After stupidly calling for mass privatisation of public monopoly assets, Infrastructure Australia (IA) has now backed a High Speed Rail (HSR) line linking Sydney, Canberra and Melbourne. From The Canberra Times:
Now, Infrastructure Australia is warning that a failure to act soon by state and federal governments might make the project much more difficult and expensive to realise.
Rapid growth on the fringes of Melbourne and Sydney threaten to add billions of dollars to the cost of building a high-speed rail line between the two cities, Infrastructure Australia warns.
IA says the governments of NSW and Victoria should get in early and buy land along the proposed rail corridor now, at an estimated cost of $720 million, or pay more than $3.5 billion later.
The agency says a failure to protect the corridor within the next three to five years could do serious harm to a project that will become vital given the populations of Melbourne and Sydney are projected to double by 2060.
In its report Corridor Protection, Infrastructure Australia says very fast trains could be running between Sydney and Canberra within 15 years and to Melbourne five years later.
Those indicative dates are based on work beginning on the main Sydney-Melbourne route by 2024, with a Canberra link to open by 2032…
Infrastructure Australia chairman Mark Birrell said New South Wales, Victoria and the Commonwealth had to commit now to acquire the land on which a high-speed rail line for Australia’s east coast will one day be built.
Otherwise Australia could blow its chance to build a link for the benefit of future generations.
“It requires governments over the next three to five years to put aside funds which will reap a long-term return,” Mr Birrell said.
I have explained many times (e.g. here and here) the reasons why I do not support the HSR proposal, namely:
- The exorbitant cost associated with building and operating the rail line;
- Lack of population density to support the project;
- Lack of competitiveness against air travel unless there are massive ongoing operational subsidies from taxpayers; and
- Equity issues if taxpayer funding is used: why should residents of WA, SA, NT, TAS or anywhere else not located along the route fork-out huge taxpayer subsidies for what will in all likelihood be an infrastructure white elephant?
The proposal put forward by CLARA suggests that the HSR line could be funded via value capture. However, in order to make value capture work, the train would have to make too many stops – making it a high-speed train that moves at a snail’s pace.
The HSR project would also likely require heavy taxpayer subsidies. As noted by Peter Thornton in April, “there has not been one project or high speed rail organisation that has not either needed significant government financial support upfront or been bailed out once in operation and that includes the four biggest systems built to date in China, France, Spain and Japan”.
Another key issue relates to the fare structure. To encourage people to move to regional centres and then commute into the CBD for work would require fares to be kept relatively affordable, which would in turn require heavy subsidies from the government. After all, there’s little point moving from, say, Melbourne to Shepparton, and saving $300,000 on a house, if it costs you $300-plus a week to travel into the Melbourne’s CBD via HSR.
Finally, a huge problem with the HSR proposal is getting from the outskirts of Sydney and Melbourne into the CBD. These trains are not compatible with suburban commuter trains unless they slow to the same speeds due to alignment, level crossings and congestion. The current train commuter systems in both Sydney and Melbourne already can’t cope with demands and imposing a HSR network is cost prohibitive and not practical. Moreover, a dedicated HSR line through some of the most expensive real estate in the world (or tunelling under it) is a nonsense dream.
In short, I can’t see how HSR adds up economically or financially.
Here’s a novel idea: instead of making Sydney’s and Melbourne’s populations double by 2060 by force-feeding mass immigration, how about slashing Australia’s immigration intake back to the historical average of 70,000 from 200,000 currently, thereby forestalling the need for expensive new infrastructure projects?
