About half of Australia’s population live in the east coast cities of Brisbane, Sydney, Canberra and Melbourne – it is well more than half if people living at points adjacent to this corridor are included. The most recent proposal for a high speed rail (HSR) link has been predictably debunked by government officials and the press alike. One positive feature of such a link is the way it would help reduce carbon emissions by reducing air traffic and car traffic along this corridor. It would also help the establishment of larger satellite cities along the corridor that would reduce the congestion, pollution population pressures on it.
I would like to see a decent cost-benefit study which accounts for such benefits. We cannot continue to debunk every long-term infrastructure investment project simply on the grounds that it is too expensive.
Some of commentary on the current HSR proposal is misguided. In today’s AFR the ACCC’s Rod Sims rules out its economics on the grounds that you can now get $150 flights from Sydney to Melbourne. This comment relates to a project whose values will stretch to at least the end of the century when cheap aircraft fuels may not be available and when climate change will be a binding issue. It is true that private returns will be low but that is obviously because many of the benefits of HSR are external. The current proposal however does yield net present value benefits of $101.3b. (They also quote a low internal rate of return measure which is inappropriate as a guide to project selection). Of course many of the benefits of HSR will not accrue to private investors or to operators of the HSR service. The comments that government would need to fund a large part of the project is correct but trite – of course it will given the non-private social benefits generated.
- Airfares are supposed to remain the same or to possibly fall as a consequence of competition from HSR.
- Aviation remains the primary means of transport for long distance trips – growth in demand for aviation from Sydney will double by 2035.
- The only external benefits generated are from reduced road congestion and accidents and these amount to $1.2b.
- The HSR is supposed to contribute net to Greenhouse gas emissions although they would be small. Of course it need not be positive at all if the electricity sector is rationalised to be low carbon. This seems a much harder Greenhouse gas saving to effect in aviation. Displacing polluting planes with non-polluting rail would greatly strengthen the economic case for HSR. (The report dismisses this saving by saying that displacement of trips from Sydney Airport by because of HSR would be offset by increased aviation demands from destinations outside Sydney that would arise because of growing congestion at Sydney airport).
I don’t think this report addresses adequately the environmental benefits of HSR as an environmentally sustainable way of linking up the main interstate travel plans of half of the Australian population.