Former chief minister opposes ACT light rail pork

ScreenHunter_06 Jun. 06 09.33

By Leith van Onselen

Former ACT Chief Minister, Kate Carnell, has joined the growing chorus of people against the ACT Light Rail Project, arguing that the population density along the proposed rail route linking Gungahlin in the North and Civic is far too low to make the project viable. From The Canberra Times:

[Carnell said] a price tag of $614 million for the project risked detracting from other infrastructure development in the capital…

“I think it’s a great idea but we just couldn’t make it work 10 or 15 years ago, and I give you Canberra is a bit bigger now but it’s not bigger all along that route,” she said…

“If what it means is the ACT government literally shoveling money into this project forever and a day, that would be very concerning,” she said.

It is important to once again remind readers that the ACT Light Rail 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.

As argued previously, the light rail project is a textbook case of infrastructure pork barreling, and is exactly the kind of project that Australia does not need if is to alleviate its infrastructure deficit and raise overall productivity and living standards.

Canberra lacks the density to make light rail viable from either an economic or social perspective. The city is highly decentralised, with its small population spread-out around six primary centres: Civic (the tiny CBD), the Parliamentary Triangle, Belconnen, Woden, Tuggeranong, and Gungahlin (where the rail line is proposed to travel to).

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. 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).

The Productivity Commission made similar arguments in its recently released report into the provision of public infrastructure:

The ACT Government’s decision to proceed with a light rail project appears to be an example of where the results of cost–benefit analysis have been ignored without a valid explanation…

In a submission to Infrastructure Australia in 2012, the ACT Government analysed a number of options including bus rapid transit (BRT) and light rail rapid transit (LRT). The analysis estimated that the upfront capital costs for the BRT and LRT would be $276 million and $614 million respectively (on an undiscounted basis) (ACT Government 2012).

In its economic appraisal (which is essentially a cost–benefit analysis), the ACT Government found net present values of $243.3 million for BRT and $10.8 million for LRT. The benefit–cost ratio for BRT was estimated at 1.98, with 1.02 for LRT. In the assessment, the benefits of BRT and LRT were similar ($491.8 million against $534.9 million respectively), but the cost of BRT was less than half that of LRT ($248.5 million against $524.1 million, when discounted by 7 per cent). The cost–benefit analysis took into account a range of factors including journey times, and avoided environmental impacts and accidents (ACT Government 2012)…

In summary, a cost–benefit analysis showed BRT to be a greatly superior option than LRT…

While it won’t admit it publicly, the ACT Government knows that light rail is an uneconomic dud, which is why it is attempting to force people to relocate along the rail corridor in order to boost the Project’s viability, thus putting the cart before the horse:

“Spot rezoning” will be used as the ACT government plans for at least another 45,000 residents along Northbourne Avenue while land and buildings will be sold to increase density and commercialise the corridor, alongside works for the 13-stop tram line.

ACT Light Rail is a classic example of what happens when political motivations are placed ahead of the public interest. If the Government had any decency, it would cut its losses and abandon the project before more taxpayer funds are wasted.

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Unconventional Economist
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  1. there is one more news related to current ACT Chief Minister:

    “What if I did nothing with that information and it was later found out that I’d just ignored the fact that someone had sent me an email saying they were administering a prohibited substance to a young child?”

    If she did nothing she might have one day, (when the unjust law gets abolished) been regarded as a hero for saving life by not adhering to unjust law.

  2. Perhaps it might be even better to understand why light rail projects are more expensive than they need to be.

    Of course something is going to be uneconomic if the price is artificially high.

    And if the price of one of the alternative options being considered for economic analysis is artificially high, the analysis is flawed in any event.

  3. If the ACT pollies need a useful project to keep them busy they could try this.

    1. Simplify and reduce restrictions on how land is used across the territory to the bare minimum.

    2. Remove the first user pays all the development cost of new land model.

    3. Establish some express bus lanes with priority lighting at intersections.

    4. Impose LVT on all new lots bought to market.

    Sit back and observe what people do uninhibited by the obsessions, personal preferences and general control freak tendencies of the town planning fraternity.

    If they choose to cluster along the bus routes in medium or high density housing that will allow more bus services and perhaps eventually light or heavy rail. What is more the LVT will be generating the funds required.

    If they choose to live in the burbs and beyond without easy access to single origin baristas and commute in cars, fine – that is their choice.

    And if that is not enough they can do an investigation into the gouge fest that is involved in constructing light and heavy rail in NSW.

  4. JacksonMEMBER

    I’d suggest it’s the Greens member that needs to be called out here. Those numbers are ridiculous, how can he justify a decision that has a $250M implication for his constituents?

    • Sure the numbers are ridiculous. However, should we not be first calling out those who are proposing the numbers in the first place? How about we stop the over engineering and profiteering, and then if the numbers don’t make sense, chase up the politicians?

      If we stop the over engineering and profiteering, then maybe the cost benefit analysis might make sense.

      At the moment, it is garbage in, garbage out.