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Response to Liberals’ Light Rail Report

By Canfan 13 June 2014 66

The paper on light rail commissioned by the Canberra Liberals chooses the most expensive construction method for the project and its use discredits the entire report, according to the Minister for the Environment and Sustainable Development, Simon Corbell.

The report is inaccurate, based on incorrect assumptions and does not stack up to rigorous assessment. It does not include important economic benefits from the project and uses unsound cost and construction assumptions. The paper’s author acknowledged the report assumes a construction alignment which is more expensive than constructing in the median corridor, and makes cost assumptions based only on a very few hand-selected foreign examples.

“Cost benefit analyses for transport projects are complex. The Liberals’ paper is based upon simplistic assumptions, including very limited foreign benchmarking that is not specific to Canberra and it cannot be relied upon,” Mr Corbell said.

“In contrast, Capital Metro’s analysis is robust and will stand up to industry standards for a project of this complexity. Our experienced economic advisers draw upon detailed and well considered inputs prepared by specialists with extensive experience on previous similar projects.

“The Liberals’ paper is based on the most expensive alignment option, a two-tracks system, one on either side of Northbourne Avenue, where the footpaths currently are. The government’s assumptions are based on the use of the median corridor because it is a more cost effective option and one which produces a better transportation outcome.

“The figures cited in the paper on benefit cost ratio and capital expenditure are completely out of the ball park. The BCR in the Liberals’ paper is less than 1.0. In contrast, work undertaken by Capital Metro and its economic advisors confirms the BCR for Capital Metro is positive and therefore delivers a positive economic return to the ACT.”

The analysis fails to include a number of key benefits, including:

– Benefits from urban densification spurred by the project, including increased patronage and the more efficient delivery of utility, health, education, waste collection and other services.
– The residual value of benefits at the end of the review period. It is wrong to say that in 35 years the line will have no value. Rail systems have long lives.
– The analysis does not include health or amenity benefits. In the press conference the Liberals’ own consultant acknowledged studies have proven people prefer light rail over buses.
– No wider economic benefits have been included in the Liberals’ analysis.

The Liberals’ report states that “few projects are funded unless the benefit to cost ratio is greater than 2.0 and usually about 2.5 is expected”. This is incorrect as there are numerous examples of transportation projects having been progressed in Australia with a publicly stated BCR of less than 2, including recent rail and road projects in Queensland and New South Wales. A project with a BCR of greater than 1.0 provides a net social and economic return sufficient to justify a project’s costs. The BCR for Capital Metro will meet this threshold.

(Simon Corbell media release)

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Response to Liberals’ Light Rail Report
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gooterz 9:34 pm 22 Jun 14

dungfungus said :

gooterz said :

Masquara said :

Can one of the proponents please explain why light rail will lead to increased urban density, while vastly increased bus services apparently wouldn’t? How are they materially different?

light rail costs much more, this in turn pushes the rates up and makes houses less affordable. The only way to fix this is to make units and apartments smaller making a much larger population density.

And eliminate car parking for residents of the units and apartments to force them to use public transport.

They’ll just have onstreet parking with super difficult to manage times so they can issue fines and bring in money

dungfungus 6:32 pm 22 Jun 14

gooterz said :

Masquara said :

Can one of the proponents please explain why light rail will lead to increased urban density, while vastly increased bus services apparently wouldn’t? How are they materially different?

light rail costs much more, this in turn pushes the rates up and makes houses less affordable. The only way to fix this is to make units and apartments smaller making a much larger population density.

And eliminate car parking for residents of the units and apartments to force them to use public transport.

gooterz 5:20 pm 22 Jun 14

Masquara said :

Can one of the proponents please explain why light rail will lead to increased urban density, while vastly increased bus services apparently wouldn’t? How are they materially different?

light rail costs much more, this in turn pushes the rates up and makes houses less affordable. The only way to fix this is to make units and apartments smaller making a much larger population density.

Masquara 4:35 pm 22 Jun 14

Can one of the proponents please explain why light rail will lead to increased urban density, while vastly increased bus services apparently wouldn’t? How are they materially different?

banco 2:54 pm 22 Jun 14

Rattenbury’s opinion piece in the CT had basically zero substance.

davo101 11:55 am 22 Jun 14

miz said :

Shane Rattenbury’s light rail opinion piece in CT reveals that he considers Canberrans who disagree with him to be ill-informed.

Well it is statement of fact. Every Canberran who does agree with him is also ill-informed because the ACT Government continues to refuse to release any of the supporting data for the plan. Even Mr Rattenbury appears to be ill-informed, Portland is not a viable model for Canberra’s situation. Portland’s light rail system has mostly been paid for by the Federal Transit Administration (somewhere just over 70%). So, sure, if the Commonwealth was going to chip in with 70% of the construction cost, why not have a tram? Otherwise Mr Rattenbury stop pretending that Portland is an example of a where a municipality has borrowed to build a tram system and it’s been worthwhile.

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