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Capital Metro a billion dollar idea going off the rails

By Peter Clack - 13 October 2014 30

light-rail

The ACT Government plans to invite expressions of interest from 31 October for a private consortium to build, own and operate a light rail system for a period of 20 years.

The Capital Metro light rail, or tramway, will come into service in 2019 along a 12 km track between Gungahlin and Civic via Dickson. The ACT government has announced construction costs of upwards of $800 million.

Details of the likely operating costs (or losses) have not been made available, but the $800 million will have to be paid back somehow. Repaying construction costs over a period of 20 years will cost the public purse some $40 million a year before any interest or other operational charges are included.

This is one of the largest single capital investment projects in the history of self-government, a once in a lifetime opportunity to embrace a new vision for Canberra and to revolutionise and modernise the concept of public transport.  Such a light rail service should connect the city to the airport and unify the major town centres as well as giving access to national attractions in the Parliamentary Triangle. It should give significant advantages for public attractions and tourism and play a part in the commercial, social and cultural life of Canberra.

It’s a big-ticket item – but it needs some big ticket thinking.

The concept of light rail is and always has been a very seductive and attractive option for Canberra –the Walter Burley Griffin blueprint includes provision for tramways. But light rail must cater to the city’s entire transport and commuting needs and all residents, not just to resolve a traffic bottleneck for Gungahlin residents.

The likely public costs of building and running the system are vital and should be publicly available in order to inform and consult with residents. The cost of Capital Metro and the service must be seen against the ongoing annual outlays for the ACT government to underwrite ACTION bus services, currently more than $100 million a year. Yet as it stands, Capital Metro is unlikely to make any significant difference.

It is hardly encouraging that chief objective of Capital Metro website is reduce the use of motor vehicles. Getting people out of cars and onto buses has been a mantra of all ACT governments. They have embraced arguments which serve to demonise drivers and strive to banish motor vehicles.

This has been used to justify the selling off of hundreds of millions of dollars of public parking space across the city and the town centres. Car drivers are being forced to the margins of Civic and town centres, offices and businesses shops and entertainment. Drivers should not be discriminated against because the existing public transport doesn’t satisfy their needs.

Buses do not allow the essential freedoms and mobility to shop or to take their children to and from daycare, to manage their families or carry out other personal or official business during the day or to visit gyms or sporting events at lunchtime or before and after work.

Light rail does offer attractive options for commuters, especially if you live in gridlocked Gungahlin.

But does Capital Metro go far enough? Do we want a light rail system that is going to cost almost $1 billion to build and yet will service a small proportion of the population? Or should we have sought a bigger blueprint that embraces and unifies the city, the town centres and Canberra’s social and economic well-being?

(image www.capitalmetro.org.au)

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30 Responses to
Capital Metro a billion dollar idea going off the rails
JC 12:22 am 14 Oct 14

dungfungus said :

“This is one of the largest single capital investment projects in the history of self-government”

It would never have got legs if we were still under the control of the Department of Territories and I think Canberrans could see that something like this might happen if we got self-government and that is why we voted twice (or was it three times?) for the status-quo to continue.
Now we are realising our worst nightmare whereby an oligarchy of unaccountable, idealistic zealots, cheered on by self-interested parasites and self-appointed experts are running the Territory, are consigning us into a financial black hole.
The fact that Federal governments have repeatedly knocked back funding submissions for a light rail is tantamount to the oversight that would be prevailing if the Department of Territories were still in charge and early comment from some in the rail industry that Canberra was too small for a light rail project and it would not be attractive for a PPP, have been totally ignored.

This typically demonstrates the total lack of commercial judgement by the government.
If the deal is so good why doesn’t the ACT Labor Party and Greens as individual members raise the money themselves and run it themselves?
One reason would be that they would first have to convince a lender it was viable and then have to sign personal financial guarantees. That would be as far as it gets.
Instead, they are abusing their power by assigning all the risk to ratepayers who will have to stay here and pay it off while the politicians have the choice to leave Canberra but still live off the generous ratepayer funded pensions with impunity.

So Federal government knows best, local is unaccountable. Though except for elections every 4 years. The fact the people of the ACT have kept on voting Labor means one of two things. They like what Labor or doing, or they think your Liebral party doesn’t offer a suitable alternative. My money is on the latter.

As for this project it is interesting you use comments such as commercial judgement. In business you would have a point, but government is not necessarily about commercial it is about delivering services that they believe the community needs and wants. If infrastructure was purley done on commercial basis we would have no free roads what so ever. Every road in this town that is built would need to be tolled to make it commercial, but alas we accept that as a community our tax and rates money needs to pay for things that don’t stack up commercially. Some other examples would be schooling, hospitals, police, fire, ambulance, the list goes on and on.

I also accept there is a large portion of the community who doesn’t see the need, mostly in South Canberra, who are probably jealous Gungahlin is getting it and they are not, doesn’t mean it is a bad thing.

We could also do without the melodrama and rhetoric of a debit to be paid off for years, your mates in the Federal Liebral party are doing that one to death it is getting boring.

Simple fact if it is going to cost $800m then that is about $2.5k for every man women and child in Canberra. Lets say even with interest amounting to lets say another $800m and a pay back over 20 years that works out to be about $230 per year per person. Seems ok to me, sh$t I am even willing to put in your bit if your too much of a tad wad, and guess what I don’t bloody well live in Gungahlin and never want to either.

farnarkler 10:41 pm 13 Oct 14

This is going to end up like the Channel tunnel in the UK. Yes it’s nice and quick, however, it costs a third more than going by ferry. The ticket prices for the light rail will be more than bus tickets and there’ll still be buses doing the same route.

miz 10:10 pm 13 Oct 14

There’s just no justification for the proposed light rail project no matter which way you look at it. The same commercial investment in Civic (not to mention other town centres) could occur with rapid buses, for way less. and we could all benefit with rapid buses, not just a small part of Canberra who doesn’t need it anyway (because there are loads of buses along the same route). We already have the buses and a great road network. A fantastic city-wide bus network could be envisaged to take this city into the 21st C without having to relocate a single pipe or cable, for far less money, and way faster and more efficiently. The Govt just has to be motivated to sell it, the same way as they are seeking to market this light rail that simply duplicates bus routes we already have. It’s baffling why they are trying to sell it, when their own studies show there is no advantage in light rail whatsoever, only massive expense for no gain.
I vote we restore the pluses of buses!

gooterz 8:24 pm 13 Oct 14

Everyone says that the cost is going to be increased over the next 10 – 15 years.

Just look at the technology cost 10-15 years ago and what the exact same technology costs today.

15 years we’ll have automated track laying machines that’ll cut the job in half.|

Also what’s the cost for the construction that isn’t directly paid by the construction company? Lost work hours waiting in traffic and lost business from the 4 year disruption along Northbourne.
Not to mention the interest on $800million over the 24 years to pay it off.

dungfungus 6:49 pm 13 Oct 14

Matt Watts said :

dungfungus said :

“This is one of the largest single capital investment projects in the history of self-government”

It would never have got legs if we were still under the control of the Department of Territories and I think Canberrans could see that something like this might happen if we got self-government and that is why we voted twice (or was it three times?) for the status-quo to continue.
Now we are realising our worst nightmare whereby an oligarchy of unaccountable, idealistic zealots, cheered on by self-interested parasites and self-appointed experts are running the Territory, are consigning us into a financial black hole.
The fact that Federal governments have repeatedly knocked back funding submissions for a light rail is tantamount to the oversight that would be prevailing if the Department of Territories were still in charge and early comment from some in the rail industry that Canberra was too small for a light rail project and it would not be attractive for a PPP, have been totally ignored.

This typically demonstrates the total lack of commercial judgement by the government.
If the deal is so good why doesn’t the ACT Labor Party and Greens as individual members raise the money themselves and run it themselves?
One reason would be that they would first have to convince a lender it was viable and then have to sign personal financial guarantees. That would be as far as it gets.
Instead, they are abusing their power by assigning all the risk to ratepayers who will have to stay here and pay it off while the politicians have the choice to leave Canberra but still live off the generous ratepayer funded pensions with impunity.

Just because the Feds didn’t provide funding in the 2000s doesn’t mean they wouldn’t have if we were still under the old no self-government system.

1. The ACT Government’s submission in support of the funding was merely a high-level wish list rather than a business plan.
2. The Dept of Territories/ NCA had planned a number of rapid mass transit routes that were never built. For example, the green space between Coulter Drive and Florey shops was envisaged as an extension of the (now disused) bus lanes from the Belconnen town centre.
3. In fact, at the now-demolished Belconnen bus interchange, the downstairs area along Benjamin Way was pictured as a light rail station (this is referenced in a paper – I don’t have access to it at present).
4. It is widely accepted that many people wanted to vote against self-government because it was seen for what it was – an attempt by the Feds to save money (i.e. there would be less spent on infrastructure etc.).

None of that changes your views on light rail, but I wanted to offer these alternative views of your narrative.

I agree with what you have said and you have cited some good examples of what was once proposed and why.
I recall Simon Corbell pushed hard for exclusive express bus lanes from Belconnen to Civic about 15 years ago. Add that one to the list.
I like trams and I travel on them when ever it is convenient (that usually means a car isn’t an option).
This is why trams flourish in Europe; people live in high density apartments and even if they had a car they would have nowhere to park it. In some cities like Tokyo, one has to own a parking space before one is permitted to own a car. In Singapore, a Toyota Prius costs $150K!. Canberra was a planned city with lots of roads. We should rejoice that despite what Labor are trying to do (sell off all the city carparks) we are still able to go anywhere at anytime in Canberra by car. Where else in the world can that be done?
If we have to use public transport the buses are there. Trams are essentially buses without flexibility.

dungfungus 6:06 pm 13 Oct 14

Josh Mulrine said :

Really Canberra can’t afford to wait any longer. I wonder how much it will cost to put this project forward in say 5 or 10 years time. Double… triple… maybe more?

It’s academic what the costs will be in the future as the project is a total dud.
The route is already adequately served by the most modern and efficient buses money can buy.
ACT Labor/Greens announcements about the Capital Metro project from day one have been scripted straight out of the ABC TV series Utopia.
Yes, we have our own “Silver Emu” but as that project name has been taken ours could perhaps be named the “Golden Turkey”.

house_husband 5:38 pm 13 Oct 14

Josh Mulrine said :

Really Canberra can’t afford to wait any longer. I wonder how much it will cost to put this project forward in say 5 or 10 years time. Double… triple… maybe more?

Please explain how the price in 5 or 10 years has anything to do with the financially viability now?

damian 5:37 pm 13 Oct 14

Light rail is the way of the future public transport in smaller and medium sized cities around the world demonstrate. Even in traditionally car dominated North American cities of modest populations (eg Calgary, Edmonton, Portland), modern tram systems have been progressively rolled out and expanded starting from the early 1980s.

Invariably they have attracted patronage well in excess of initial forecasts and conservative opponents who might claim “it will never work” or “it will bankrupt us” are left stunned and muted by their success. In the UK, check out the success of light rail in such cities as Manchester, Sheffield, Leeds, Blackpool, Croydon (south London) and Dublin. In France and Germany, there have been a host of modern light rail systems constructed over the past decade or so in dispersed regional centres with population densities not too different from parts of the ACT…check out light rail in places like Rheims, Bordeaux, Nancy and Clermont-Ferrand. Those who imply that Canberra is going out on a limb with its light rail vision are living in the 1950s. Why opponents become blinkered by the financial commitment involved is just grasping at straws; the same lot don’t bat an eyelid at the billions that have gone into Canberra’s road system in the two decades since self-government …virtually all of which has been undertaken without any rigorous cost-benefit analysis.

If there is a sting in the tail with the planned financing of the initial light rail project, it is because of the planned use of private-public partnerships (PPPs) to build and operate the system. PPP’s are widely discredited around the world in the aftermath of their initial popularity and then frequent failures through the 1980s and continuing through to the late 1990s.

Real world experience suggests that they invariably end up costing the taxpayer a good deal more than would be the case without them. PPPs are often financially dubious propositions, they don’t necessarily ensure timely project delivery and often see the taxpayer bailing them out at exorbitant cost. Just look at the Sydney Harbour Tunnel, airport transport infrastructure links, the UK/French Eurotunnel Channel tunnel. The ACT Government would be well advised to steer right away from this form of infrastructure provision; PPPs are not some kind of “magic pudding”! Sure, leave it to private businesses with demonstrable expertise to operate the trams if this can be done more cost effectively.

Regardless of whether it is privately or publicly operated, the elephant in the room may well be the transport sector unions; they are streetwise enough from years of experience to ensure that transport workers legitimate rights and reasonable service conditions are not compromised by private sector managers; it would be naive to think otherwise.

HiddenDragon 4:54 pm 13 Oct 14

When I saw the title of this thread, I thought “oh, another one on the trams…..can I be bothered” – yes I can! maintain the rage! (and plus one to just about everything dungfungus said at 9.15am.

Josh Mulrine 4:33 pm 13 Oct 14

Really Canberra can’t afford to wait any longer. I wonder how much it will cost to put this project forward in say 5 or 10 years time. Double… triple… maybe more?

Matt Watts 1:41 pm 13 Oct 14

dungfungus said :

“This is one of the largest single capital investment projects in the history of self-government”

It would never have got legs if we were still under the control of the Department of Territories and I think Canberrans could see that something like this might happen if we got self-government and that is why we voted twice (or was it three times?) for the status-quo to continue.
Now we are realising our worst nightmare whereby an oligarchy of unaccountable, idealistic zealots, cheered on by self-interested parasites and self-appointed experts are running the Territory, are consigning us into a financial black hole.
The fact that Federal governments have repeatedly knocked back funding submissions for a light rail is tantamount to the oversight that would be prevailing if the Department of Territories were still in charge and early comment from some in the rail industry that Canberra was too small for a light rail project and it would not be attractive for a PPP, have been totally ignored.

This typically demonstrates the total lack of commercial judgement by the government.
If the deal is so good why doesn’t the ACT Labor Party and Greens as individual members raise the money themselves and run it themselves?
One reason would be that they would first have to convince a lender it was viable and then have to sign personal financial guarantees. That would be as far as it gets.
Instead, they are abusing their power by assigning all the risk to ratepayers who will have to stay here and pay it off while the politicians have the choice to leave Canberra but still live off the generous ratepayer funded pensions with impunity.

Just because the Feds didn’t provide funding in the 2000s doesn’t mean they wouldn’t have if we were still under the old no self-government system.

1. The ACT Government’s submission in support of the funding was merely a high-level wish list rather than a business plan.
2. The Dept of Territories/ NCA had planned a number of rapid mass transit routes that were never built. For example, the green space between Coulter Drive and Florey shops was envisaged as an extension of the (now disused) bus lanes from the Belconnen town centre.
3. In fact, at the now-demolished Belconnen bus interchange, the downstairs area along Benjamin Way was pictured as a light rail station (this is referenced in a paper – I don’t have access to it at present).
4. It is widely accepted that many people wanted to vote against self-government because it was seen for what it was – an attempt by the Feds to save money (i.e. there would be less spent on infrastructure etc.).

None of that changes your views on light rail, but I wanted to offer these alternative views of your narrative.

dungfungus 12:49 pm 13 Oct 14

Holden Caulfield said :

How far will Capital Metro be in terms of actual construction before the next election?

It’s a great idea in theory—who wouldn’t support a feasible light rail network servicing our sprawled out city?

In practice, I can’t see it being any more than a massive white elephant—underused and terribly over budget.

I am hoping that they get the proposal to “investment ready” stage next year and then shelve it, as, by then, the Territory’s revenue situation will be pretty grim.
They have already shelved the new lakeside international convention centre and halved the size of the new stadium so, with a bit of spin, it will be easy to “sell” the decision especially as there will be an election the following year.
By then, about $100 million will have been wasted but they will say it was money that would have to be spent anyhow when (and if) the project resumes so it will be a “forward saving”.
That is only twice as much as they lost on Transact (through Actew) and they actually said (and believed) that was a “win win” outcome.
We should be thankful our leaders have this uncanny insight.

tooltime 11:21 am 13 Oct 14

Hi All,

I have grave misgivings about this project. The debt burden is too great, and given this mobs handling of other big ticket infrastructure items (think Cotter Dam), it could well cost double that $800m quoted.

Warren Buffett had ideas of doing this sort of thing in the U.S. But only a handful of cities in the U.S. had the population densities (and lack of alternatives) to make it viable, so he didn’t do it. The previous poster said it well…

Thanks

Holden Caulfield 9:59 am 13 Oct 14

How far will Capital Metro be in terms of actual construction before the next election?

It’s a great idea in theory—who wouldn’t support a feasible light rail network servicing our sprawled out city?

In practice, I can’t see it being any more than a massive white elephant—underused and terribly over budget.

dungfungus 9:15 am 13 Oct 14

“This is one of the largest single capital investment projects in the history of self-government”

It would never have got legs if we were still under the control of the Department of Territories and I think Canberrans could see that something like this might happen if we got self-government and that is why we voted twice (or was it three times?) for the status-quo to continue.
Now we are realising our worst nightmare whereby an oligarchy of unaccountable, idealistic zealots, cheered on by self-interested parasites and self-appointed experts are running the Territory, are consigning us into a financial black hole.
The fact that Federal governments have repeatedly knocked back funding submissions for a light rail is tantamount to the oversight that would be prevailing if the Department of Territories were still in charge and early comment from some in the rail industry that Canberra was too small for a light rail project and it would not be attractive for a PPP, have been totally ignored.

This typically demonstrates the total lack of commercial judgement by the government.
If the deal is so good why doesn’t the ACT Labor Party and Greens as individual members raise the money themselves and run it themselves?
One reason would be that they would first have to convince a lender it was viable and then have to sign personal financial guarantees. That would be as far as it gets.
Instead, they are abusing their power by assigning all the risk to ratepayers who will have to stay here and pay it off while the politicians have the choice to leave Canberra but still live off the generous ratepayer funded pensions with impunity.

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