Thursday, April 12, 2018

Why the Tullamarine rail link barely stacks up

Just months ago in December, Infrastructure Victoria published the most comprehensive analysis yet of Victoria’s infrastructure needs.

It examined 300 potential projects, many of them desperately needed, and pronounced the Melbourne Airport Rail Link only “supported in principle”.

And not for a long time.

Upgrades to SkyBus should be pursued first, as “a more cost effective solution in the short-term”.

How long was that short term? Infrastructure Victoria said the airport rail link wouldn’t be needed for 15 to 30 years.

The supporting analysis prepared by consultants KPMG, Arup and Jacobs said the most cost-effective time for a Tullamarine railway to open would be between 2036 and 2039 - two decades away.

Infrastructure Victoria said if the rail link cost $3 billion to $5 billion, and was opened way into the future when the need was greater, it would have a benefit-cost ratio of between 1 and 1.4, meaning its benefits would exceed the costs - a conclusion that might not apply to the Turnbull government’s proposal, which would cost more than twice as much and open as soon as possible.

The reason Infrastructure Victoria wanted to wait is that the alternative of using priority signals for Skybus is so much cheaper - a total cost of only $50 million to $100 million according to its estimates.

Giving buses priority all the way to Melbourne airport wouldn’t even need dedicated lanes on the freeway, although it would on several of the roads leading up to it, including the entry and exit to Adderley Street and Footscray Road.

Ramp metering and priority traffic signals could do the trick, avoiding inconvenience to other users.

Infrastructure Victoria reckons the cheap changes will allow buses to run every three to five minutes during peak times with “a reliable 20-to-25-minutes journey time”, in contrast to the rail proposal in which trains would run every 10 minutes, with a journey time to the city of 30 minutes.

Eventually, decades on, the freeway would become congested enough for the railway to make sense. But in the meantime, improving SkyBus provided “the opportunity to defer the significant cost of a heavy rail link to the airport”.

The billions of dollars saved “could be used to fund other high priority projects”.

Delaying projects that aren’t yet needed is one of the best ways governments can manage money.

The Grattan Institute’s John Daley puts it this way: “In capital investment, sequencing is everything. The value of deferring a project is enormous. Put another way, the cost of building a project early is enormous.”

And in the next 20 to 30 years things might change. The report says in a few decades driverless cars may make the calculations different.

And the report delivers a warning: A rail link wouldn't allow users of public transport to have their cake and eat it too. For the train to make sense, city buses would have to stop, as they did in Sydney.

That’s because the railway would scarcely bring about any increase in the number of passengers using public transport. In the words of the report, the increase would be “not that significant”.

Driving to the airport would remain attractive, and become more so, which is one of the claimed benefits of the railway.

Premier Daniel Andrews supports the project. He has promised that construction will be “well under way” by the time the Metro Tunnel is completed in 2026.

And he'll be grateful for the money. Before the announcement, Treasury calculations had Victoria getting less than 10 per cent of Commonwealth infrastructure funds, even though Victoria accounts for more than 25 per cent of Australia’s population.

Five billion from the Commonwealth will take it to 18 per cent.

In The Age and Sydney Morning Herald