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.
It must be kept in mind that this study is about government’s role in HSR and how much it’s prepared to pay directly or via the tax system. Private investors have already done or will do their own analyses. So the study has to be objective and managed at arm’s length from any parties with a potential pecuniary interest.
In my view the study should be managed directly by the Minister’s Department. An advisory committee specially constituted for the study with expertise drawn from disinterested parties could be helpful, but the most useful thing would be a transparent process. Drawing some inspiration from the Government 2.0 idea, all briefs, scoping papers and technical reports should be made public from draft to final stage and subject to an ongoing process of on-line inspection, comment and debate.
There’re also some technical issues specific to this proposal that need to be addressed. The study should (not exhaustive):
- Examine the impact of HSR on existing industries. In particular, how would consumers be better off with a monopoly train operator replacing a competitive airline industry with four major operators servicing the east coast? And how would HSR affect competition within the airline industry and the ability of airlines to provide regional air services elsewhere in the country?
- Account for carbon emitted during construction and evaluate the estimated savings in operating emissions against the cost of abating it in other ways. It should show how expenditure on such a massive scale justifies emissions savings on the Sydney-Melbourne route that could be offset in other ways for less than $50 million p.a.
- Define the mechanism by which HSR could attract high value jobs away from capital cities to regional areas, rather than simply assuming it will happen
- Assess what impact HSR will have on small country towns located within the ambit of larger regional centres served by stations – will the life be sucked out of them?
- Examine the extent to which HSR would promote sprawl by making regional cities located close to capital cities viable commuter dormitories. What effect would this have on the distances that residents located in these satellites drive by car, especially on weekends?
- Evaluate the assumption that all travellers want to depart from the CBD. For example, what proportion of (high-fare) business travellers begin or end their trip from home compared to those who embark from the CBD?
- Explain why lower security arrangements when boarding HSR compared to planes is sustainable in the longer term. Why would terrorists exempt HSR?
- The extent to which reductions in traffic congestion in places like the Sydney-Newcastle corridor can be achieved by providing HSR and, if so, over what period can they be maintained before they’re swallowed up by latent demand?
- Determine at an early stage the level of explicit and implicit subsidies, if any, provided to European and Asian HSR operations and the value of extrapolating from their successes in light of the distances between major cities in Australia and the relatively sparse distribution of significant regional centres
- Calculate the cost imposed on urban commuter services, urban freight services and country and interstate train services if priority within major urban services is given to HSR
Finally, the best case for HSR will probably lie in its potential to provide a better option than construction of a second Sydney airport. Hence that aspect will demand very close attention.