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Apr 12, 2016

The little policy that couldn't: high-speed rail's failures to launch

A brief history of all the times governments tried and failed to get high-speed rail chugging along.

One of the tropes of an election is that the closer we get to one, the more likely we are to get some policy announcement about high-speed rail and, what a shock, Prime Minister Malcolm Turnbull delivered yesterday.

Turnbull said yesterday the government could use value-capture financing — where the cost of the project can, in part, be met by taking money from the increased value of the land around an infrastructure project — to fund the project to build a railway between Sydney and Melbourne at a cost of up to $114 billion. High-speed rail between Australia’s two largest cities has been a consideration of both sides of politics going back over 30 years, but it has never managed to get off the ground.

The first time high-speed rail came before the federal government in Australia, according to the Parliamentary Library, was in 1984 during the Hawke government, when CSIRO proposed a “Very Fast Train” project with a 350 km/h train to run between Sydney and Melbourne via Canberra. It was going to be based on the French TGV, and was estimated to cost $2.5 billion and generate revenues of $120 million per year. After the costs of the proposal were assessed, it was rejected by then-transport minister Peter Morris.

Despite the government rejection, private industry began looking into the proposal, and, by 1986, a joint venture had been set up, with a $19 million feasibility study undertaken by the group. A proposal was put to government in 1988. In 1989, a Senate committee examined the proposal, but it took until 1991 to recommend additional studies on the project. By this time, one of the joint venture partners, TNT, had lost interest in funding the project.

By the end of 1991, the joint venture folded because the cabinet couldn’t agree on proposals put forward by the joint venture around tax concessions for the companies building the project.

It returned in 1993 in the form of a $2.4 billion proposal for a Sydney-to-Canberra high-speed train. Another working group was established to examine the Speedrail proposal. It carried over into the Howard government era, with four proposals received for the project by 1997. Then-prime minister John Howard chose a consortium of companies including Leighton Contractors, the Commonwealth Bank and Qantas for the estimated $3.5 billion project, which would have taken commuters from Sydney to Canberra in less than 90 minutes. It was eventually killed off in 2000, because the Howard government was concerned it would not be built with no net cost to the government.

A report produced by the Howard government after this estimated that it would cost between $33 and $59 billion to build a high-speed rail system between Melbourne, Canberra, Sydney and Brisbane, depending on the technology used, with the magnetic levitation (or “maglev”) version of the train being the most expensive. It was abandoned due to the cost involved in 2002.

The idea of a high-speed rail between Brisbane, Sydney and Melbourne was resurrected by the Rudd government in 2008, with two reports produced during the Rudd-Gillard era on the project. The first report estimated that the project would cost up to $108 billion, and would take commuters between Sydney and Melbourne, and Sydney and Brisbane in as little as three hours. Tickets between Sydney and Melbourne would be comparable to flight costs — between $99 and $197.

The second-phase report pushed up the cost to $114 billion, and said operations on a Sydney-to-Canberra line would not commence until 2035, with lines between Canberra and Melbourne not running until 2040. It would carry around 84 million passengers a year, and there would be a total of 19 stations between Melbourne and Brisbane. After the release of this report in April 2013, the Gillard government established the High Speed Rail Advisory Group to advise the public on the findings of the second report. This group was scrapped by the Abbott government after it was elected in September 2013.

In response to yesterday’s announcement, Labor’s transport spokesperson Anthony Albanese flagged that Labor would now seek to introduce legislation re-establishing the advisory body to see if the Turnbull government was committed to the policy, and was willing to put up investment to get the planning up and running.

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10 thoughts on “The little policy that couldn’t: high-speed rail’s failures to launch

  1. jmendelssohn

    All the groans about the never ending Very Fast Train to Melbourne, and why it never happens remind me of the never ending proposal for an Eastern Suburbs Railway that was first proposed in the 1920s, stopped first by the Great Depression then World War II, before becoming a running political joke in the 1950s, 60s, 70s. The joke ended in 1979 when it was opened by the Wran government.
    Despite people at the time saying it was a waste of money and buses along Oxford Street were adequate, I understand it is well used.
    Whoever has the nous to actually build a decent train service to Melbourne via Canberra and satellite cities will be undertaking a public good.

  2. klewso

    “Would you buy a red herring off this man?”?

  3. Bill Morton

    ” would take commuters between Sydney and Melbourne, and Sydney and Brisbane in as little as three hours. Tickets between Sydney and Melbourne would be comparable to flight costs — between $99 and $197.”

    Does anyone believe that?

    Just track maintenance after a proper wet season would cost a fortune, and some cows on the track, or a car stalled on a rail crossing could see travel times blow out.

    And what of the patronage required to drive the ticket prices that low? If 5% of Melbourne worked in Sydney there would probably be enough patronage.

  4. Norman Hanscombe

    Why Crikey continues to ugnore what the Japanese High Speed Trains Company told Australian audiences re the impracticality of doing it here is difficult to understand, unless of course it’s because they see revenue flows for themselves which could be affected if the full story was told.
    Naturally, as a capitalist enterprise it’s understandable they would do this.

  5. Bob the builder

    @Bill #3

    Are you serious – cows on the track, cars stalled on crossings???

    This is a proposal for a very fast train, not a tram to Bondi. Cows on the road doesn’t stop freeways being built and one of the reasons is they build fences and overpasses …

    FFS …

  6. Bill

    I just love high speed rail, but seriously, here, with our population. The article says that the service would carry 84 million passengers a year. Doing the sums on that, if you had hourly services 365 days a year you would have about 10,000 passengers per service. Now, not everyone will be travelling the full distance, so each seat might be occupied a number of times (Melb-Canb, Can-Syd, Syd-Newcastle, Newcastle to Coffs, Coffs to Gold Coast, GC to Brisbane). But even allowing the most optimistic seat occupancy, it is very hard to see this adding up. So how about just a Fast Train, Canb to Sydney that might work

  7. Lord Muck

    Personally, I would prefer medium-speed rail (say 200 kmh/hr cf. 80 km/hr currently) between capital cities and some regional cities to flying between the East Coast capital cities. Why is MSR never an option for the East Coast? Is it less effective as a political pipe dream? It would be a lower cost option than the VFT and would greatly benefit the regional areas.

  8. Wayne Cusick

    Norman, what did the Japanese High Speed Trains Company say?

  9. Wayne Cusick

    Bill Morton: “And what of the patronage required to drive the ticket prices that low? If 5% of Melbourne worked in Sydney there would probably be enough patronage.”

    The Melbourne-Sydney air route carries roughly 8m passengers per year (ranked third in the world).

    Sydney-Brisbane has around 4.5 million passengers per year (ranked =10th).

    Brisbane-Melbourne >3m, Gold Coast-Sydney >2.5m, Gold Coast-Melbourne 1.7m.

  10. AR

    I’d settle for a decent rail service throughout NSW/VIC, paid for by having ALL containers removed from long distance trucking.
    It would revitalise the Interior and decentralise the overcrowded megacities, with truckers moving the containers short distances from rail hubs to destinations.