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 between $61-108 billion, involve tens of billions of dollars for improved access to brand new high speed terminals in the four SE capitals, which in each case would cost an additional sum equaling or exceeding the combined market capitalization 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.
To paraphrase the Infrastructure Minister, Anthony Albanese, this is about saving the vision of the future from the suburbs of today, as metropolitan expansion impinges on the potential corridors.
That is why the study is in its own right valuable and important. Yet the fairy tales being rolled out in its support could bring it into disrepute.
These dubious claims include the supposedly green credentials of trains using electricity which 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 which do not liberate fossil carbon, meaning the jets will be truly greener or closer to being carbon neutral than the high speed trains.
In its fundamentals, the current project cost for around 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, including how it could possibly cost up to $3 billion for terminals that are routinely built for under half a billion dollars, and sometimes under $100 million, in airports all around the world.
How would the entire project cost between $61 billion and $108 billion in today’s dollars depending on route and station locations 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 between $12-15 billion?
Another fairly tale 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.
Albanese made it clear at the media conference to launch the first stage of the study that he doesn’t believe this project would eliminate the need for a second Sydney Airport which he has already said can’t cope with growth beyond 2025, if not sooner. And if the Sydney-Newcastle link was built first, there is no room for expansion at Williamtown Airport anyhow.
The next stage of the report, in about a years time, will deal more precisely with the potential corridors and the engineering realities.
If the pace of this investigation is maintained, SE Australia will at the very least, get protected high speed rail corridors and a real grip on the costs.
If everything clicks, in terms of political, community and financial commitments, we could be catching 350 kmh trains on the first sections of this project by 2023. Or such hopes might become just another fast rail fairy tale.