Wednesday, 12th February, 2003

The Government’s analysis of the Transitways has been seriously flawed from the outset.

1. Ignoring half the market
The Government analysed the need for the Liverpool - Parramatta Transitway (LPT) purely in terms of passenger travel. Freight was ignored. So the Government installed a new transport system which passed right through one of the largest freight generating areas in Sydney without ever considering a system which could also move freight. It’s not hard to make a railway look uneconomic when you ignore half the potential demand for the service. Do they ever do that when building a road?

2. No Proper Cost / Benefit Comparison
The Government analysed the costs and benefits of the Transitway, but never thoroughly compared that with alternative projects. The Minister has referred to the higher cost of alternatives, but he has never released a comprehensive cost comparison.⁽¹⁾

3. Not Comparing Like with Like
The Government has from time to time said one alternative, light rail, would have cost $750-800m. In 1999, the Minister released some information to justify this claim. It is attached as Appendix 2. The document shows an amateurish failure to compare like with like. For light rail, the Government relied on a price per kilometre taken from the PTAC Light Rail Strategic Plan 1997. The figures in that Plan are at the end of Appendix 2. A comparison of these figures shows the following discrepancies.

• (a) The cost of trams has been included in the costing of light rail, but the cost of buses was omitted from the price of the LPT. Ticket machines were included in the costing of light rail, but omitted them from the price of the LPT.
• (b) It has been assumed that the cost of moving services under a light rail in Western Sydney would be as high as it was for the Central to Pyrmont tramway - as if there were as many phone lines and other services under suburban streets as there were under skyscrapers.
• (c) No allowance was made for the fact that light rail uses less land than buses.
  This explains why the Government estimated the cost per kilometre of light rail as more than 2.5 to 4 times higher than extensions to the Melbourne tramways were forecast to cost around the same time.⁽²⁾

Per passenger moved, buses need a wider corridor and a higher number of vehicle movements than fixed rail systems. This means that a much larger area is needed for the bus interchange at Parramatta than would have been needed had the LPT been a railway.

The cost of the interchange has been hidden in the cost of the Parramatta Rail Link, now deferred due to alleged cost blowouts. The Government is yet to come clean on the real cost of the Transitways.

5. Focussing on the Up-Front Capital Cost
The major political parties act as if the capital cost of installing infrastructure is overwhelmingly important. While the capital cost must of course be funded at the time of installation, it is only one part of the equation. The rate of return on the capital invested is a more important consideration. If the return is there, a Government can borrow part of the capital cost and put in place measures to recoup the borrowed money from all those who benefit from the project.

It is a mistake to dismiss rail as ‘too expensive’ without considering the rate of return on the investment. Rail uses land more efficiently than road-based transport, it can move higher volumes of people and freight and a railway lasts for decades. Its return on investment will often be higher than that for roads.

6. Getting it wrong on population
Occasionally the Minister has justified buses rather than light rail by saying that population densities in South-Western Sydney did not justify rail. There is no reason why current densities should determine what is provided for the future. Had that approach been taken in the past, Sydney would never have built railways. (The Government’s support for a North-West Rail Link is of course based on future population densities, not the current position.)

The Transitways were planned using data from the 1996 census. The Rail Now Campaign has a map prepared by the Australian Bureau of Statistics which plots the Transitway routes on to the 1996 population density map for Sydney. In the catchment for the LPT there were two dozen areas where the density was between 4,000 and 7,500 persons per square kilometre. This compared favourably with densities along the North Shore and Cronulla rail lines. So when the Transitways were planned, there was as much justification for rail in South-Western Sydney as there was for the North Shore or Cronulla rail lines.

7. Not Analysing a Cheaper Alternative - Bus Lanes on Existing Roads
The Government has spent $258.1m on what is basically a new bus route between Liverpool and Parramatta. Why did they never compare the costs and benefits of the Transitway, with the costs and benefits of creating bus-only lanes on existing roads between Liverpool and Parramatta, and installing bus priority measures?

Recently the RTA created bus-only lanes along Parramatta Road between Balmain Rd and City Rd. According to the Sydney Morning Herald on 27th January 2003, these 5 kilometres of bus lanes cost only $750,000, or $150,000 per kilometre. Had a similar approach been adopted to the LPT, its 30km would have cost only $9.0m - 30km x 1 lane each way x $150,000 - not a quarter of a billion.

If the Government was not wasting money on Transitways, we could have more bus routes while still being able to build what Western Sydney really needs - railways.

Footnotes

(1) A detailed feasibility study on the LPT was prepared in 1998. An Overview Report was issued allegedly reporting its outcomes, but the study itself was not released. Appendix 1 of this Briefing Paper shows the only information which was included in the Overview Report on alternatives to the proposal.

(2) The cost of recent light rail extensions in Melbourne:

• A press release from the Vic. Minister for Transport on 28th October 1998 announced that a 2km tram extension from Mont Albert to Box Hill, then anticipated to be completed in June 2002, would cost $9m. This extension is nearing completion and is now forecast to cost $22m for 2.2km - about $10m per kilometre. As yet, the Rail Now Campaign does not have a breakdown of this figure, so it is unclear what factors have caused the cost to escalate, but the per kilometre figure is still less than 40% what the NSW Government claims is the cost per kilometre of light rail.
• The $2.3km extension of the tram network into the Docklands area, announced on 20/05/99, was expected to cost $17.3m (see Transit Australia magazine July 1999).
• In July 1993, a 1.7km extension of the East Burwood tram route was opened, at a cost of $6m, according to the Victorian Hansard (Assembly debates) on 16th October 1996, p.618ff. Extensions to an existing system will always cost less than building a new system, but the scale of disparity between the Melbourne figures and those the Minister claims would be experienced in Sydney could not be explained on that basis alone.

Prepared for the Rail Now Campaign by Philip Howell, howell@bigpond.net.au.

Appendix 1 Transitways Overview Report.
Appendix 2 Information Released By Mr Scully in 1999.