Missing your forecast

From today’s Sydney Morning Herald: Cross City Tunnel receivers put tollroad on sale block . The tollroad tunnel went under (so to speak) in part because they missed their forecast, getting 30000 travelers per day instead of 90000.
Another article on this in Toll Roads News The firm responsible for the forecast was Hyder Consulting who remarkably still claim credit for the project on their website.
Forecasting traffic is not easy, but there are established methods that should get freeway demand estimates within 20-30% or better (i.e. one lane) of actual values (not 300% off) and one is not convinced these guys used them. In fact, even with no tolls, traffic was still only 60% of the predicted flow.
Unfortunately, there is really no liability for poor forecasts, at least not for the forecasters.
Of course this points out the advantages to private sector assuming the risk, the public is not on the hook for a bailout. It also argues for higher returns to compensate for the risk, otherwise projects won’t get built.

2 thoughts on “Missing your forecast

  1. We note your comments indicating that Hyder Consulting conducted traffic modelling on Cross City Tunnel on behalf of the Cross City Motorway consortium (‘CCM’).
    By way of clarification, Hyder Consulting was engaged by CCM to prepare a traffic study co-ordinating the outputs from CCM’s other consultants and to assist in communicating the contents of the study.
    CCM engaged another organisation to undertake traffic modelling that formed the basis for traffic forecasts in that study. CCM is best placed to provide information regarding the model utilised.
    Please contact cindy.lee@hyderconsulting.com for further information.


  2. From Hyder’s website below … it looks like as lead consulant and project manager they should be takingsome responsibility for the forecasts.
    From their site:
    Date July – December 2002
    Client Cross City Motorway
    Consortium (CCM)
    Lead consultant and project manager for
    Netanal modelling to produce traffic forecasts
    for revenue modelling
    A total of approximately 580,000 vehicles
    access the Sydney CBD daily, over half of
    which is through traffic. Sydney’s existing
    transport network provides good connections
    for traffic travelling north/south and
    north/west, but poor connections on
    east/north and east/west routes. As a result
    traffic flow through the CBD is highly
    inefficient and time consuming.
    Additional problems such as bus lanes along
    principal travel routes, on-street parking,
    access to driveways and alleyways,
    pedestrian “scramble? phases at signalised
    intersections and pedestrian operated
    crossings and general CBD activity
    throughout Sydney’s complex system of one-
    way streets has resulted in the RTA
    identifying the need for a major new east-
    west road connection across the CBD with
    connections to major access routes. Cross
    City Tunnel (CCT) serves this need and
    relieves traffic congestion and infiltration into
    local streets through the CBD.
    The CCM Consortium appointed Hyder
    Consulting to lead a team of consultants –
    the Patronage Team – to undertake a
    detailed analysis of the patronage forecasts
    and implications for potential traffic using
    CCT. The identified benefits of CCT
    Diversion into the tunnel of most traffic
    currently using the east/west network
    Improved operational and functional
    capacity at key intersections in the CBD
    to lower congestion and improve travel
    Travel time reductions of approximately
    20 minutes from east to west Sydney
    Improved bus travel times and less
    delays for pedestrians at traffic signals
    Reduced traffic noise and improved air


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