It seems you can’t keep a dumb idea down. Just when it appeared that the Rudd Government’s pie-in-the-sky high speed rail (HSR) project linking the major East Coast capitals died with the former Government, the Abbott Government has sought to resurrect it. From The Australian:
THE push for an east coast, high-speed, rail link has received a boost, with the Abbott government holding a series of high-level meetings with Japanese, Chinese, Spanish and French rail companies in Australia and abroad.
Trade Minister Andrew Robb said the talks had included discussions on financial models to make the project viable, despite its hefty estimated price tag of $110 billion and the government’s fiscal constraints…
Mr Robb’s comments reveal the Coalition is continuing to explore options to build the project, provided it can be predominantly privately funded, and the government has committed to trying to purchase the identified land corridor for the route…
Travel times for Melbourne-Sydney and Sydney-Brisbane would be less than three hours. For the project to be viable without subsidy, the highest ticket prices would need to be about equal to a business-class flight, about $300-$400 for the Melbourne-Sydney sector, proponents say.
…the Japan Bank for International Co-operation was willing to fund the project if the Australian government was prepared to underwrite a certain minimum level of patronage.
Let me reiterate my view of why a HSR line linking the East Coast capitals makes little sense on either economic or social grounds.
Cost:
In Europe and Asia, with high density populations, HSR can work well. But in a large, sparsely-populated country like Australia, it makes little sense.
It is around 2000 kilometres Melbourne to Brisbane. Even if we assume that the population doubles by 2050, then we are still only looking at a catchment of around 22 million people along the route, versus hundreds of millions in Europe or Asia. Put simply, finances will never work on this project
Indeed, the Stage 2 feasibility study, which was completed in April 2013 by the High Speed Rail Advisory Group (the body tasked by the former Labor Government with overseeing the eventual building of a high speed rail line) found a high-speed rail link along the East Coast would cost taxpayers a whopping $114 billion (in 2012 dollars). That’s a price tag of nearly $5,000 per man women or child, or nearly $9,800 per employed person.
Further, to be competitive with air travel, ticket prices would need to be at least comparable with a discount plane ticket – say $100 between Melbourne and Sydney. This means it would be highly unlikely that HSR would ever be able to pay back, or even significantly offset, its cost of construction, with ongoing operational subsidies also likely as far as the eye can see.
Convenience:
The route between Melbourne and Sydney is roughly 900 kilometres, which would require an average travel speed of around 300 kilometres per hour to make it within the claimed three hours.
Proponents argue that HSR would be a ‘game changer’ for regional communities along the route, suggesting that the train would need to stop at these locations. But the more stops that are included in the route, the slower the trip, making the three hour promise seem little more than a pipe dream.
For example, if the HSR train stopped just six times between Melbourne and Sydney, it could add up to one hour to the trip, assuming 10 minutes per station (including slow down, boarding, and acceleration times). If this was the case, then the Melbourne to Sydney HSR journey would slow to four hours, making it even less competitive against air travel.
Further, some of the time savings noted by proponents are spurious. They often mention airport travel and waiting times as costs disadvantaging air travel, but conveniently ignore the time and cost associated with traveling to/from the CBD to board HSR (most of us don’t live near the CBD, after all).
Equity:
HSR is not mass transit. It is corridor transit. At best, it is a niche market serving predominantly a highly specialised, relatively wealthy, and narrow customer base (i.e. high-income business travelers and tourists). It will do little to relieve urban traffic congestion and its contribution to improving air quality (or reducing carbon emissions) will be negligible because it is unlikely to carry enough riders to make much of a difference. These factors undermine HSR justifications based on public good arguments.
For the tens-of-billions cost, Australia could probably fix-up most of the infrastructure in Australia’s cities and major towns, and/or build world class freight infrastructure, providing a much bigger productivity pay-off in the process, whilst also improving living standards for a wider share of the population.
Moreover, why should residents in Adelaide, Northern Queensland, Darwin, Alice Springs, Hobart, Perth, or a range of other regional towns not located near the line be called upon to fund (via their taxes) a massively expensive project that provides no benefit to them and minimal (if any) productivity benefit to the nation?
Conclusion:
Sound infrastructure investment is all about weighing-up alternatives and choosing projects that deliver the biggest social/productivity pay-offs per dollar spent. HSR looks likely to fail this most basic test, and smells like another one of those dubious big ticket pet projects that politicians and greenies love, but leaves taxpayers and the economy significantly worse-off.
It is exactly the opposite of what Australia needs if it is to rebuild its competitiveness. If the Coalition goes ahead with the project, Abbott will likely go down as the “infrastructure pork Prime Minister”.
