Melbourne airport rail link another costly waste

By Leith van Onselen

Last week, I questioned the efficacy of the announced $10 billion rail link connecting Melbourne airport to the CBD, noting that:

  1. the cost of a rail ticket is likely to be exorbitant, since Melbourne Airport’s private operators are likely to impose significant rental charges on any railway station that is built on their land (as has occurred in Sydney);
  2. the rail link is likely to be significantly underutilised, since it is suitable only to tourists and those living in the CBD; and
  3. the existing SkyBus system could be expanded at much lower cost to taxpayers.

Since its announcement on Thursday, other commentators have also questioned the project’s merits.

Infrastructure Partnerships Australia chief executive, Adrian Dwyer, is also concerned that the ticket cost is likely to be excessive:

“Ticket sales alone will not be able to support the construction and operation of the airport rail link, meaning the commonwealth will need to put hard-­dollar grant funding on the table to keep fares affordable”…

“For the airport line to be well used by the community and to open up the areas surrounding the precinct, ticket prices will need to be accessible and attractive to consumers”…

Of course, keeping “fares affordable” means taxpayers providing operational subsidies as far as the eye can see, which comes on top of the proposed $10 billion cost to taxpayers to build the project.

The Guardian’s Greg Jericho is even more sceptical:

…those who use the airport will like it, but despite the prime minister’s claims that “everybody in Melbourne uses this airport” the reality is they don’t and not in sufficient numbers that will see the benefits from a rail link be widely spread.

The prime minister argued that the rail link will be a “congestion-busting piece of infrastructure” and yet it is unlikely to do much…

A study for Infrastructure Victoria by KPMG-Arup and Jacobs concluded that that the project will “have minimal impact on overall demand for road and public transport” and that as result the main beneficiaries would not be users of the Tullamarine Freeway but rather “travellers and people accessing Melbourne airport for leisure purposes”.

Similarly, as Infrastructure Victoria noted in its 30-year plan, the optimum need for link will be in 15 to 30 years’ time – with the economically optimal opening year for such a rail link estimated to be between 2036 and 2039…

But the project is popular – not surprisingly Bill Shorten quickly came out in support of the proposal – and in a pre-election budget, popularity rather than economic need will take precedence.

As I noted last week, there are far many other infrastructure projects far more worthy of $10 billion of taxpayer funding (let alone ongoing operational subsidies). A good start would be to examine Infrastructure Australia’s Priority List:

As you can see, an airport rail link is nowhere to be seen.

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  1. The recently built 47.5 km long Regional Rail Link in Vic cost A$3.65 billion, so it is a load of corruption to say that a much shorter railway to the airport must cost A$10 billion.

    The Gotthard Base Tunnel is 57 km long and allows 250 km/h speeds but still only cost U$12.3 billion. It was also built through very heavy mountains and very hard rock. Much easier to construct a tunnel when there is no mountain above.

    No tunnels will be required to build the airport railway – just build an elevated railway atop the existing Albion Goods Line and have 200 metre long trains like London Crossrail.

    As for ticket prices, the braindead Greens need to demand that the state buy back the airport. Why have the same rotten policies as the psychopathic LNP?

    • The Gotthard tunnel is my goto comparison when it comes to Australian infrastructure and pork barrelling. And Switzerland is a first world country, so unless they entirely outsourced the labour to Albanians (not impossible I know) the unit costs for labour should be not much different than Australia.

      Why is Australia so much less efficient? Pervasive incompetence and corruption I’d guess.

      • ajostu, when MB did an article on the airport railway last week, one person on this website replied to me and said “it is easier to bore through granite than it is to bore through soil”! 🙄

        Labour probably only makes up 10-20% of the cost of building a tunnel – but I am not sure.

        Tunneling would not even be needed for the airport railway. You could do it for the same price as the RRL or the ongoing skyrail.

      • “it is easier to bore through granite than it is to bore through soil” may be a simplification, but it is easier to support the ground and thus faster to construct tunnels that are located in granite compared to soil.

      • ResearchtimeMEMBER

        Its way over simplification… every job is unique, from the rock type, to the ability to get rid of the mullock, noise pollution, dust suppression, power inputs and the like. These particular tunnelling jobs are highly specialised. Know a couple guys who build projects from Hong Kong to Scotland, for a variety of primary outputs. Sometimes rail, sometimes car tunnels, sometimes just sewage! You cannot compare a tunnel in Switzerland to the cross tunnel project in London. For a starter, numerous archeological sites and stoppages. And you certainly cannot compare a tunnel in Switzerland with a freeway project in Australia. Comparison in costs is utterly futile.

        The danger of these incredible over implication of costs, which I know we all love to do – is that it detracts (a) from the need; and (b) the site specificity. These jobs are typically tendered for, multiple bidders (international companies for the big projects) have detailed contracts, each company undertakes massive due diligence, spending millions per proposal. For one large mistake, could cost the company its existence – as he case recently in the UK (and its basically how these guys go bust). Moreover, margins on the cost of these projects are typically single digits (although to be fair they often have double digit budget initials, but always cost over runs).

        Its not an either situation. MB, in particular a single contributor, has opposed virtually any major infrastructure project publicly proposed. In my experience, its easy to be negative, and be the expert on the spot and point out the obvious flaw and its alternative, that no else could possibly see, and be the genius. It gives one a nice warm fuzzy feeling.

        But this is the rub – (i) do you want to I’ve in a first world country, with infrastructure that works?; (ii) do you want personal and economic efficiencies to be collective (no one wants to spend two hours getting to work, their are economic costs involved); (iii) do you enjoy being employed, with a strong economy, with a future for your kids?

        This nonsense on the cost is an irrelevant argument. Given any projects approval, its unlikely that any other party could do the project materially cheaper, as long as the bidding process is fair and transparent.

        We are a growing country, and there are monetary costs involved. With expected infrastructure lifespans of hundreds of years, in reality, you don’t have a choice in building many of these projects, nor can one fully account for the economic benefit tech project supplies. They are an economic reality and necessity.

        Australia has been doing economic growth on the cheap for a decade or more – but eventually, we pay. We need to build this country.

    • HadronCollision

      there is the inconvenient fact , when doing the suburban rail of
      1. acquiring much more expensive land/properties
      2. the time (and therefore cost factor, wages etc of project workers) for planning, acquisition, EIS etc etc

      • The Swiss tunnel took 10 years to build. So there goes your time = cost argument.

        No land needs to be acquired. Just use the existing Albion Goods Line and existing RRL. You probably reside in NSW and do not know the area.

        An elevated railway is under construction in MEL called Skyrail atop an existing railway, so no land needs to be purchased – look at the 3rd photo:

      • HadronCollision

        I am actually from Victoria. I grew up in the Macedon Ranges.

        Time = cost. What are Swiss wages like compared to us.

        Work harder on the snark comrade.

        I am not denying the pork factor.

        This should be built. Return all the fecking car parking to developers to develop medium density dwellings around the place.

        Then you wouldn’t need to park in Romsey and catch a shuttle. Thought they’ll need a watering hole, because there’s not even a pub in Romsey anymore. How’s that for local knowledge brother.

      • HadronCollision, there is a mantra in engineering:

        Cheaper, sooner, better – pick 2.

        You are just coming up with your own theories.

        Oh, you are blaming it on wages? The first comment under this article says the Regional Rail Link in Vic was completed in 2015 and only cost A$4 billion. The RRL is quite long – 47 km long. The $10 billion figure is ridiculous. Building it slowly over 10 years would make it cheaper – perhaps that explains the price tag: they left it to the last minute (even though it was on the cards since the 1960s!) and building it rapidly will cost a fortune.

    • gballardMEMBER

      I am in total support of your view Jacob. I was going to make somewhat similar comments but no need – you have done it!!!

  2. Express buses Southern Cross station….dedicated lanes.
    Everyone compares Sydney but airport sits on pre-existing rail line so really just another station.
    Heaps better stuff to do with this much money.
    Priority to fixing West Gate car park and genuine high speed rail to regional Victoria.

    • HadronCollision

      Hello tourist from Europe Japan China etc

      Do you a) want to catch a bus or b) a nice new train straight to the (Casino).

      • Tourist from China? I would say “soon-to-become-a majority-Chinese dear citizen”, do you want train or bus or private car to your destination in this colony of yours?

  3. The road to Melbourne airport was widened in 1999. It was controversial at the time because an existing public road was handed over to a private company and made into a toll road. There were rumours at the time that the contract contained a secret clause preventing the building of a rail link for N years into the future. It would have been a lot more cost effective if they had just built the rail link in 1999 and not bothered expanding the road. I am willing to bet that at least one billion of the $10bn price tag is for knocking down houses that didn’t exist in 1999.

    • A lot of people don’t seem to ‘get’ the population diseconomies of scale (as MB puts it).

  4. A 10 billion price tag project and there is no additional analysis whether a portfolio of projects worth 10 billion dollars delivers a much better outcome and value to the community of Australia. Where is that analysis?

  5. Imagine the number of stadiums you could build for a lazy $10 bn. These people aren’t thinking straight.

  6. A seriously stupid proposal.
    I suspect that the business case depends on patronage from ex-defence land, I think still currently for sale. Explains the Commonwealth interest in putting money on the table out of nowhere.

    All that is needed is a spur line from Craigieburn to Tulla, as has been proposed for many, many years, Probably still expensive but nowhere near this folly.

  7. I smell fake pork!
    It’s only pork to the builders and their employees (who will includ backpackers, 457’s and maybe a few Australians) and probably those who use it, although NSW slugs the pepople who use the airport rail link with huge fares compared to the stop 2km away.

  8. Massive waste of money. Will be contracts for mates (corruption), just like east-west tunnel, myki, etc.

  9. Sitting in the queue of taxis nearly back to the ring road at 6am on any given weekday morning sucks balls.

    Taking a solid hour to get from Tulla to the city in a taxi on any pre 9 am flight sucks even more balls.

    Bring on a rail link, no idea why it has to cost 10 billion though.

    • A billion for the build and the rest to various parasites, insiders, cronies, middle-men and coupon-clippers. Everyone needs a piece of the action.

  10. UE you might note the only significant project south of the Murray in your list is the Western Ring Road. With population growth you might think there would be more on that list from down here.

    • And given the speed with which these things get built if we need it in 15 years we had better start today!
      In all seriousness the most expensive proposal puts a new train line from cbd to city extremity for first time in 100 years. If they wont turn off the immigration tap then they had better spend up on infrastructure. If tulla link no good theres the Doncaster rail line Rowville … 50 years of broken rail extension promises waiting to be fulfilled. And interest rates are at gene ational lows so secure the funding begore rates go up!

    • Oh dear. Surely replacing the cladding would cost less than that depreciation?

      Edit: OK, now I have read the article I see it is the usual problem – none of the big players who are to blame want to pay.

    • Arrow2, Gordon Ramsay’s Maze and Maze Grill in MEL went into liquidation in Aug 2011.

      Here is an interesting one for you, one of the best restaurants in LA is at a petrol station:

      You could be right in saying that Gordon and Jamie might have been one of the few in this town to not steal wages from their staff and therefore could not compete against restaurants that do steal wages. But maybe they could have opened their restaurants in suburbs where rents are much cheaper.

  11. ceteris paribus

    When has infrastructure ever been about rationality. It is a bread and circuses routine.

  12. the cost of a rail ticket is likely to be exorbitant

    Indeed, especially compared with taking the 901 bus to Broadmeadows and then the train to the city. Putting a rail line to the airport would put that option at risk. People who don’t like paying through the nose would rather things stay as they are. Spending money on the Western Ring Road would provide a lot more benefit to a lot more people.