High Speed Rail – again!

Posted by on Apr 11, 2013 in News, Urban and Regional Economics | One Comment

The Department of Infrastructure and Transport has just released Phase 2 of its feasibility study into high speed rail (HSR) in Australia (along the east coast, specifically – sorry fellow Perthites). The proposed route would run from Brisbane, to Sydney, to Melbourne, via Canberra. Currently, no rail link exists between Canberra and the outside world, and it the report estimates that an HSR link would attract 70% of the Sydney-Canberra airline passengers. Existing rail services between Melbourne, Sydney and Brisbane are far too slow for servicing passengers, and are mostly used for freight.

The Phase 1 report, released in 2011, “identified corridors and station locations and potential patronage, as well as providing an indicative estimate of the cost to build an HSR network” (DIT website). The Phase 2 report provided more detailed estimates of cost, demand, travel times and the return on investment – both a financial return and the broader economic benefit of building the line.

The report can be found here.

Blog 14 - High Speed Rail - Again! - image

I won’t repeat all of the study’s findings here, but the most interesting for me was the estimated financial return and broader economic cost-benefit analysis. I say interesting because both were positive. This is a new result. In the past, advocates for high speed rail in Australia have had to concede that a substantial subsidy would be required, but that the overall economic and “nation-building” benefits of the project would make it worthwhile. Now these new estimates are saying that the government would even be able to recoup its costs (unlike for, for example, the country’s highways), although without making much of a return.

This isn’t to say that the thing getting built is a foregone conclusion. There have been numerous studies into the feasibility of high speed rail in Australia over the years and nothing has come of it (see the Wikipedia article for a summary, if you’re interested), despite there generally being declared political support and little overt opposition. There will still need to be some colossal political will required to bring the project to fruition and no doubt some ferocious lobbying on the part of those who stand to lose from it being built – shareholders in Sydney Airport, for example. Still, it will be interesting to see the study’s affects on the public discussion of this issue.

1 Comment

  1. Avatar for lee
    April 16, 2013

    Hey Sebastian,

    Just reading your comments and the various reports and it got me wondering what the possible implications may be on the domestic airline market, and whether domestic airlines are having much of a say in the development of these HSR’s.

    Obviously the only reason the plan would ever go ahead is if it is proven that there is enough demand for such a rail line as suggested by the 2010 Infrastructure Partnerships Australia study; which would mean that an almost direct loss to the demand for flights around Eastern Australia.
    A few years ago a similar situation arose in China with analysts in China predicting a 10% loss to airline passengers switching to the new bullet trains.

    I guess in a way this could prove benefitial to customers as the two disciplines may be forced to compete with each other in terms of prices for these journeys.

    Just my two cents