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HSR High Speed Rail

Jul 10, 2017

Should corridors be protected for HSR?

Infrastructure Australia reckons protecting corridors for East Coast High Speed Rail would save billions, but the case hasn't been made that the project makes sense

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Possible alignments into Melbourne for East Coast HSR (source: AECOM HSR study, phase 2 report)

Infrastructure Australia released a report on Friday, Corridor Protection, recommending that corridors for seven critical transport infrastructure projects should be protected by acquiring properties early. It examined key rail and road projects in urban and country Australia and concluded:

According to the independently audited model, the protection and early acquisition of just these seven corridors could save Australian taxpayers $10.8 billion in land purchase and construction costs (measured in discounted 2016 dollars).

The projects are East Coast High Speed Rail (HSR), Outer Sydney Orbital, Outer Melbourne Ring Road, Western Sydney Airport Rail Line, Western Sydney Freight Line, Port of Brisbane Rail Line, Hunter Valley Rail Freight Line.

My interest this time is in East Coast HSR. Infrastructure Australia estimates it’s recommendation to “protect and acquire now” would save $1.9 Billion (NPV) in the long term compared to the “do not protect now but acquire at the time of construction” option, and $3.5 Billion (NPV) compared to the “do not protect, but tunnel” option.

The Chairman of Infrastructure Australia, Mark Birrell, told the media (see Act now on high-speed rail or pay heavy price later: Infrastructure Australia):

No one is saying we won’t need high-speed rail in 20 years, but to do that you need to preserve the corridor now.

I expect there’s a broad consensus that protecting corridors makes good sense if the proposed project makes good sense. But in the case of HSR that’s arguable. Contrary to Mr Birrell’s assertion, there are plenty outside politics who’re saying the case hasn’t been made that we’ll need this project in 20 years or even 50 years; for example, I first questioned it in April 2010 (see Is the Very Fast Train all huff and no puff?).

Here are some issues to take into account when considering Infrastructure Australia’s recommendation to “protect and acquire”:

  1. If East Coast HSR isn’t worth doing in the first place, then the case for incurring the costs of protection is non-existent. This is a project that’s attractive politically, but is doubtful because the distances between the earmarked major population centres are big; because we already have an efficient and competitive airline system for inter-urban travel; because the net environmental benefits are tiny relative to the cost; because the regional development benefits are small to non-existent; and because most of the benefits accrue to business travellers who can pay the full cost themselves (see Is High Speed Rail our national boondoggle?)
  2. Protection isn’t cost-free. Notwithstanding the “protect and acquire now” title, the recommended option mostly relies on imposing controls on properties rather than buying them early (the great bulk of acquisition – $4 Billion of a total of $4.3 Billion – would still occur at the time of construction). The history of protecting corridors over long periods shows it leads to uncertainty for landowners and to properties being used inefficiently, and in some cases to blight. The alignment hasn’t been determined yet, so protection of a wide corridor necessarily forces controls on land that ultimately won’t be required for the project
  3. The relatively small sum required for early acquisition ($0.3 Billion) will doubtless be attractive to politicians, but it could be optimistic given the long time frame for the project. Landowners are likely to put intense pressure on future governments to acquire their properties earlier rather than later, potentially inflating this figure significantly. Funds spent earlier on acquisition are effectively tied up in a real estate investment portfolio; they’re not available for other productive public uses, e.g. improving urban transport, building schools. At this stage it’s not evident the return to the community of investing that money in HSR would give a higher social return than other options
  4. This is a huge project implemented over a long time frame. There’s a risk large parts of it won’t happen or will be delayed indefinitely because of cost issues, political difficulties, or technological developments e.g.that make air travel more competitive. The costs imposed on landowners should be assessed against these risks
  5. The estimated $1.9 – 3.5 Billion potential saving under the recommended “protect and acquire now” option is a large sum, but given the high level of risk associated with the project, foregoing it might be viewed as a modest “penalty” in the context of a project estimated by the AECOM feasibility study to cost $114 – 127 Billion and to take 50 years to construct. History shows broad-brush preliminary studies invariably under-estimate the true cost; based on the experience with major projects around the world, it would be foolish not to expect the final cost to be at least 50% higher than the initial estimate (see Are cost estimates for transport projects reliable?)
  6. There could be a case for reserving some short corridors where alternative modes are less competitive and where population at both ends and at intermediate stops is large e.g. Sydney to Newcastle (see Does Labor’s Sydney-Newcastle High Speed train make sense?). But it doesn’t follow that the best solution in these sorts of situations would necessarily be HSR; something less dazzling would probably make more sense.

Politicians love HSR because it’s glamorous, looks forward-thinking, and because such a long-term project won’t cost much in the current political cycle. Business doesn’t question it because government’s footing the bill and it’s a gold mine for rent-seeking.

Infrastructure Australia makes the case that protecting corridors reduces the cost of building good projects in the future. That seems obvious; protecting corridors is like mother’s milk. But it’s not obvious East Coast HSR is a good project and that the costs of protection in this particular case are therefore justified. Infrastructure Australia still needs to explain why this project is worth it and how corridor protection would work.

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21 thoughts on “Should corridors be protected for HSR?

  1. John Jefkins

    The air lobby has a lot to protect here.
    HSR has swiped huge chunks of the worldwide short haul market, and the air lobby will fight hard to protect their interests in Australia. HSR could easily take 75% to 80% of the Melbourne-Sydney air market, 100% of short routes like Canberra-Sydney or to Newcastle, and also 75% of routes from Sydney to the Gold Coast and Brisbane as any new HSR can do 350km/hr and thus give Melbourne-Sydney journey times of about 2Hrs 40 mins (and not much more to from Sydney to Brisbane too).

    As that is to city centres, when you factor in reaching the airport and security (I have experience that any HSR bag checking takes 2 mins compared with at least 1 hr at an airport), HSR is FASTER, cheaper and more reliable than air travel.

    There was actually an advertising standards court case in the UK where the judge said exactly that – ie “when you include reaching the airport (in the Ryan air v Eurostar case), it is the TRAIN that is faster, cheaper and more reliable than the plane”.

    So the air looby will fight hard – as for distances under 1000 km, HSR is king (and Sydney-Melbourne and Sydney-Brisbane are both about 750km for rail). HSR passengers for those sort of routes are now double short haul air in Europe and China. There are now about 3 billion HSR passengers per year on 35,000 km of new lines worldwide.

    TGV France typically earns a BILLION Euros profit each year and has repaid costs on older lines (eg the 750km Paris-Lyon-Marseilles route) many times over.

    Japan’s 3 private rail companies have made billions in profits from Bullet trains (for 50 yrs) and again have repaid costs of their older lines (Tokyo-Osaka) many times over.

    But most income goes to the government in the form of increased TAX income from a boosted economy. Any improved transport infrastructure boosts an economy. If you halve journey times you double business hinterlands for sales or recruitment of talent to create more jobs in ALL sectors and increase income & sales tax to the government. In the UK the canals, Victorian railways and the motorways were proved to have done that. HSR does too.

    But it does matter that the HSR has a sufficient potential market. Domestic routes between a country’s top cities with big existing air & road markets and a new journey time of 3 hrs or under make the best profits.

    Melbourne-Canberra-Sydney-Newcastle-Gold Coast-Brisbane is perfect for that.
    It has two of the worlds busiest air markets (the only couple not already taken by HSR), some smaller air markets too (eg Sydney-Canberra etc), two busy road markets (M31 & M1) AND opportunities for shared commuter trains, airport express trains, and shared use of a new Sydney circle line route via the new airport too.

  2. John Jefkins

    I’d preserve the airport route into Melbourne and run around Sydney via the new airport.
    It is important to wire the airports in, so long haul can transfer to short haul RAIL.

    Sydney-Melbourne is a SHORT haul route in HSR terms even these days – let alone with the 400 km/hr rail speeds now under development.

    Its about 750km that can be done in about 2hrs 45mins by HSR.

    That time normally takes 75% to 80& of that 9 million pass/yr market.
    And 100% of the Newcastle and Canberra air markets would also fall to rail.

    Even with today’s markets HSR can win the same sort of markets Eurostar has between London, Paris and Brussels – and it can also win big markets from the M31 and M1 too.

  3. cud chewer

    Alan,

    You’ve missed the point entirely. Governments reserving corridors is, as Ian points out, essentially risk free. Its otherwise known as land banking. The real risk is reserving the wrong corridor.

    Your faith in the 2013 AECOM study is disappointing. Its not just the gold plating, or the inflated headline costings, its the entire approach. It evaluated HSR as a premium fared intercapital airline competitor, rather than as a commuter fared intercity car travel replacement.

    As a consequence it went horribly wrong (another expression comes to mind). It has projections of intercity (Newcastle to Sydney) and (Brisbane to Gold Coast) total travel market and HSR mode share that are physical impossibilities.

    The number of extra car journeys (according to AECOM) would require a tripling of motorway capacity in those corridors. That AECOM did not do this elemental sanity checking or even ask the obvious question “what is the cost of doing nothing?” reveals the entire exercise as bunk.

    A well designed HSR network would not be an adjunct to the existing intercity train network (as AECOM would have it). Rather it would be the intercity train network, with the conventional network playing a synergistic role.

    Let me also ask you Alan. Do you honestly believe that HSR should be subject to the ‘full fare recovery’ standard, when all othet forms of transport are not bound to that rule? Lets be honest. Transport is the glue that holds a society together. Without it we’d still be living in villages and probably still banging rocks together. Throughout the ages, transport has been a socialised activity. We don’t dispute the utility of roads or metros. We build them knowing the payback, however hard to quantify, is real. Why should HSR be any different?

    Let me also ask. Lets suppose that the consequence of not building HSR is spending billions on widened/duplicated motorways. So much so that the cost of doing HSR and doing nothing are roughly comparable. How should we act? Because this is the situation we find ourselves facing in at least three corridors. And these are the corridors at most risk from loss of corridor.

    1. Alan Davies

      Cud Chewer, the issues you raise around HSR in the corridors near capital cities, eg Sydney-Newcastele, are irrelevant; I make it clear in the article that there might be potential in these cases (please read point 6). They could make sense because the existing dominant mode is driving, whereas in the case of long distance inter-urban travel, eg Sydney-Melbourne, it’s aviation.

      As noted in the article, the costs associated with corridor preservation mostly relate to sterilising land via imposing long-term planning restrictions; it’s not land banking. That’s good where HSR has real prospects within a reasonable time frame, but highly doubtful over most of the route where the case hasn’t been made it should be a priority for public funding. And yes, the risk of protecting the wrong route is an important consideration.

      1. cud chewer

        Well I’m glad you’re coming around to the possibility that HSR makes sense for intercity transport over medium distance.

        You din’t however answer the question of why you seem to be applying a “full fare recovery” standard, since this is a theme of many of your articles regarding HSR.

        1. Alan Davies

          Hardly “coming around”, Cud Chewer, when I wrote the piece linked to in the article seven years ago! i.e. see Does Labor’s Sydney-Newcastle high speed train make sense?.

          And I did address the matter of “full fare recovery” in my previous response, where I pointed out that long distance inter-urban HSR competes with aviation, which largely pays for itself. Not a lot of sense in prioritising expenditure of >$100 Billion of public dollars to build a new transport system that competes with an existing public transport system that isn’t subsidised.

          The conventional rationale for subsidising construction and operation of public transport mostly relates to short intra-urban (cities and towns) trips.

    2. John Jefkins

      HSR won’t just get its market from the motorways though.
      2.5 hrs journey times normally win at least 75% of an AIR market.
      There are currently 9 million passenger /yr on what would be a 2hr 40 mins hr rail journey between Sydney & Melbourne city centres, another million on SYD-Canberra (where a 45 min rail journey would cause a 100% air to rail transfer). Similar markets from Sydney & Canberra to Newcastle, Ballina, Gold Coast, Coffs Brisbane & Sunshine (for 75% transfers to each of those sub 3hr rail journey times too). Whilst a 5.5 hr Melbourne to Brisbane rail journey typically only wins about 25% of an air market (in various cases elsewhere) but that still adds another million rail passengers to a probable total of between 12 and 15 million rail passengers/yr from just air to rail transfers alone.

      Road commuters on Canberra & Newcastle etc routes to Sydney would typically double that market for rail.

      And of course any circle line route around Sydney would be shared by other express trains to the new airport site too.

      But that new airport could concentrate on long haul – ie routes of > 1000 km and act as an interchange to short haul rail to the Melbourne & Brisbane areas plus places in-between.

      And that new airport would have 30% fewer passengers – and thus be smaller, cheaper and be not needed so urgently.

      In fact, could HSR save the cost of building a new Sydney airport at all ???

  4. asdfhhjgjs

    And then there’s the crap idea of a airport train in Melbourne, another idea which sounds good on the surface but wont be economic in reality. And the taxpayer will pick up the tab for that as well.

  5. asdfhhjgjs

    The HSR doesn’t stack up, unfortunately, I fear our gullible voters and media will fall for it. The stupendous cost of all this is pretty much enough to bankrupt the nation even further.

  6. Ian Fraser

    Alan,

    Do you understand the principle of a call option?

    Just because one acquires land for one possible use, doesn’t mean it has to be used for that purpose. But according to IA modelling (and it’s possibly conservative if one goes back to Dr Paul Wild’s original CSIRO analysis of HSR) what they are talking about is a call option that returns a premium even if the option is let to lapse.

    As to whether full HSR per the 2013 report will eventually make sense, you or I don’t know as that depends on population growth and how government policies dictate that population is dispersed. It also depends on travel habits and growth in travel.

    Aviation beats HSR over longer distances, although there is an argument (not necessarily one for optimising economics) that a country should not have all it’s infrastructure eggs in one basket or alternatively that people could be provided with choice. Some say that the Melbourne-Sydney distance is such that if the Japanese, followed by the Chinese and French, who are investing in even faster rail technology, are successful in getting the trip time down to 2 hours for that distance, then HSR will potentially impinge on the economics of aviation and force aviation to adopt different plans. I have seen the Japanese SC-Maglev and its performance is impressive and they are due to complete their first commercial line by about the time Sydney will have its second airport. Moreover, as I said, their competitors in this game are not standing still with China progressively adopting Maglev for other rail situations.

    The people that I speak to all say that faster rail will not only work for situations like Newcastle to Sydney and Gold Coast to Sunshine Coast through Brisbane, but that (especially in the former case) it is truly needed.
    However, if we were to do faster rail between Newcastle & Sydney and Sydney and Canberra, then wouldn’t it be a mistake to do it in such a way as to put road blocks (i.e. cost barriers) in front of later continuing with Canberra to Melbourne?

    Hence a reservation of enough (not necessarily all) of a suitable corridor does actually make sense to me. Suitability looking decades ahead, mindful of potential technology progress in the intervening years, I think dictates they find the straightest, most level corridor sections they can. The rest can be covered later by tunnelling and bridge (or viaduct) building – both areas in which the Chinese thrust into HSR has brought about huge scale economies in the most recent period.

    1. Alan Davies

      Ian, it would be very nice to have HSR along Australia’s east coast. I used the Maglev in China last month; very exciting to hit 431 kmh for a few seconds (all HSR is speed-limited in China ATM due to safety concerns). The problem though is East Coast HSR requires a massive subsidy from taxpayers. Given we’ve already got an efficient public transport system for long distance inter-urban travel that largely operates without cash subsidies, I think there are vastly better ways that $114 – 127 Billion of public money could be used.

      1. Ian Fraser

        Alan
        An alternative view to yours; not disagreeing with all you’ve said, but…

        Continually quoting the headline price tag (an estimate only) for full Melb-Syd-Bris HSR is not helpful to getting any improvements in intercity rail. That was based on high per km construction rates and I presume your higher figure of $127 bn was a P90 estimate, as the only thing that hit the press was the $114 bn.

        A World Bank report that I saw on China’s HSR effort placed the per km rate they have achieved at $US25-35 M per km (if I remember correctly) which is some 1/5th or less than the rate that AECOM used. I note that Aurecon issued a report for the ARA which also questioned what it would be if costed to world’s best practice (as of about 2014 I think).

        So it may be that things have been over-stated. Or it may be that we don’t believe we can ever achieve any reduction on cost rates as achieved in other parts of the world, despite the fact that the dominant part of China’s cost reductions are said to be due to economies of scale in materials and methods of construction (more so with viaduct rollout than tunnelling).

        In any event, quoting such high “headline” numbers means that our politicians (and unaware members of the public) are conditioned to thinking nothing, even the most attractive shorter intervals of HSR, can ever happen. It is a fact that over shorter intervals like 100-200 kms HSR should achieve major modal shift from roads and we do have a problem with doubling our population then doubling the width of the Hume and Pacific Highways.

        I would be much more in favour of doing what Singapore and Malaysia, plus India, are doing – that is, invite in the big overseas HSR experts (Japan, France, Germany, China, Spain, Italy plus Bombardier) and see what they can do. That could be done under Anthony Albanese’s idea of a High Speed Rail Authority, which set up appropriate legislation, worked out the optimal corridors, invested to protect key parts of them, and worked out some early stages that can be better justified without committing to the whole thing. A “call option” remember.

        That way we could have some actual testing of hypotheses which would provide benefits regardless – such as connecting Australia’s largest regional city (the future Newcastle-Central Coast-Hunter conurbation) with the country’s current largest capital city (Sydney). There must be manifold economic agglomeration and social benefits in that sort of thing, so long as the rail transit time is brought down below that for the road by sufficient to counter the “first mile, last mile” time and inconvenience penalty.

        What I am referring to here is not just a rail project of course. It would have to be that, just as the 2001 VHST Scoping Study for the Howard Government concluded:
        “The securing of a place for an EC VHST in Australia’s transport future would be dependent on whether or not it could become an integral part of a vision and action plan for a new paradigm of development, mobility, and transportation connectivity in the East Coast corridor”.

        For that read “regional development and decentralisation”.

        The July 2014 issue of Railway Digest magazine had an article by Dr Phillip Laird, which it would be nice if you and your followers could read (I can’t supply an electronic link unfortunately). It measures the experience of two journeys of similar length by rail – one being Newcastle to Wollongong and return (change of trains at Central), the other being in Japan between Shizuoka and Oyama using the Shinkansen service (change of trains in Tokyo). The contrast is stark, the latter broadly half the time.

        Granted, however, any such upgrade to HSR in Australia would require government underwriting, but the economic benefits would be substantial (including taking housing supply and price pressures off the Sydney basin). Moreover, if we don’t do this kind of thing the F3/M1 corridor would either need widening or duplication sooner than many might think. Under formal road pricing, I suspect it would be a “no brainer”.

        Even now, according to local press reports, the F6/SouthConnex upgrade proposal for Sydney’s south coast is mooted to be anywhere between $8 bn and $18 bn (depending on which information source one believes) – that provides interesting scope for considering the rail upgrade alternatives, and again the tolling of that motorway may be what finally suggests that faster rail has a role to play.

        Apologies that my comments on this topic are Sydney-centric, because that’s where I just happen to have intimate personal experience.

        1. Alan Davies

          Ian, I agree the prospects for HSR are stronger for short haul lines like Sydney-Newcastle where the current dominant mode is cars; see point 6 in the article.

          The headline figures are for East Coast HSR; that’s the topic IA is addressing and the subject of the AECOM study. I think we can be pretty confident they’re optimistic.

          Chinese construction costs are irrelevant to Australia – we’re afflicted with the cost disease problem that’s especially severe in Anglophone countries. See Why do subways cost so much more here than elsewhere? and Why is infrastructure so bloody expensive?

          Sydney-centric is good.

          1. John Jefkins

            Sydney-Melbourne is a SHORT haul route in HSR terms even these days – let alone with the 400 km/hr rail speeds now under development.

            Its about 750km that can be done in about 2hrs 45mins by rail.

            That time normally takes 75% to 80& of that 9 million pass/yr market.
            And 100% of the Newcastle and Canberra air markets would also fall to rail.

            1. Alan Davies

              John Jefkins, you can of course build HSR routes as long as you like. You could build one direct from Brisbane to Perth via Port Augusta, but you wouldn’t get benefits that exceed costs.

              Over long distances like Sydney-Melbourne – and where we don’t have large intermediate cities like in Europe and China – flying becomes more competitive.

              You have to ask what’s the advantage that would justify such a huge public subsidy when there’s no shortage of other socially useful projects crying out for funding.

              HSR makes better sense in Australia for shorter distances between major population centres where it would mostly compete with cars.

              1. John Jefkins

                Sydney-Melbourne is not a “long distance” for HSR.
                Its the same as Paris-Marseilles (where rail took the air markets).

                That route also has a decent intermediate city (Canberra) with its own air market to easily take 100% of.

                Those 2 markets alone could fill 4 standard trains an hour that stop at ONLY Canberra en-route.

                But there are OTHER M31 markets too for medium speed commuter trains too, and the new line could also form a new Sydney circle line (with say 8 stations including the new airport and central) and thus airport express for long haul air /short haul rail.

                And that’s before you then add in routes to Newcastle & Brisbane.

                I’d agree that other distances in Australia are too long.
                But a pair of 750 Km distances are just fine for HSR.
                That’s two 2.5 hr journey times with max speed 360km/hr trains (and the latest trains will be able to run at 400km/hr).

                1. Alan Davies

                  Jeff Jenkins, an HSR line in my street running the 8 km to the CBD would doubtless win 75% of my neighbours away from Metro’s rail service too. There’d be a big time saving. But what would it cost? Who would pay?

                  1. John Jefkins

                    As the Government earns the extra tax it earns, the GOVERNMENT should organise the loans that its fare income and tax take would repay many times over.

                    Sure there’d also be some private interest (eg to operate it), but as only GOVERNMENTS earn tax income, only GOVERNMENTS have the long term incentive to improve the transport infrastructure that creates the stronger economy that earns future TAX income.

                    And it does not need to be in your street, and it works as a team with your Metro service (rather than compete with it) – to offer (a) improved rail capacity (as Metro gets intercity trains moved off its tracks and thus more room to run more Metro trains), (b) a choice of fast & slow rail services (c) more rail profits to boost Metro too (just as TGV France earns the profits that subsidise loss making local trains across the rest of France.

                    Victorian Canals boosted the economy – to earn tax.
                    So did the railways & motorways. The Government paid for the M31, M5 and M1 to boost tax income, and THEY would take out the loans to fund this too.

                    1. John Jefkins

                      And for clarification Alan, the preferred type of HSR takes trains that could ALSO use existing tracks looping into existing stations (eg Gosford) whilst the new line bypassed by hugging the M1.

                      Maglev is incompatible and unable to do that. The Chinese only bothered with 30k of it (as an airport line they only half built). They tried it, rejected it and are building a THOUSAND times as much HSR instead – ie 30,000 km of HSR & 30km of Maglev.

      2. John Jefkins

        HSR would replace that air route though to make the same profits
        – as it would not only have the lion’s share of one of the worlds busiest air route’s market
        – it would also be able to tap into the busy M31 road market too.
        – and it moves intercity trains out of the way of commuter & freight trains, to boost capacity and make the existing lines more profitable too.

        I agree with you that there is no point with HSR unless you have a decent intercity market and a distance of about 400 km to 800 km.

        With Melbourne-Sydney-Brisbane we have TWO such opportunities with air markets combined with decent road markets too to intermediate cities for a mixture of trains.

  7. Jacob HSR

    Thank goodness the land for Badgerys Creek airport was purchased in the 1980s!

    Imagine trying to find land for a 2nd SYD airport now.

    AUS has mass immigration with over 200,000/year coming over. That clearly means AUS will have 48 million people. Unless SAP or ONP puts a stop to it.

    What is a waste of money is negative gearing handouts ($10 billion per year) and building 12 submarines for $75 billion!

    A huge problem in AUS is indeed a lack of land reservation for public use. North West Rail link. Would it have been really sinful to reserve a 22 metre wide corridor to allow a railway to be built? Now it is being built underground at enormous expense. The muppets should have reserved some land in Docklands and Barangaroo for an oval. Fancy that, an oval for a government school!

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