Appendix E: Cost or Benefit Analysis of Transit Priority Measures

Disclaimer: Legacy Content

The information on this page is derived from Moving Forward Together Plan, approved by Halifax Regional Council in 2016. Minor adjustments to route numbering and route planning have since been made and approved in Halifax Transit Annual Service Plans. 

Understanding the Benefits and Trade-Offs: A Cost-Benefit Analysis of Transit Investment

Determining the costs and benefits of a project like a Transit Priority Measure (TPM) is crucial for its evaluation, as well as for planning purposes. This type of analysis ensures that all factors and impacts are assessed and understood before any action is taken.

Although the cost to build a project can be relatively easy to quantify, measuring the benefits and trade- offs of a TPM is often more challenging.

The following methodology will help Halifax Transit staff, Regional Council, and Halifax residents gain a better understanding of the costs, trade-offs and benefits of any TPM being considered, large or small:

Step 1: Develop Estimates for the Capital Cost of the Project: Some TPMs being considered may have very little cost (for example installation of a regulatory sign),whereas others may require significant capital cost. Once preliminary designs are completed for any measure, the cost of any geometric changes can be calculated, including curb, asphalt, sod, traffic signals, pavement markings or any other features.

Step 2: Develop Estimates  for Annual Operating Cost (if applicable): Some  TPMs may have negligible operating cost, however, many TPMs have some ongoing operating costs from year to year which need to be incorporated into the cost analysis (for example the annual cost to operate traffic signals required by transit). Estimates are typically based on the approximate annual operating costs for the particular TPM using historical costs for similar measures.

Step 3: Develop operational cost savings to Halifax Transit: Using running time data collected onboard Halifax Transit vehicles, we can calculate the average delay per bus experienced today without the Transit Priority Measure, and an average cost per hour for the transit vehicle and driver. To the extent that a given TPM would eliminate this delay, this data allows us to determine how much it costs for buses to operate in mixed traffic at the location being considered for a TPM. The calculation would look like this:

Daily Cost Savings to Transit

= Average Delay⁄Transit Vehicle x # Transit Vehicles x Cost⁄hour for Transit Vehicle

Annual Cost Savings to Transit  = Daily Cost Savings to Transit x Days⁄Year TPM is in Use

Step 4: Understand TPM’s Impact to All Road Users:  When considering the introduction of any TPM, it is very important to understand the impact on all people using that particular intersection or corridor. For this we look at the “Net Road User Delay” which captures the benefit to transit users (i.e. time saved by transit users due to the TPM) and the benefit or disbenefit experienced by other road users, whether motorists, cyclists or pedestrians. This calculation would look like this:

In some cases, TPMs could have the impact of delaying the movement of personal vehicles, while in other cases, removing the buses from mixed traffic could actually mean that other cars on the road can get through an intersection or corridor faster. 

Net Road User Delay = Net Transit User Delay + Net Non Transit User Delay



Net Transit User Delay
= Delay⁄Transit Vehicle x # Transit Vehicles x Average Ridership per Transit Vehicle


      Net Non Transit User Delay

      = Delay⁄(Non Transit Vehicle  x # Non Transit Vehicles x Average Vehicle Occupancy

Note: Delay reductions will be a negative value while delay increases will be a positive value. 


Step 5: Determine the Payback Period for the TPM: Once the costs and benefits are calculated, the payback periods can be determined. A Total Payback Period, which considers not only the costs to Halifax Transit, but also the cost to all road users including car commuters, can be calculated using the following equation:

Total payback period

Example TPM Cost Benefit Calculation

Let us assume that the construction of a new Transit Signal Phase is being considered at an intersection to reduce the amount of delay experienced by buses travelling northbound on 2nd Avenue. This phase would only operate during afternoon rush hour (for a total of 2 hours per day).

Traffic modeling found that the time savings per bus is 15 seconds, while the delay increase per private vehicle is 3 seconds. There are 20 transit vehicles and 1,000 non-transit vehicles which use the road network in this area in the peak two hour period. Average transit ridership is 30 passengers per bus, while the average vehicle occupancy is 1.221 people per non-transit vehicle.


•    15 seconds of savings per bus
•    20 buses in peak period
•    3 seconds of increased delay per non-transit vehicle
•    1000 non transit vehicles during peak period
•    260 weekdays per year
•    Initial capital cost for construction $6,500
•    Annual Operating Cost $200
•    Transit hourly rate for vehicle and driver: $65.14/hr
•    Average hourly rate for commuters (transit and non-transit users): $21.922

Since we are provided with Capital and Operating costs above, we skip ahead to Step 3: Develop operational cost savings to Halifax Transit.

Daily Cost savings to transit

Next, we move on to Step 4: Understand TPM’s Impact to All Road Users. First, we have to understand
how much delay or time savings transit users and other road users will have with the new TPM. From here, we can calculate how much money is saved by looking at the annual change in cost to the public:


Net Transit User Delay = Delay⁄Transit Vehicle x # Transit Vehicles x Average Ridership per Transit Vehicle

              Net Transit User Delay = −15s⁄Transit Vehicle x 20 vehicles x 30 users
              Net Transit User Delay = −9,000 user seconds

When the delay experienced by private vehicles is less than 5s per vehicle, this delay will not be noticed by users, and is considered negligible:


Net Transit User Delay

Finally, we can look at Step 5: Determine the Payback Period for the TPM:

Determine the Payback Period for the TPM:


1  This value was collected by HRM Strategic Transportation Planning, collected over several years via screenline counts throughout Halifax.
2 This rate was extracted from Statistics Canada for Nova Scotia from September 2015