Corona and public transport
The corona crisis affected all of us, but one of the sectors hit most was the public transport sector. The lockdown led to a decrease in the use of public transport in the Netherlands of ~50% in 2020 (in the first weeks declines of 80-90%1). Our client was faced with investment decisions on rail track capacity, vehicles, and line network. These decisions often need to be taken 5-10 years in advance for rail transport. Aside from direct investment, costing tens to hundreds of millions, these decisions impact passenger service, operations, and yearly cost levels for 30+ years. The client asked us how they could make the best investment and operational decisions when they were in the middle of the pandemic.
The future is unpredictable – so don’t predict
Together with the government, the transport authority, and the public transport operator, we helped to tackle this decision-making. Starting off, we created multiple passenger-growth scenarios based on a custom-build, data-driven projection model. More than just ‘high’ and ‘low’ scenarios, we needed scenario’s that targeted the specific uncertainties. For example, what happens if commuters keep working at home multiple days a week? If schools/ universities spread their opening hours? If more/ less tourists return to the city or if there is a major economic recession?
Simultaneously we created an overview of investment decisions and the drivers behind them (capacity, safety, replacement, etc.). We quantified their economic impact on the operation, the impact on passenger quality and the realization lead times.
Adaptivity as key
We used these scenarios to answer important questions for the investment decisions. For example: if the clients decide to invest now – how will they be able to reduce costs if less travelers return than anticipated? Or what are back-up plans if passenger growth is higher than anticipated? When do they need to decide on such a back-up plan?
We summarized the results from our scenario-analyses in comprehensive roadmaps, outlining the decision timeline and showing the interconnectivity of certain decisions. Based on these, clients can ensure that decisions will be made right on time: never too late, but often as late as possible to allow for the most informed decision in these uncertain times. This gave our clients the much-needed ability to adapt when the situation calls for a change of plans.