Australian Election Campaign – Another Election, Another Fast Rail Promise

Posted on Tue 08/27/2013 by

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Bolt New 01By Andrew Bolt ~

The Australian Labor Government likes promising fast rail projects it never delivers.WMC_AUS_PM_KevinRudd_FI-300x250

2007:

FEDERAL Labor leader Kevin Rudd has unveiled his vision for Sydney, promising a massive cash injection for the Penrith fast rail link and the M7 to F3 motorway and a new national infrastructure fund for the city.

2010:

The Government says if it is re-elected it will fund a study into a high-speed rail link along Australia’s east coast as well as commit to building an inland rail link between Brisbane and Melbourne. Transport Minister Anthony Albanese …  says the Government will commit $20 million to study the feasibility of a fast-speed rail link between Sydney and Newcastle…

Labor has also promised voters it will build an inland rail line between Brisbane and Melbourne via the New South Wales central west, including Parkes. 

2013:

LABOR will kick in $52 million to start a multibillion-dollar project to deliver high-speed rail between Sydney and Melbourne by 2035. 

UPDATE

Terry McCrann:

Rudd Mark I ‘only’ committed to spend $40 billion – probably going on $60 billion or $80 billion – on a completely uncosted, completely unexamined National Broadband Network.

He did so, on the basis that it ‘looked like a good idea at the time’ – on the back of a VIP serviette, scribbled out by then communications minister Stephen Conroy, on a prime ministerial flight been Canberra and Brisbane…

Now Rudd Mark II has doubled down on fiscal lunacy, by seizing on the idea of spending at least three times that – officially $114 billion, but in the same inevitable NBN-blowout way, probably going on who knows what: $154 billion? $214 billion? – on an even more irrational, more irresponsible, high-speed rail line between Melbourne and Brisbane…

Three things stand out about this high-speed rail idea which makes it eerily, disturbingly, similar to the NBN.

First is the manner in which it’s unveiled. Seemingly on the spur of a moment, without the slightest economic or business justification. And cooked up by Rudd for purely political spin reasons…

The second thing that stands out about both the NBN and the high-speed rail are that they’ll take at least a decade to actually arrive…

That points to the third unifying feature: the bizarre Rudd commitment to very slow building, arguably outdated before you even start and all but certainly by the time you finish, very expensive fixed infrastructure.

UPDATE 2

A short history of fast rail schemes:

June 1984

CSIRO officers propose a high speed rail link between Sydney, Canberra and Melbourne

The Chairman of the CSIRO, Dr Paul Wild, and colleagues Dr John Brotchie and Dr John Nicholson propose a high speed rail link between Sydney Canberra and Melbourne via Cooma, Orbost and the Latrobe Valley. The train would run at 350 km/h, and be based on French TGV (Train à Grande Vitesse) technology. The initial cost is estimated to be $2.5 billion, and they claim could generate initial revenue of $120 million a year against operating costs of $50 million a year…

September 1984

Unfavourable response to CSIRO proposal

It is reported that the Bureau of Transport Economics finds the scheme proposed by Dr Paul Wild to be uneconomic. The Bureau finds that Dr Wild’s cost estimate of $2500 million to build the system to be $1500 million too low, and as a consequence, passenger fares would need to be set at a rate that would not be commercially viable.

The Minister for Transport, Mr Morris rejects Dr Wild’s proposal.

24 September 1986

Very Fast Train Joint Venture established

The Very Fast Train (VFT) Joint Venture established. The group comprises TNT, Elders IXL, and Kumagai Gumi. The plan is to be to build a line from Sydney to Canberra via Bowral and Goulburn, and a line from Canberra to Melbourne via Cooma, east Gippsland and the La Trobe Valley (the ‘coastal route’) or alternatively though Wagga Wagga, Albury-Wodonga, Wangaratta and Seymour (the ‘inland route’)… Dr Paul Wild is appointed director of a $600 000 pre-feasibility study of the Sydney-Melbourne and Canberra-Sydney routes.

7 March 1989

VFT has Prime Ministerial support

It is reported that in a caucus meeting, Prime Minister Bob Hawke strongly supports the VFT project saying that it would revolutionise the geographic and demographic aspects of cities on the route.

7 July 1991

Report urging government tax concessions

A confidential report prepared by Credit Suisse First Boston Australia Bank for the Joint Venture partners allegedly finds that the VFT proposal is not viable without government tax concessions. The report lists the project’s other weaknesses as:
•an unsatisfactory nominal internal rate of return (15.9% for equity investors)
•no established track record…
•the possible non-attainment of passengers and freight market revenues
•the possibility of capital and operating cost over-runs and completion delays

August 1991

Cabinet rejects proposals regarding tax concessions

Cabinet rejects the Joint Venture’s proposals regarding taxation treatment that would have allowed tax deductions for tax losses from construction to be passed to shareholders in the operating company… Former Federal Finance Minister Peter Walsh claims that the tax concessions as proposed would have cost $1.4 billion.

August 1991

VFT Joint Venture folds

The project subsequently folds allegedly because of Cabinet’s rejection of the Joint Venture’s proposals regarding taxation. Other reasons for failure may have been the suspicion that the project was motivated by real estate development, very high costs, and a disparate group of backers who lacked a coordinated and focused approach.

18 January 1996

The ALP Government commits funds to a feasibility study

The Federal Government announces that it will contribute $50000 to a feasibility study for the Sydney-Canberra rail link, matching funds provided by the ACT and NSW Governments.

June 1996

A report on transport development options for NSW, ACT and Victoria is released by the South East Australian Transport Study (SEATS) group. Both the Sydney-Melbourne and Sydney-Canberra high speed rail links are examined, and receive high scores for the potential benefits the schemes could provide. The schemes are recognised however as less desirable because of their high costs compared with the benefits.

September 1996

Confidential Government report condemns the proposal

A Secretariat appointed by the Commonwealth, NSW and ACT Governments complete a report which is not publicly released. Newspapers claim that the report suggests that the project would not be viable without a Government subsidy of more than $1.5 billion. This cost would comprise $1.3 billion for construction and $406 million over five to six years to subsidise operating costs.

4 December 1996

Joint ACT, NSW, Commonwealth investigation announced

Prime Minister announces a joint Commonwealth-NSW-ACT venture to investigate options for a high speed train service. Any project must be on the basis of no net cost to the taxpayer. Constitutional powers may be used to acquire land compulsorily along the route.

July 1997

Short list released

Six consortiums short-listed to build the Sydney-Canberra rail link:
•Capital Rail
•Inter-Capital Express
•Goninan Consortium
•Speedrail Group
•Talgo/Rail Services Australia
•Thyssen Transrapid

January 2001:

FURY ERUPTED in Australia in the wake of the federal government’s decision on December 11 that it would not provide financial support for the Sydney – Canberra Speedrail project. A formal announcement the following day attempted to disguise the abandonment of the A$4·5bn scheme by calling for a feasibility study for a high speed line linking Melbourne with Sydney and Brisbane, provoking a feeling of déjà-vu among high speed train watchers.

The first Sydney – Melbourne high speed line proposal was put forward in 1984 by Dr Paul Wild of the Commonwealth Scientific & Industrial Research Organisation, and this evolved rapidly into the Very Fast Train concept. This eventually fell at a government hurdle in March 1991 when the cabinet failed to agree to proposed tax concessions that would have moved the project beyond the stage of lines on maps. Out of the ashes of VFT grew Speedrail, which emerged in 1993 as a Sydney – Canberra line that could be opened in time for the 2000 Olympic Games…

Speedrail, a consortium of Alstom Transport and local construction company Leighton Contractors, was chosen in August 1998 from four submissions as preferred bidder to build and operate the 270 km line, but the grouping eventually concluded that a contribution from state funds would be needed to make the project fly. In its final submission in 1999 Speedrail had asked for A$1·55bn in tax breaks and help with land acquisition.

Andrew Bolt is a journalist and columnist writing for The Herald Sun in Melbourne Victoria Australia.

Andrew Bolt’s columns appear in Melbourne’s Herald Sun, Sydney’s Daily Telegraph and Adelaide’s Advertiser. He runs the most-read political blog in Australia and hosts Channel 10’s The Bolt Report each Sunday at 10am. He is also heard from Monday to Friday at 8am on the breakfast show of radio station MTR 1377, and his book  Still Not Sorry remains very widely read.

Read more excellent articles from Andrew Bolt’s Blog . http://blogs.news.com.au/heraldsun/andrewbolt/

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