27 September 2021

Audit report questions costs and benefits of Light Rail Stage 2A

| Ian Bushnell
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Light rail tram

ACT Auditor-General Michael Harris has raised doubts about the economics of extending light rail from Alinga Street to Commonwealth Park. Photo: File.

The cost of the next stage of light rail to Commonwealth Park may have been be underestimated and the project’s economic benefits overstated, according to a new audit report.

ACT Auditor-General Michael Harris also says in the report, ‘Canberra Light Rail Stage 2A: Economic Analysis’, that the demand for public transport may not be the same in the future due to the COVID-19 pandemic changing the way people work, with many to continue working remotely.

The audit found that a significant amount of the $150 million in benefits identified for Light Rail Stage 2A are predicated on the project being a catalyst for the development of the Acton Waterfront, but that neither the Stage 2A Business Case or Economic Appraisal Report provides information or evidence on how it will actually do this.

“Should the Acton Waterfront not be developed as fast as is hoped, then the timing and quantification of the expected benefits of Light Rail Stage 2A are at risk,” said Mr Harris.

The audit also found the economic appraisal was dependent on a series of ‘transformational projects’ and revitalisation activities such as the raising of London Circuit; National Capital Authority (NCA) plans to transform Commonwealth Avenue and Kings Avenue into grand boulevards, and the development of Section 100, next to the ACT Law Courts.

Mr Harris said any failure to implement these projects on a timely basis would have a negative impact on the expected benefits of Light Rail Stage 2A.

The audit found the estimated $162 million cost of the project did not take into account the requirement for wire-free running and retrofitting light rail vehicles.

Artist's impression of the intersection of London Circuit and Commonwealth Avenue on the Light Rail Stage 2A

An artist’s impression of the intersection of London Circuit and Commonwealth Avenue on the Light Rail Stage 2A route to Commonwealth Park. Image: ACT Government.

The cost of retrofitting was estimated to be about 17 per cent of the estimated capital cost.

“At the time of the preparation of the Stage 2A Business Case, there was a very strong likelihood that wire-free technology would be required for any extensions towards and through the Parliamentary Zone, but this cost, and other costs associated with urban design finishes, were not explicitly included in the capital cost estimate for Light Rail Stage 2A,” said the report.

The audit said the cost of disruption to businesses along the 1.7km route had also not been taken into account.

The audit recommends that Major Projects Canberra should review and update the economic analysis, including its assumptions and costs and benefits.

This should be made publicly available.

The audit also recommends the ACT Chief Minister, Treasury and Economic Development Directorate work with Major Projects Canberra and the Transport Canberra and City Services Directorate to develop a Benefits Realisation Plan for Light Rail Stage 2A.

An ACT Government spokesperson said the government would be considering the report’s findings closely.

“The report focuses on Stage 2A of Light Rail,” said the spokesperson. “While the Stage 2A extension provides some benefits, the ACT Government’s intention is to maximise the benefits for the city in extending the line from Gungahlin to Woden.

“Stage 2 of Light Rail will be Canberra’s biggest ever infrastructure project, delivering major long-term benefits. We recognise the importance of delivering this project in a way that realises economic, environmental and social benefits for the Canberra community.”

Public Transport Association of Canberra chair Ryan Hemsley said the report highlighted the importance of delivering the full extension of the network, rather than stopping short at Commonwealth Park.

Mr Hemsley said there are concerns the overall project is falling behind schedule with a Works Approval yet to be submitted to the NCA, and the 9km extension to Woden still without a planned opening date.

Last week, the ACT Government announced of early works to relocate utilities and an expression-of-interest process for the raising of London Circuit.

“While last week’s announcements are welcome, a handful of utility relocations and an expression of interest for enabling works does not a project make,” said Mr Hemsley.

He said there was a widening gulf between the ACT Government’s election promises and the actual delivery of infrastructure.

“It may be time to consider whether a dedicated light rail planning and delivery entity, such as the former Capital Metro Agency, can cut through some of the delays and streamline the process for future stages to Belconnen, Tuggeranong, Molonglo, Fyshwick and the airport,” said Mr Hemsley.

He is concerned the delays also risk adding unnecessary costs to the project.

“The longer this stretches out, the harder it will be to secure the necessary construction expertise, which is presently in very high demand across the country,” said Mr Hemsley.

“Canberrans cannot afford to wait until the late 2020s for this much needed public transport infrastructure to be completed.”

The ACT Government has promised that first tracks for Stage 2A will be laid in 2024.

Stage 2B to Woden still has multiple approval hurdles to clear.

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“The audit recommends that Major Projects Canberra should review and update the economic analysis, including its assumptions and costs and benefits.

This should be made publicly available.”

…and just a reminder, nearly three years later… crickets.

Barry McDonald5:29 pm 08 May 23

The light rail is great. I live along the light rail route and have used it since it’s inception. I use it twice a day to get to and from work in Civic and in my whole time using it have only ever paid for a ticket TWICE.
The ticketing system is a total joke – basically an honesty system.
If an inspector looks like he going round checking, I just jump off at the next stop and catch the next one in. I have saved THOUSANDS over the years and I know I am not the only one.
Cheers Labour!

“A significant amount of the benefits identified for Light Rail Stage 2a are predicated on the project being a catalyst for the acceleration of development of the Acton Waterfront. Neither the Stage 2a Business Case or Economic Appraisal Report provides information or evidence on how Light Rail Stage 2a is expected to accelerate development at the site.”

Translation: Dodgy figures were used to justify the project based on wishful thinking.

“Major Projects Canberra and the Chief Minister, Treasury and Economic Development Directorate (ACT Treasury) were also asked to provide comments for inclusion in the final report in the Summary chapter. No comments were provided for inclusion in this Summary chapter.”

Translation: The ACT Government will ignore this audit report and will treat the Audit Office with the same degree of contempt it treats all other residents.

Conclusion: When you have a Greens run Labor government you get Greens/Labor arrogance, corruption, waste and mismanagement.

Hmmm…yes…and a Triple AAA credit rating too.

Capital Retro2:16 pm 02 Oct 21

A Triple AAA credit rating is actually an AAAAAAAAA one.

Lehman Bros are a company, not government, different ratings system. No one in their right mind is suggesting that the ACT economy is not in a strong position, it’s just disappointing to the can the tram chicken littles who ran around crying about the sky falling in if light rail was introduced and now that it has been introduced….and the sky didn’t fall down, they’re left without a leg to stand on. The rest of us have just moved on.

Capital Retro9:58 pm 02 Oct 21

How can the ACT government not be in a strong position and still have a AAA credit rating, astro2? If you claim some sort of expertise in these matters let’s hear the full story.

And while I accept that you are a passionate supporter of the Right Fail and an apologist for the government the fact that you rely solely on a fairy tale as an analogy to attack detractors doesn’t leave you with much credibility.

Simply saying the ACT government can afford to commit to major infrastructure projects, which it has done. (Also with buy-in from the Federal Government). That’s not being “an apologist” for anything, just accepting reality here. Also not sure where the “attacking detractors” idea comes from, obviously you’re perennially upset by the idea of light rail. At some stage, I would think we all need to accept reality don’t we.

Astro if it was a road being built for the same cost not be a word would be heard.

People just like to whinge about anything new and different. Look at the negative comments on other new sites about the electric hybrid fire truck the ACT is buying.

Never mind that hybrid heavy vehicles mostly bus have been in use elsewhere around the world for a good 15+ years.

That’s such a ridiculously incorrect statement.

If the government was proposing on spending a few billion dollars on a road project that had a woeful cost benefit ratio, the intelligent people opposed to light rail would have the same position.

Exactly like if the Light Rail had a cost benefit ratio of over 2.5 like the Majura Parkway, those people wouldn’t complain either.

Most cities of the world see public transport use driven by a mix of economic, reliability, accessibility, demographic, lack of car ownership and journey travel time factors.

In Canberra however, ‘Travel Time’ has consistently trumped the other factors in public transport use for Canberrans. Many of our behaviours are often different to other cities.

When journey time gets slower, Canberrans are more likely to use a car (as most people can afford this). We recently saw this effect after the 2019 network changes. More bus/rail use in faster journey areas like Gungahlin, Inner North and Weston Creek. BUT, Reduced bus use in Tuggeranong, Woden and Belconnen.

Replacing a fast transit lane bus service with a slower light rail service is the exact opposite of what time poor Canberra commuters want.

It’s like trying to fur jackets in Darwin. You’re not giving people what they want.

Get out the champagne again, I 100% agree.

As I’ve said elsewhere, building this project now is a solution looking for a problem.

Economic is a major factor. If car use was charged more appropriately public transport use would go up. By appropriately I mean paying true cost of building and maintaining roads, carparks and impact on environment.

You seem to be suggesting some sort of user or beneficiary pays system that matches the true costs to the benefits of providing such infrastructure.

I would fully agree with that but it would seem strange to then not apply the same to light rail, particularly when cheaper options for the same level of service are available.

I’m glad you’re finally getting on board.

Crazy times Chewy. Too much agreement between us.

I think it would be good for Canberra to revisit the proposal for stage 2. A full and honest assessment by balanced experts.

ACT Government continually choose consultancies by companies that already hold predefined opinions.

If a Belco Light Rail route legitimately stacks up with a high return on investment, ‘then go for it’.

But independent transport experts ‘keep’ highlighting that Canberra’s Spatial geography suits dedicated bus rapid lanes, with bus connections and park and rides spreading into the suburbs.

A 10 billion dollar investment into a Canberra wide light rail system should be made by experts not by voters, who have little credible alternative options.

Yes the decision making has clearly been too clouded by the politics.

As you say, if a solid business case can be put together, let’s go for it. But currently, no such thing exists and based in the evidence available, it’s not viable.

The only alternate to a rapid bus network in reality for a city like Canberra (Given its size, geography and layout) that could make the travel time elements stack up would be an underground – but for obvious reasons that is really not a viable option (If you think they can make the tram expensive, imagine what that would cost in this town).

Capital Retro4:03 pm 01 Oct 21

“Lack of car ownership” in a lot of cities in Europe where trams are the only mode of public transport reflects the fact that there is a “lack of anywhere to park a car” because the cities are 100 of years old, densely populated and there was no planning for the future.

Visitors from these European cities can’t believe how lucky we are in Canberra because we can house our private cars at our homes. I explain them to them that it is because Canberra was designed around the private motor car as the main means of transport.

It worked very well until this current government came to power and we all know how much they like to mimic the “Euro vibe”. Now they are retro-designing Canberra to be just like European cities with trams, densification and nowhere to park cars.

It’s a case of going regressive to become progressive.

Rather than the “Los Angeles vibe” with congested motorways. I think Canberrans have made their choice on this one in the last two elections so let’s just proceed as planned with a clean quiet multi-modal transport system.

Ah, Astro,
You’ve unsurprisingly been missing the last few days.

But no, we haven’t voted on any such thing.

An election isn’t a suicide pact and when the evidence clearly shows that this isn’t viable, we don’t all have to jump off the cliff behind those spouting meaningless cliches.

A good government would recognise their mistakes and change their position to reflect the current reality rather than doubling down because they don’t want to deal with the political fallout.

It’s interesting that the vast majority of people in the new apartments in Civic still own and drive a car.

There was a stat that showed a higher proportion of car ownership in areas of the inner north than in areas of Canberra’s outer suburbs.

I’ve seen Rattenbury many times in his car but only once on his bike.

Gosh, that’s a very emotional post there mate. I think by “we” didn’t vote on any such thing you mean “you” didn’t but that’s already known. Nobody’s jumping off a cliff here, it’s a major infrastructure project, it’s what governments do. Just because it doesn’t suit you personally, doesn’t mean that it won’t go ahead. And BTW, a handful of hardcore ‘can the trammers’ on RiotACT isn’t political fallout to speak of. As previously noted – time to move on.

No emotion there, I think you’re mistaking the facts I’ve presented because once again you have no response.

And it’s honestly laughable that you suggest people “move on” when the government is proposing to waste a few billion dollars on the next stage of light rail, whilst it’s fiscal position is nowhere near as rosy as you’re suggesting.

But of course you don’t care about the government wasting taxpayers money as you’ve made abundantly clear. As long as you personally support a project, no amount of expenditure is unjustified.

Oh and while you’re here, did you see Victoria had 1488 Covid cases today. Exponential growth hey, it can really make fools of people who don’t understand data, but we already knew that.

Wait, people are only now starting to realise the tram is slower than the bus routes and a waste of money and it would have been better spent on improving roads, buying new busses and improving infrastructure like dedicated bus lanes and new shelters? I’m sorry, but how does it make any sense to terminate the R4/5 in Woden, only to force you onto a tram which will be 33% slower than the current bus network? Not to mention the traffic delays it will cause in the city and Woden while under construction and also the removal of one of the main thoroughfares through Woden – Callum St . Oh but wait, it’s a small price to pay for the “benefits” as a result of the tram. Mr Barr needs to stop trying to make the ACT a mini Sydney and focus more on what Canberra ACTUALLY needs, like improved road maintenance, a new hospital, better education funding, etc. Never mind, my fellow “Ken Behrens” just keep voting in the short bald guy anyway. It’s even better now that we have the Greens in the mix too!

HiddenDragon7:50 pm 28 Sep 21

A government which is doubtless revving itself up to hit the Canberra public with a barrage of spin about “building back better” should take the message of this report (particularly the implicit message about the opportunity costs of light rail extensions) to heart and divert spending to areas of genuine and pressing need and away from this nice to have (for some) obsession.

Tom Worthington2:59 pm 28 Sep 21

A trackless tram would be a better, cheaper option from Civic to Woden, and could be built sooner. It would not need track to be laid, or overhead wires installed, just a dedicated lane painted on the road. Commonwealth Avenue bridge could be used, without the need for extensive (and expensive) engineering work.

In 2015 I traveled the world’s longest guided busway, in Cambridge, England. Like one in Adelaide, this uses concrete tracks, which a modified buses travels along without the driver having to steer. But technology has moved on, and a special track is no longer needed. A bus can follow a line painted on the road. The vehicle can be built larger, and more comfortable, looking like a tram. It can draw power at the stops, to be stored in a battery. https://blog.tomw.net.au/search/label/guided%20busway

Capital Retro7:47 am 30 Sep 21

A tramless track would even be better.

Seems stupid to me to be building this section when the government doesn’t have all the approvals lined up for getting over the lake and through the parliamentary zone. Will look really dumb if the Commonwealth sticks to its guns and refuses, or puts impossible conditions on it (eg must be underground). It’s obvious that stage 2A exists essentially to pressure the Commonwealth into approving 2B.

The main issues have been sorted for the rest of stage 2 with conditions imposed and agreed to.

Feds also putting money into 2A.

An outsider perspective. How is it that a spread out city like Brisbane can manage to operate an effective bus network unlike Canberra. I have 2 simple observations of differences between the cities. Firstly Brisbane has some extensive dedicated busways which have been basically add-ons to existing infrastructure. As an example the south-eastern busway is an add-on to the south-eastern motorway and winds underneath and either side with entry and exit points roughly every kilometre. The buses move a lot of people very quickly. Another example of their use of busways is they have a lot of little ones so that at traffic intersection hotspots there will be a little busway which ensures that buses get through on one change of lights whereas cars in peak hours might take 2 or 3 changes. Another point is the unions are much more supportive of allowing weekend work than in Canberra. The simple solution is subcontract it to Brisbane City Council.

thoughtsonthesubject11:51 am 28 Sep 21

The Auditor-General’s report high-lights just one aspect of the problems of the light rail for Canberra, namely the financial ones. There are many others. For instance the trip between Woden and Civic with 11 stops in between is estimated to take 30 minutes while the express R4 bus takes 15 minutes off-peak, 16 minutes during rush hour. To “persuade” people to take the tram, R4 will become a local service between Lanyon and Woden. The doubling of commuting time becomes even more serious for people in Tuggeranong whose place of work happens to be in Civic. Of course there is an alternative to the light rail, namely the new electric buses Transport Canberra is procuring which have all the comforts of the tram including lowering their carriages to the level of the platform at stops. For routes with heavy passenger demand during rush-hour, the new bi-articulated electric buses with a capacity of up to 180 passengers which Brisbane is ordering would do the trick. They even look like the light rail, but don’t need the infrastructure of the latter and hence are flexible regarding routes. After the financial debacle of the new light rail, Sydney too is ordering 8.000 electric buses.

Fact check 1 : Trip between Woden and Civic via light rail with additional stops to the current R4 is estimated to take between 25 to 30 minutes, not 30 minutes. Also R4 takes up to 17 minutes on the timetable (longer if caught in traffic).
Fact check 2: Brisbane and Canberra will both be using electric buses. Brisbane also has rail transport.

vintagenikoncamera9:24 am 28 Sep 21

People act as though there is a viable alternative to not building some form of higher-capacity public transport. Commuting by private vehicle is expensive and spacially inefficient thus resulting in congested motorways. Busses are a massive improvement on this however, they still have limitations and lower relative capacity compared to any form of rail.

The report (as represented by this article), essentially makes the following conclusions:
-Delays to the construction will reduce the economic benefit.
-Acton waterfront may not be developed as much as the ACT government predicted.
-Building light rail will be disruptive (no shit).
-Making the rolling stock wire-free will cost more money
-Delays = Bad

The conclusions are somewhat obvious and definitely do not advocate (as some commenters seem to have wrongly interpreted) for not extending the light rail. The report even states the necessity of the light rail:

“Canberrans cannot afford to wait until the late 2020s for this much needed public transport infrastructure to be completed.”

thoughtsonthesubject11:59 am 28 Sep 21

The answer is Brisbane’s new bi-articulated electric buses with a capacity of up to 180 passengers. They even look like the tram but don’t incur the massive financial and ecological costs of the light rail’s infrastructure. They are also flexible with regard to the route and can quickly be utilized for new suburbs.

The problem you’ve got is that the business case already showed that the second stage of light rail wasn’t viable, so any further hits to the truly heroic assumptions included in that assessment makes it even worse.

Particulaly when the majority of benefits claimed are due to land development activities, not transport ones. Transport benefits should dominate if your claim of high capacity transport needs was correct.

And the Land development benefits could similarly be achieved without light rail, which the Auditor could not assess here because it’s not part of their mandate.

“People act as though there is a viable alternative to not building some form of higher-capacity public transport.”

That’s because there is, and the government’s own business case for light rail actually provided it, with a bus rapid transit system that could achieve almost all of the benefits at a fraction of the cost.

Now on stage 1 that position was perhaps arguable, but stage 2 currently has none of the transport problems that stage 1 did. The current buses are significantly faster and more flexible than light rail. Light Rail on this route is a solution looking for a problem.

There may be an argument that a higher capacity system is needed in 20 years and should be planned for now. But that wouldn’t meet the political drivers, which are clearly at the forefront of decisions on this project.

Capital Retro8:16 am 28 Sep 21

“The cost of retrofitting was estimated to be about 17 per cent of the estimated capital cost.”

Gee, I didn’t think rubber bands cost that much!

Why does the “Public Transport Association of Canberra” get asked for commentary when they are a just a rebadged version of the “ACT Light Rail” lobby group that pushed for years to get Light Rail into Canberra?

They have absolutely zero ability to be unbiased in any discussion of the project.

At least it’s good that the Auditor is asking questions about this unviable project, it’s just a shame that the ACT Government will never listen and Light Rail supporters are generally not willing to even reconsider their blind and unwavering support.

Just like anti light rail supporters such as yourself are not willing to even consider their blind unwavering opposition.

simply not correct, I’m not anti anything other than bad governance and poor decision making. Particularly when the decisions are made for political reasons.

If the government could provide solid justification for the light rail, I would be 100% on board. I’ve even suggested multiple times that light rail will likely be viable in 10-20 years. Unfortunately every piece of evidence they’ve put together shows that it isn’t viable at the moment, there are other superior options available and massive amounts of public funds could be saved by thinking differently about the project.

The project is also far too heavily reliant on land development rather than transport benefits and when you consider that some of the main beneficiaries are already well off landholders being given windfall gains from public funds, it only compounds the issues.

Thank you once again chewy for proving my point with your diatribe.

Thanks for proving my point with your inability to provide even a skerrick of rebuttal to my factual points.

To be honest, you used to be one of the posters that could at least put some sort of a logical argument together, using evidence, logic and a reasoned position.

It’s a shame that this type of meaningless response from you is now the norm.

And you’ve proved mine with the inability to put together a reasoned response which seems all too regular these days.

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