Why ACT light rail should be abandoned

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ScreenHunter_06 Jun. 06 09.33

By Leith van Onselen

I usually treat anything that comes out of a politician’s mouth with great skepticism. But the below article published in the Canberra Times deriding the $600 million-plus 12-kilometre ACT light rail project, connecting Gungahlin in the north and Civic, written by Deputy Leader of the Opposition Alistair Coe, is about as logical as it gets:

While everyone likes the idea of getting a tram, how many people in Canberra will be able to travel from point A to point B on the proposed light rail route?

The ACT government’s light rail project… is a poor example of how to build a transport system, which has cost the ACT taxpayer greatly.

The only economic analysis the government has released shows investment in buses would deliver more than double the economic return of light rail… A dedicated bus lane, or relatively simple bus priority measures, would go a long way to achieving the benefits proposed of light rail.

Before committing to such a program, the government should have done a genuine assessment of the viability of an ACT-wide light rail network and then, if it was shown to be viable and affordable, determined the most economic way to roll out the network in stages.

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Instead, the government is operating in reverse by deciding, as a political measure, the first leg, and then trying to mould a network around it. Through this approach, it will render the first stage of light rail a white elephant and ruin for decades any prospect of light rail expansion to other parts of Canberra…

As such, light rail should be delayed until the economics of the project are viable.

Coe’s views of course echo my own concerns with the ACT light rail project, which have been expressed multiple times on this site (see here).

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The project only came to fruition because Labor lacked the numbers to form government and needed to gain support from the Greens sole MLA, Shane Rattenbury, who held the balance of power. And the 12 kilometre rail link from Gungahlin to Civic was the price paid.

As is often the case with such ill-conceived projects, it is already facing significant cost blowouts due to the exorbitant costs of relocating underground pipes and wires, as well as trees.

Moreover, in a desperate bid to make the project more viable, the Government has flagged route changes and directing development along the rail line. So instead of being a way of complementing the existing urban structure, the Government plans to forcefully change the urban structure via regulation in order to ‘force’ citizens to use the project and improve its viability.

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As argued previously, Canberra is totally unsuited to light rail, as it lacks the population base or density to make such a project viable from either an economic or social perspective. According to Coe, the Government’s own figures forecast that only 4,500 commuters will use the service each day. So while light rail will operate near peak capacity during the hour-long morning and afternoon peaks, it will be severely underutilised for the other 22 hours of the day and on weekends.

Surely, if the Government was truly concerned about improving public transport options across the capital, rather than only along this narrow 12 kilometre strip, then it would expand the existing bus service across the entire city, and save significant taxpayer expense in the process. Such an option would also be far more equitable than forcing taxpayers everywhere, other than along the Gungahlin to Civic corridor, to subsidise a dubious project to which they gain little benefit (either directly or indirectly).

No amount of spin can polish this infrastructure turd, and the ACT Government should immediately cut its losses and abandon the project before more taxpayer funds are wasted.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.