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. Read the rest of this entry »
I’ve had an admittedly rushed look at the Executive Summary of the High Speed Rail Study – Phase One, released today by the Minister for Infrastructure and Transport, Anthony Albanese. I’ll have a closer look at the full report shortly, but for now here are a few initial thoughts.
Today’s report is Phase One. It looks at infrastructure costs and forecast patronage. The really important bit – the analysis of the benefits and costs and how the project might be financed – must wait for completion of Phase Two. So for the moment difficult questions like “is HSR a good idea?” are side-stepped.
This study was done partly because The Greens and Independents required it be done. But given how popular the idea of HSR is, it could be up there with the NBN as one of the Government’s smarter moves politically. One way or another the Government’s going to support it and find a way to make it look plausible. After all, it reeks of ‘vision’ and no significant outlays will probably be required for at least two terms. But the risk is it won’t be examined seriously.
Mr Albanese is certainly talking up HSR. He is quoted as saying high-speed rail would be an “attractive alternative” for many, particularly those fed up with airport scanners introduced after the 9/11 attacks. It’s a pity he didn’t see recent reports of Al Qaeda’s interest in trains or recall the Madrid train bombing.
As is now seemingly obligatory, Mr Albanese also cites the success of the AVE system in Spain in support of HSR. ”In Spain, the line between Madrid and Seville is so popular, it carries more people between those cities than cars and airplanes combined”, he says. I’ve pointed out before that AVE is a questionable analogy, at least for routes like Sydney-Melbourne and Sydney-Brisbane – Madrid has a population of 6.5 million and is only 391 km from Sevilla.
The report says the estimated cost for the most likely route between Brisbane and Melbourne is a cool $108 billion – and there’s a 10% chance it could be higher (ignore the lower $61 billion figure published in the media as there’s a 90% chance it’s too low). These estimates don’t include planning and procurement costs – so add another 15% – and nor do they include the cost of buying and operating the rolling stock.
The estimated cost for the Sydney-Canberra-Melbourne leg is a whopping $45-$50 billion, depending on whether it goes via Wollongong. And of course, add procurement and operating costs.
The study is upfront in making it clear the capital cost can’t be recovered from revenue. International experience, it says, “suggests it is unrealistic to expect the capital cost of a HSR network to be recovered”. Of course that’s par for the course with public transport, but in this case we already have a competitive airline system transporting the public between Brisbane, Sydney, Canberra and Melbourne. So the cost to the taxpayer of replacing one form of public transport with another is no idle matter.
One reason the capital cost is so high is because the investigators have concluded an HSR network is only sensible if it provides for speeds as fast as 350 km/hr in non-urban areas and 200 km/hr within cities. They have assumed a dedicated two track right of way, with tunnels from the urban periphery to the CBD in Sydney, Melbourne and Brisbane.
Based on these speeds, they estimate the travel time between Sydney and Melbourne CBDs at around three hours, making it competitive with air for city centre workers. That seems ambitious – I’ve noted before the maximum permitted speed of Spain’s new AVE system is 300 km/hr. China’s extensive HSR system is also limited to a maximum speed of 300 km/hr for reasons of safety.
Although other candidates are being considered, the most likely city centre station in Sydney is Central and in Melbourne Southern Cross (the alternative is North Melbourne). Suburban stations are also being examined e.g. Parramatta. Stations deep underground are ruled out, so it could be a challenge to accommodate new works in the CBD.
It will come as a surprise to many that HSR is not capable of serving either Sydney or Melbourne airports due to differing operational requirements. It’s possible however than a Melbourne Airport train and HSR could share the same infrastructure, e.g. own tracks but same tunnel. One of the most interesting aspects of the report is that a second Sydney Airport doesn’t appear to even be mentioned. Regional stations are assumed to be located at approx 70-100 km intervals. Read the rest of this entry »
There’s a long history of rent-seeking in Australia over major projects. Business puts a lot of effort into lobbying government and the media to subsidise projects the private sector wouldn’t otherwise touch with a bargepole.
So when IPA (Infrastructure Partnerships Australia) – the nation’s peak infrastructure lobby group – releases a new study calling for land to be reserved for a High Speed Rail (HSR) service from Brisbane to Melbourne, I don’t immediately assume it’s an impartial assessment.
However that didn’t bother The Age, which ran the story as the lead on the front page of Saturday’s issue. The paper reports that AECOM, who prepared the study jointly with IPA, was involved in France’s TGV and Britain’s HS2 HSR projects.
The Chairman of IPA, Mark Birrell, is also on the board of Infrastructure Australia, the body established under legislation to advise the Federal Minister on infrastructure needs and priorities.
No, rather than assume the report is impartial, I thank the angel of small mercies that the only promise on the table from the Greens and Labor is for a $20 million feasibility study of HSR. There may be a thousand more welfare-enhancing ways that $20 million could be spent, but it will well and truly have earned its keep if it leads to the right decision on what could be a $40 – $80 billion investment in HSR.
I’m not going to reiterate the many and varied problems I see with HSR, since I’ve covered them before (see here, here, and here, ). What I do want to address however is the way the planned feasibility study will be conducted. Read the rest of this entry »