Alignment and stations for east coast High Speed Rail preferred by Federal government’s 2013 study

A federal election is imminent, so of course east coast High Speed Rail (HSR) is back on the agenda. Last month the Shadow Minister for Infrastructure, Anthony Albanese, said HSR from Brisbane to Melbourne would “be a real game changer – it is expensive, but nation-building requires vision.”

Then earlier this month, Senator Janet Rice, Australian Greens transport spokesperson, promised her party would fund east coast HSR service in full, arguing “it would be nation building at its best: big, bold and transformative.”

Whenever “nation building” gets trotted out you can be pretty sure the advocates of the subject proposal have little confidence in the logic of their argument. The big question to my mind is why anyone who knows anything about transport and cities still takes this idea seriously.

Why is this even a thing? Why are we still talking about east coast HSR in 2019 as if it’s a pressing national priority?

Where’s ‘the problem’?

It’s not because there’s an obvious problem to be addressed. There’s already a regular public transport service operating on this route. It’s got adequate capacity and scope to scale up in line with demand. Importantly, it’s a competitive market with four major operators i.e. Qantas, Tiger, Jetstar and Virgin.

This isn’t like a new outer suburban growth area where there’s no rail access at all. East coast HSR is about replacing one form of public transport with another. That’d be fine except for the fact it hinges on provision of a mammoth subsidy.

Is it financially sensible?

It’s not because it only requires a modest outlay of a few billion dollars or so. Any discussion of east coast HSR must be in the context of the truly monumental level of public subsidy required to build it. The 2013 study undertaken by Labor and the Greens put the capital cost at $114 – $127 billion (that’s a ‘b’) and made it clear virtually all of that would have to come from the public purse.

But we know it’s near-certain the cost would be much higher, probably in the range $150 – $200 billion, because early scoping studies like this invariably grossly under-estimate the cost, largely due to optimism bias (see Why do the worst infrastructure projects get built? and Are cost estimates for transport projects reliable?). The cost of building California HSR was initially estimated at $33 billion in 2008; by 2018 it had escalated to $63.2 – $98.1 billion.

Is it instead of a second Sydney Airport?

It’s not because Sydney’s second airport isn’t going ahead. One of the key arguments for east coast HSR was that it might obviate or delay the need to build a costly second airport in Sydney. That’s no longer relevant. Construction of Nancy-Bird Walton Airport at Badgerys Creek started on September 2018, with completion scheduled for December 2026.

In fact, the new airport weakens the case for east coast HSR. According to the Labor/Greens HSR feasibility study, that’s because it would reduce a key driver of demand for HSR – delays and unpredictability of flight times at Kingsford Smith airport arising from air traffic congestion. The study found the new airport would lower the demand for HSR into and out of Sydney and therefore decrease the economic benefits.

Is it to tackle emissions?

It’s not because it’s an efficient way of reducing emissions. After allowing for additional emissions from construction, operation and induced demand, east coast HSR would yield net savings of 55 Mt CO2-e over 50 years. That sounds good, but given the estimated cost of construction it would be an extraordinarily expensive way of addressing climate change i.e. circa $2,000 per tonne of CO2-e avoided. At a more likely $150 billion for construction, the cost rises to $2,700 per tonne (see So high speed rail would increase carbon emissions?).

That scale of subsidy would have a much larger impact on emissions if it were instead used to fund renewable power generation. The Bloomberg New Energy Finance energy outlook estimates the cost of making 92% of generation in Australia from renewable sources by 2050 is $186 billion.

Is it to improve equity?

It’s not because it would be more equitable. The great bulk of benefits from east coast HSR would come from faster trips between Sydney and Melbourne for business travellers. This group currently pays the full capital and operating cost of air travel; there’s no reason why it should now be gifted such a titanic subsidy.

Is it much, much faster?

It’s not because east coast HSR would be significantly faster than flying. CBD business people are the key beneficiaries; they’d save 15 minutes door-to-door travelling from Melbourne CBD to Sydney CBD, compared to what’s currently a three-hour journey by air (although HSR would be slower from Sydney to Brisbane than air). Nice, but hardly worth a couple of generations worth of infrastructure subsidy.

Is it to decentralise big cities?

It’s not because it would encourage decentralisation and “grow the regions”. The Labor/Greens feasibility study couldn’t find any net benefits from regional development. Heavily subsidised HSR fares from somewhere like Shepparton to Melbourne (notwithstanding that air fares aren’t subsidised!) wouldn’t shift high-paying jobs from the capital cities to the regions. Rather, they’d just promote regional sprawl by creating remote dormitory suburbs for city centre workers.

Is it to reduce housing costs?

It’s not because it would reduce housing costs appreciably compared to the capital cities. They’ll be much the same in Goulburn as they are in the outer suburbs of Sydney. It’s hard to see why sprawl in Goulburn or Yass would somehow be better than sprawl in Liverpool (see Will business really pay for High Speed Rail? and Is value capture the silver bullet for funding infrastructure?).

Is it “Nation building”?

It’s not because it would be “transformative” or “nation building” as claimed by Ms Rice and Mr Albanese. How can that be the case when it will mostly do pretty much what planes already do i.e. move travellers between Brisbane, Sydney and Melbourne?

The fact that it’s a bit faster than flying for some potential users doesn’t make it “transformative” or “nation building”. This is nothing like the huge increase in speed that trains in the 19th century, and subsequently planes in the post-war era, brought to east coast inter-capital travel. The only way it might be transformative is if it were to destroy the competitive airline services between Brisbane-Sydney-Melbourne, leading to higher fares and/or fewer services, and perhaps ultimately an HSR monopoly.

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Faster trains might well have a role in the future in connecting far-flung suburbs and major regional centres like Canberra and Newcastle to Sydney, but something like the 160 km/h Type D Trainset currently being tested for the New Airport Line in Beijing is likely to be a much better fit than the 350 km/h HSR service touted by Mr Albanese and Ms Rice.

Public funding on the scale required to build east coast HSR could be more usefully deployed in many other ways. For example, it could be used to improve over-loaded public transport systems in capital cities (e.g. see What would happen if public transport use grew faster?).

It says something truly awful about our political culture and the standard of public discourse, especially around cities and transport, that this foolishness still has legs. I don’t expect gunzels are going to lose their enthusiasm for east coast HSR, but it’s way past time politicians, academics and the commentariat got over this folly. And it’s time to be a great deal more circumspect with terms like “nation building”.