Launched today as a 350-page blueprint for a high-speed rail network connecting Melbourne, Canberra, Sydney, Newcastle and Brisbane (and winnable electorates between any of these locations), the first stage of the government’s high-speed rail study appears to set implausible capital costs and match them with highly attractive theoretical cheap fares.
The headline project costs, of $61-108 billion, involve tens of billions of dollars in additional costs for improved access to brand new high-speed terminals in the four south-eastern capitals, which in each case would cost an additional sum equalling or exceeding the combined market capitalisation of Qantas and Virgin Australia at current share prices.
But this is the start of a study that will (if completed) define and preserve the high-speed rail corridors that a “big” or rapidly growing population will need within 25 years if such links are to be efficiently built.
That is why the study is, in its own right, valuable and important. Yet the fairytales being rolled out in its support could bring it into disrepute.
These dubious claims include the supposedly green credentials of trains using electricity that will come from coal.
Yet by 2036, where the report anchors its key projections for demand, fossil carbon releasing jet fuel is realistically predicted to be at least 50% derived from algal or biological fuel substitutes that do not liberate fossil carbon, meaning the jets will be truly greener or closer to being carbon neutral than the high-speed trains.
Earlier today the Minister for Infrastructure, Anthony Albanese, claimed the trains would bypass airport security hassles. But why, these are 450-passenger trains hurting at high speed along elevated tracks or through what will be the longest tunnels ever built in Australia?
In its fundamentals, the current project cost for about 1600 kilometres of new double-tracked links between Melbourne at one end and Brisbane at the other is assessed at between $61.1 billion and $108.6 billion. The report highlights as a priority the Sydney-Newcastle section at a cost of between $10.7 billion and $17.9 billion.
By highlighting an entirely NSW section of a costly project the political vulnerability of the scheme is made even more evident from day one.
In Melbourne the cost of “city access” (read land values and supporting infrastructure) to a terminal at either Southern Cross or North Melbourne is an identical $3.3 billion and $2 billion respectively, which is a total of $5.3 billion or almost as much as the $5.7 billion market capitalisation of Qantas earlier this year before its stock price weakness in recent months.
A network in which the stations and access costs alone could exceed the market value of the entire Qantas group in just one major city raises some questions.
The very first question would be how come the entire rail infrastructure could cost between $61 billion and $108 billion in today’s dollars when the estimates for extending Sydney’ M4 motorway to the edges of the main CBD with a branch to Port Botany and Sydney Airport is $12 billion-$15 billion?
Another fairlytale is the claim that the project could remove the need for a second Sydney Airport, which even if this was true, would represent a bizarre national expenditure to fix what is essentially a gross failure by successive state governments to secure Sydney’s future growth as a business centre by making sure it has convenient and competitive airports.
Even Albanese has condemned Sydney Airport for its inability to cope with growth in the very near future. And if the Sydney-Newcastle link was built first, there is no room for expansion at Williamtown Airport anyhow.
Relying on a high-speed rail to somehow induce travellers to spent money and time to go to a remote Sydney Airport would be a disaster for the harbour city.
Crikey is committed to hosting lively discussions. Help us keep the conversation useful, interesting and welcoming. We aim to publish comments quickly in the interest of promoting robust conversation, but we’re a small team and we deploy filters to protect against legal risk. Occasionally your comment may be held up while we review, but we’re working as fast as we can to keep the conversation rolling.
The Crikey comment section is members-only content. Please subscribe to leave a comment.
The Crikey comment section is members-only content. Please login to leave a comment.