How important are the regions for HSR?

HSR - passenger loadings 2036 (from High Speed Rail Study - Phase One Report)

The exhibit above is one of the ‘money’ graphs from the High Speed Rail study – Phase One report released on Thursday by the Minister for Transport, Anthony Albanese. In my last post, I concentrated on doing a broad but quick response to the report and questioned the wisdom of spending mega dollars on a project that doesn’t reduce either travel times or the cost of travel.

Now I want to start exploring some issues the report raises. One of those is that, up to this point, the focus of the HSR discussion has largely been around travel between major cities, especially Sydney-Canberra-Melbourne, with some residual claims for regional development (see Categories in the side pane for previous posts on HSR).

The Phase One report however shows regional trips are a very large component of the travel forecast on the complete Brisbane to Melbourne HSR network in 2036. In fact regional travellers – those who are journeying between regional areas and one of the major cities – comprise an extraordinary 75% of forecast demand in 2036 (see exhibit). These are the sorts of trips that are almost all currently made by car. A significant proportion are also “induced” trips – in the absence of HSR and the greater accessibility it provides, they wouldn’t otherwise be made.

Only a small proportion of regional trips are for business purposes. The vast majority – 85% – are for private or leisure purposes i.e. to visit friends or relatives, holidays, entertainment, sport, shopping, education, personal or health-related purposes. The study assumes leisure passengers will pay a lower fare than business travellers (who are concentrated on the inter-city services, e.g. Sydney-Melbourne, where they account for 50% of passengers).

Regional trips are also shorter on average (they comprise half of all HSR passenger kilometres), so the contribution of regional travellers to total revenue is much lower than their 75% share of patronage. Even so, as with airlines at present, their contribution is vital.

There are a number of issues raised by the high level of forecast regional patronage. One is that leisure travellers are sensitive to the cost of travel. The study assumes HSR fares are pitched a little lower than air fares, but if this assumption proves optimistic the demand for HSR could be much lower. Unfortunately there’s no estimate provided for regional travellers, but for inter-city travel the study says a 10% increase in fares will reduce patronage by 10%, and vice versa.

In estimating demand, the study compares the cost of travel by HSR between the regions and the major cities against the car, but doesn’t allow for the usefulness of having a car when travelling within the big smoke. HSR will certainly suit people going (say) from Seymour to the MCG – they can drive to their nearest HSR station (they’ll be about 100 km apart in the regions), disembark at Southern Cross and take a local train/tram combination to get to the G. If however they’re not going to the city centre – perhaps they’re attending a wedding, a party or staying overnight with one of the 90% of the population who lives more than 5 km from the CBD – they might prefer the convenience of having a car for travel within Melbourne.

The car will be a more attractive option the closer regional residents live to the city, although anyone familiar with Canberra will know of the large numbers of young people who commonly drive to Sydney on weekends. Another thing to note is car occupancy for leisure travel is much higher than it is for commuting (where solo driving predominates). Two people travelling (say) to Sydney from Gosford for a concert would pay $26 each per one-way trip on HSR i.e. a combined total of $104 to get to and from Central station. Once the novelty of HSR has subsided, driving could be a more attractive alternative for many.

The big issue to my mind though is just why we as a society would want to spend so much money to improve the leisure travel options of regional populations living along Australia’s east coast. Doubtless they deserve it and would appreciate it, but they already have pretty reasonable travel choices. Last time I drove the Hume Highway from Sydney to Melbourne (about five years ago) it was divided carriageway practically all the way. Large centres like Wagga Wagga and Albury-Wodonga have pretty good air connections to Sydney and Melbourne. There’s already (an admittedly slowish) train service connecting Brisbane, Sydney and Melbourne.

Some will put the decentralisation argument and there’s no doubt HSR would make regional life more attractive. However it has limited potential for commuting other than in the Sydney-Newcastle corridor (where a massive additional subsidy is assumed e.g. the non-business HSR fare from Gosford to Sydney is $26 one-way but the commuter fare is $14.25). I’ve argued before there’s little serious decentralisation potential in HSR. I don’t think this report changes that broad conclusion, however I will look at that topic again shortly in the light of the new information in the study.

Most importantly, it’s not hard to think of other ways money on this scale could be invested to produce a higher social dividend. Improving public transport in the capital cities would provide big economic benefits for business, commuters and leisure travellers – I expect it could provide a more equitable outcome, too. Or the funds might be spent on social policy, on education or on improving the nation’s response to climate change. Perhaps it could be applied to accelerating the transition from coal-fired electricity to cleaner sources of energy – a much more cost-effective way of addressing carbon emissions than HSR.

In fact I wonder if there’s a risk HSR could actually make regional populations elsewhere worse off by prompting airlines to reduce the frequency of country air services. For example, to the extent the lucrative east coast corridor currently enables airlines to cross-subsidise marginal country services in other parts of Australia, competition from HSR might actually lead to cost-cutting elsewhere, or provide an excuse to reduce services. At the least, a reduction in services on trunk routes could make it harder to make connections to country flights. This is an issue I’ve previously suggested should be looked at in the current study and I trust Phase Two will look closely at the impact HSR would have on aviation in this country.

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8 Comments on “How important are the regions for HSR?”

  1. Although HSR I think in principle is a good idea, there are certainly other things you could be doing with the money. One thing that could be done is to upgrade the track speed from Melbourne to Sydney, or at least most of the track, say Craigieburn to just outside Sydney. The XPT train which runs this service has a top speed I believe of 160 km/h, which could improve the trip time to more like 6-8 hours rather than the current 11 hours. Although they are only just investigating a near fatal incident on this line and the condition of the track is so notorious it was mentioned in 730, so an upgrade may not be an easy task.

    Another blog post i would recommend to readers of this blog is an article about so called medium fast rail at http://transporttextbook.com/?p=1428. This post details the time improvements possible with only slight speed improvements on lines in regional Victoria and NSW, say from an 80 km/h average to 120 km/h.

  2. Johnyboy says:

    Again I think that whole proposal is technically wrong. We have alot of congestion in melbourne. I have lived in sydney and find the same congestion problems even in the regional areas just outside of sydney. This congestion is not only a cost to business but also a time cost to our lives. Just because the other countries have excepted congestions as part of city life , it does not mean there are no solutions. The money needs to be invested in the cities but not like it has been done before.

    No more stupid road tunnels.

  3. Russ says:

    Alan, one thing about reduced costs. The obvious advantage of a train is that it allows a business traveller to continue working whilst travelling, which is more difficult (or at least constrained) while travelling to and from an airport, or while on a plane. That value potentially offsets a higher fare or longer journey. Which brings me to the regions…

    It is technically impossible to have a HSR do a trip in less than 4 hours and have it stop more than, at most, once (somewhere in the Albury or Wagga area) en-route from Melbourne-Sydney. That includes skipping Canberra for most services as it requires a 100km diversion (about 1hr). That doesn’t preclude regional travel, the French system is a network of direct full-speed services and regional connections that run at ~150-200km/h on normal lines before joining the main track. But there is very little value in stopping a train with a 40km acceleration distance at Seymour (over both a car and the existing train service), and any study searching for regional value will fail in the same way as the ones that went before.

    I agree too, that the chances of decentralisation being led by the HSR are very low. That said, assuming there is a HSR hub in the Albury/Wagga region for Canberra and regional service connections, then it would also be an excellent spot for an international airport that served Melbourne, Sydney and Canberra for Asian destinations. Being closer, the total travel time would be broadly similar, but reduce fuel usage and passenger inefficiencies from split destinations (good for the airlines, and therefore flight costs). Unlike HSR by itself, that kind of facility would create a regional boost – freight and logistics, conference centres, hotels and so forth: probably in the order of 10-20,000 jobs. Add 10-20m trips to the projections for the HSR in 2035 and the numbers start to look a lot different.

    • Alan Davies says:

      I would love to see a good study of how much real work actually gets done by business travellers on planes and trains on short legs like 3 hours and, to the extent it does, who in the corporate hierarchy does it. I suspect the amount done is commonly over-estimated, especially in business class, and when it is done a lot of it’s reading – and that can be done well enough on a plane.

      Re your point about regional trains, the report assumes 29 Sydney-Canberra-Melbourne services per day in 2036, of which two would operate per hour in the peak.

      It assumes an additional 18 regional services per day, of which two would also run per hour in the peak, between Canberra and Melbourne, with two intermediate stops, one in the Riverina/Murray and one on the periphery of Melbourne.

      There’s also another 38 regional services between Canberra and Sydney (again with two per hour in the peak) with an intermediate stop in the Southern Highlands and another on the periphery of Sydney.

      So it looks like the regional services will be more like your example of the French regional connections.

      • wizofaus says:

        Alan you need to take the train from, say, New York to Boston one day. A walk along the aisle is enough to see a very respectable percentage of business people working on (online) computers that are obviously not at the lower rungs of the corporate ladder.
        I could definitely envisage that sometime within the next couple of decades once the populations of Sydney and Melbourne reach critical levels (especially if the economic feasibility of air travel becomes problematic), a train service that takes even 5 or 6 hours but allows people to use the travel time productively could be popular enough with business travels to make it profitable. The question is only really at what point it makes sense to start building it. A lot will change in the next two decades.

        • Alan Davies says:

          What I’m thinking of is First-Business class travel on domestic planes, but I also have in mind the New York-Washington DC train which I took two years ago (BTW the demand for ‘quiet’ carriages where mobiles aren’t permitted is pretty high). My contention is the higher the level in the corporate hierarchy the lower the likelihood, on average, the traveller will use electronics of any form in-cabin/carriage. .

          • wizofaus says:

            Well it’s possible, but I’m not sure why it’s strictly relevant, as long as there are enough business travellers (willing to pay for business class facilities) for whom the advantage of being able to work for the entire journey time offsets the potentially total longer travel time. Out of curiousity, do we have an idea how much less a VFT would cost if we were only aiming for, say, 200 km/h average speed?

      • Russ says:

        Alan, I was actually thinking the main difference is uninterrupted time. 3 straight hours on a train is a lot better than 1 hour on a plane, and a couple of 10-20min bursts in taxis/waiting rooms.

        The value of being connected is an interesting question. A fair chunk of travel is done by sales people who certainly would, but I suspect you are right about the upper hierarchy. I’ve seen a lot of business travellers on the phone right up until they pass through the plane gate, and the fact that people would request an area without mobiles indicates a significant portion of people are doing the opposite. But whether that is worth more to them than an extra hour in the office (or bed) before-hand?

        Re: regional travel. I am glad it is being assessed much more sensibly than previously, but I still maintain stopping in Canberra is missing the point of having a fast train.


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