high speed rail report
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High SpeedRail Study
Phase 2 Report
Key ndings andExecutive summary
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In accordance with the east coast high speed rail (HSR)study terms o reerence, AECOM and its sub-consultants(Grimshaw, KPMG, SKM, ACIL asman, Booz & Co andHyder, hereater reerred to collectively as the Study eam)have prepared this report (Report). Te Study eam has
prepared this Report or the sole use o the CommonwealthGovernment: Department o Inrastructure and ransport(Client) and or a specic purpose, each as expressly statedin the Report. No other party should rely on this Reportor the inormation contain in it without the prior writtenconsent o the Study eam.
Te Study eam undertakes no duty, nor accepts anyresponsibility or liability, to any third party who may relyupon or use this Report. Te Study eam has preparedthis Report based on the Clients description o itsrequirements, exercising the degree o skill, care anddiligence expected o a consultant perorming the same orsimilar services or the same or similar study, and havingregard to assumptions that the Study eam can reasonably
be expected to make in accordance with sound proessionalprinciples. Te Study eam may also have relied uponinormation provided by the Client and other third partiesto prepare this Report, some o which may not have beenveried or checked or accuracy, adequacy or completeness.Te Report must not be modied or adapted in any wayand may be transmitted, reproduced or disseminated onlyin its entirety. Any third party that receives this Report, bytheir acceptance or use o it, releases the Study eam andits related entities rom any liability or direct, indirect,consequential or special loss or damage whether arising incontract, warranty, express or implied, tort or otherwise,and irrespective o ault, negligence and strict liability.
Te projections, estimation o capital and operationalcosts, assumptions, methodologies and other inormationin this Report have been developed by the Study eamrom its independent research eort, general knowledgeo the industry and consultations with various third
parties (Inormation Providers) to produce the Reportand arrive at its conclusions. Te Study eam has notveried inormation provided by the Inormation Providers(unless specically noted otherwise) and it assumesno responsibility nor makes any representations withrespect to the adequacy, accuracy or completeness o suchinormation. No responsibility is assumed or inaccuraciesin reporting by Inormation Providers including, withoutlimitation, inaccuracies in any other data source whetherprovided in writing or orally used in preparing or presentingthe Report.
In addition, the Report is based upon inormation that wasobtained on or beore the date in which the Report wasprepared. Circumstances and events may occur ollowing
the date on which such inormation was obtained that arebeyond the Study eams control and which may aect thendings or projections contained in the Report, includingbut not limited to changes in external actors such aschanges in government policy; changes in law; fuctuationsin market conditions, needs and behaviour; the pricing ocarbon, uel, products, materials, equipment, services andlabour; nancing options; alternate modes o transportor construction o other means o transport; populationgrowth or decline; or changes in the Clients needs andrequirements aecting the development o the project.Te Study eam may not be held responsible or liable orsuch circumstances or events and specically disclaim anyresponsibility thereore.
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High Speed Rail Phase 2 / iii
OverviewA strategic study on the implementation o a High Speed Rail
(HSR) network (the study) on the east coast o Australia between
Brisbane, Sydney and Melbourne was announced by the Minister
or Inrastructure and Transport, the Hon Anthony Albanese MP,
in August 2010.
The study has been conducted in two phases. Phase 1, published
in August 2011, identied a short-list o corridors and station
options and estimated preliminary costs and demand or HSR
on the east coast o Australia. Phase 2 built on phase 1, but was
considerably broader and deeper in objectives and scope, and so
rened many o the phase 1 estimates, particularly the demand
and cost estimates. This phase 2 report presents detailed
ndings on the 12 advisory objectives established or the study.
Drawings and maps have been prepared or the purpose o
depicting the recommended alignment or the HSR system andto enable civil construction cost estimates to be made.
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High Speed Rail Phase 2 / v
Keyndings
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Key Findings
Denition o the preerred HSR system
The HSR network would comprise
approximately 1,748 kilometres o dedicated
route with our city centre stations, our
city-peripheral stations (one in Brisbane,
two in Sydney and one in Melbourne) and 12
regional stations.
HSRwouldrequireadedicatedrailwaynetworktodeliverthenecessarylevelofsystemperformance,intermsofjourneytimeandreliability,tobecompetitivewithothermodesoftransport,particularly aviation.
To meet expected demand, the HSR system
would oer a combination o services,
including direct express services and limited
stop services.
Typicalexpressjourneytimeswouldbetwohoursand37minutesbetweenBrisbaneandSydney,onehourandfourminutesbetweenSydneyandCanberra,andtwohoursand44 minutesbetweenSydneyandMelbourne.
eHSRwouldoperatefrequentservicesbetweencapitalcitiesandregionalcentres.
In2065,itisforecastthatpeakperioddemandforSydney-Melbournewouldbemetbytwonon-stopinter-capitalexpressservicesperhourperdirectionandthreeone-stopinter-capitalexpressservicesperhourperdirection,callingateitherSydneySouthorMelbourneNorthcityperipheralstations.
The dedicated HSR network would need to
be integrated into the hubs o existing urban
public transport systems and road networks
to maximise its connectivity with other
transport networks.
Allcitycentrestationsmustbeintegratedwithotherpublictransportnetworksandthecity-peripheralstationsmusthavegoodaccesstomajorroadnetworks.
Mostofthestationsonthenetworkwouldrequiresomelocalenhancementstopublictransportservices,parkingandinterchangearrangementstoensuregoodconnectivity.
Cost o constructing the HSR system
The estimated cost o constructing the
preerred HSR alignment in its entirety
would be about $114 billion (in 2012 terms),
comprising $64 billion between Brisbane
and Sydney and $50 billion between Sydney,
Canberra and Melbourne.
epreferredHSRalignmenthasbeendesignedrstandforemosttomeetmarket needs(intermsofjourneytimesandreliability),whilealsobeingenvironmentallyandeconomically sustainable.
Tunnellinghasbeenadoptedwherenodedicatedsurfaceroutecouldbecreatedwithoutunacceptabledislocationand/or
environmentalcosts.Tunnelsmakeup144kilometres(eightpercent)ofthepreferredalignmentandarethemostsignicantconstructioncostelement(29 percentof
totalconstructioncosts).AccesstoandfromSydneywouldrequirethemosttunnelling(67kilometres)comparedtoBrisbane(ve kilometres),Melbourne(eightkilometres)andCanberra(fourkilometres).
eHSRsystemwouldadoptinternationallyprovenandavailabletechnologyfortrainsetsandassociatedsystems(suchastraincontrolandpowersupplysystems),whichwouldcostlessthanifacustomiseddesignwererequired.
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High Speed Rail Phase 2 / vii
Forecast HSR demand
Between 46 million and 111 million passengers
are orecast to use HSR services or inter-
city1 and regional trips2, i the preerred HSR
network were ully operational in 2065, with a
central orecast o 83.6 million passengers
per year.
By2065,HSRcouldattract40percentofinter-cityairtravelontheeastcoastand60percentofregionalairtravel(primarilylongregional).Onthethreemainsectors,Sydney-Melbourne,Sydney-BrisbaneandSydney-Canberra,HSRcouldattractmorethan50percentoftheairtravelmarket.
Actualpassengernumberswoulddependontheratesofpopulationandeconomicgrowth,thelevelsofcongestionatairports,includingtravellingtoandfromairports,andthefares charged.
Sydney-MelbourneisexpectedtobethelargestmarketforHSR,withabout19millionpassengertripsperyearforecast.isis
considerablymorethanthenextlargestmarket,Brisbane-Sydney,withnearly
11millionpassengertripsperyear,andalmostfourtimesasmanyastheSydney-Canberramarket,withaboutvemillionpassengertripsperyear.
Inter-city andlongregionaltravel(>250km)areexpectedtoaccountfor49percentandapproximately36 percentoftotalpassengertripsand 62percentand35percentoftotalpassengerkilometrestravelledrespectively.Shortregionaltravel(
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Key Findings
Table1 Commencementandoperationalmi lestonesforoptimalstag ing
Stage
Main construction
commences
Operations
commence
Sydney-Melbourne line
Sydney-Canberra 2027 2035
Canberra-Melbourne 2032 2040
Brisbane-Sydney line
Newcastle-Sydney 2037 2045
Brisbane-GoldCoast 2043 2051
GoldCoast-Newcastle 2048 2058
Somepreliminary(enabling)workstoenableconstructionoftheHSRatSydneyCentralstation(e.g.movingplatformsandutilities)
wouldbeundertakenbefore2027.
ConstructionofthewholeHSRsystemwouldtakearound30years.
eSydney-MelbournelinehasstrongerforecastdemandthantheBrisbane-Sydneyline,wouldbelessexpensivetobuildandispredictedtohavehighereconomicandnancialreturns.Itshouldthereforebecompletedrst.
epreferredstagingofconstructionfortheBrisbane-Sydneyline(Newcastle-Sydney,Brisbane-GoldCoastandthenGoldCoast-Newcastle)reectsbothmarketdemandandeconomiccharacteristics.
Forthepurposeofevaluation,thestudyassumedtheinitialstagebetweenSydneyandCanberra
wouldoperatefrom2035,withtheSydney-Melbournelineoperationalfrom2040.
Brisbane-GoldCoastwouldbecompletedin 2051.
GoldCoast-Newcastlewouldbethelaststagetobebuilt,withthecompleteBrisbane-Melbournelineoperationalby2058.
It is possible the program could be
accelerated, with the Sydney-Melbourne
line operational by 2035. In this case the
Sydney-Canberra stage could be operational
by 2030.
Assumingfunding,nancingandallrelevant
approvalswereinplaceandpreliminarydesignhadbeencompleted,theearliestthatmainconstructionworkcouldreasonablystartwouldbe2022.
Bringingtheprogramforwardwouldreducetheeconomicbenets,primarilybecausethemarket
volumeswouldbelowerwhenoperationsbegan.
Table2 Commencementandoperationalmi lestonesforacceleratedstag ing
StageMain construction
commences
Operations
commence
Sydney-Melbourne line
Sydney-Canberra 2022(earliestpossiblestart) 2030
Canberra-Melbourne 2027 2035
Brisbane-Sydney line
Newcastle-Sydney 2032 2040
Brisbane-GoldCoast 2038 2046
GoldCoast-Newcastle 2043 2053
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High Speed Rail Phase 2 / ix
Financial assessment
The HSR program and the majority o
its individual stages are expected to
produce only a small positive nancial
return on investment.
edistributionoftheeconomicbenetsofHSRbetweenusersofthesystemandtheoperator(s)woulddependontheprices charged.
Basedonchargingcompetitivefares,theHSRoperationsandancillaryservices(suchascarparkingandleaserevenuesfromrelatedproperty
development)wouldnotdeliversucientrevenuetofundorrecovertheexpectedcapitalcostsoftheHSRprogram.
Governments would be required to und the
majority o the upront capital costs.
epotentialtoattractprivatenanceislimited.Anexpectedreturnofatleast15percentwouldberequiredatthisstageofprojectdevelopmenttobeattractivetocommercialprovidersofdebtandequitytomajorinfrastructureprojects.HSR
wouldfallwellshortofthis. eestimatedrealnancialinternalrateof
return(FIRR)is1.0percentforSydney-Melbourneand0.8percentforthe
wholenetwork.
Ifpotentialcommercialfundingweremaximised,afundinggapintheorderof$98billion,or86 percentoftheup-frontcapitalcostoftheHSRprogram,wouldremain.
I HSR passenger projections were met
at the are levels proposed, the HSR
system, once operational, could generate
sufcient are revenue and other revenue
to meet operating costs without ongoing
public subsidy.
Postconstruction,theHSRprogramasawhole,andeachofitssectors(withtheexceptionofSydney-Canberraasastand-alonesector)areexpectedtogeneratesucientoperatingincometocovertheirongoingoperationalandassetrenewalcosts.
HSR ares adopted or the study have been
assumed to be comparable to air ares on the
inter-capital routes, and it would appear HSR
could sustain higher ares.
Increasingthecostoffareswouldincreasethenancialreturnsandreducethefundinggap,althoughdoingsowouldreducethenumberofpeopleusingthesystem.Evenso,theeconomicbenetsoftheprogramwouldremainpositive.
GiventhatairfaresinAustraliaarealreadyhighlycompetitiveonmajorroutes,itisnotexpectedthatairlineswouldrespondtoHSRcompetitionbyreducingfaresonasustainedbasis.Ithasbeenassumed,inlinewithinternationalexperience,thatairlineswouldquicklyreducecapacity,eitherbyreducingfrequenciesoraircraftsizes,tolocationswithintheHSRcorridorwherethereissignicantpassengerdiversiontoHSR.Itislikelythatanyreductionincapacitywouldberedeployedto
routesoutsidetheHSRcorridor. Nevertheless,totheextentthatairlinesare
abletoinnovateinwaysthathavenotbeenanticipatedinthisstudy,therewouldbeanimpactonHSRpatronageandcapacitytomeetoperatingcosts.esensitivitytestsincludedonescenarioinwhichairfareswerereducedby50percentfortwoyears.
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Key Findings
Economic assessment
Investment in a uture HSR program could
deliver positive net economic benets.
eSydney-Melbournelinewoulddeliveraslightlyhighereconomicinternalrateofreturn(EIRR)oninvestmentthanthewholenetwork
would.eEIRRofSydney-Melbourneisestimatedat7.8percent,comparedto7.6 percentforaninvestmentinthestagedHSRprogramasawhole.
eeconomicbenetcostratio(EBCR)calculatestheratioofthepresentvalueofbenetstothepresentvalueofcosts.Whencalculatedusingadiscountrateoffourpercent,theECBRis2.5forSydney-Melbourneand2.3forthewholenetwork.
eeconomicnetpresentvalue(ENPV)ofcostsandbenetsassociatedwithaprogramofinvestmentinthepreferredHSRsystem
wouldbe$70billionforSydney-Melbourneand$101 billionforthenetworkasawhole,
calculatedusingadiscountrateoffourpercentayearuntilthestartofconstructionin2027(nancialyear2028),andexpressedin $2012.
eeconomicresultsremainpositiveunderarangeofchangedassumptions.Whencalculatedusingasevenpercentdiscountrate,whichrepresentsahigherhurdlerateforjudgingeconomicperformance,theEBCRwouldbe1.1andtheENPVwouldbe$5 billion.
Mostoftheeconomicbenets(90percent)
wouldaccruetotheusersoftheHSRsystem.Abouttwo-thirdsoftheuserbenetsareattributabletobusinessuserstravellinglongdistances,whichreectsinparttherelativelyhighervalueoftimeattributedtobusinesstravellerscomparedtoleisuretravellers.
Externalitieswouldberelativelyminor,accountingforonlyaboutthreepercentofthe benets.
Environmental and social assessment
The preerred HSR alignment has been
selected to avoid major environmental and
social impacts. The residual impacts on
natural environments and heritage can be
managed by appropriate mitigation and,
where necessary, osets.
Potentialsignicantimpactsinurbanareas,suchasnoiseandlargescalepropertyacquisition,havelargelybeenavoidedbytheuseoftunnellingontheapproachestocapital cities.
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High Speed Rail Phase 2 / xi
Broader impacts o HSR
Aligning public policies, programs and
capabilities across Australian Government,
state/territory government and local
government agencies as part o a corridor
regional development concept would be
necessary to realise the ull benets o HSR.
eimplementationofHSRwouldsubstantiallyimproveaccessibilityfortheregionalcentresthatitserves,providingtheopportunityforbutnottheautomaticrealisationofincreasedregionaleconomicdevelopment.eabilityofthese
centrestotakeadvantageoftheopportunitiescreatedbyimprovedaccessibilitywouldrequirecoordinatedandcomplementarypoliciestobeimplemented.
Emerginginternationalevidencesuggeststhatwidereconomicbenetsmaybegeneratedbyregionalaccessibilityimprovements,butthequantitativeestimatesareneithersucientlycertainnorrobustforinclusioninthemaineconomicassessment.
Implementing a uture HSR program
Both the public and private sectors would
play a signicant role in the planning and
implementation o a uture HSR system.
Governmentswouldneedtohaveacentralroleintheplanninganddevelopmentofthe
HSRsystem,includingsecuringthenecessaryapprovals.eprimarypublicsectorroles
wouldbeexecutedthroughasingleHSRdevelopment authority.
AsHSRwouldbepredominantlypubliclyfunded,theAustralian,ACTandrelevantstategovernmentswouldbetheownersofthesystemandwouldassumethekeyroleinthespecicationandprocurementofnetworkinfrastructure,theallocationofitscapacityfortransportservicesandthespecicationof
minimumservicerequirements.
eprivatesectorwouldberesponsibleforbuildingtheHSRinfrastructureundercontract
totheHSRdevelopmentauthority,andforthedeliveryoftrainservicestothepublic.Controlofthemovementoftrainsandmaintenanceofinfrastructurewouldalsobetheroleoftheprivatesector,undercompetitivelytendered
concession arrangements.The key risks to the HSR program and
its successul perormance are common
to all major greeneld inrastructure
projects; most notably, a lack o certainty
about uture demand and revenues,
and the potential or cost over-runs
during construction.
Allowanceforriskanduncertaintyhasbeenincludedinthedemand,economicandnancialassessments,buttheriskscannotbeperfectlycontrolledandaprogramofthisnature,particularlyextendingoveralongperiodoftime,containssignicant uncertainties.
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Key Findings
Key public policy issues or a decision to proceed
Whether to proceed with planning or a
uture HSR program must necessarily be
a policy decision, taking account o many
actors that cannot be known with certainty,
and in the context o risks which cannot be
perectly controlled.
isstudyestimatesthatHSRwouldhavepositiveneteconomicbenets,usingtheAustralianTransportCouncilscost-benetmethodologyguidelines,whichareconventionallyappliedtomajortransportinfrastructureprojects.However,thisappraisalextendsto2085,anecessarilydistanttimehorizonforprogramdeliveryandmarketimpactcomparedtomostinfrastructurefeasibilitystudies.
elong-termfutureisinherentlyuncertainandrequirescautionwhenmakingajudgement,butitismostlikelythatdemographicandeconomictrendswillsupportasteadilyimprovingcaseforHSRontheeastcoastratherthanotherwise.Inthatcase,policy-makers,whetherornot
yetconvincedofthemeritsofcommittingtoHSR,mayalsolegitimatelyweighthepossibleconsequencesofnottakingactionstopreservethatoptionatsometimeinthefuture.
Inthisregard,inactionisnotbenign.Intheabsenceofaprotectedroute,thespreadofcitiesandotherdevelopmentsinthepreferredcorridorwillgraduallyreducetheconstructabilityandincreasethepotentialcapitalcostsofafutureHSRprogram,renderingitincreasinglymorediculttoimplement,even
whilethefundamentaltrendsmaybecomeincreasinglyfavourable.
As in all publicly-unded inrastructure
projects, the balance between public benet
and public cost should be considered.
epositiveeconomicperformancethatisestimatedtobeachievablefromaninvestmentinHSR,mostofwhichwoulddirectlybenettheusersofthesystem,contrastswithlownancialreturns,whichwouldneedtobesupportedby
publicfunding.Althoughthisistrueofmanytransportinfrastructureprojects,includingnationalhighways,itisanissuethatmustbeconfronted.
eexternalbenetsofHSR-fewerroadaccidents,reducedroadcongestionandsoon
whichmightcontributetoitsrationale,wouldbepositivebutareestimatedtofallfarshortofthepublicfundingrequired.
Bycontrast,theopportunitiesforurbanandregionaldevelopmentintheHSRcorridor
willbeconsideredbymanypeopleinAustraliatohaveahighpotentialvalueinpublicpolicyterms,butthosebenetsdonotfollow
automaticallyorwithcertainty.erewouldneedtobecondencethattheywouldbeactivelyexploitedandrealisedtojustifyanygreatweightinthedecisiononwhethertoproceed.atinturnwouldrequirepolicycommitmentatalllevelsofgovernmenttopursuinganintegratedcorridordevelopmentstrategy,synchronised
withthedeliveryoftheHSRprogram.
A related policy issue is the extent to which
the initial capital costs o an HSR program
should be recovered rom users.
Taxpayerswouldneedtomakeasubstantialcontributiontotheup-frontcostsofestablishinganHSRsystem.eanalysissuggeststhatcharginghigherfaresthanthoseassumedwouldbefeasible,andwouldimprovenancialreturns,butwouldreduceoveralleconomicbenetsasfewerpeoplewouldusethesystem.
Whileeconomicprinciplessuggestthatthecommunityseconomicwelfareisbestpursuedbychargingusersonlythemarginalcostofinfrastructure,establishingthebalancebetweenrecoveryofpublicinvestmentininfrastructureandmaximisingitseconomicbenetsisultimatelyapolicymatter.
IfanHSRprogramwereadopted,therewouldneedtobeanup-frontunderstandingofwhatprincipleswouldbeappliedtoinfrastructurepricingandcostrecovery.Certainly,ifpassengernumbersweretogrowovertime,governments
wouldbeinapositiontobegintorecoversomeproportionofitscapitalinvestment.
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High Speed Rail Phase 2 / 1
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ES
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High Speed Rail Phase 2 / 3
The expected growth in
travel demand
PopulationandemploymentgrowthwillcontinuetochallengethecapacityofexistingtransportnetworksandpublicinfrastructurealongtheeastcoastofAustralia1.TravelontheeastcoastofAustraliaisforecasttogrowataround1.8percentperyearoverthenext20years,increasingbyapproximately60percentby2035.By2065,travelontheeastcoastwillhavemorethandoubled,from152milliontripsin2009to355milliontripsperyear2.
WithoutHSR,aviationwouldremaintheprimarymeansoftransportforlongdistanceinterstate(andsomeinter-regional)tripsandroad-basedtravelbyprivatevehiclewouldremaintheprimarymodeforconnectionswith,andbetween,regionalcentres.Togetherthesewouldcarryover90per
centofthetripsontheeastcoast,subjecttocapacitybeingavailable.
isstrategicstudyinvestigateshowHSRcanplayaneectiveroleinmeetingfuturetraveldemandbyprovidinganalternativemodeoftransportthat
wouldbeattractiveforpeopletouse.
1 AustralianBureauofStatistics(ABS)mid-rangepopulationprojectionsestimatethatbetween2011and2050,thepopulationwillgrowby37percentinNSW,49percentinVictoriaand80percentinQueensland.ABS,PopulationProjectionsAustralia2006to2101,catalogueno.3222.0.
2 SeeChapter 2fordetailofhowtheseforecastsweredetermined.
Executivesummary
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Executive Summary
What is HSR?HSRisgenerallydenedasapurpose-built,xed-trackmodeoftransport,capableofmovingpeopleatspeedsofatleast250kilometresperhour,usuallyoverlongdistances.Internationally,ittypicallyoersservicesbetweenmajorcities,competinginthesametravelmarketasaviation,butalsoprovidesopportunitiesforintermediatestopsinregionalareasandfastcommuterrailservicesfromoutermetropolitanareas.HSRstationsaretypicallylocatedwithincitycentres,
closetopopulationandbusinesscentres.
OriginatinginJapaninthe1960s,HSRsystemsnowoperatein14countries3.Totalglobalkilometresoftrackhaveincreasedfromjustover1,000kilometresin1980,to15,000kilometresin20114.Chinaiscurrentlyconstructinganadditional10,000kilometresofHSRnetwork5.
MostHSRsystemsoperateondedicatedtracksatamaximumspeedofbetween250and300kilometresperhour,withsomesystemsnow
operatinginexcessof300kilometresperhour6.SomeHSRservicesalsousesectionsofconventionaltracksatlowerspeeds,eitheronentrytocitiesortoextendbeyondadedicatedline 7.AllcurrentHSRsystemsuseconventionalsteelwheelsonrailsandarepoweredbyelectrictraction,althoughthereareseveralvariantsintermsofrollingstockandinfrastructure.
Denition o the preerred
HSR system
HSR alignment and station locations
epreferredHSRrouteontheeastcoastofAustraliahasbeendevelopedrstandforemosttomeetmarketneeds(intermsofjourneytimesandreliability),whilealsobeingenvironmentallyandeconomicallysustainable.eroute,illustratedinFigure ES-1,broadlyfollowsacoastalalignmentbetweenBrisbaneandSydneyfollowedbyaninlandalignmentfromSydneytoMelbourne,withspurlinestotheGoldCoastandCanberra.
CitycentrestationswouldbeterminalstationswithintheCBDsofthecapitalcities.eselocationsarethesinglemostimportantoriginanddestinationineachcityandprovidereadyaccessto,andintegratewith,othermetropolitantransportservices.CBDstationswouldbelocatedbeneaththeBrisbaneTransitCentreinBrisbaneandontheeasternfringeofCivicinCanberra,andwouldshareexistingstationsatCentralinSydneyandSouthernCrossinMelbourne.Eachofthethreemaincapitalcities(Sydney,MelbourneandBrisbane)wouldalsohaveaperipheralstation(inSydneyscaseitwouldhavetwoonetothenorthandonetothesouthoftheurbanarea),forpassengerswhowouldnditmoreconvenienttoaccessHSRwithouthavingtotravelintooroutoftheCBD.
eminimumcorridorwidthrequiredtoaccommodatetwodedicatedHSRtracksis30metres.isrepresentsarenementofthephase1evaluation,whichwasbasedona200 metrewidthtoensurethatanysignicant
issueswerecapturedwhencomparinginitialcorridoroptions.e30metrewidthdoesnotincludetheadditionalwidthrequiredforembankmentsorcuttingsnecessarytomaintainthesmoothverticalalignmentrequiredforHSR.
Inmanydevelopedurbanareas,surfacealignmentswouldnotpermitcompetitiveaccesstimestothecitycentresforHSRserviceswithoutmajordislocationoftheurbanpopulationand,insuchcases,thealignmentwouldbeplacedintunnel.Sectionsoftheregionalalignmentwouldalso
bebuiltintunneloronviaductstoavoidbuilt-uporenvironmentallysensitiveareas.Althoughtunnelsaddtothecapitalcost,theywouldallowtheinfrastructuretobedeliveredinawaythatminimisesanypotentialnegativeimpactsonthecommunityandenvironmentduringconstructionandoperation,andminimisesdelaysanddicultiesduringconstruction.
3 Japan,Italy,France,Germany,Spain,Switzerland,Belgium,Netherlands,Luxembourg,China,UnitedKingdom,Korea,TaiwanandTurkey.
4 DerivedfromeWorldBank,High speed rail: the fast track to economic development?,2010(updated).
5 ZhangJianping,Planning and Development of High Speed Rail Network in China,UIC8thWorldCongressonHighSpeedRail,2012.
6 Forexample,bothFranceandSpainoperateserviceswithspeedsofover300kilometresperhourincommercialservice.
7 ParticularlyinFranceandGermanyand,toalimitedextent,inJapanandChina.
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High Speed Rail Phase 2 / 5
RegionalstationswereselectedonthebasisofpotentialpatronageandhavebeenproposedattheGoldCoast,Casino,Grafton,CosHarbour,PortMacquarie,Taree,Newcastle,CentralCoast,SouthernHighlands,WaggaWagga,Albury-
WodongaandShepparton.Tominimisecostand
avoiddisruptiontobuilt-upareas,thesestationswouldbelocatedoutsidethecurrenturbanareas,althoughtheywouldtypicallybewithintento20kilometresofthetowncentreandwouldhavebothcarparkingfacilitiesandfacilitiestointerchangewithlocalpublictransportservices.
FigureES-1 PreferredHSRalignmentandstationsfortheeastcoastofAustralia
QLD
NSW
VIC
ACT
SYDNEY
BRISBANE
CANBERRA
MELBOURNE
KEY Station locationsState border Not to scale
LINE 1
LINE 2
Taree
Newcastle
Central Coast
Southern Highlands
Casino
Graton
Cofs
Harbour
Port
Macquarie
Wagga Wagga
Shepparton
Albury-
Wodonga
Gold
Coast
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Executive Summary
Types o HSR servicesemarketassessmentshowedstrongdemandontheeastcoast,nowandintothefuture,forhighspeedtravelbetweenthecapitalcitiesandtoandfromregionalcentres.epreferredHSRsystem
wouldthereforeoertwotypesofservices:
Inter-capitalexpressservices,mostlyoperatingnon-stopbetweenthecapitalcitycentralstationsbutwithsomealsostoppingatthecityperipheralstations.
Inter-capitalregionalservicesoeringhigh
speedservicesbetweenthecapitalcitiesandmajorregionalcentres.Regionalserviceswouldalsofacilitatetravelbetweenregionalstations,althoughsomeinter-regionalmovementswithlowdemandmayrequirepassengerstochangefromoneservicetoanotheratanintermediatestationtocompletetheirjourney.
Ifbuilt,thesystemwouldalsohavethecapacitytoaccommodatefastcommuterrailservicesbetweenthecapitalcitiesandtheirnearerregionalcentres(suchastheCentralCoastandNewcastlein
NSW),manyofwhichcurrentlyhaverelativelyslow,ifany,services.Commuterserviceswouldprobablybeoperatedbythirdparties.eyhavebeenallowedforinthephysicalplanningbutthey
wouldnotpositivelycontributetothenancialperformanceofHSR,norwouldtheybethesourceofanysignicantincrementaleconomicbenetinthecost-benetanalysisofHSR.Commuterdemandwasthereforeexcludedfromtheeconomicandnancialappraisals.
HSR service characteristicsAustralianmarketresearchandinternationalexperiencehaveindicatedthatHSRwouldneedtooercompetitivedoor-to-doorjourneytimes,highstandardsofcomfortandconvenienceandacompetitivefarestructuretosuccessfullycompete
withothermodesoftransport,especiallyair.HSRcoulddelivernon-stopjourneytimesunderthreehourscitycentretocitycentre,betweenBrisbaneandSydneyandSydneyandMelbourne,asshowninFigure ES-2andTable ES-1and
Table ES-2.
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High Speed Rail Phase 2 / 7
FigureES-2 HSRtraveltimesbetweenmajorcities
Not to scaleKEY
HSR preferred alignment
State border
Newcastle
Gold
CoastQLD
NSW
VIC
ACT
SYDNEY
BRISBANE
MELBOURNE
CANBERRA
NEWCASTLE TO SYDNEY
39 mins
SYDNEY TO BRISBANE
2 hrs 37 mins
SYDNEY TO MELBOURNE
2 hrs 44 minsSYDNEY TO CANBERRA
64 mins
Roads
Station locations
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TableES-1 TypicalHSRtraveltimesanddist ancesbetweenselectedstationsonBrisbane-SydneylineDestination
Cofs
HarbourNewcastle
Central
CoastSydney
Regional Regional Regional Express Regional
Or
igin
Brisbane1hr11min*
(332km)2hr28min
(662km)2hr43min
(714km)2hr37min(797km)
3hr09min(797km)
Cofs Harbour1hr09min
(330km)1hr30min
(382km)-
1hr50min(465km)
Newcastle0hr14min
(52km)-
0hr39min(134km)
Central Coast -0hr27min
(83km)
*Withonestop.Onehour23minuteswiththreestops.Note:Distancesmaynotaddduetorounding.
TableES-2 TypicalHSRtraveltimesanddist ancesbet weenselectedstationsonSydney-Melbourneli ne
Destination
SouthernHighlands
Canberra Albury-Wodonga
Melbourne
Regional Express Regional Regional Express Regional
Origin
Sydney0hr29min
(98km)1hr04min(280km)
1h11min(280km)
1hr55min(540km)
2hr44min(824km)
3hr03min(824km)
Southern
Highlands-
0hr39min(183km)
1h31min*(442km)
-2hr29min(727km)
Canberra1hr16min(366km)
2hr10min(651km)
2hr28min(651km)
Albury-
Wodonga-
1hr09min(284km)
*PlusinterchangetimeatWaggaWagga.Note:Distancesmaynotaddduetorounding.
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Serviceswouldtypicallyoperate18hoursperdayfor365daysperyear.Servicefrequencieswouldtypicallybeatleasthourly,increasingasdemandgrewtoreachpeakperiodservicefrequenciesin2065,asshowninTable ES-3.
Ultimately,trainfrequencieswouldbeinuencedbyfuturemarketneedsandthepreferredtrainoperatingstrategy(operatingspeedsandstoppingpatterns)buttheindicativefrequenciesestablishedforthisstudyarecompatiblewiththeforecastdemandandecienttrainutilisation.
TableES-3 Peakserv icefrequenciesin2065(perhourineachdirection)
Route Inter-capital express Inter-capital regional
Brisbane-Sydney 3-4 2Gold Coast-Sydney - 4
Sydney-Canberra 1 2
Sydney-Melbourne 5 2
Canberra-Melbourne 1 1
Fareswouldbestructuredtobecompetitivewithalternativemodesoftransport.Forthepurposesofthemaindemandassessment,averagefaresforbusinessandleisuretravelweredesignedto
becomparableto,andcompetitivewith,airfaresonthemaininter-capitalroutesontheeastcoast,takingintoaccountthetypesoffarestypicallypurchasedbythedierenttypesofpassenger8.Inpractice,arangeoffareswouldbeoered,targetedtomarketsegmentsandinuencedbyseatutilisationpatternsandcompetitivepressures,asiscurrentlythecasewiththeairlines.
Forecast HSR demand
AnHSRsystemwouldsignicantlyincreaselongandmedium-distancetransportcapacityon
theeastcoastofAustraliaandwouldprovideanalternativemodeoftransportthat,accordingtomarketresearchandsupportedbyinternationalevidence,wouldbeattractivetomanytravellers.IfthecompleteHSRnetworkwasfullyoperational,thestudypredictsthat,underthereferencecaseassumptions9,itcouldattractapproximately83.6 millionpassengertripsby2065,asshowninTable ES-4.Figure ES-3illustratesthemaininter-citypassengertripows.
8 Forexample,theaverageHSRsinglefaresassumedinthereferencecasebetweenSydneyandMelbournewere$141fortheaveragebusinesspassengerand$86fortheaverageleisurepassengerbutsensitivitytestsalsoconsideredfaresupto30percentand50percentgreater.ecorrespondingaveragefarespaidbyairpassengerswereestimatedas$137and$69respectively.
9 ereferencecaseispartofthecentralcaseestablishedforevaluation.
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FigureES-3 HSRtraveldemandin2065betweenmajorcitiespassengertrips
Not to scale
Newcastle
Gold
CoastQLD
NSW
VIC
ACT
SYDNEY
BRISBANE
MELBOURNE
CANBERRA
SYDNEY TO CENTRAL COAST/
NEWCASTLE
4.75 million
SYDNEY TO BRISBANE
10.86 million
SYDNEY TO MELBOURNE
18.76 millionSYDNEY TO CANBERRA
5.19 million
KEY
HSR preferred alignment
State border Roads
Station locations
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TableES-4 HSRtravelmarketfor2065
Total travel market (inter-city and regional)
Trips without HSR (million) 355
Trips with HSR (million)* 389
HSR travel market (inter-city and regional)
HSR trips (million) 83.6
HSR passenger kilometres (billion) 53.1
*IncludesnewdemandinducedbytheconstructionofHSR.Assumesthefullsystemisoperational.
AsetofalternativeassumptionsproducedforecastsforHSRin2065,assumingafullsystemweretobeoperational,ofbetween46millionand111millionpassengertrips.ealternativeassumptionsincludedvariationsinpopulationandeconomicgrowth,increasesinairportcapacityatSydney(andhenceimprovementsintheaviation
levelofservice)andvariationsinHSRfaresrelativetotheprojectedairfaresandcarrunningcosts.
ForecastHSRtraveldemandbyjourneytypeinthereferencecaseispresentedinFigure ES-4(forpassengertrips)andFigure ES-5(forpassengerkilometres).Travelforbusinessaccountsfor35percentofforecastHSRpatronage,withinter-citybusinesstravelbeingthemostimportant 10.Inter-citytravelwouldmakeupabout49percentoftotalpassengertripsand62percentofpassengerkilometres.Regionaltravelwouldrepresentabout
50percentoftotalpassengertripsand38percentofpassengerkilometres.
10 Inter-citytripsarede nedasjourneysover60 0kilometresbetweenthesi xmaintownsandcitiesinthecorridorbasedonpopulation(Brisbane,GoldCoast,Newcastle,Sydney,CanberraandMelbourne).Regionaltripshavebeenbrokenintolongregionaltripsofgreaterthan250kilometres,whichincludesSydney-Canberra,andshortregionaltripsoflessthan250kilometres,whichincludesBrisbane-GoldCoastandNewcastle-Sydney.
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FigureES-4 HSRtraveldemandin2065byjourneytype(assumingthefullHSRnetworkwasoperational)passengertrips
Inter-city non-business Inter-city business Long regional non-business
Long regional business Short regional non-business Short regional business
1%
13%24%
25%
27%
9%
Note:Totaldoesnotaddto100%duetorounding.
FigureES-5 HSRtraveldemandin2065byjourneytype(assumingthefullHSRnetworkwasoperational)passengerkilometres
Inter-city non-business Inter-city business Long regional non-business
Long regional business Short regional non-business Short regional business
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Table ES-5showstheforecasttravelmatrixforthereferencecasein2065whenthefullnetworkwouldbeoperational.Intermediatestationsbetweencapitalcentresareaggregatedforpresentationpurposes.Excludingcommutermarkets,Sydney-MelbourneisthelargestmarketsegmentforHSRwithabout19 millionpassengertrips,considerablymorethanthenextlargest,Brisbane-Sydney,withnearly11 millionpassengertripsandalmostfourtimesSydney-Canberra,withaboutvemillionpassengertrips.
Sometravelwasomittedfromthematrixbecauseitcoveredonlyashortdistance,orwouldbebestservedbycar,implyingthatfewsuchjourneys
wouldbelikelytotransfertoHSR.isincludedalltravelwhollywithineachoftheintermediate
areas,otherthanthattoandfromWollongong.AsmallproportionoftheomittedlongertripscoulduseHSR,andtothisextent,theHSRforecastsareconservative.Tripstoandfromplacesexternaltothestudyareawerealsoexcluded.eexcludedtripsreferredtoaboveareshownbyanXinthetable.
AbouthalfoftheHSRdemandwouldbedivertedfromforecastairtravelasshowninFigure ES-6.About19percentoftotaltripswouldbenewdemandgeneratedbythe
introductionofanHSRservice(shownasinduceddemand).
TableES-5 HSRtravelmarketmatrixfor2065(0 00tripsinbothdirectionsperyear)
Sectors
Brisbane
GoldCoast
Intermediate
Newcastle
Intermediate
Sydney
Intermediate
Canberra
Intermediate
Melbourn
e
Total
Brisbane X 2,210 1,650 750 600 10,860 1,240 1,130 730 2,490
Gold Coast X 900 520 580 3,830 610 190 440 340
Intermediate X 810 X 5,500 190 330 X 850
Newcastle X 170 1,760 220 250 150 330
Intermediate X 2,990 20 300 X 730
Sydney X 2,690 5,190 2,290 18,760
Intermediate 80 480 100 2,320
Canberra X 640 2,720
Intermediate X 4,660
Melbourne X
Total 83,600*
*Cellsmaynotexactlysumtothetotalduetorounding.
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FigureES-6 SourceofHSRtraveldemandin2065byjourneytype(passengertrips)
All
Business
Non-business
Air Coach Car Rail Induced
1%
2%
55%
19%
23%
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HowthetotalHSRandairmarketwouldbesharedbetweenthetwomodesoftransportisakeyissueinthedemandassessment.ConsiderableevidencehasbeenassembledintheinternationalliteratureontheimpactsofHSRoninter-capitalairtravelinEuropeandEastAsia.InFigureES-7,theinternationalmarketsarerepresentedbythebluedots,whichshowtheproportionofthecombinedairandHSRtravelmarketcapturedbyHSRonselectedroutes.ForHSRjourneytimesoflessthantwohours,thisistypicallyover80percent,whereasifHSRjourneytimesexceedfourandahalfhours,theHSRsharefallsbelow30percent.Fortripsofuptothreehours(asforSydney-
MelbourneandSydney-Brisbane),observedHSRmarketsharesrangefromaround55percentuptoaround70percent.
isstudysreferencecaseinter-capitalforecastsfor2035havebeenincludedinthegureforcomparisonandshowahighdegreeofconsistency
withtheinternationalexperience.Sydney-Canberraislowerthantheexpectedrangefor
journeyslessthantwohours,butthisislargelyexplainedbytherelativelyhighproportionofpassengerstransferringtoconnectingights,
whichareassumedintheforecastsnottodiverttoHSR.
FigureES-7 HSRshareofcombinedHSR/airtravelmarket,comparingthenalmodelforecastfor2035withinternationalevidence
HSRmodeshare(%)
HSR in-vehicle time (mins)
SydneyCanberra
CanberraMelbourne
BrisbaneSydney
SydneyMelbourne
BrisbaneMelbourne
10%
0%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0 50 100 150 200 250 300 350 400 450
International evidence Model forecasts for 2035
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Executive Summary
Cost o constructing theHSR network
Internationally,HSRsystemsareveryreliablewhentheyoperateasclosedsystemsdedicatedtohighspeedserviceswithpurpose-builtinfrastructureandtrainsets.AlthoughmixingHSRserviceswithconventionalrailservicesonsharedinfrastructuremayreducecapitalcosts,particularlyforaccessintotheurbanareas,operationalperformancecandiminishdramatically.Suchsystemsaregenerallynot
capableofdeliveringthejourneytimesthatwouldbenecessaryforanHSRsystemontheeastcoastofAustraliatoachievetherequiredlevelsofreliabilityandcompetitiveness.
ToachievethetargetjourneytimeofunderthreehoursforSydney-MelbourneandBrisbane- Sydney,anaveragejourneyspeedofapproximately300 kilometresperhourwouldneedtobeachieved.iswouldrequireasystemcapableofamaximumoperatingspeedof350kilometresperhour,toallowforsomeslowersectionsof
trackduetoterrainorotheroperatingconditions.SuchaveragespeedswouldnotbepossibleontheexistingconventionalrailinfrastructureontheeastcoastofAustralia,evenifitwasonlyusedforshortsectionsforcityaccessandegress,sodedicatedHSRinfrastructurewouldberequired.IftheHSRnetworkwereusedtoprovidefastcommuterservices,itislikelytheywouldnotoperateatsuchhighspeeds;amaximumoperatingspeedof200- 250kilometresperhourwouldeectivelyservethecommutermarket,giventherelatively
shorterdistancesandmoreintensivestoppingpatternsoffastcommuterservices.
Inadditiontothephysicalcomponentsofcapitalcost(land,earthworks,structures,track,equipmentandfacilities),thecostestimatesalsoincludedesign,programandconstructionmanagement,andassetrenewalwhenitwouldfalldue.CostcomponentsweredevelopedfromAustralianunitcostsandbenchmarkedagainstinternationalHSRsystemstoensuretherobustnessoftheestimates.Rollingstock(trainsets)isequivalenttoafurtherninepercentofthetotalcapitalcost,butthiswouldonlybeexpendedasdemandbuiltupovertheappraisalperiodandservicefrequenciesincreased.
Tunnell ingwouldbeusedwheretheterrainrequiresit,butwouldalsobeadoptedwherenodedicatedsurfaceroutecouldbecreatedwithoutunacceptablecommunitydislocationand/orenvironmentalcosts.isisparticularlythecase
wheretheroutepassesthroughthemiddleandinnersuburbsofthecapitals,wherenosuitableeasementsareavailable.Ithasalsobeenusedinsomelocationswhicharehighlyenvironmentally
sensitive.Intotal,thepreferredalignmentincludes144kilometresoftunnelalongtheroute,representingaround29percentofthetotalcostofconstruction.Sixtypercentofthetunnellengthisinurbanareas,with67kilometresinSydney,eightkilometresinMelbourne,ve kilometresinBrisbaneandfourkilometresinCanberra.
ecostestimatesreecttheuseofprovenHSRsystemtechnology(suchastraincontrolandpowersupplysystems)andtrainsetsalreadyinservice,andreadilyavailable,andtakeaccountofarange
ofmanufacturersdeliveredcostsforexistingHSRsystems.
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ecapitalcostshavebeenrisk-adjustedtoreectuncertainty,principallyaroundthe scopeofthemajor construction,engineeringandoperationalelementsofafutureHSRprogram.Expectedconstructioncostsareexpressedthroughoutthischapterintermsofrisk-adjustedvalue,in$2012.
Intotal,theriskadjustmentprocessincreasedcapitalcostsbyabout10.8percent11.
eestimatedcapitalcostforthefullHSRsystem,excludingthecostoftrainsets 12,is$114.0 billionin$2012,asshowninTable ES-6.
TableES-6 Risk-adjustedHSRprogramcosts($2012,$bil lion)
Sydney-
Canberra
Canberra
Junction-
Melbourne
Newcastle-
Sydney
Brisbane-
Gold
Coast
Gold
Coast
Junction-
Newcastle
Total
HSR
system
Projectdevelopment
2.2 2.5 1.7 1.0 3.1 10.4
Construction 20.8 24.4 17.2 10.0 31.2 103.6
Total capital costs 23.0 26.9 18.9 11.0 34.3 114.0
Notes:Totaldoesnotaddupexactlyduetorounding.ereferencestoCanberraJunctionandGoldCoastJunctiondescribethepointsatwhichtheGoldCoastandCanberraspursleavethemainalignment.
Figure ES-8presentstheresultsofthe@RISKanalysisfortotalconstructioncostsincludingdevelopmentcostsforthefutureHSRprogram 13.
eanalysisil lustratesthat:
In50percent(P50)ofsimulations,totalconstructioncostsareexpectedtobelessthan$113.9billion($2012).
In90percent(P90)ofsimulations,totalconstructioncostsareexpectedtobelessthan$127.0billion($2012).
Intenpercent(P10)ofsimulations,totalconstructioncostsareexpectedtobelessthan$102.0billion($2012).
11 isistheexp ectedrisk-adjustedcostandiswit hinonepercentofthemedianrisk-adjustedcost,commonlyknownastheP50;thedierencebetweenthemisduetotheriskadjustmentappliedtotheindividualcostcomponentsbeingnon-symmetrical.Takingintoaccounttheallowancesincludedindevelopingthenon-risk-adjustedcosts,theriskallowanceiscomparablewithwhatwouldbeallowedasaphysicalcontingencyforaprojectatasimilarearlystageofdevelopment.
12 Trainsetsareassumedtobeleasedinthenancialassessment.13 efrequencyrepresentsthelikel ihoodofthetotalconstructioncostsbeingwithi na$1bill ionbandcentredonthecorrespondingpointonthecurve.usthereisatwopercentchancethatthecostwillliebetween$100.5billionand$101.5billionandafourpercentchancetheyliebetween$107billionand$108billion.
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Executive Summary
FigureES-8 Totalconstructioncosts(includingdevelopmentcosts)($2012,$billion)
0.06
0.05
0.04
0.03
0.02
0.01
90 95 100 105 110 115 120 125 130 135 140
P10
102.0
P50
113.9
P90
127.0
Frequency
($2012, $billion)
Figure ES-9presentsestimatedaverageconstructioncostsperroutekilometreona
segmentbysegmentbasis.eextensivetunnellingrequiredforaccessintoandoutofSydneyincreasesthecostperroutekilometreforthesesegmentsbytwotothreetimescomparedtothecostsfortheremainderofthenetwork.
PartsoftheroutebetweenBrisbaneandNewcastlealsohavehighcosts,reectingthevolumeofearthworksrequiredintheseareas.
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FigureES-9 HSRprogramaverageconstructioncostsperroute-kilometreinstagingorder($2012,$million)
160
180
185
120
140
8080
100
40
20
60
BrisbanetoGoldCoast
GoldCoastJun
ctiontoCasino
Ca
sinotoGrafton
Graftonto
CoffsHarbour
CoffsHarbourto
PortMacquarie
PortMac
quarietoTaree
TareetoNewcastle
NewcastletoCentralCoast
CentralC
oasttoSydney
SydneytoSout
hernHighlands
SouthernHighlan
dstoCanberra
CanberraJunctionto
WaggaWagga
WaggaWaggatoA
lbury-Wodonga
Albury-Wodonga
toShepparton
Shepparto
ntoMelbourne
($2012$millionperkm)
87
54 5550
38
57 57
43
137
41 4032
25
56
185
Staging the development o HSR
esizeandcomplexityofanHSRsystemontheeastcoastofAustraliawouldbesuchthatitcouldnotbedeliveredasasingleproject;instead,it
wouldbedeliveredinstageslinkingtheprincipalcentres.EventhesestageswouldbelargeprojectsbyAustralianstandards.Stagingwouldnotonlyallowtheupfrontfundingtobereducedandsmoothfuturefundingrequirements,butwouldalsobettermatchsystemdevelopmenttomarketgrowthandwouldallowrevenuetobegeneratedonsectionsofthesystemastheyarecompleted.
estudyhasconcludedthatthebenetsofHSRarestronglyrelatedtothevolumeoftravelbetweenthecapitalcities,inparticularSydney-
Melbourne,andthatestablishingthislinkwouldbetherstpriorityforanyHSRnetworkonthe
eastcoastofAustralia.Ataconstructioncostofabout$50billionin$2012(risk-adjusted),theSydney-Melbournelinewouldrepresentamajorundertakingandwoulditselfneedtobestaged.Canberra,whichwouldbeconnectedbyaspurlinetotheSydney-Melbourneline,isthenextmostimportantcityonthislinefromademand
viewpointandwouldbeanappropriateterminalfortherststagetoensurerevenuewouldbegeneratedasearlyaspossible.
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Executive Summary
FigureES-10 StagingofthepreferredHSRsystemcommencementofoperations
Not to scale
Newcastle
Gold
CoastQLD
NSW
VIC
ACT
SYDNEY
BRISBANE
MELBOURNE
CANBERRA
LINE 2
2051Gold Coast to Brisbane
$11.0 BN
LINE 2
2058Newcastle to Gold Coast
$34.3 BN
LINE 2
2045Sydney to Newcastle
$18.9 BN
LINE 1
2040Canberra to Melbourne
$26.9 BN LINE 1
2035Sydney to Canberra
$23.0 BN
KEY
HSR preferred alignment
State border Roads
Station locations
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estagingofthepreferredHSRsystemassumedinthenancialandeconomicevaluations,asshowninFigure ES-10andTable ES-7,takesintoaccounttheextenttowhichindividualsectionscapturetheforecastmarket,thecostofconstructionandtheeconomicandnancialreturnsofeachstage.
TableES-7 StagingofthepreferredHSRsystem
Built
track(km)*
Risk-adjusted
cost ($b)
Cost per
km ($m)
Potential
operationaldate
Line 1 Sydney-Melbourne 894 49.9 56 2040
-Stage1:Sydney-Canberra 283 23.0 81 2035
-Stage2:Canberra-Melbourne** 611 26.9 44 2040
Line 2 Brisbane-Sydney 854 64.1 75 2058
-Stage3:Newcastle-Sydney 134 18.9 141 2045
-Stage4:Brisbane-GoldCoast 115 11.0 96 2051
-Stage5:GoldCoast-Newcastle** 606 34.3 56 2058
Total 1,748 114.0 65 2058
*Notethatthebuilttrackincludesspurjunctionsandotherconnections.esedistancesaredierentfromthetravelkilometresinTable ES-1andTable ES-2.**ConstructionofStages2and5wouldstartattheCanberraJunctionandGoldCoastJunctionrespectively,thepointsat
whichtheGoldCoastandCanberraspursleavethemainal ignment.Note:Totalsdonotaddupexactlyduetorounding.
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Executive Summary
FigureES-11 StagingofthepreferredHSRsystemcumulativecapitalcosts($2012,$billion)
20
40
60
80
100
120
($2012,
$billion)
205520502045204020352030202520202015 2060
Total capital costs
Sydney toCanberra operational
Brisbane to GoldCoast & Newcastle toMelbourne operational
Sydney toMelbourne operational
Network operationalNewcastle toMelbourne operationalA
DB
EC
A B C D E
Figure ES-11showstheproleofcumulativecapitalcostsovertheHSRprogram.
Line1betweenSydneyandMelbournewould
beamajorundertakingintermsofplanning,construction,testingandcommissioningand,basedoncurrentindustryexperience,wouldneedtobedoneindiscretestages.Forevaluationpurposes,astartdateof2035wasassumed.
Workingbackfromthatdate,enablinglegislationwouldneedtobepassedby2019.Priorto2019,thenalpreferredrouteandstationlocationswouldbedetermined,furthertechnicalinvestigationscompletedandallnecessarygovernmentapprovalsobtained.Stepswouldalsobetakentopreservethe
preferredHSRcorridorpriortoanycommitmenttoproceed.
Followingenablinglegislation,aperiodofmorethantwoyearswouldberequiredforconceptdesign,environmentalimpactassessmentand
publicconsultation,beforeadecisiontoproceedtoimplementationwouldbemadein2021.erewouldthenbeaprocurementperiodoftwotothreeyearstoletcontractsandtoacquireland.Enablingworkswouldthenbeundertaken(criticallyatSydneysCentralstation).eseworksareanticipatedtotakefouryearstodivertthecurrentserviceswithintheexistingoperationalstationbeforethemainimplementationcontractscouldcommencein2027(i.e.nancialyear2028).
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eimplementationprogramofafurther84monthsreectstheactualprogramtodelivertheTaiwanHSRandincludesaperiodof34monthsfortestingandcommissioning.Basedonthisevaluationprogram,therstpublicHSRserviceswouldstartinApril2035.Subsequentstageswouldbedeliveredatvetosevenyearintervals,withplanningofeachstageoverlappingwithconstructionofthepreviousstage.Undertheseassumptions,theentirenetworkcouldbeinoperationby2058.
estagingassumedinTable ES-7could,however,beacceleratedbyaboutveyears,althoughitwouldlikelyincuradditionalcostandrisk.etimetakentopasstherelevantlegislationandtomakeaformaldecisiontoproceedcouldbeaccelerated.eenablingworkscouldalsobestartedearlier,soasnottodelaythecommencementofimplementationworksatSydneyCentralstation;thiswouldrequirefundinginadvanceoftheformaldecisiontoproceed,butcouldsave18months.ereisalsopotentialfor
theconstructionperiodtobeshortenedbyasmuchas24months,butthiswouldrequireextendedworkinghoursandcouldbelimitedbyalackofqualiedresources.AnacceleratedprogramcouldthereforestartwiththeSydneyenablingworksin2019,withSydney-Canberraoperationalby2030andSydney-Melbourneoperationalby2035.Underthisacceleratedprogram,thefullnetworkcouldbeoperationalby2053.
Financial assessmentefutureHSRprogramandthemajorityofitsindividualstagesareexpectedtoproduceonlyasmallpositivenancialreturnoninvestment.
eestimatedrealnancialinternalrateofreturn(FIRR)fortheprogramasawholeis0.8percent.ForSydneytoMelbourne,theestimated(post-tax)realFIRRis1.0percent.esefallwellshortofthenancialreturnsthatwouldberequiredbycommercialprovidersofdebtandequitytomajorinfrastructureproviders14.Atafourpercentdiscountrate,thenancialnetpresentvalue(FNPV)ofnancialcostsandrevenuesassociated
withaninvestmentinHSRwouldbenegative$47billion15.GovernmentswouldberequiredtomeetthemajorityofconstructionandestablishmentcostsfortheHSRnetwork.
Postconstruction,thefutureHSRprogramanditsstages(withtheexceptionofSydney-Canberraasastand-alonestage 16)areexpectedtogeneratesucientoperatingincometocover
ongoingoperationalandassetrenewalcosts.isforecastholdstrueforallbutoneofthescenariosandsensitivitiestested.Asaconsequence,HSRoperationswouldbenanciallyself-sustainingiftracandcostassumptionsweremet.
Table ES-8summarisestheresultsoftheFNPVandFIRRanalysisonapreandpost-taxbasisforthefutureHSRprogramanditsstages.esearepresentedonacumulativepresentvaluebasis,
withthesummarycostsandrevenueobtainedbydiscountingcashowsbytheevaluationdiscount
rateoffourpercenttonancialyear2028.Sydney-Canberradeliversanegativenancialreturn.Neithertheprogramasawhole,noranyofthestages,returnsapositiveFNPVatafourpercentdiscountrate.
14 esewouldtypicallybearound15percentormore.15 Discountedto2028andin$2012.
16 atis,ifSydney-CanberrawasoperatedindependentlyofanyotherHSRline.
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Executive Summary
AssumptionsaboutthetimingofthevariousstagesarealsoshowninTable ES-8.
Table ES-9setsoutthesummaryofrisk-adjustedcapitalcosts,revenues,operatingcostsandassetrenewalsovertheevaluationperiodto2085.
eHSRprogramasawholedeliversapositivenetoperatingsurplus.atis,forthepreferredHSRsystem,revenueswouldcoverongoing
operatingcostsandthecostsofrenewingassetswhentheywearout.erefore,providedtracforecastsandcostsestimatesaremet,noongoinggovernmentsubsidywouldberequiredtosustainHSRoperationsoncethesystemisconstructedandoperational.Astracbuildsup,theabilityoftransportoperationstoreturnsomeofthecapitalcostswouldincrease.
TableES-8 Summar yofFNPVandFIRRresu lts(presentvaluediscountedto2028,$2012,$bil lion,4%discountrate)
Future HSR program
Sydney-
Canberra
Sydney-
Melbourne
Newcastle-
Melbourne
Brisbane-
Gold Coast &
Newcastle-
Melbourne
Network
complete 17
Year operations
commence2035 2040 2045 2051 2058
Totalcosts 20.9 41.1 52.8 58.3 72.0
Netoperatingresult* -0.4 10.5 11.6 11.3 15.5
FIRR (real) n/a 1.0% 0.9% 0.4% 0.8%
FIRR (real, pre-tax) n/a 1.4% 0.9% 0.4% 0.8%
FNPV -21.5 -26.5 -35.2 -41.3 -47.0
FNPV (pre-tax) -21.5 -25.0 -35.2 -41.3 -47.0
Notes:*Revenueslessoperatingcostsincludingpaymentsforrollingstockleasesandassetrenewal.Duetoaccumulatedtaxlosses(primarilyfromdepreciationontheinfrastructureassetbase),onlytheSydney-MelbourneHSRstagepayscorporationtaxduringtheevaluationperiod.Wheretaxisnotpayable,theFIRRandFNPVdonotdieronapreandpost-taxbasis.n/adenotesanFIRRoflessthanzeropercentthatcannotbemathematicallycalculated.
17 NetworkcompleterepresentstheentireHSRnetworkbetweenBrisbaneandMelbourne.
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TableES-9 Summar yrisk-adjustedcapitalcosts,revenues,operatingcostsandassetrenewalsoverthetotalevaluationperio dto2085(presentvaluediscountedto2028,$2012,$billion,4%discountrate)
Sydney-
Canberra
Sydney-
Melbourne
Newcastle-
Melbourne
Brisbane-
Gold
Coast &
Newcastle-
Melbourne
Network
complete
Year operations
commence2035 2040 2045 2051 2058
Totaldevelopmentcosts 2.3 4.7 6.1 6.8 8.8
Totalconstructioncosts 18.6 36.4 46.7 51.5 63.2Total capital costs 20.9 41.1 52.8 58.3 72.0
Totalrevenue 5.0 39.4 43.0 43.5 62.7
Totaloperatingcosts 4.4 25.1 27.3 27.9 42.2
Totalpaymentsforrollingstocknanceleases
0.1 1.3 1.3 1.3 1.8
Totalassetrenewals 1.0 2.5 2.8 3.0 3.2
Total operating result -0.4 10.5 11.6 11.3 15.5
Terminal value -0.2 4.0 5.6 5.4 9.1
FNPV -21.5 -26.5 -35.2 -41.3 -47.0
Note:Totalmaynotbeexactduetotimingandroundingdierences.
Risk-adjustedprojectcashowsforeachyearoftheevaluationperiod,reectingtheproposedstagingoftheHSRprogram,areshowninFigure ES-12.
Totalannualprojectcapitalexpenditurerangesfrom$2 billionto$8billionineachoftheeight
yearspriortotheopeningoftheSydney-Canberrasectionin2035,andthencontinuesatbetween$2billionand$7billionperyearforthenext23 yearsuntilthefullnetworkisoperationalin 2058.
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Executive Summary
FigureES-12 HSRprogramrisk-adjustedprojectcashowsperyear($2012,$billion)
Revenue received Operating costs paid GST (paid)/received
Payments for rollingstock fnance leases
Sydney toCanberra operational
Brisbane to GoldCoast & Newcastle toMelbourne operational
Sydney toMelbourne operational
Network operationalNewcastle toMelbourne operational
Tax paid Capital expenditure
15
10
5
-5
-10
-15
205520502045204020352030202520202015 2060 2065 2070 2075 2080
($2012,
$b
illion)
A
DB
EC
A B C D E
WiththeexceptionofthecostsassociatedwithaccessingSydney(asshowninFigure ES-9),capitalcostsincreasebroadlyinproportiontothelengthoftheHSRlinebeingconstructed.
AsindicatedinFigure ES-12,extensionstothenetworkleadtostepchangesinpatronageandthereforearecriticaltotheoperatingcashows.Forinstance,completingSydney-CanberraorCanberra-Melbourneasstand-alonesegments
wouldproduceonlymoderatepassengerdemand
andnancialreturns.WhenthewholelineconnectingSydney-Melbourneiscompleted,signicantadditionaldemandwouldbegenerated
(passengernumbersatthatpointincreasebyafactorofve).Operatingcashowsandreturnsthenalsoimprove,reectingthegrowthinpatronagewithoutacorrespondinglymaterialincreaseincapitalcosts.esamebenetwouldbeobservedwhentheGoldCoastisconnectedtoNewcastleandthefullHSRsystemisinoperation,resultinginaconsiderableupliftindemandbetweenBrisbane,SydneyandMelbourne.enancialperformance(annualcashow)ofeach
stageissummarisedinFigure ES-13.
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FigureES-13 HSRprogramrisk-adjustedcashowsperyearbystage($2012,$billion)
($2012
$billion)
Full network Sydney to Canberra
Sydney to MelbourneNewcastle to Melbourne
Brisbane to Gold Coast andNewcastle to Melbourne
Sydney toCanberra operational
Brisbane to GoldCoast & Newcastle toMelbourne operational
Sydney toMelbourne operational
Network operationalNewcastle toMelbourne operational
A
DB
EC
205520502045204020352030202520202015 2060 2065 2070 2075 2080
4
2
-2
-4
-6
-8
A B C D E
DuetothefutureHSRprogramsexpectedlownancialreturns,signicantprivatesectorfunding(debt/equity)wouldnotbeavailableorappropriatetonancetheprogram.Assuch,aconsiderablecommercialnancinggapwouldexistbetweenthetotalcapitalcostoftheHSRprogramandtheamountofnancingthatcouldberaisedfromthenancialmarketsoncommercialterms,basedonthefutureHSRprogramoperatingcashows.
Basedonthedetailedanalysisofprogramcashows,thecommercialnancinggapfortheentireHSRprogramwouldbeabout$98billion(or86percentofthetotalrisk-adjustedcapitalcost)asshowninTable ES-10.FortheSydney-Melbourneline,thecommercialnancinggapwouldbeabout$45billion,or92 percentofthetotalcapitalcost.
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TableES-10 Summar yofthecommercialna ncinggapreferencecase($2012,$bil lion)
HSR program Sydney-Melbourne
Total capital cost 114.0 49.9
Debt carrying capacity 16.3 4.1
Commercial coverage 14% 8%
Commercial fnancing gap 97.7 45.7
Valuecapturehasthepotentialtopartiallyclosethecommercialnancinggapthroughmeasures
suchasgovernmentlandsalesandcapturingtheincrementalimpactthattheHSRprogramwouldhaveonstampduty,developmentsandratesintheHSRaectedzones.However,thiswouldbeasmallcontributionatbest.Itishighlyunlikelythatallofthesemeasureswouldbeimplementedandtheultimatebenetthatvaluecapturemight
haveonclosingthecommercialnancinggapisthereforediculttodetermineatthisstage.
UltimatelygovernmentswouldberequiredtofundthemajorityofthefutureHSRprogramsupfrontcapitalcosts.AsummaryofthecashowimplicationsforgovernmentforthewholenetworkispresentedinFigure ES-14.
FigureES-14 HSRprogramgovernmentcashows($2012,$billion)
($2012,
$billion)
205520502045204020352030202520202015 2060 2065 2070 2075 2080
-4
-6
-8
-2
2
4
A B C D E
Sydney toCanberra operational
Brisbane to GoldCoast & Newcastle toMelbourne operational
Sydney toMelbourne operational
Network operationalNewcastle toMelbourne operational
A
DB
EC
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Economic assessmentestudyadoptedacost-benetmethodologythatisconventionallyappliedtomajortransportinfrastructureprojects.ecostcomponentsoftheanalysis,includingthenecessarycapitalexpenditurerequiredtodevelop,constructandrenewtheHSRsystemascomponentswearout,dependontheproposedHSRengineeringandtechnicalspecicationsadoptedforthepreferredHSRsystemandontheassumedstagingofnetworkdevelopmentsetoutinTable ES-7.
Forthepurposesofevaluation,constructionofstage1ofLine1(i.e.theSydney-CanberrastageoftheSydney-Melbourneline)isassumedtostartin
July2027(startofnancialyear2028).
Onceconstructed,theHSRsystemwouldgenerateastreamofeconomicbenets,linkedtotheassessmentoffuturetraveldemand.Ingeneralterms,thetotaleconomicbenetoftravelonHSR
woulddependonhowmucheachpassengervaluestheirtrip,oftentermedtheirwillingnesstopay.
isiscalculatedbymeasuringthedierences
ingeneralisedtripcostswhencomparingthereferencecase(withHSR)tothebasecase(withoutHSR).AggregatingwillingnesstopayacrossallusersofHSRandovertimeprovidesanassessmentofthetotal(gross)economicvaluecreatedforusersofthesystembytheinvestmentinafutureHSRprogram.
Transportingpassengersconsumeseconomicresourcessuchaslabourandfuel.BecauseHSRcouldreducedemandforothermodesoftransport,andhencetheirconsumptionofresources,the
additionalresourcesrequiredforHSRneedtobeosetagainsttheresourcesavoidedinothermodes.
enetchangeinresourcesisdeductedfromthegrosseconomicvaluetocalculatethestreamofeconomicbenetsderivedfromtheinvestmentinHSR.
edistributionofthenetbenetsbetweentheusersandtheoperator(s)oftheHSRsystemisdeterminedbythepricescharged.Ultimately,priceswouldservetotransfereconomicvaluefromusersofthesystemtoitsoperators.Revenueisthereforeincludedinthecalculations(asacosttousersandabenettooperators)toassesstherelativebenetstousersandoperators.
eneteconomicbenetsinternaltothetransportsystemarethereforemeasuredbyaddingthetwocomponents:
Userbenets(orconsumersurplus)arecalculatedbasedonthedierencebetweenauserswillingnesstopayforaserviceandtheactualpricepaid.
Operatorbenets(orproducersurplus)representthedierencebetweenthepricepaidorrevenuegeneratedbyaserviceandthecostsassociatedwith(orresourcesconsumedby)operatingtheservice.echangeinoperatorbenetsisassessedforeachmode(i.e.HSR,aviation,conventionalrailandcoach).
Inaddition,therewouldbecostsandbenetsthatareexternaltothetransportsystemthatcanbemeasuredinmonetarytermsandincludedinthecost-benetanalysis.eseexternalitiesmeasuretheimpactofHSRtothebroadercommunity,includingenvironmentalandsafetyimpacts,decongestionbenetsandanyalternativeavoidedordeferredtransportnetworkcapitalexpenditure.
Aresidualva luehasalsobeenincludedtocapturetheremainingvalueoftheassetsattheendoftheevaluationperiod 18.epresentvaluesofcostsand
benetsbycategory,discountedatfourpercent,areshowninFigure ES-1519.eeconomicnetpresentvalue(ENPV)isthesumofthepresent
valueoftheeconomiccostsandbenets,whichfortheprogramasawholeis$101billion.
18 A50yearevaluationperiodhasbeenadopted,commencingin2035.19 ediscountrateconvertscashowsoffuturecostsandbenetsintopresentdaydollarstoal lowacomparisonofcostsandbenets,expressedin$2012,andusingacommonbaseyear,inthiscasenancialyear2028,whichistheassumedstartofconstructionoftherststage.
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Executive Summary
FigureES-15 PresentvalueofcostsandbenetsfortheHSRprogram(presentvaluediscountedto2028,$2012,$bill ion,4%discountrate)
Costs Benefts ENPV
100
120
80
60
40
20
0
-40
-20
-60
-80
-100
Capital
expenditure
User
benefts
Operator
benefts
Externalities Residual
value
ENPV
($bn)
14 1
79
141
25 101
eHSRuserbenetsdominatetheeconomicresultsandaccountfor90percentoftheestimatedbenets(excludingtheresidualvalue).Akeycomponentistheassessmentoftimesavingsfortravellersacrosstheirfulljourneyincludingtraveltime,waitingtime,check-intimeandaccesstime,withadjustmentsfortheinconvenienceofhavingtochangemodes.Traveltimesavingsaremeasuredusingvaluesoftimebasedonmarketresearchconductedforthisstudyandtestedforreasonablenessagainstconventionalvaluesusedinroadprojects,whichvarybytrippurpose(e.g.businessversusleisure)20.
Businesstravellerswouldgainthemajorityofuserbenetsduetotheirhighervalueoftime,eventhoughtheyonlyrepresentabout35percentofthetotalHSRtravelmarket,asshowninTable ES-11.
20Austroads,Guide to Project Evaluation,2012.
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TableES-11 Userbenetestimatesbymarketsegment(presentvaluediscountedto2028,$2012,$billion)
Business users Leisure users Total
Short regional 1.7 7.4 9.1
Long regional 31.3 27.1 58.4
Inter-city 60.6 12.6 73.2
Total 93.6 47.1 140.7
esummaryresultsforthereferencecasepredictthataninvestmentinthepreferredHSRprogram
wouldgenerateaneconomicinternalrateofreturn(EIRR)of7.6percentandaneconomiccost-benetratio(EBCR)of2.3usingafourpercent
discountrate21.AsevenpercentdiscountratehasalsobeentestedandwouldreducetheENPVto
$5billionandtheEBCRto1.1,asshowninTable ES-12;althoughmarginal,theestimatedeconomicbenetsremainpositive.
TableES-12 Summar yeconomicindicatorsfortheHSRprogram(presentvaluediscountedto2028,$2012,$billion)
4% discount rate 7% discount rate
Totalcosts 79.3 58.9
Totalbenets 180.6 63.8
EIRR 7.6% 7.6%ENPV 101.3 4.9
EBCR 2.3 1.1
Sydney-Melbourneisthestrongestperformingline,withanestimatedEIRRof7.8percent,asshowninTable ES-13.IthasanestimatedpositiveENPVof$69billionandanEBCRof2.5whenmeasuredonastand-alonebasis.
TableES-13 Summar yeconomicindicatorsforSydney-Melbourne(presentvaluediscountedto2028,$2012,$billion)
4% discount rate 7% discount rate
Totalcosts 46.5 38.9
Totalbenets 115.7 45.3
EIRR 7.8% 7.8%
ENPV 69.3 6.5
EBCR 2.5 1.2
Note:Totalsdonotaddupexactlyduetorounding.
21 eEIRRrepresentsthediscountratethatmakesthenetpresentvalueofalleconomiccashowsequaltozero.ehighertheEIR RthegreatertheneteconomicreturnsachievedbyaprojectrelativetoitscapitalresourcecostsandifEIRRisgreaterthanthediscountrate,thentheprojectwoulddeliverapositiveneteconomicbenet.
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Executive Summary
eincrementaleconomicresultsforeachadditionalstageofthepreferredHSRprogramaresetoutinTable ES-14.eresultssupportthepreferredstagingoftheHSRprogram,withSydney-MelbournedeliveringanestimatedEIRRof7.8percent.esubsequentnorthernstages
fromNewcastle-MelbourneandBrisbane-GoldCoastaddlittleincrementaleconomicvalueonastand-alonebasis(i.e.ENPVdoesnotmateriallychange)andtheresultssuggesttheywouldnotbeundertakenunlesstheintentionweretocompletethelineconnectingBrisbaneandSydney.
TableES-14 Incrementaleconomicimpactsforeachadditiona lstageoftheHSRprogram(presentvaluediscountedto2028,$2012,$billion)
Future HSR program
Sydney-
Canberra
Sydney-
Melbourne
Newcastle-
Melbourne
Brisbane-
Gold
Coast &
Newcastle-
Melbourne
Network
complete
(i.e. Brisbane-
Melbourne)
Year operations
commence2035 2040 2045 2051 2058
Totalcosts* 22.2 46.5 58.6 64.3 79.3
Totalbenets 20.4 115.7 126.7 126.7 180.6
EIRR 3.8% 7.8% 7.3% 7.1% 7.6%
ENPV -1.7 69.3 68.1 63.9 101.3
EBCR 0.9 2.5 2.2 2.0 2.3
*Costsincluderollingstockandassetrenewalcosts.
Overall,theresultsoftheanalysispresentapositiveeconomiccasefortheintroductionofHSR.Forecastswerepreparedforthereferencecase(i.e.withHSR)whichwaspartofthecentralcaseforevaluationpurposes.ereferencecasereectsarangeoflong-termassumptionsandexpectations,including:
Stronggrowthinthebasetravelmarketoverthe52yearsto2065(travelontheeastcoast
willmorethandoublefrom153milliontripsto355milliontrips).
NosignicantincreaseinaviationcapacityintheSydneybasin.isresultsinincreaseddelaysandtheinabilityofpassengerstotravelatpreferredtimes,consistentwithassumptionsintheJointStudyonAviationCapacityfortheSydneyRegion22.AssumedadditionalaviationcapacityinSydneyhastheeectofreducingtheestimatedEIRRfortheHSRprogramasawholefrom7.6percentto7.1percentandreducingtheECBRfrom2.3to2.1.Additionalaviationcapacityalsoreducesthenancialreturnfrom0.8percentto0.3percent.
22 AustralianGovernmentandNSWGovernment,Joint Study on Aviation Capacity for the Sydney Region,Canberra,2012.
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HSRfareswouldbestructuredtobecomparabletoandcompetitivewithalternativemodesoftransportforbothbusinessandleisurepurposes.HSRfareshavebeensettobecompetitivewithairfaresonthemaininter-capitalroutesontheeastcoast,trendingdownwardsovertimeby0.5percentperyearto2015andremainingconstantthereafter,consistentwiththeforecastreductioninrealairfares.Caroperatingcostsincreaseovertimeduetoaforecastrealincreaseinthecostoffuel(13percentrealincreaseby2065afterallowingforforecastimprovementsinfueleciency).
IfHSRfareswereincreasedby30percent,theEIRRfortheprogramasawhole
wouldreduceto7.4percent.However,thenancialreturnwouldimprovefrom0.8percentto2.3 percent,withoperatingcashowsbecomingpositivethreeyearsearlierin2038.
IfHSRfareswereincreasedby50percent,economicreturnswouldfallfurtherbutHSRwouldstillproducesubstantialneteconomicgains,withanEIRRof7.2per
centandanEBCRof2.1(atafourpercentdiscountrate).enancialreturnwouldimprovefurthertothreepercent.
Competitive aviation response
estudypredictsthatoverhalfthe83.6millionHSRtripsforecastin2065wouldbedivertedfromair,whichwouldhaveasignicantimpactonaviationmarkets.
Airlineservicesaremobileinthesensethattherearefewsignicantsunkcapitalcostsinservicingparticularroutesandassetscanbequicklyredeployedtootherroutes.Airlinesoperatingalongkeyregionalandinter-capitalroutesacrosstheeastcoastofAustraliaalreadycompetestronglyagainsteachother,andfarelevelsofmanyfareclasseshavedeclinedovertime,whichsuggeststhatairfarelevelsare
alreadyhighlycompetitiveonmajorroutes.
ItisnotexpectedthatairlineswouldrespondtoHSRcompetitionbyreducingtheirfaresonasustainedbasis.Rather,ithasbeenassumedthatairlineswouldquicklyreducecapacity,eitherbyreducingfrequenciesoraircraftsizes,tolocationswithintheHSRcorridorwherethereissignicantpassengerdiversiontoHSR.isassumptionisconsistentwithoverseasexperiencewhere,followingtheintroductionofHSR,theairlineresponsehasgenerallybeentoreduceservicesonthecompetitiveroute.
AirlinesdonotcontrolallofthecomponentsofanendtoendjourneybyairthatinuencetherelativecompetitivenessofairtravelandHSRtravel.Mostimportantofthesearethecostofaccessingtheairport,itslocationrelativetoHSRstationsandairportcapacity.Nevertheless,totheextentthat
airlinesareabletoinnovateinwaysthathavenotbeenanticipatedinthisstudy,itcouldhaveanimpactonactualHSRpatronage.
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Executive Summary
Alowdemand/highcostsensitivitywasdevelopedthatincludedarangeofalternativeassumptionswhichincombinationresultinasetofcircumstancesunfavourabletoHSR.elowdemand/highcostscenarioincludes:
NoaviationcapacityconstraintsinSydney.
A30percentincreaseinpre-riskcapitalcosts.
Lowpopulationgrowthandloweconomicgrowth.
A50percentincreaseinHSRfares.
Whilethecombinationoftheseassumptionsmaybeunlikely,theresultsoftheanalysisprovideausefulbasisforcomparisonandanunderstandingoftheeconomicperformanceoftheHSRprogram.
ecombinationofassumptionssignicantlyreducestheeconomicreturngeneratedbythefutureHSRprogramfrom7.6percentto3.8percent.eimpactonthenancialreturnis,however,modestwiththehighercostsosetbythelargefareincrease.
eeconomicandnancialresultsweretested
againstarangeofsensitivitytests,withtheresultssummarisedinFigure ES-16andFigure ES-17:
elowgrowthscenarioassumeslowereconomicandpopulationgrowth(relativetothereferencecase)resultinginloweroveralldemandfortransportandthuslowerdemandforHSR.ItassumespercapitaGDPgrowthratesareassumedtobe0.3percentperyearlowerthanthereferencecase,andpopulationgrowthisassumedtobe51percentbetween2010and2065,comparedto72percentinthe
referencecase.
ehighgrowthscenarioassumesthattheAustralianeconomyexperiencesstronggrowthintothefuture(highGDPgrowth),withhighpopulationgrowth.isscenarioresultsinhigheroveralldemandfortransportandthushigherdemandforHSR.PercapitaGDPgrowthratesareassumedtobe0.3percentperyearhigherthaninthereferencecase,andpopulationgrowthisassumedtobe103 percentbetween2010and2065,comparedto72percentinthereferencecase.
Higher(+30percentand+50percent)HSRfares.
Anaggressivecompetitiveaviationresponsewhichresultsina50percentreductioninfaresfortwoyears.
AdditionalaviationcapacitywithintheSydneyregion,whichremovesthenegativeeectsoftraveltimeonightsto/fromSydneyfromthereferencecase,andassumesthereisnounmetdemand.
AdditionalaviationcapacitywithintheSydney
region,combinedwith30percentincreaseinHSRfares.
Lowdemandandhighcosts(describedabove).
Modechoicemodelsensitivities(includingalternativespecicconstants(ASCs),access/egressweightingandvaluesoftime).
Higher(+30percent)capitalandoperatingcosts.
Lower(10percent)capitalandoperatingcosts.
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Executive Summary
Environmental andsocial assessment
Astrategicenvironmentalassessmentframework,consistentwithAustralianGovernmentguidelines,
wasdevelopedanditskeyprinciplesincorporatedintotheselectionofthepreferredalignmentandstationlocationstoreducethepotentialfornegativeenvironmentalimpactsshouldtherebeadecisiontoproceedwithHSR.
Apreliminarystrategicassessmentofthe
environmentalandsocialaspectsofaHSRsystemontheeastcoastwasundertakenforthreereasons:
ToensurethatenvironmentalfactorswereintegratedintothedevelopmentoftheHSRsystem,includingdecisionsaboutthecorridorselection,alignment,stationlocationsanddesignfeatures.
ToensurethattheoverallHSRsystemisconsistentwithprinciplesofecologicallysustainabledevelopment.
Toidentifyimportantenvironmentalandsocial
issuestobefurtherinvestigatedandassessedintheimplementationphases,shouldadecisionbemadetoproceedwithHSR.
eassessmentoftheenvironmentalimpactsofHSRwasintegratedintotheevaluationofalignmentoptionsandstationoptions,usingaGeographicInformationSystem(GIS)toolkittoidentifypotentialecologicalandheritageinteractionsandlanduseplanningconstraintsandopportunitiesassociatedwiththevariousoptions.
eseevaluationswerecombinedwithother
considerations,suchasengineeringparameters,constructability,costanduserbenetstodeterminethepreferredalignmentandstationlocations.
epreferredHSRalignmentandstationswereselectedtoavoid,whereverpossible,signicantimpactsoncommunitiesandecologicalandheritageresources.ResidualimpactswouldbemanagedbymitigationstrategiesdevelopedduringtheconceptanddetaileddesignphasesofHSRdevelopment,shouldadecisionbemadetoproceed
withHSR.isisastandardpracticeforlargeinfrastructureprojects.Wherenecessary,osetsfornaturalenvironmentscouldalsobeused.
Inaddition,theassessmentofenvironmentalissuesassociatedwithHSRhasaddressednoiseandvibration,energyuseandcarbonemissions/greenhousegasconsiderations,theimplicationsofclimatechange,andthepromotionofecologicallysustainabledevelopment(ESD).Additionaldetailedinvestigationswouldberequiredacrosseachofthesedisciplines,shouldgovernmentsdecidetoproceedwithHSR,tominimisetheenvironmentalimpactsandmaximisepotentialpositiveoutcomes.
esocialimpactshavebeencanvassedthroughtheme-basedcasestudiesintothreekeyareasidentiedthroughresearchandstakeholderconsultation:
a. Workforceandcommunitydevelopment.
b. Accesstohealthandotherpublicservices.
c. Tourism,recreationandsocialinclusion.
ecasestudieshighlightthatHSRcouldpotentiallyhavearangeofbothpositiveandnegativeimpacts.
Broader impacts o HSR
Impacts on regions
InternationalevidencedemonstratesthatHSRcancontributeto,butisnotalwaysacauseof,regionaldevelopment.ImplementationofHSRwouldsignicantlyimproveaccessibilitybetweencapitalcitiesandregionalcentresandwouldprovidethepotentialforsignicantregionaleconomicdevelopment.However,theextenttowhichregionaltownsandcitiesservedbyHSRtake
advantageofthatpotentialwoulddependon:
SupportiveandalignedregionaldevelopmentpoliciesattheCommonwealth,stateandlocallevels.
eavailabilityandappropriateapplicationofinvestment.
MetropolitanandregionalplanningpoliciesthatencourageandsupportnewdevelopmentinregionalcentreswithHSRstations.
etimingofHSRopeninginrelationtobroad
economictrends.
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Robustandpragmaticplanningwouldberequiredtodeterminehowtheseinitiativesshouldbedevelopedandwhatoutcomesshouldbepursued.Inpart,theyareassociatedwiththenatureandscaleoftheproposedHSRnetworkandrequireforecastingresponsesandconditionsmanyyearsintothefuture.eyarealsouncertain,however,becausetheywouldrequireresponsesfromoutsidethetransportsector.eywouldneedbusinessestochangehowtheyoperate,investmentstoswitchtonewlocations,andtouriststochangetheirtravelpatterns.
AninvestmentofthemagnitudeandnatureofHSRcouldalsohaveunintendedconsequencesandimpacts,suchascausingsmallregionalcitiestolosejobsandresidentstonearbyregionalcentreswithHSRstations.esenegativeimpacts
wouldneedtobemanagedthougheectiveregionaldevelopmentpolicies,earlyandcarefulplanningtopositionlocalbusinessesforchange,andappropriatehumanandcapitalinvestmentincomplementaryassets.
TogainpositiveandsustainedbenetsfromHSR,regionalcommunitiesalongthecorridors
wouldneedtofollowdeliberatestrategies.HSRisnotapanaceaforregionaldevelopmentbut,
whencoupledwithappropriatestrategiesandplans,itcouldhaveapositiveimpactonregionalcommunitiesovertime.
InexaminingthepotentialimpactsofHSR,theinherentuncertaintiesneedtobeacknowledged.However,withproactiveandpositiveresponsesfromkeystakeholders,theimplementationofHSRcouldresultinimprovementsinregionalproductivity,changestotouristspendingpatternsand,forregionsclosertothecapitalcities,changestocommutingpatterns.Emerginginternationalevidencesuggeststhatwidereconomicimpactsattheregionallevelmaybegeneratedbyregionalaccessibilityimprovements,thoughquantitativeestimatesoftheseareconsideredneithersucientlycertainnorrobustforinclusioninthemaineconomicassessment.
Impacts on citiesHSRcouldhavewidereconomicimpactsoncitiesthroughitsimpactoneectiveemploymentdensity,thatis,bybringingplacesofresidenceandemploymentclosertogetherbyareductionintraveltimes.Benetscanthenariseinanumberofways:
Itiseasiertomatchworkerstospecicvacanciesandtondemployeeswithappropriateskills.
Itenablesgreaterspecialisationofsupply,leadingtomoreecientproductionofgoods
andprovisionofservices. Itleadstoknowledgespill-over(i.e.greater
opportunitiesforformalandinformalcontactthroughincreasedaccessibility).
Employeeshaveagreaterchoiceofjobs.
ereismorecompetitionbetweencompaniesandbetweenindividuals.
AstheHSRsystemisconstructed,accessibilitytomajorcitiesfromareassuchastheCentralCoast(toSydney)andtheGoldCoast(toBrisbane)
wouldimprove,al lowingemployerstoaccessalargerlabourpoolandprovidingemployeeswithawiderchoiceofemployers.Internationally,positiveeconomicbenetshavebeenattributedtosuchimpacts,socalledagglomerationbenets,andincludedinthequantitativeassessmentofthebenetsofinvestmentsintransportinfrastructure.However,asnotedabove,becauseoftheuncertaintyoftheseeectsinthecurrentcontext,noadjustmentstotheeconomicreturnshavebeenmadefortheminthisstudy.
Impacts on the national economy
AlthoughthemajorityofbenetsofHSRwouldaccruetousersofthesystem,HSRwouldhaveapositivenetimpactonthesizeofthenationaleconomy,withGDPestimatedtobe0.1percenthigherrelativetothebaselinein2085.
HSRwouldalsoraisetheoveralllevelofinvestmentinAustralia.In2036,HSRinvestment
wouldrepresent0.8percentofaggregateinvestmentintheeconomy,andwouldaverage
around0.4percentduringtheconstructionperiodasawhole.eassumptionthatHSRwouldbenanceddomesticallymeansthat,toaccumulate
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Executive Summary
therequiredHSRcapitalstock,someofAustraliaspoolofinvestmentwouldbechannelledintoHSRinsteadofelsewhere.isinvestmentsubstitutioneectproducesanegativeimpactontheeconomy,sinceitassumesthatinvestmentwouldbedivertedawayfromsectorswithahighernancialreturnthanwouldbeachievableforHSR(whichisprojectedtoachieveonlya0.8percentnancialrateofreturnoncapitalinvested),lowering
Australiasaveragereturnoninvestment.Otherthingsbeingequal,andintheabsenceofhigherproductivitybenetsgeneratedbyHSR,this
wouldlowerconsumptionandGDP.However,businesstraveltimesavingsgeneratedbyHSRareestimatedtoincreaselabourproductivity,whichoverthelongtermdrivesgainsinGDP,osettingthenegativeinvestmentimpacts.
einvestmentimpactsofHSRwouldbedierentifitwereassumedtobenancedbyborrowingfromforeignsources.erewouldbelesscrowdingoutofhigherreturncapital,butcostsinvolvedwithservicingtheforeigndebtwouldbeincurred.
RealconsumptionisestimatedtodecreaseduringtheconstructionofHSR(untilaround2056).Post2056,realconsumptionbeginstoincreaserelativetothebaselineasbenetsstarttoowfromtheoperationofHSR.AsinvestmentinHSRtailsoandproductivitygainsowfromtheoperationalphase,resourcescanberedirectedtootherinvestmentusesandtoconsumption,andnationalincome(movingcloselywithGDPduetotheassumptionofdomesticnancing)beginstoincreaseandmoveabovethebaseline.
Similarly,theinvestmentsubstitutioneectmeansthatHSRwouldimpacteachofthe
Australianstatesindierentways.Allelsebeingequal,anincreaseininvestmentinonestate,forexample,wouldresultinareductioninthelevelofinvestmentacrosstheremainingstates.InthecaseofHSR,theimpactoneachstatereectsthestrengthofinvestmentinandoperationofHSR,andtheconcentrationofindustriesthatcompeteforHSRinputswithineachstate.
Basedontheseassumptions,NSW/ACTisexpectedtobetheprimarybeneciarystatefromHSRduetothesubstantialinvestmentitreceives.
eexpansioninNSW/ACTsGSPwouldcomeatacosttotheotherstates,whichwouldsharetheburdenofreducedinvestmentinothersectors.ProductivitygainsarealsoexpectedtobeconcentratedinNSW/ACT,althoughtherewouldstillbesucientgainsinVictoriaandQueenslandtoyieldapositiveGSPimpact.
econstructionofHSRdrawslabourintoNSW/ACTandawayfromotherstates.eassumedconstraintonlaboursupplymeansthatthebulkoftheexpansioninconstructionsectorlabour
requirementsinNSW/ACTwouldhavetobeosetbycontractionsinothersectors,leadingto
varyingimpactsonemploymentbystatesimilartoimpactsonGSPbystate,butwithlessintensity.
Whilebeyondthescopeofthemodelling,alternativefundingarrangementsinvolvingadierentsharingofthenancingofHSRwouldclearlyalterthepatternofgainsandlossesindierentregions.
Implementing a uture
HSR program
Roles o the public and private sectors
eAustralianGovernment,ACTGovernmentandrelevantstategovernmentswouldneedtohaveacentralroleinthedevelopmentofHSR.
iswouldbeduebothtoitsstrategicnatureandtothefactthattheAustralianpublicwouldhavetofundmostoftheinfrastructure.Governments
wouldowntheinfrastructureandwouldhaveanobligationtoensurethatitwasecientlyand
eectivelyprovidedandused.
Withaninitialcapitalcostinexcessof$100billion,afutureHSRprogramwouldbeoneofthelargestinfrastructureprogramseverundertakeninAustralia.Itssizewouldchallengetheresourcesofthesupplierindustry,bothdomesticallyandglobally,withonlyalimitednumberoforganisationshavingthenancialcapacityanddepthofskillsandresourcesavailabletocompeteforthelikelysizeofworkspackages.Toachievevalueformoney,governmentswouldneed
tocarefullypackageandstagetheprocurementtoensurecompetitivebidswereachievedfor
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eachpackage.Governmentwouldneedtoretainsomeoftherisksaroundtheintegrationofthecomponentparts,buttheseriskscouldbemitigatedthroughrigoroustechnicaloversight.
GovernmentswouldretainanongoingroleinthestewardshipoftheHSRsectorafterconstruction,toensuretheobjectivesandeconomicbenetsoftheHSRprogramwereachieved.isrole
wouldinvolveprovidingoversightofthedeliveryofHSRservicesagainstagreedpriceandservicequalitymetrics,whilebeingcarefultoavoid
constrainingthemarketagilityandinnovationofthosemanagingthetransportservices.Governmentswouldalsoberesponsibleforsafetyandenvironmentalcompliance.
eprivatesectorshouldbecloselyinvolvedinabroadrangeofroles:
DesignandconstructionofcomponentsoftheHSRinfrastructurenetworkundercontracttogovernments.
Developmentofstationprecinctsinpartnership
withtherelevantgovernment. Supplyofrollingstock(trainsets)andthe
signallingandcommunicationssystems.
ControlandoperationofHSRtrainstodeliverhighstandardtransportservicestothepublic.
MaintenanceoftheHSRsystem.
DevelopmentofHSRstations,andassociatedcommercialopportunities,wouldoeranopportunityforprivatenance.Apublic-privatepartnershipmodelisenvisagedforgreeneld
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