of criteria and subcriteria organized in a hierarchical manner, covering a variety of decision aspects, expert opinions and sensitivity and risk analysis. It aims to more accurately, and realistically reflect uncertainties and exogenous conditions that may significantly affect the costs and the benefits of a project. Consequently, it facilitates public debate about investment alternatives, since it makes it possible to present, in a structured way, the decision problem to the affected community and decision-makers. Keywords: BRT; LRT; Multi-Criteria Decision Analysis; Land Use and Transport; Investment analysis iv RESUMO Quando as autoridades públicas enfrentam a necessidade de melhorar um sistema de transporte, têm normalmente de fazer uma escolha difícil entre um conjunto de alternativas tecnológicas e operacionais. Para ajudar a avaliação correta de cada alternativa e seus impactos, custos e benefícios, seria útil contar com um sistema de apoio à decisão (DSS) baseado em abordagens tais como Análise Multicritério (MCDA) e / ou Análise de Custo Benefício (CBA). Entre os muitos impactos causados por um sistema de transporte público, tipicamente aqueles no uso do solo não são adequadamente considerados nos processos de tomada de decisão, principalmente porque são difíceis de monetizar, são geralmente considerados como transferência de valor em vez de criação de valor, e são muito complexos para serem avaliados por ferramentas de modelação de transporte tradicionais. Para superar essas fraquezas, os objetivos desta pesquisa são identificar e medir os impactos dos sistemas de transporte público sobre o uso do solo e a acessibilidade, e considerar esses impactos nos processos de tomada de decisão, juntamente com os impactos financeiros e de transportes mais tradicionais. Para isso, foi desenvolvido um DSS, combinando um modelo de uso do solo e transporte com um modelo MCDA. O DSS foi então aplicado em um pequeno estudo de caso ilustrativo, onde projetos de sistemas Bus Rapid Transit (BRT) e Light Rail Transit (LRT) são apresentados, e depois em um estudo de caso real, o projeto Green Line Extension em Boston, EUA. O DSS incorpora uma série de critérios e subcritérios organizados de forma hierárquica, abrangendo uma variedade de aspectos de decisão, opiniões de especialistas e análises de risco e sensibilidade, de forma precisa e realista, refletindo incertezas e condições exógenas que podem afetar significativamente os custos e os benefícios de um projeto. Consequentemente, facilita o debate público sobre alternativas de investimento, uma vez que permite, de forma estruturada, apresentar o problema de decisão à comunidade afetada e aos decisores. Keywords: BRT; LRT; Análise Multicritério; Uso do solo e transportes; Análise de investimentos v ACKNOWLEDGEMENTS This Ph.D. was a fantastic journey. I met so many interesting and inspiring people. First, I would like to thank my supervisors, Luís Martínez and Jorge Pinho de Sousa. They were great during the entire process. I would also like to thank professor Manuel Matos, Carla Monteiro and all MIT Portugal staff and professors. Second, I would like to thank professor Chris Zegras for hosting me during my stay in Cambridge. I want also to thank lecturer Mikel Murga, lecturer Fred Salvucci, professor Joe Ferreira and MIT friends from Boston BRT and LUTUncertainty projects and MIT staff for welcoming me and helping me with my research during my time at MIT back in 2015. Third, I would like to thank Sebastian, we talked about everything and shared office at MIT. He is a good friend, a friend for life. Cristina, Marco, António Lobo, Teresa and the remainder of my MIT Portugal friends must also receive my acknowledgements. Fourth, I want to thank the experts from various countries who answered my survey. Fifth, I want to thank my family back in Brazil and my in-laws here in Portugal for all the support during this period. Lastly – but most importantly – I want to thank my wife Sofia and my kids Gabriel and Rodrigo, for all the love and support. You are the best things that happened in my life. In addition, I am thankful to FCT for the scholarship SFRH/BD/52001/2012 and to FEUP for being such an incredible school. vi TABLE OF CONTENTS Abstract .................................................................................................................................... iv Resumo ...................................................................................................................................... v Acknowledgements .................................................................................................................. vi Table of Contents .................................................................................................................... vii Figures ....................................................................................................................................... x Tables ....................................................................................................................................... xii List of abbreviations ................................................................................................................xvi 1. Introduction ....................................................................................................................... 1 1.1. Motivation ................................................................................................................. 2 1.2. Objectives .................................................................................................................. 4 1.3. Research questions .................................................................................................... 5 1.4. Research methodology .............................................................................................. 5 2. Capital investment decision-making on Public Transport systems ................................... 9 2.1. Introduction ............................................................................................................. 10 2.2. Definition of investment alternatives ...................................................................... 13 2.3. Common decision parameters and aspects ............................................................ 24 2.4. Four-step model ...................................................................................................... 35 2.5. Cost Benefit Analysis ............................................................................................... 37 2.6. Multi-Criteria Decision Analysis ............................................................................... 39 2.7. Risk and uncertainty ................................................................................................ 42 2.8. The final choice ........................................................................................................ 45 2.9. Conclusions and further research............................................................................ 46 3. Land use and public transport decision-making .................................................................. 49 3.1. Introduction ............................................................................................................. 50 3.2. Accessibility ............................................................................................................. 51 3.3. Mixed-use, density and Transit Oriented Development ......................................... 55 3.4. Property prices and Value Capture mechanisms .................................................... 62 3.5. Forecasting land use changes .................................................................................