Thursday 15^th October 2004

How rational was the decision to 'defer' the Parramatta to Epping railway? Has the Government told us the real reason for the 'deferral'?

Which half of the railway was more valuable?

This is what the Minister for Transport Services, Mr Costa said when announcing the 'deferral' of the Parramatta to Epping railway on 21st August 2003:

"Stage Two of the Parramatta Rail Link would cost taxpayers $1.2 billion but only provide an extra 15,000 passenger trips.
"That's unjustifiable because over one million trips are provided on the network every day."⁽¹⁾

Two years previously, in August 2001, the Government had released the Preferred Activity Report for the Epping to Chatswood section of the railway, which revealed that:

"Current modelling for the Epping to Chatswood section will add an extra 7.1 million new trips, or around 12,000 passengers each working day, to the CityRail network in its first full year of operation (2009)".

Assuming the Parramatta Transport Interchange is still forecast to cost $100m, the most recent estimate of the cost of the Epping Chatswood section is $1.52 billion⁽³⁾.

So in summary, this is how the two legs of the Parramatta to Chatswood railway compare:

Section	Length	Extra Passengers Per Day	Cost
Epping to Chatswood	About 13 km	12,000	$1.52 billion
Parramatta to Epping	About 13 km	15,000	$1.2 billion

On the State Government's own figures, the Parramatta to Epping railway was less expensive, and would deliver more new passengers to the rail system, than the Epping to Chatswood section.

Yet the Government proceeded with the Epping to Chatswood section, while "deferring" the Parramatta to Epping railway.

Why no revised economic assessment?

Transport infrastructure projects are subject to detailed economic assessments before they are approved. Strangely though, there is no requirement for a revised economic assessment before a decision is made to cancel a project previously shown to be economically viable.

The economic worth of a new transport facility is not limited to the number of new people who will use the facility. Economic assessments typically consider the extent to which other travellers would save travel time due to the new railway. For motorways, the value of time saved usually amounts to most of the supposed value of the project.

If the Government really believed its revised passenger projections made the proposal uneconomical, this could have been confirmed through a revised economic assessment. But the Government undertook no such assessment.

A Short Term Focus

Even if the passenger projections were low, it later became apparent⁽⁴⁾ that the figure cited by Mr Costa was for 2011. In 2003, the railway's anticipated completion date was 2010, so the figures he relied on related to the first year of the rail link's operation.

Railways are the longest of long term projects. Most of Sydney's railways have been around for decades, some more than 100 years.

Yet the Government judged the Parramatta to Epping railway on the basis of the rate of return in its first year of operation. Even motorways don't make money in the first year. Only a fool would judge a long term investment by its return in the first year.

The Real Reason?

The stated reasons for the 'deferral' are sufficiently irrational as to raise the question whether the Government told us the truth.

The author's view, for what it is worth, is that the Government's decision had nothing to do with passenger projections. There were 2 reasons for the decision: 1. It had finally dawned on the Government that the rail system was falling apart. It didn't have the money to both fix the system and build a new railway, and it wasn't prepared to cut road funding to pay for both. 2. Those who want to simplify train operations were finally winning the battle to influence the Government. A Parramatta to Chatswood route complicated, rather than simplified, train operations, because it would have intersected with 3 main lines: the western, northern and north shore lines. Shortly after 'deferring' the Parramatta rail link the Government announced its rail clearways plan, which aims to dramatically cut the extent to which lines intersect with each other.

The second reason is the most telling. Had the Government acknowledged that a Parramatta Chatswood route no longer fitted its long term plans, it would have had to admit the railway has been cancelled, not just deferred.

Written by Philip Howell for the Rail Now Campaign Inc.
howell@bigpond.net.au