Melbourne’s $13b slow train to the airport

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By Leith van Onselen

Yesterday I lashed the proposed $10 billion-plus light rail line to Melbourne’s airport, which has received funding commitments from both the federal and state governments, arguing that it represented a massive waste of taxpayer money.

My concerns centre around the following key issues:

  1. The cost of a rail ticket is likely to be exorbitant, given the monopoly airport owners are likely to impose significant rental charges on any railway station that is built on their land. For example, the rent imposed by Sydney Airport is such that it costs $8 just to travel 90 seconds from the last station outside of its control to the station at its domestic terminal.
  2. Infrastructure Partnerships Australia believes that ticket sales alone will not be able to support the operation of the airport rail link, meaning operational subsidies as far as they eye can see, which comes on top of the proposed $10 billion cost to taxpayers to build the project.
  3. 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”.
  4. The existing SkyBus system could be expanded, thus providing similar service at much lower cost to taxpayers. SkyBus could also be improved by giving it a dedicated road lane during peak periods at considerably lower capital and operating cost to taxpayers than building an airport train.
  5. Other than tourists and those living in the CBD, I can’t envisage many locals actually using an airport rail link. Why? Because they would still need to get to the CBD, where the cost of parking is equally exorbitant as the airport. This means they would either have to carry luggage on the public transport network, or catch a cab to the rail link. In which case, why not just go directly to the airport and avoid the changeover hassles?

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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.