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High Speed Rail Study

Phase 2 Report

Key findings and Executive summary

In accordance with the east coast high speed rail (HSR) study terms of reference, AECOM and its sub-consultants (Grimshaw, KPMG, SKM, ACIL Tasman, Booz & Co and Hyder, hereafter referred to collectively as the Study Team) have prepared this report (Report). The Study Team has prepared this Report for the sole use of the Commonwealth Government: Department of Infrastructure and Transport (Client) and for a specific purpose, each as expressly stated in the Report. No other party should rely on this Report or the information contain in it without the prior written consent of the Study Team.

The Study Team undertakes no duty, nor accepts any responsibility or liability, to any third party who may rely upon or use this Report. The Study Team has prepared this Report based on the Client’s description of its requirements, exercising the degree of skill, care and diligence expected of a consultant performing the same or similar services for the same or similar study, and having regard to assumptions that the Study Team can reasonably be expected to make in accordance with sound professional principles. The Study Team may also have relied upon information provided by the Client and other third parties to prepare this Report, some of which may not have been verified or checked for accuracy, adequacy or completeness. The Report must not be modified or adapted in any way and may be transmitted, reproduced or disseminated only in its entirety. Any third party that receives this Report, by their acceptance or use of it, releases the Study Team and its related entities from any liability for direct, indirect, consequential or special loss or damage whether arising in contract, warranty, express or implied, tort or otherwise, and irrespective of fault, negligence and strict liability.

The projections, estimation of capital and operational costs, assumptions, methodologies and other information in this Report have been developed by the Study Team from its independent research effort, general knowledge of the industry and consultations with various third parties (Information Providers) to produce the Report and arrive at its conclusions. The Study Team has not verified information provided by the Information Providers (unless specifically noted otherwise) and it assumes no responsibility nor makes any representations with respect to the adequacy, accuracy or completeness of such information. No responsibility is assumed for inaccuracies in reporting by Information Providers including, without limitation, inaccuracies in any other data source whether provided in writing or orally used in preparing or presenting the Report.

In addition, the Report is based upon information that was obtained on or before the date in which the Report was prepared. Circumstances and events may occur following the date on which such information was obtained that are beyond the Study Team’s control and which may affect the findings or projections contained in the Report, including but not limited to changes in ‘external’ factors such as changes in government policy; changes in law; fluctuations in market conditions, needs and behaviour; the pricing of carbon, fuel, products, materials, equipment, services and labour; financing options; alternate modes of transport or construction of other means of transport; population growth or decline; or changes in the Client’s needs and requirements affecting the development of the project. The Study Team may not be held responsible or liable for such circumstances or events and specifically disclaim any responsibility therefore.

High Speed Rail Phase 2 / iii

OverviewA strategic study on the implementation of a High Speed Rail (HSR) network (the study) on the east coast of Australia between Brisbane, Sydney and Melbourne was announced by the Minister for Infrastructure and Transport, the Hon Anthony Albanese MP, in August 2010.

The study has been conducted in two phases. Phase 1, published in August 2011, identified a short-list of corridors and station options and estimated preliminary costs and demand for HSR on the east coast of Australia. Phase 2 built on phase 1, but was considerably broader and deeper in objectives and scope, and so refined many of the phase 1 estimates, particularly the demand and cost estimates. This phase 2 report presents detailed findings on the 12 advisory objectives established for the study.

Drawings and maps have been prepared for the purpose of depicting the recommended alignment for the HSR system and to enable civil construction cost estimates to be made.

Keyfindings

Key Findings

Definition of the preferred HSR system

The HSR network would comprise approximately 1,748 kilometres of dedicated route with four city centre stations, four 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 offer a combination of services, including direct express services and limited stop services.

• Typicalexpressjourneytimeswouldbetwohoursand37minutesbetweenBrisbaneandSydney,onehourandfourminutesbetweenSydneyandCanberra,andtwohoursand44 minutesbetweenSydneyandMelbourne.

• TheHSRwouldoperatefrequentservicesbetweencapitalcitiesandregionalcentres.

• In2065,itisforecastthatpeakperioddemandforSydney-Melbournewouldbemetbytwonon-stopinter-capitalexpressservicesperhourperdirectionandthreeone-stopinter-capitalexpressservicesperhourperdirection,callingateitherSydneySouthorMelbourneNorthcityperipheralstations.

The dedicated HSR network would need to be integrated into the hubs of existing urban public transport systems and road networks to maximise its connectivity with other transport networks.

• Allcitycentrestationsmustbeintegratedwithotherpublictransportnetworksandthecity-peripheralstationsmusthavegoodaccesstomajorroadnetworks.

• Mostofthestationsonthenetworkwouldrequiresomelocalenhancementstopublictransportservices,parkingandinterchangearrangementstoensuregoodconnectivity.

Cost of constructing the HSR system

The estimated cost of constructing the preferred 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.

• ThepreferredHSRalignmenthasbeendesignedfirstandforemosttomeetmarket needs(intermsofjourneytimesandreliability),whilealsobeingenvironmentallyandeconomically sustainable.

• Tunnellinghasbeenadoptedwherenodedicatedsurfaceroutecouldbecreatedwithoutunacceptabledislocationand/or

environmentalcosts.Tunnelsmakeup144kilometres(eightpercent)ofthepreferredalignmentandarethemostsignificantconstructioncostelement(29 percentoftotalconstructioncosts).AccesstoandfromSydneywouldrequirethemosttunnelling(67kilometres)comparedtoBrisbane(five kilometres),Melbourne(eightkilometres)andCanberra(fourkilometres).

• TheHSRsystemwouldadoptinternationallyprovenandavailabletechnologyfortrainsetsandassociatedsystems(suchastraincontrolandpowersupplysystems),whichwouldcostlessthanifacustomiseddesignwererequired.

Forecast HSR demand

Between 46 million and 111 million passengers are forecast to use HSR services for inter-city1 and regional trips2, if the preferred HSR network were fully operational in 2065, with a central forecast of 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.Thisisconsiderablymorethanthenextlargestmarket,Brisbane-Sydney,withnearly

11millionpassengertripsperyear,andalmostfourtimesasmanyastheSydney-Canberramarket,withaboutfivemillionpassengertripsperyear.

• Inter-city andlongregionaltravel(>250km)areexpectedtoaccountfor49percentandapproximately36 percentoftotalpassengertripsand 62percentand35percentoftotalpassengerkilometrestravelledrespectively.Shortregionaltravel(<250km)wouldrepresent14 percentoftotaltrips,andonlyasmallpercentoftotalpassengerkilometrestravelled.Businesstravellerswouldaccountforabout35percentoftotaltripsand42percentoftotalpassengerkilometresontheentireHSRsystem.

• Forthepurposeofassessingdemand,averagefaresforbusinessandleisuretravelweresettobecomparableto,andcompetitivewith,airfareratesonthemaininter-capitalroutesontheeastcoast.Inpractice,arangeoffareswouldbeoffered,targetedtomarketsegmentsandinfluencedbyseatutilisationpatternsandcompetitivepressures,asiscurrentlythecasewiththeairlines.

Staging the development of HSR

The optimal staging for the HSR program would involve building the Sydney-Melbourne line first, starting with the Sydney-Canberra sector. Subsequent stages would be Canberra-Melbourne, Newcastle-Sydney, Brisbane-Gold Coast and Gold Coast-Newcastle.

• Internationalexperienceoflargeinfrastructuredevelopmentsshowsthatapproximatelytenyearscouldberequiredforplanning,consultationandenvironmentalapprovals,andfiveyearsforpreconstructionandprocurementactivities.

1 Theinter-citymarketisdefinedasjourneysover600kilometresbetweenthesixmaintownsandcitiesinthecorridorbasedonpopulation–Brisbane,GoldCoast,Newcastle,Sydney,CanberraandMelbourne.

2 Theregionalmarkethasbeenbrokenintolongregionaltripsgreaterthan250kilometres,whichincludesSydney-Canberra,andshortregionaltripslessthan250kilometres,whichincludesBrisbane-GoldCoastandNewcastle-Sydney.

Key Findings

Table1 Commencementandoperationalmilestonesforoptimalstaging

Stage Main construction commences

Operations commence

Sydney-Melbourne line

Sydney-Canberra 2027 2035Canberra-Melbourne 2032 2040Brisbane-Sydney line

Newcastle-Sydney 2037 2045Brisbane-GoldCoast 2043 2051GoldCoast-Newcastle 2048 2058

• Somepreliminary(‘enabling’)workstoenableconstructionoftheHSRatSydneyCentralstation(e.g.movingplatformsandutilities)wouldbeundertakenbefore2027.

• ConstructionofthewholeHSRsystemwouldtakearound30years.

• TheSydney-MelbournelinehasstrongerforecastdemandthantheBrisbane-Sydneyline,wouldbelessexpensivetobuildandispredictedtohavehighereconomicandfinancialreturns.Itshouldthereforebecompletedfirst.

• ThepreferredstagingofconstructionfortheBrisbane-Sydneyline(Newcastle-Sydney,Brisbane-GoldCoastandthenGoldCoast-Newcastle)reflectsbothmarketdemandandeconomiccharacteristics.

• Forthepurposeofevaluation,thestudyassumedtheinitialstagebetweenSydneyandCanberrawouldoperatefrom2035,withtheSydney-Melbournelineoperationalfrom2040.

Table2 Commencementandoperationalmilestonesforacceleratedstaging

Main construction Operations Stage commences commence

Sydney-Melbourne line

Sydney-Canberra 2022(earliestpossiblestart) 2030Canberra-Melbourne 2027 2035Brisbane-Sydney line

Newcastle-Sydney 2032 2040Brisbane-GoldCoast 2038 2046GoldCoast-Newcastle 2043 2053

• 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,financingandallrelevantapprovalswereinplaceandpreliminarydesignhadbeencompleted,theearliestthatmainconstructionworkcouldreasonablystartwouldbe2022.

• Bringingtheprogramforwardwouldreducetheeconomicbenefits,primarilybecausethemarketvolumeswouldbelowerwhenoperationsbegan.

Financial assessment

The HSR program and the majority of its individual stages are expected to produce only a small positive financial return on investment.

• ThedistributionoftheeconomicbenefitsofHSRbetweenusersofthesystemandtheoperator(s)woulddependontheprices charged.

• Basedonchargingcompetitivefares,theHSRoperationsandancillaryservices(suchascarparkingandleaserevenuesfromrelatedpropertydevelopment)wouldnotdeliversufficientrevenuetofundorrecovertheexpectedcapitalcostsoftheHSRprogram.

Governments would be required to fund the majority of the upfront capital costs.

• Thepotentialtoattractprivatefinanceislimited.Anexpectedreturnofatleast15percentwouldberequiredatthisstageofprojectdevelopmenttobeattractivetocommercialprovidersofdebtandequitytomajorinfrastructureprojects.HSRwouldfallwellshortofthis.

• Theestimatedrealfinancialinternalrateofreturn(FIRR)is1.0percentforSydney-Melbourneand0.8percentforthewholenetwork.

• Ifpotentialcommercialfundingweremaximised,afundinggapintheorderof$98billion,or86 percentoftheup-frontcapitalcostoftheHSRprogram,wouldremain.

If HSR passenger projections were met at the fare levels proposed, the HSR system, once operational, could generate sufficient fare revenue and other revenue to meet operating costs without ongoing public subsidy.

• Postconstruction,theHSRprogramasawhole,andeachofitssectors(withtheexceptionofSydney-Canberraasastand-alonesector)areexpectedtogeneratesufficientoperatingincometocovertheirongoingoperationalandassetrenewalcosts.

HSR fares adopted for the study have been assumed to be comparable to air fares on the inter-capital routes, and it would appear HSR could sustain higher fares.

• Increasingthecostoffareswouldincreasethefinancialreturnsandreducethefundinggap,althoughdoingsowouldreducethenumberofpeopleusingthesystem.Evenso,theeconomicbenefitsoftheprogramwouldremainpositive.

• GiventhatairfaresinAustraliaarealreadyhighlycompetitiveonmajorroutes,itisnotexpectedthatairlineswouldrespondtoHSRcompetitionbyreducingfaresonasustainedbasis.Ithasbeenassumed,inlinewithinternationalexperience,thatairlineswouldquicklyreducecapacity,eitherbyreducingfrequenciesoraircraftsizes,tolocationswithintheHSRcorridorwherethereissignificantpassengerdiversiontoHSR.ItislikelythatanyreductionincapacitywouldberedeployedtoroutesoutsidetheHSRcorridor.

• Nevertheless,totheextentthatairlinesareabletoinnovateinwaysthathavenotbeenanticipatedinthisstudy,therewouldbeanimpactonHSRpatronageandcapacitytomeetoperatingcosts.Thesensitivitytestsincludedonescenarioinwhichairfareswerereducedby50percentfortwoyears.

Key Findings

Economic assessment

Investment in a future HSR program could deliver positive net economic benefits.

• TheSydney-Melbournelinewoulddeliveraslightlyhighereconomicinternalrateofreturn(EIRR)oninvestmentthanthewholenetworkwould.TheEIRRofSydney-Melbourneisestimatedat7.8percent,comparedto7.6 percentforaninvestmentinthestagedHSRprogramasawhole.

• Theeconomicbenefitcostratio(EBCR)calculatestheratioofthepresentvalueofbenefitstothepresentvalueofcosts.Whencalculatedusingadiscountrateoffourpercent,theECBRis2.5forSydney-Melbourneand2.3forthewholenetwork.

• Theeconomicnetpresentvalue(ENPV)ofcostsandbenefitsassociatedwithaprogramofinvestmentinthepreferredHSRsystemwouldbe$70billionforSydney-Melbourneand$101 billionforthenetworkasawhole,

calculatedusingadiscountrateoffourpercentayearuntilthestartofconstructionin2027(financialyear2028),andexpressedin $2012.

• Theeconomicresultsremainpositiveunderarangeofchangedassumptions.Whencalculatedusingasevenpercentdiscountrate,whichrepresentsahigherhurdlerateforjudgingeconomicperformance,theEBCRwouldbe1.1andtheENPVwouldbe$5 billion.

• Mostoftheeconomicbenefits(90percent)wouldaccruetotheusersoftheHSRsystem.Abouttwo-thirdsoftheuserbenefitsareattributabletobusinessuserstravellinglongdistances,whichreflectsinparttherelativelyhighervalueoftimeattributedtobusinesstravellerscomparedtoleisuretravellers.

• Externalitieswouldberelativelyminor,accountingforonlyaboutthreepercentofthe benefits.

Environmental and social assessment

The preferred 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, offsets.

• Potentialsignificantimpactsinurbanareas,suchasnoiseandlargescalepropertyacquisition,havelargelybeenavoidedbytheuseoftunnellingontheapproachestocapital cities.

Broader impacts of HSR

Aligning public policies, programs and capabilities across Australian Government, state/territory government and local government agencies as part of a corridor regional development concept would be necessary to realise the full benefits of HSR.

• TheimplementationofHSRwouldsubstantiallyimproveaccessibilityfortheregionalcentresthatitserves,providingtheopportunityfor–butnottheautomaticrealisationof–increasedregionaleconomicdevelopment.Theabilityofthese

centrestotakeadvantageoftheopportunitiescreatedbyimprovedaccessibilitywouldrequirecoordinatedandcomplementarypoliciestobeimplemented.

• Emerginginternationalevidencesuggeststhatwidereconomicbenefitsmaybegeneratedbyregionalaccessibilityimprovements,butthequantitativeestimatesareneithersufficientlycertainnorrobustforinclusioninthemaineconomicassessment.

Implementing a future HSR program

Both the public and private sectors would play a significant role in the planning and implementation of a future HSR system.

• GovernmentswouldneedtohaveacentralroleintheplanninganddevelopmentoftheHSRsystem,includingsecuringthenecessaryapprovals.TheprimarypublicsectorroleswouldbeexecutedthroughasingleHSRdevelopment authority.

• AsHSRwouldbepredominantlypubliclyfunded,theAustralian,ACTandrelevantstategovernmentswouldbetheownersofthesystemandwouldassumethekeyroleinthespecificationandprocurementofnetworkinfrastructure,theallocationofitscapacityfortransportservicesandthespecificationofminimumservicerequirements.

• TheprivatesectorwouldberesponsibleforbuildingtheHSRinfrastructureundercontract

totheHSRdevelopmentauthority,andforthedeliveryoftrainservicestothepublic.Controlofthemovementoftrainsandmaintenanceofinfrastructurewouldalsobetheroleoftheprivatesector,undercompetitivelytenderedconcession arrangements.

The key risks to the HSR program and its successful performance are common to all major greenfield infrastructure projects; most notably, a lack of certainty about future demand and revenues, and the potential for cost over-runs during construction.

• Allowanceforriskanduncertaintyhasbeenincludedinthedemand,economicandfinancialassessments,buttheriskscannotbeperfectlycontrolledandaprogramofthisnature,particularlyextendingoveralongperiodoftime,containssignificant uncertainties.

Key Findings

Key public policy issues for a decision to proceed

Whether to proceed with planning for a future HSR program must necessarily be a policy decision, taking account of many factors that cannot be known with certainty, and in the context of risks which cannot be perfectly controlled.

• ThisstudyestimatesthatHSRwouldhavepositiveneteconomicbenefits,usingtheAustralianTransportCouncil’scost-benefitmethodologyguidelines,whichareconventionallyappliedtomajortransportinfrastructureprojects.However,thisappraisalextendsto2085,anecessarilydistanttimehorizonforprogramdeliveryandmarketimpactcomparedtomostinfrastructurefeasibilitystudies.

• Thelong-termfutureisinherentlyuncertainandrequirescautionwhenmakingajudgement,butitismostlikelythatdemographicandeconomictrendswillsupportasteadilyimprovingcaseforHSRontheeastcoastratherthanotherwise.Inthatcase,policy-makers,whetherornotyetconvincedofthemeritsofcommittingtoHSR,mayalsolegitimatelyweighthepossibleconsequencesofnottakingactionstopreservethatoptionatsometimeinthefuture.

• Inthisregard,inactionisnotbenign.Intheabsenceofaprotectedroute,thespreadofcitiesandotherdevelopmentsinthepreferredcorridorwillgraduallyreducetheconstructabilityandincreasethepotentialcapitalcostsofafutureHSRprogram,renderingitincreasinglymoredifficulttoimplement,evenwhilethefundamentaltrendsmaybecomeincreasinglyfavourable.

As in all publicly-funded infrastructure projects, the balance between public benefit and public cost should be considered.

• ThepositiveeconomicperformancethatisestimatedtobeachievablefromaninvestmentinHSR,mostofwhichwoulddirectlybenefittheusersofthesystem,contrastswithlowfinancialreturns,whichwouldneedtobesupportedbypublicfunding.Althoughthisistrueofmanytransportinfrastructureprojects,includingnationalhighways,itisanissuethatmustbeconfronted.

• TheexternalbenefitsofHSR-fewerroadaccidents,reducedroadcongestionandsoon–whichmightcontributetoitsrationale,wouldbepositivebutareestimatedtofallfarshortofthepublicfundingrequired.

• Bycontrast,theopportunitiesforurbanandregionaldevelopmentintheHSRcorridorwillbeconsideredbymanypeopleinAustraliatohaveahighpotentialvalueinpublicpolicyterms,butthosebenefitsdonotfollowautomaticallyorwithcertainty.Therewouldneedtobeconfidencethattheywouldbeactivelyexploitedandrealisedtojustifyanygreatweightinthedecisiononwhethertoproceed.Thatinturnwouldrequirepolicycommitmentatalllevelsofgovernmenttopursuinganintegratedcorridordevelopmentstrategy,synchronisedwiththedeliveryoftheHSRprogram.

A related policy issue is the extent to which the initial capital costs of an HSR program should be recovered from users.

• Taxpayerswouldneedtomakeasubstantialcontributiontotheup-frontcostsofestablishinganHSRsystem.Theanalysissuggeststhatcharginghigherfaresthanthoseassumedwouldbefeasible,andwouldimprovefinancialreturns,butwouldreduceoveralleconomicbenefitsasfewerpeoplewouldusethesystem.

• Whileeconomicprinciplessuggestthatthecommunity’seconomicwelfareisbestpursuedbychargingusersonlythemarginalcostofinfrastructure,establishingthebalancebetweenrecoveryofpublicinvestmentininfrastructureandmaximisingitseconomicbenefitsisultimatelyapolicymatter.

• IfanHSRprogramwereadopted,therewouldneedtobeanup-frontunderstandingofwhatprincipleswouldbeappliedtoinfrastructurepricingandcostrecovery.Certainly,ifpassengernumbersweretogrowovertime,governmentswouldbeinapositiontobegintorecoversomeproportionofitscapitalinvestment.

High Speed Rail Phase 2 / 1


The expected growth in travel demandPopulationandemploymentgrowthwillcontinuetochallengethecapacityofexistingtransportnetworksandpublicinfrastructurealongtheeastcoastofAustralia1.TravelontheeastcoastofAustraliaisforecasttogrowataround1.8percentperyearoverthenext20years,increasingbyapproximately60percentby2035.By2065,travelontheeastcoastwillhavemorethandoubled,from152milliontripsin2009to355milliontripsperyear2.

WithoutHSR,aviationwouldremaintheprimarymeansoftransportforlongdistanceinterstate(andsomeinter-regional)tripsandroad-basedtravelbyprivatevehiclewouldremaintheprimarymodeforconnectionswith,andbetween,regionalcentres.Togetherthesewouldcarryover90percentofthetripsontheeastcoast,subjecttocapacitybeingavailable.

ThisstrategicstudyinvestigateshowHSRcanplayaneffectiveroleinmeetingfuturetraveldemandbyprovidinganalternativemodeoftransportthatwouldbeattractiveforpeopletouse.

1 AustralianBureauofStatistics(ABS)mid-rangepopulationprojectionsestimatethatbetween2011and2050,thepopulationwillgrowby37percentinNSW,49percentinVictoriaand80percentinQueensland.ABS,PopulationProjectionsAustralia2006to2101,catalogueno.3222.0.

2 SeeChapter 2fordetailofhowtheseforecastsweredetermined.

Executive summary

Executive Summary

What is HSR?HSRisgenerallydefinedasapurpose-built,fixed-trackmodeoftransport,capableofmovingpeopleatspeedsofatleast250kilometresperhour,usuallyoverlongdistances.Internationally,ittypicallyoffersservicesbetweenmajorcities,competinginthesametravelmarketasaviation,butalsoprovidesopportunitiesforintermediatestopsinregionalareasandfastcommuterrailservicesfromoutermetropolitanareas.HSRstationsaretypicallylocatedwithincitycentres,closetopopulationandbusinesscentres.

OriginatinginJapaninthe1960s,HSRsystemsnowoperatein14countries3.Totalglobalkilometresoftrackhaveincreasedfromjustover1,000kilometresin1980,to15,000kilometresin20114.Chinaiscurrentlyconstructinganadditional10,000kilometresofHSRnetwork5.

MostHSRsystemsoperateondedicatedtracksatamaximumspeedofbetween250and300kilometresperhour,withsomesystemsnowoperatinginexcessof300kilometresperhour6.SomeHSRservicesalsousesectionsofconventionaltracksatlowerspeeds,eitheronentrytocitiesortoextendbeyondadedicatedline7.AllcurrentHSRsystemsuseconventionalsteelwheelsonrailsandarepoweredbyelectrictraction,althoughthereareseveralvariantsintermsofrollingstockandinfrastructure.

Definition of the preferred HSR systemHSR alignment and station locationsThepreferredHSRrouteontheeastcoastofAustraliahasbeendevelopedfirstandforemosttomeetmarketneeds(intermsofjourneytimesandreliability),whilealsobeingenvironmentallyandeconomicallysustainable.Theroute,illustratedinFigure ES-1,broadlyfollowsacoastalalignmentbetweenBrisbaneandSydneyfollowedbyaninlandalignmentfromSydneytoMelbourne,withspurlinestotheGoldCoastandCanberra.

CitycentrestationswouldbeterminalstationswithintheCBDsofthecapitalcities.Theselocationsarethesinglemostimportantoriginanddestinationineachcityandprovidereadyaccessto,andintegratewith,othermetropolitantransportservices.CBDstationswouldbelocatedbeneaththeBrisbaneTransitCentreinBrisbaneandontheeasternfringeofCivicinCanberra,andwouldshareexistingstationsatCentralinSydneyandSouthernCrossinMelbourne.Eachofthethreemaincapitalcities(Sydney,MelbourneandBrisbane)wouldalsohaveaperipheralstation(inSydney’scaseitwouldhavetwo–onetothenorthandonetothesouthoftheurbanarea),forpassengerswhowouldfinditmoreconvenienttoaccessHSRwithouthavingtotravelintooroutoftheCBD.

TheminimumcorridorwidthrequiredtoaccommodatetwodedicatedHSRtracksis30metres.Thisrepresentsarefinementofthephase1evaluation,whichwasbasedona200 metrewidthtoensurethatanysignificantissueswerecapturedwhencomparinginitialcorridoroptions.The30metrewidthdoesnotincludetheadditionalwidthrequiredforembankmentsorcuttingsnecessarytomaintainthesmoothverticalalignmentrequiredforHSR.

Inmanydevelopedurbanareas,surfacealignmentswouldnotpermitcompetitiveaccesstimestothecitycentresforHSRserviceswithoutmajordislocationoftheurbanpopulationand,insuchcases,thealignmentwouldbeplacedintunnel.Sectionsoftheregionalalignmentwouldalsobebuiltintunneloronviaductstoavoidbuilt-uporenvironmentallysensitiveareas.Althoughtunnelsaddtothecapitalcost,theywouldallowtheinfrastructuretobedeliveredinawaythatminimisesanypotentialnegativeimpactsonthecommunityandenvironmentduringconstructionandoperation,andminimisesdelaysanddifficultiesduringconstruction.

3 Japan,Italy,France,Germany,Spain,Switzerland,Belgium,Netherlands,Luxembourg,China,UnitedKingdom,Korea,TaiwanandTurkey.

4 DerivedfromTheWorldBank,High speed rail: the fast track to economic development?,2010(updated).5 ZhangJianping,Planning and Development of High Speed Rail Network in China,UIC8thWorldCongressonHighSpeed

Rail,2012.6 Forexample,bothFranceandSpainoperateserviceswithspeedsofover300kilometresperhourincommercialservice.7 ParticularlyinFranceandGermanyand,toalimitedextent,inJapanandChina.


RegionalstationswereselectedonthebasisofpotentialpatronageandhavebeenproposedattheGoldCoast,Casino,Grafton,CoffsHarbour,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

Grafton

Coffs Harbour

Port Macquarie

Wagga Wagga

Shepparton

Albury-Wodonga

Gold Coast

Figure ES-1

Executive Summary

Types of HSR servicesThemarketassessmentshowedstrongdemandontheeastcoast,nowandintothefuture,forhighspeedtravelbetweenthecapitalcitiesandtoandfromregionalcentres.ThepreferredHSRsystemwouldthereforeoffertwotypesofservices:• Inter-capitalexpressservices,mostlyoperating

non-stopbetweenthecapitalcitycentralstationsbutwithsomealsostoppingatthecityperipheralstations.

• Inter-capitalregionalservicesofferinghighspeedservicesbetweenthecapitalcitiesandmajorregionalcentres.Regionalserviceswouldalsofacilitatetravelbetweenregionalstations,althoughsomeinter-regionalmovementswithlowdemandmayrequirepassengerstochangefromoneservicetoanotheratanintermediatestationtocompletetheirjourney.

Ifbuilt,thesystemwouldalsohavethecapacitytoaccommodatefastcommuterrailservicesbetweenthecapitalcitiesandtheirnearerregionalcentres(suchastheCentralCoastandNewcastleinNSW),manyofwhichcurrentlyhaverelativelyslow,ifany,services.Commuterserviceswouldprobablybeoperatedbythirdparties.TheyhavebeenallowedforinthephysicalplanningbuttheywouldnotpositivelycontributetothefinancialperformanceofHSR,norwouldtheybethesourceofanysignificantincrementaleconomicbenefitinthecost-benefitanalysisofHSR.Commuterdemandwasthereforeexcludedfromtheeconomicandfinancialappraisals.

HSR service characteristicsAustralianmarketresearchandinternationalexperiencehaveindicatedthatHSRwouldneedtooffercompetitivedoor-to-doorjourneytimes,highstandardsofcomfortandconvenienceandacompetitivefarestructuretosuccessfullycompetewithothermodesoftransport,especiallyair.HSRcoulddelivernon-stopjourneytimesunderthreehourscitycentretocitycentre,betweenBrisbaneandSydneyandSydneyandMelbourne,asshowninFigure ES-2andTable ES-1andTable ES-2.

FigureES-2 HSRtraveltimesbetweenmajorcities

Not to scaleKEYHSR preferred alignmentState 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

RoadsStation locations

Inter-capital express

Inter-capital regional

Inter-capital regional

The operation of a combination of HSR services, including

express services and regional services.

Figure ES-2

Executive Summary

TableES-1 TypicalHSRtraveltimesanddistancesbetweenselectedstationsonBrisbane-Sydneyline

igin

Or

Destination

Coffs Central Newcastle SydneyHarbour Coast

Regional Regional Regional Express Regional

1hr11min* 2hr28min 2hr43min 2hr37min 3hr09minBrisbane (332km) (662km) (714km) (797km) (797km)

1hr09min 1hr30min 1hr50minCoffs Harbour -(330km) (382km) (465km)

0hr14min 0hr39minNewcastle -(52km) (134km)

0hr27minCentral Coast - (83km)

*Withonestop.Onehour23minuteswiththreestops.Note:Distancesmaynotaddduetorounding.

TableES-2 TypicalHSRtraveltimesanddistancesbetweenselectedstationsonSydney-Melbourneline

Ori

gin

Destination

Southern Albury-Canberra MelbourneHighlands Wodonga

Regional Express Regional Regional Express Regional

0hr29min 1hr04min 1h11min 1hr55min 2hr44min 3hr03minSydney (98km) (280km) (280km) (540km) (824km) (824km)

Southern 0hr39min 1h31min* 2hr29min- -Highlands (183km) (442km) (727km)

1hr16min 2hr10min 2hr28minCanberra (366km) (651km) (651km)

Albury- 1hr09min-Wodonga (284km)

*PlusinterchangetimeatWaggaWagga.Note:Distancesmaynotaddduetorounding.

High Speed Rail Phase 2 / 7 High Speed Rail Phase 2 / 9

Serviceswouldtypicallyoperate18hoursperdayfor365daysperyear.Servicefrequencieswouldtypicallybeatleasthourly,increasingasdemandgrewtoreachpeakperiodservicefrequenciesin2065,asshowninTable ES-3.

Ultimately,trainfrequencieswouldbeinfluencedbyfuturemarketneedsandthepreferredtrainoperatingstrategy(operatingspeedsandstoppingpatterns)buttheindicativefrequenciesestablishedforthisstudyarecompatiblewiththeforecastdemandandefficienttrainutilisation.

TableES-3 Peakservicefrequenciesin2065(perhourineachdirection)

Route Inter-capital express Inter-capital regional

Brisbane-Sydney

Gold Coast-Sydney

Sydney-Canberra

Sydney-Melbourne

Canberra-Melbourne

3-4 2

- 4

1 2

5 2

1 1

Fareswouldbestructuredtobecompetitivewithalternativemodesoftransport.Forthepurposesofthemaindemandassessment,averagefaresforbusinessandleisuretravelweredesignedtobecomparableto,andcompetitivewith,airfaresonthemaininter-capitalroutesontheeastcoast,takingintoaccountthetypesoffarestypicallypurchasedbythedifferenttypesofpassenger8.Inpractice,arangeoffareswouldbeoffered,targetedtomarketsegmentsandinfluencedbyseatutilisationpatternsandcompetitivepressures,asiscurrentlythecasewiththeairlines.

Forecast HSR demand AnHSRsystemwouldsignificantlyincreaselongandmedium-distancetransportcapacityontheeastcoastofAustraliaandwouldprovideanalternativemodeoftransportthat,accordingtomarketresearchandsupportedbyinternationalevidence,wouldbeattractivetomanytravellers.IfthecompleteHSRnetworkwasfullyoperational,thestudypredictsthat,underthereferencecaseassumptions9,itcouldattractapproximately83.6 millionpassengertripsby2065,asshowninTable ES-4.Figure ES-3illustratesthemaininter-citypassengertripflows.

8 Forexample,theaverageHSRsinglefaresassumedinthereferencecasebetweenSydneyandMelbournewere$141fortheaveragebusinesspassengerand$86fortheaverageleisurepassengerbutsensitivitytestsalsoconsideredfaresupto30percentand50percentgreater.Thecorrespondingaveragefarespaidbyairpassengerswereestimatedas$137and$69respectively.

9 Thereferencecaseispartofthecentralcaseestablishedforevaluation.

Executive Summary

FigureES-3 HSRtraveldemandin2065betweenmajorcities–passengertrips

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

KEYHSR preferred alignmentState border Roads

Station locations

Figure ES-3


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.Thealternativeassumptionsincludedvariationsinpopulationandeconomicgrowth,increasesinairportcapacityatSydney(andhenceimprovementsintheaviationlevelofservice)andvariationsinHSRfaresrelativetotheprojectedairfaresandcarrunningcosts.

ForecastHSRtraveldemandbyjourneytypeinthereferencecaseispresentedinFigure ES-4(forpassengertrips)andFigure ES-5(forpassengerkilometres).Travelforbusinessaccountsfor35percentofforecastHSRpatronage,withinter-citybusinesstravelbeingthemostimportant10.Inter-citytravelwouldmakeupabout49percentoftotalpassengertripsand62percentofpassengerkilometres.Regionaltravelwouldrepresentabout50percentoftotalpassengertripsand38percentofpassengerkilometres.

10 Inter-citytripsaredefinedasjourneysover600kilometresbetweenthesixmaintownsandcitiesinthecorridorbasedonpopulation(Brisbane,GoldCoast,Newcastle,Sydney,CanberraandMelbourne).Regionaltripshavebeenbrokenintolongregionaltripsofgreaterthan250kilometres,whichincludesSydney-Canberra,andshortregionaltripsoflessthan250kilometres,whichincludesBrisbane-GoldCoastandNewcastle-Sydney.

Executive Summary

FigureES-4 HSRtraveldemandin2065byjourneytype(assumingthefullHSRnetworkwasoperational)–passengertrips

Figure ES-4 Passenger Trips

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

<1%

2%

9%29%

33%

26%

Figure ES-5Passenger Kms


Table ES-5showstheforecasttravelmatrixforthereferencecasein2065whenthefullnetworkwouldbeoperational.Intermediatestationsbetweencapitalcentresareaggregatedforpresentationpurposes.Excludingcommutermarkets,Sydney-MelbourneisthelargestmarketsegmentforHSRwithabout19 millionpassengertrips,considerablymorethanthenextlargest,Brisbane-Sydney,withnearly11 millionpassengertripsandalmostfourtimesSydney-Canberra,withaboutfivemillionpassengertrips.

Sometravelwasomittedfromthematrixbecauseitcoveredonlyashortdistance,orwouldbebestservedbycar,implyingthatfewsuchjourneyswouldbelikelytotransfertoHSR.Thisincludedalltravelwhollywithineachoftheintermediate

areas,otherthanthattoandfromWollongong.AsmallproportionoftheomittedlongertripscoulduseHSR,andtothisextent,theHSRforecastsareconservative.Tripstoandfromplacesexternaltothestudyareawerealsoexcluded.TheexcludedtripsreferredtoaboveareshownbyanXinthetable.

AbouthalfoftheHSRdemandwouldbedivertedfromforecastairtravelasshowninFigure ES-6.About19percentoftotaltripswouldbenewdemandgeneratedbytheintroductionofanHSRservice(shownasinduceddemand).

TableES-5 HSRtravelmarketmatrixfor2065(‘000tripsinbothdirectionsperyear)

Sect

ors

Brisbane

Gold Coast

Intermediate

Newcastle

Intermediate

Sydney

Intermediate

Canberra

Intermediate

Melbourne

Total

Bri

sban

e

Go

ld C

oas

t

Inte

rmed

iate

New

cast

le

Inte

rmed

iate

Syd

ney

Inte

rmed

iate

Can

ber

ra

Inte

rmed

iate

Mel

bo

urne

Tota

lX 2,210 1,650 750 600 10,860 1,240 1,130 730 2,490 X 900 520 580 3,830 610 190 440 340 X 810 X 5,500 190 330 X 850 X 170 1,760 220 250 150 330 X 2,990 20 300 X 730 X 2,690 5,190 2,290 18,760 80 480 100 2,320 X 640 2,720 X 4,660 X

83,600*

*Cellsmaynotexactlysumtothetotalduetorounding.

Executive Summary

FigureES-6 SourceofHSRtraveldemandin2065byjourneytype(passengertrips)

All

Business

Non-business

Air Coach Car Rail Induced

1%

2%

55%

19%

23%

<1%66%

24%

9%

49%

17%

30%

2%

2%

<1%

Figure ES-6


HowthetotalHSRandairmarketwouldbesharedbetweenthetwomodesoftransportisakeyissueinthedemandassessment.ConsiderableevidencehasbeenassembledintheinternationalliteratureontheimpactsofHSRoninter-capitalairtravelinEuropeandEastAsia.InFigure ES-7,theinternationalmarketsarerepresentedbythebluedots,whichshowtheproportionofthecombinedairandHSRtravelmarketcapturedbyHSRonselectedroutes.ForHSRjourneytimesoflessthantwohours,thisistypicallyover80percent,whereasifHSRjourneytimesexceedfourandahalfhours,theHSRsharefallsbelow30percent.Fortripsofuptothreehours(asforSydney-

MelbourneandSydney-Brisbane),observedHSRmarketsharesrangefromaround55percentuptoaround70percent.

Thisstudy’sreferencecaseinter-capitalforecastsfor2035havebeenincludedinthefigureforcomparisonandshowahighdegreeofconsistencywiththeinternationalexperience.Sydney-Canberraislowerthantheexpectedrangeforjourneyslessthantwohours,butthisislargelyexplainedbytherelativelyhighproportionofpassengerstransferringtoconnectingflights,whichareassumedintheforecastsnottodiverttoHSR.

FigureES-7 HSRshareofcombinedHSR/airtravelmarket,comparingthefinalmodelforecastfor2035withinternationalevidence

HSR

mod

e sh

are

(%)

HSR in-vehicle time (mins)

Sydney–Canberra

Canberra–Melbourne

Brisbane–Sydney

Sydney–Melbourne

Brisbane–Melbourne

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

Figure ES-7

Executive Summary

Cost of constructing the HSR networkInternationally,HSRsystemsareveryreliablewhentheyoperateasclosedsystemsdedicatedtohighspeedserviceswithpurpose-builtinfrastructureandtrainsets.AlthoughmixingHSRserviceswithconventionalrailservicesonsharedinfrastructuremayreducecapitalcosts,particularlyforaccessintotheurbanareas,operationalperformancecandiminishdramatically.SuchsystemsaregenerallynotcapableofdeliveringthejourneytimesthatwouldbenecessaryforanHSRsystemontheeastcoastofAustraliatoachievetherequiredlevelsofreliabilityandcompetitiveness.

ToachievethetargetjourneytimeofunderthreehoursforSydney-MelbourneandBrisbane- Sydney,anaveragejourneyspeedofapproximately300 kilometresperhourwouldneedtobeachieved.Thiswouldrequireasystemcapableofamaximumoperatingspeedof350kilometresperhour,toallowforsomeslowersectionsoftrackduetoterrainorotheroperatingconditions.SuchaveragespeedswouldnotbepossibleontheexistingconventionalrailinfrastructureontheeastcoastofAustralia,evenifitwasonlyusedforshortsectionsforcityaccessandegress,sodedicatedHSRinfrastructurewouldberequired.IftheHSRnetworkwereusedtoprovidefastcommuterservices,itislikelytheywouldnotoperateatsuchhighspeeds;amaximumoperatingspeedof200- 250kilometresperhourwouldeffectivelyservethecommutermarket,giventherelativelyshorterdistancesandmoreintensivestoppingpatternsoffastcommuterservices.

Inadditiontothephysicalcomponentsofcapitalcost(land,earthworks,structures,track,equipmentandfacilities),thecostestimatesalsoincludedesign,programandconstructionmanagement,andassetrenewalwhenitwouldfalldue.CostcomponentsweredevelopedfromAustralianunitcostsandbenchmarkedagainstinternationalHSRsystemstoensuretherobustnessoftheestimates.Rollingstock(trainsets)isequivalenttoafurtherninepercentofthetotalcapitalcost,butthiswouldonlybeexpendedasdemandbuiltupovertheappraisalperiodandservicefrequenciesincreased.

Tunnellingwouldbeusedwheretheterrainrequiresit,butwouldalsobeadoptedwherenodedicatedsurfaceroutecouldbecreatedwithoutunacceptablecommunitydislocationand/orenvironmentalcosts.Thisisparticularlythecasewheretheroutepassesthroughthemiddleandinnersuburbsofthecapitals,wherenosuitableeasementsareavailable.Ithasalsobeenusedinsomelocationswhicharehighlyenvironmentallysensitive.Intotal,thepreferredalignmentincludes144kilometresoftunnelalongtheroute,representingaround29percentofthetotalcostofconstruction.Sixtypercentofthetunnellengthisinurbanareas,with67kilometresinSydney,eightkilometresinMelbourne,five kilometresinBrisbaneandfourkilometresinCanberra.

ThecostestimatesreflecttheuseofprovenHSRsystemtechnology(suchastraincontrolandpowersupplysystems)andtrainsetsalreadyinservice,andreadilyavailable,andtakeaccountofarangeofmanufacturers’deliveredcostsforexistingHSRsystems.


Thecapitalcostshavebeenrisk-adjustedtoreflectuncertainty,principallyaroundthe scopeofthemajor construction,engineeringandoperationalelementsofafutureHSRprogram.Expectedconstructioncostsareexpressedthroughoutthischapterintermsofrisk-adjustedvalue,in$2012.

Intotal,theriskadjustmentprocessincreasedcapitalcostsbyabout10.8percent11.

TheestimatedcapitalcostforthefullHSRsystem,excludingthecostoftrainsets12,is$114.0 billionin$2012,asshowninTable ES-6.

TableES-6 Risk-adjustedHSRprogramcosts($2012,$billion)

Project development

Construction

Total capital costs

Canberra Sydney- Junction-Canberra Melbourne

Newcastle-Sydney

Brisbane- Gold Coast

Gold Coast Junction-Newcastle

Total HSR system

2.2 2.5 1.7 1.0 3.1 10.4

20.8 24.4 17.2 10.0 31.2 103.6

23.0 26.9 18.9 11.0 34.3 114.0

Notes:Totaldoesnotaddupexactlyduetorounding.Thereferencesto‘CanberraJunction’and‘GoldCoastJunction’describethepointsatwhichtheGoldCoastandCanberraspursleavethemainalignment.

Figure ES-8presentstheresultsofthe@RISKanalysisfortotalconstructioncostsincludingdevelopmentcostsforthefutureHSRprogram13.

Theanalysisillustratesthat:• In50percent(P50)ofsimulations,total

constructioncostsareexpectedtobelessthan$113.9billion($2012).

• In90percent(P90)ofsimulations,totalconstructioncostsareexpectedtobelessthan$127.0billion($2012).

• Intenpercent(P10)ofsimulations,totalconstructioncostsareexpectedtobelessthan$102.0billion($2012).

11 Thisistheexpectedrisk-adjustedcostandiswithinonepercentofthemedianrisk-adjustedcost,commonlyknownastheP50;thedifferencebetweenthemisduetotheriskadjustmentappliedtotheindividualcostcomponentsbeingnon-symmetrical.Takingintoaccounttheallowancesincludedindevelopingthenon-risk-adjustedcosts,theriskallowanceiscomparablewithwhatwouldbeallowedasaphysicalcontingencyforaprojectatasimilarearlystageofdevelopment.

12 Trainsetsareassumedtobeleasedinthefinancialassessment.13 Thefrequencyrepresentsthelikelihoodofthetotalconstructioncostsbeingwithina$1billionbandcentredonthecorresponding

pointonthecurve.Thusthereisatwopercentchancethatthecostwillliebetween$100.5billionand$101.5billionandafourpercentchancetheyliebetween$107billionand$108billion.

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

P10102.0

P50113.9

P90127.0

Freq

uenc

y

($2012, $billion)

Figure ES-8

Figure ES-9presentsestimatedaverageconstructioncostsperroutekilometreonasegmentbysegmentbasis.TheextensivetunnellingrequiredforaccessintoandoutofSydneyincreasesthecostperroutekilometreforthesesegmentsbytwotothreetimescomparedtothecostsfortheremainderofthenetwork.

PartsoftheroutebetweenBrisbaneandNewcastlealsohavehighcosts,reflectingthevolumeofearthworksrequiredintheseareas.


FigureES-9 HSRprogramaverageconstructioncostsperroute-kilometreinstagingorder($2012,$million)

160

180

185

120

140

8080

100

40

20

60

–

Bris

bane

to G

old

Coa

st

Gol

d C

oast

Jun

ctio

n to

Cas

ino

Cas

ino

to G

rafto

n

Gra

fton

to C

offs

Har

bour

Cof

fs H

arbo

ur to

Por

t Mac

quar

ie

Port

Mac

quar

ie to

Tar

ee

Tare

e to

New

cast

le

New

cast

le to

Cen

tral

Coa

st

Cen

tral

Coa

st to

Syd

ney

Sydn

ey to

Sou

ther

n H

ighl

ands

Sout

hern

Hig

hlan

ds to

Can

berr

a

Can

berr

a Ju

nctio

n to

Wag

ga W

agga

Wag

ga W

agga

to A

lbur

y-W

odon

ga

Alb

ury-

Wod

onga

to S

hepp

arto

n

Shep

part

on to

Mel

bour

ne

($20

12 $

mill

ion

per

km

)

87

54 55 5038

57 5743

137

41 4032

25

56

185

Figure ES-9Staging the development of HSRThesizeandcomplexityofanHSRsystemontheeastcoastofAustraliawouldbesuchthatitcouldnotbedeliveredasasingleproject;instead,itwouldbedeliveredinstageslinkingtheprincipalcentres.EventhesestageswouldbelargeprojectsbyAustralianstandards.Stagingwouldnotonlyallowtheupfrontfundingtobereducedandsmoothfuturefundingrequirements,butwouldalsobettermatchsystemdevelopmenttomarketgrowthandwouldallowrevenuetobegeneratedonsectionsofthesystemastheyarecompleted.

ThestudyhasconcludedthatthebenefitsofHSRarestronglyrelatedtothevolumeoftravelbetweenthecapitalcities,inparticularSydney-

Melbourne,andthatestablishingthislinkwouldbethefirstpriorityforanyHSRnetworkontheeastcoastofAustralia.Ataconstructioncostofabout$50billionin$2012(risk-adjusted),theSydney-Melbournelinewouldrepresentamajorundertakingandwoulditselfneedtobestaged.Canberra,whichwouldbeconnectedbyaspurlinetotheSydney-Melbourneline,isthenextmostimportantcityonthislinefromademandviewpointandwouldbeanappropriateterminalforthefirststagetoensurerevenuewouldbegeneratedasearlyaspossible.

Executive Summary

FigureES-10 StagingofthepreferredHSRsystem–commencementofoperations

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

KEYHSR preferred alignmentState border Roads

Station locations

Figure ES-10


ThestagingofthepreferredHSRsystemassumedinthefinancialandeconomicevaluations,asshowninFigure ES-10andTable ES-7,takesintoaccounttheextenttowhichindividualsectionscapturetheforecastmarket,thecostofconstructionandtheeconomicandfinancialreturnsofeachstage.

TableES-7 StagingofthepreferredHSRsystem

Line 1 Sydney-Melbourne

Built track (km)*

Risk-adjusted cost ($b)

Cost per km ($m)

Potential operational date

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.ThesedistancesaredifferentfromthetravelkilometresinTable ES-1andTable ES-2.**ConstructionofStages2and5wouldstartattheCanberraJunctionandGoldCoastJunctionrespectively,thepointsatwhichtheGoldCoastandCanberraspursleavethemainalignment.Note:Totalsdonotaddupexactlyduetorounding.

Executive Summary

FigureES-11 StagingofthepreferredHSRsystem–cumulativecapitalcosts($2012,$billion)

–

20

40

60

80

100

120

($20

12, $

billi

on)

205520502045204020352030202520202015 2060

Total capital costs

Sydney to Canberra operational

Brisbane to Gold Coast & Newcastle to Melbourne operational

Sydney to Melbourne operational

Network operationalNewcastle to Melbourne operational

A

DB

EC

A B C D E

Figure ES-11

Figure ES-11showstheprofileofcumulativecapitalcostsovertheHSRprogram.

Line1betweenSydneyandMelbournewouldbeamajorundertakingintermsofplanning,construction,testingandcommissioningand,basedoncurrentindustryexperience,wouldneedtobedoneindiscretestages.Forevaluationpurposes,astartdateof2035wasassumed.Workingbackfromthatdate,enablinglegislationwouldneedtobepassedby2019.Priorto2019,thefinalpreferredrouteandstationlocationswouldbedetermined,furthertechnicalinvestigationscompletedandallnecessarygovernmentapprovalsobtained.StepswouldalsobetakentopreservethepreferredHSRcorridorpriortoanycommitmenttoproceed.

Followingenablinglegislation,aperiodofmorethantwoyearswouldberequiredforconceptdesign,environmentalimpactassessmentandpublicconsultation,beforeadecisiontoproceedtoimplementationwouldbemadein2021.Therewouldthenbeaprocurementperiodoftwotothreeyearstoletcontractsandtoacquireland.Enablingworkswouldthenbeundertaken(criticallyatSydney’sCentralstation).Theseworksareanticipatedtotakefouryearstodivertthecurrentserviceswithintheexistingoperationalstationbeforethemainimplementationcontractscouldcommencein2027(i.e.financialyear2028).


Theimplementationprogramofafurther84monthsreflectstheactualprogramtodelivertheTaiwanHSRandincludesaperiodof34monthsfortestingandcommissioning.Basedonthisevaluationprogram,thefirstpublicHSRserviceswouldstartinApril2035.Subsequentstageswouldbedeliveredatfivetosevenyearintervals,withplanningofeachstageoverlappingwithconstructionofthepreviousstage.Undertheseassumptions,theentirenetworkcouldbeinoperationby2058.

ThestagingassumedinTable ES-7could,however,beacceleratedbyaboutfiveyears,althoughitwouldlikelyincuradditionalcostandrisk.Thetimetakentopasstherelevantlegislationandtomakeaformaldecisiontoproceedcouldbeaccelerated.Theenablingworkscouldalsobestartedearlier,soasnottodelaythecommencementofimplementationworksatSydneyCentralstation;thiswouldrequirefundinginadvanceoftheformaldecisiontoproceed,butcouldsave18months.Thereisalsopotentialfortheconstructionperiodtobeshortenedbyasmuchas24months,butthiswouldrequireextendedworkinghoursandcouldbelimitedbyalackofqualifiedresources.AnacceleratedprogramcouldthereforestartwiththeSydneyenablingworksin2019,withSydney-Canberraoperationalby2030andSydney-Melbourneoperationalby2035.Underthisacceleratedprogram,thefullnetworkcouldbeoperationalby2053.

Financial assessment ThefutureHSRprogramandthemajorityofitsindividualstagesareexpectedtoproduceonlyasmallpositivefinancialreturnoninvestment.

Theestimatedrealfinancialinternalrateofreturn(FIRR)fortheprogramasawholeis0.8percent.ForSydneytoMelbourne,theestimated(post-tax)realFIRRis1.0percent.Thesefallwellshortofthefinancialreturnsthatwouldberequiredbycommercialprovidersofdebtandequitytomajorinfrastructureproviders14.Atafourpercentdiscountrate,thefinancialnetpresentvalue(FNPV)offinancialcostsandrevenuesassociatedwithaninvestmentinHSRwouldbenegative$47billion15.GovernmentswouldberequiredtomeetthemajorityofconstructionandestablishmentcostsfortheHSRnetwork.

Postconstruction,thefutureHSRprogramanditsstages(withtheexceptionofSydney-Canberraasastand-alonestage16)areexpectedtogeneratesufficientoperatingincometocoverongoingoperationalandassetrenewalcosts.Thisforecastholdstrueforallbutoneofthescenariosandsensitivitiestested.Asaconsequence,HSRoperationswouldbefinanciallyself-sustainingiftrafficandcostassumptionsweremet.

Table ES-8summarisestheresultsoftheFNPVandFIRRanalysisonapreandpost-taxbasisforthefutureHSRprogramanditsstages.Thesearepresentedonacumulativepresentvaluebasis,withthesummarycostsandrevenueobtainedbydiscountingcashflowsbytheevaluationdiscountrateoffourpercenttofinancialyear2028.Sydney-Canberradeliversanegativefinancialreturn.Neithertheprogramasawhole,noranyofthestages,returnsapositiveFNPVatafourpercentdiscountrate.

14 Thesewouldtypicallybearound15percentormore.15 Discountedto2028andin$2012.16 Thatis,ifSydney-CanberrawasoperatedindependentlyofanyotherHSRline.

Executive Summary

AssumptionsaboutthetimingofthevariousstagesarealsoshowninTable ES-8.

Table ES-9setsoutthesummaryofrisk-adjustedcapitalcosts,revenues,operatingcostsandassetrenewalsovertheevaluationperiodto2085.TheHSRprogramasawholedeliversapositivenetoperatingsurplus.Thatis,forthepreferredHSRsystem,revenueswouldcoverongoing

operatingcostsandthecostsofrenewingassetswhentheywearout.Therefore,providedtrafficforecastsandcostsestimatesaremet,noongoinggovernmentsubsidywouldberequiredtosustainHSRoperationsoncethesystemisconstructedandoperational.Astrafficbuildsup,theabilityoftransportoperationstoreturnsomeofthecapitalcostswouldincrease.

TableES-8 SummaryofFNPVandFIRRresults(presentvaluediscountedto2028,$2012,$billion,4%discountrate)

Future HSR program

Sydney- Sydney- Newcastle- Brisbane- Network 17Canberra Melbourne Melbourne Gold Coast & complete

Newcastle- Melbourne

Year operations 2035 2040 2045 2051 2058commence

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,theFIRRandFNPVdonotdifferonapreandpost-taxbasis.‘n/a’denotesanFIRRoflessthanzeropercentthatcannotbemathematicallycalculated.

17 NetworkcompleterepresentstheentireHSRnetworkbetweenBrisbaneandMelbourne.


TableES-9 Summaryrisk-adjustedcapitalcosts,revenues,operatingcostsandassetrenewalsoverthetotalevaluationperiodto2085(presentvaluediscountedto2028,$2012,$billion,4%discountrate)

Sydney- Sydney- Newcastle- Brisbane- Network Canberra Melbourne Melbourne Gold complete

Coast & Newcastle-Melbourne

Year operations 2035 2040 2045 2051 2058commence

Totaldevelopmentcosts 2.3 4.7 6.1 6.8 8.8

Totalconstructioncosts 18.6 36.4 46.7 51.5 63.2

Total 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

Totalpaymentsforrolling 0.1 1.3 1.3 1.3 1.8stockfinanceleases

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:Totalmaynotbeexactduetotimingandroundingdifferences.

Risk-adjustedprojectcashflowsforeachyearoftheevaluationperiod,reflectingtheproposedstagingoftheHSRprogram,areshowninFigure ES-12.Totalannualprojectcapitalexpenditurerangesfrom$2 billionto$8billionineachoftheeightyearspriortotheopeningoftheSydney-Canberrasectionin2035,andthencontinuesatbetween$2billionand$7billionperyearforthenext23 yearsuntilthefullnetworkisoperationalin 2058.

Executive Summary

FigureES-12 HSRprogramrisk-adjustedprojectcashflowsperyear($2012,$billion)

Revenue received Operating costs paid GST (paid)/received

Payments for rolling stock finance leases





Tax paid Capital expenditure

15

10

5

–

-5

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-15

205520502045204020352030202520202015 2060 2065 2070 2075 2080

($20

12, $

billi

on)

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DB

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A B C D E

Figure ES-13

WiththeexceptionofthecostsassociatedwithaccessingSydney(asshowninFigure ES-9),capitalcostsincreasebroadlyinproportiontothelengthoftheHSRlinebeingconstructed.AsindicatedinFigure ES-12,extensionstothenetworkleadtostepchangesinpatronageandthereforearecriticaltotheoperatingcashflows.Forinstance,completingSydney-CanberraorCanberra-Melbourneasstand-alonesegmentswouldproduceonlymoderatepassengerdemandandfinancialreturns.WhenthewholelineconnectingSydney-Melbourneiscompleted,significantadditionaldemandwouldbegenerated

(passengernumbersatthatpointincreasebyafactoroffive).Operatingcashflowsandreturnsthenalsoimprove,reflectingthegrowthinpatronagewithoutacorrespondinglymaterialincreaseincapitalcosts.ThesamebenefitwouldbeobservedwhentheGoldCoastisconnectedtoNewcastleandthefullHSRsystemisinoperation,resultinginaconsiderableupliftindemandbetweenBrisbane,SydneyandMelbourne.Thefinancialperformance(annualcashflow)ofeachstageissummarisedinFigure ES-13.


FigureES-13 HSRprogramrisk-adjustedcashflowsperyearbystage($2012,$billion)

($20

12 $

billi

on)

Full network Sydney to CanberraSydney to MelbourneNewcastle to Melbourne

Brisbane to Gold Coast and Newcastle to Melbourne





A

DB

EC

205520502045204020352030202520202015 2060 2065 2070 2075 2080

4

2

–

-2

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-8

A B C D E

Figure 2 DuetothefutureHSRprogram’sexpectedlowfinancialreturns,significantprivatesectorfunding(debt/equity)wouldnotbeavailableorappropriatetofinancetheprogram.Assuch,aconsiderablecommercialfinancinggapwouldexistbetweenthetotalcapitalcostoftheHSRprogramandtheamountoffinancingthatcouldberaisedfromthefinancialmarketsoncommercialterms,basedonthefutureHSRprogramoperatingcashflows.

Basedonthedetailedanalysisofprogramcashflows,thecommercialfinancinggapfortheentireHSRprogramwouldbeabout$98billion(or86percentofthetotalrisk-adjustedcapitalcost)asshowninTable ES-10.FortheSydney-Melbourneline,thecommercialfinancinggapwouldbeabout$45billion,or92 percentofthetotalcapitalcost.

Executive Summary

TableES-10 Summaryofthecommercialfinancinggap–referencecase($2012,$billion)

Total capital cost

Debt carrying capacity

Commercial coverage

Commercial financing gap

HSR program

114.0

16.3

14%

97.7

Sydney-Melbourne

49.9

4.1

8%45.7

ValuecapturehasthepotentialtopartiallyclosethecommercialfinancinggapthroughmeasuressuchasgovernmentlandsalesandcapturingtheincrementalimpactthattheHSRprogramwouldhaveonstampduty,developmentsandratesintheHSRaffectedzones.However,thiswouldbeasmallcontributionatbest.Itishighlyunlikelythatallofthesemeasureswouldbeimplementedandtheultimatebenefitthatvaluecapturemight

haveonclosingthecommercialfinancinggapisthereforedifficulttodetermineatthisstage.

UltimatelygovernmentswouldberequiredtofundthemajorityofthefutureHSRprogram’supfrontcapitalcosts.AsummaryofthecashflowimplicationsforgovernmentforthewholenetworkispresentedinFigure ES-14.

FigureES-14 HSRprogramgovernmentcashflows($2012,$billion)

Figure ES-14

($20

12, $

billi

on)

205520502045204020352030202520202015 2060 2065 2070 2075 2080

—

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A B C D E





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Economic assessmentThestudyadoptedacost-benefitmethodologythatisconventionallyappliedtomajortransportinfrastructureprojects.Thecostcomponentsoftheanalysis,includingthenecessarycapitalexpenditurerequiredtodevelop,constructandrenewtheHSRsystemascomponentswearout,dependontheproposedHSRengineeringandtechnicalspecificationsadoptedforthepreferredHSRsystemandontheassumedstagingofnetworkdevelopmentsetoutinTable ES-7.Forthepurposesofevaluation,constructionofstage1ofLine1(i.e.theSydney-CanberrastageoftheSydney-Melbourneline)isassumedtostartinJuly2027(startoffinancialyear2028).

Onceconstructed,theHSRsystemwouldgenerateastreamofeconomicbenefits,linkedtotheassessmentoffuturetraveldemand.Ingeneralterms,thetotaleconomicbenefitoftravelonHSRwoulddependonhowmucheachpassengervaluestheirtrip,oftentermedtheir‘willingnesstopay’.Thisiscalculatedbymeasuringthedifferencesingeneralisedtripcostswhencomparingthereferencecase(withHSR)tothebasecase(withoutHSR).AggregatingwillingnesstopayacrossallusersofHSRandovertimeprovidesanassessmentofthetotal(gross)economicvaluecreatedforusersofthesystembytheinvestmentinafutureHSRprogram.

Transportingpassengersconsumeseconomicresourcessuchaslabourandfuel.BecauseHSRcouldreducedemandforothermodesoftransport,andhencetheirconsumptionofresources,theadditionalresourcesrequiredforHSRneedtobeoffsetagainsttheresourcesavoidedinothermodes.ThenetchangeinresourcesisdeductedfromthegrosseconomicvaluetocalculatethestreamofeconomicbenefitsderivedfromtheinvestmentinHSR.

Thedistributionofthenetbenefitsbetweentheusersandtheoperator(s)oftheHSRsystemisdeterminedbythepricescharged.Ultimately,priceswouldservetotransfereconomicvaluefromusersofthesystemtoitsoperators.Revenueisthereforeincludedinthecalculations(asacosttousersandabenefittooperators)toassesstherelativebenefitstousersandoperators.Theneteconomicbenefitsinternaltothetransportsystemarethereforemeasuredbyaddingthetwocomponents:• Userbenefits(orconsumersurplus)are

calculatedbasedonthedifferencebetweenauser’swillingnesstopayforaserviceandtheactualpricepaid.

• Operatorbenefits(orproducersurplus)representthedifferencebetweenthepricepaidorrevenuegeneratedbyaserviceandthecostsassociatedwith(orresourcesconsumedby)operatingtheservice.Thechangeinoperatorbenefitsisassessedforeachmode(i.e.HSR,aviation,conventionalrailandcoach).

Inaddition,therewouldbecostsandbenefitsthatareexternaltothetransportsystemthatcanbemeasuredinmonetarytermsandincludedinthecost-benefitanalysis.TheseexternalitiesmeasuretheimpactofHSRtothebroadercommunity,includingenvironmentalandsafetyimpacts,decongestionbenefitsandanyalternativeavoidedordeferredtransportnetworkcapitalexpenditure.Aresidualvaluehasalsobeenincludedtocapturetheremainingvalueoftheassetsattheendoftheevaluationperiod18.Thepresentvaluesofcostsandbenefitsbycategory,discountedatfourpercent,areshowninFigure ES-1519.Theeconomicnetpresentvalue(ENPV)isthesumofthepresentvalueoftheeconomiccostsandbenefits,whichfortheprogramasawholeis$101billion.

18 A50yearevaluationperiodhasbeenadopted,commencingin2035.19 Thediscountrateconvertscashflowsoffuturecostsandbenefitsintopresentdaydollarstoallowacomparisonofcostsandbenefits,

expressedin$2012,andusingacommonbaseyear,inthiscasefinancialyear2028,whichistheassumedstartofconstructionofthefirststage.

Executive Summary

FigureES-15 PresentvalueofcostsandbenefitsfortheHSRprogram(presentvaluediscountedto2028,$2012,$billion,4%discountrate)

Costs Benefits ENPV

100

120

80

60

40

20

0

-40

-20

-60

-80

-100

Capitalexpenditure

Userbenefits

Operatorbenefits

Externalities Residual value

ENPV

($bn)

14 1

79

141

25 101

TheHSRuserbenefitsdominatetheeconomicresultsandaccountfor90percentoftheestimatedbenefits(excludingtheresidualvalue).Akeycomponentistheassessmentoftimesavingsfortravellersacrosstheirfulljourneyincludingtraveltime,waitingtime,check-intimeandaccesstime,withadjustmentsfortheinconvenienceofhavingtochangemodes.Traveltimesavingsaremeasuredusingvaluesoftimebasedonmarketresearchconductedforthisstudyandtestedforreasonablenessagainstconventionalvaluesusedinroadprojects,whichvarybytrippurpose(e.g.businessversusleisure)20.

Businesstravellerswouldgainthemajorityofuserbenefitsduetotheirhighervalueoftime,eventhoughtheyonlyrepresentabout35percentofthetotalHSRtravelmarket,asshowninTable ES-11.

20Austroads,Guide to Project Evaluation,2012.


TableES-11 Userbenefitestimatesbymarketsegment(presentvaluediscountedto2028,$2012,$billion)

Short regional

Long regional

Inter-city

Total

Business users Leisure users Total

9.1

58.4

73.2

140.7

1.7 7.4

31.3 27.1

60.6 12.6

93.6 47.1

ThesummaryresultsforthereferencecasepredictthataninvestmentinthepreferredHSRprogramwouldgenerateaneconomicinternalrateofreturn(EIRR)of7.6percentandaneconomiccost-benefitratio(EBCR)of2.3usingafourpercent

discountrate21.AsevenpercentdiscountratehasalsobeentestedandwouldreducetheENPVto$5billionandtheEBCRto1.1,asshowninTable ES-12;althoughmarginal,theestimatedeconomicbenefitsremainpositive.

TableES-12 SummaryeconomicindicatorsfortheHSRprogram(presentvaluediscountedto2028,$2012,$billion)

4% discount rate 7% discount rate

Totalcosts 79.3 58.9

Totalbenefits 180.6 63.8

EIRR 7.6% 7.6%

ENPV 101.3 4.9

1.1EBCR 2.3

Sydney-Melbourneisthestrongestperformingline,withanestimatedEIRRof7.8percent,asshowninTable ES-13.IthasanestimatedpositiveENPVof$69billionandanEBCRof2.5whenmeasuredonastand-alonebasis.

TableES-13 SummaryeconomicindicatorsforSydney-Melbourne(presentvaluediscountedto2028,$2012,$billion)

4% discount rate 7% discount rate

Totalcosts 46.5 38.9

Totalbenefits 115.7 45.3

EIRR 7.8% 7.8%

ENPV 69.3 6.5

EBCR 2.5 1.2

Note:Totalsdonotaddupexactlyduetorounding.

21 TheEIRRrepresentsthediscountratethatmakesthenetpresentvalueofalleconomiccashflowsequaltozero.ThehighertheEIRRthegreatertheneteconomicreturnsachievedbyaprojectrelativetoitscapitalresourcecostsandifEIRRisgreaterthanthediscountrate,thentheprojectwoulddeliverapositiveneteconomicbenefit.

Executive Summary

TheincrementaleconomicresultsforeachadditionalstageofthepreferredHSRprogramaresetoutinTable ES-14.TheresultssupportthepreferredstagingoftheHSRprogram,withSydney-MelbournedeliveringanestimatedEIRRof7.8percent.Thesubsequentnorthernstages

fromNewcastle-MelbourneandBrisbane-GoldCoastaddlittleincrementaleconomicvalueonastand-alonebasis(i.e.ENPVdoesnotmateriallychange)andtheresultssuggesttheywouldnotbeundertakenunlesstheintentionweretocompletethelineconnectingBrisbaneandSydney.

TableES-14 IncrementaleconomicimpactsforeachadditionalstageoftheHSRprogram(presentvaluediscountedto2028,$2012,$billion)

Year operations commence

Future HSR program

Sydney-Canberra

Sydney- Melbourne

Newcastle- Melbourne

Brisbane-Gold

Coast & Newcastle-Melbourne

Network complete

(i.e. Brisbane-Melbourne)

2035 2040 2045 2051 2058

Totalcosts* 22.2 46.5 58.6 64.3 79.3

Totalbenefits 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.Thereferencecasereflectsarangeoflong-termassumptionsandexpectations,including:• Stronggrowthinthebasetravelmarketover

the52yearsto2065(travelontheeastcoastwillmorethandoublefrom153milliontripsto355milliontrips).

• NosignificantincreaseinaviationcapacityintheSydneybasin.Thisresultsinincreaseddelaysandtheinabilityofpassengerstotravelatpreferredtimes,consistentwithassumptionsintheJointStudyonAviationCapacityfortheSydneyRegion22.AssumedadditionalaviationcapacityinSydneyhastheeffectofreducingtheestimatedEIRRfortheHSRprogramasawholefrom7.6percentto7.1percentandreducingtheECBRfrom2.3to2.1.Additionalaviationcapacityalsoreducesthefinancialreturnfrom0.8percentto0.3percent.

22 AustralianGovernmentandNSWGovernment,Joint Study on Aviation Capacity for the Sydney Region,Canberra,2012.


• HSRfareswouldbestructuredtobecomparabletoandcompetitivewithalternativemodesoftransportforbothbusinessandleisurepurposes.HSRfareshavebeensettobecompetitivewithairfaresonthemaininter-capitalroutesontheeastcoast,trendingdownwardsovertimeby0.5percentperyearto2015andremainingconstantthereafter,consistentwiththeforecastreductioninrealairfares.Caroperatingcostsincreaseovertimeduetoaforecastrealincreaseinthecostoffuel(13percentrealincreaseby2065afterallowingforforecastimprovementsinfuelefficiency).

– IfHSRfareswereincreasedby30percent,theEIRRfortheprogramasawholewouldreduceto7.4percent.However,thefinancialreturnwouldimprovefrom0.8percentto2.3 percent,withoperatingcashflowsbecomingpositivethreeyearsearlierin2038.

– IfHSRfareswereincreasedby50percent,economicreturnswouldfallfurtherbutHSRwouldstillproducesubstantialneteconomicgains,withanEIRRof7.2percentandanEBCRof2.1(atafourpercentdiscountrate).Thefinancialreturnwouldimprovefurthertothreepercent.

Competitive aviation responseThestudypredictsthatoverhalfthe83.6millionHSRtripsforecastin2065wouldbedivertedfromair,whichwouldhaveasignificantimpactonaviationmarkets.

Airlineservicesaremobileinthesensethattherearefewsignificantsunkcapitalcostsinservicingparticularroutesandassetscanbequicklyredeployedtootherroutes.Airlinesoperatingalongkeyregionalandinter-capitalroutesacrosstheeastcoastofAustraliaalreadycompetestronglyagainsteachother,andfarelevelsofmanyfareclasseshavedeclinedovertime,whichsuggeststhatairfarelevelsarealreadyhighlycompetitiveonmajorroutes.

ItisnotexpectedthatairlineswouldrespondtoHSRcompetitionbyreducingtheirfaresonasustainedbasis.Rather,ithasbeenassumedthatairlineswouldquicklyreducecapacity,eitherbyreducingfrequenciesoraircraftsizes,tolocationswithintheHSRcorridorwherethereissignificantpassengerdiversiontoHSR.Thisassumptionisconsistentwithoverseasexperiencewhere,followingtheintroductionofHSR,theairlineresponsehasgenerallybeentoreduceservicesonthecompetitiveroute.

AirlinesdonotcontrolallofthecomponentsofanendtoendjourneybyairthatinfluencetherelativecompetitivenessofairtravelandHSRtravel.Mostimportantofthesearethecostofaccessingtheairport,itslocationrelativetoHSRstationsandairportcapacity.Nevertheless,totheextentthatairlinesareabletoinnovateinwaysthathavenotbeenanticipatedinthisstudy,itcouldhaveanimpactonactualHSRpatronage.

Executive Summary

Alowdemand/highcostsensitivitywasdevelopedthatincludedarangeofalternativeassumptionswhichincombinationresultinasetofcircumstancesunfavourabletoHSR.Thelowdemand/highcostscenarioincludes:• NoaviationcapacityconstraintsinSydney.• A30percentincreaseinpre-riskcapitalcosts.• Lowpopulationgrowthandlow

economicgrowth.• A50percentincreaseinHSRfares.

Whilethecombinationoftheseassumptionsmaybeunlikely,theresultsoftheanalysisprovideausefulbasisforcomparisonandanunderstandingoftheeconomicperformanceoftheHSRprogram.ThecombinationofassumptionssignificantlyreducestheeconomicreturngeneratedbythefutureHSRprogramfrom7.6percentto3.8percent.Theimpactonthefinancialreturnis,however,modestwiththehighercostsoffsetbythelargefareincrease.

Theeconomicandfinancialresultsweretestedagainstarangeofsensitivitytests,withtheresultssummarisedinFigure ES-16andFigure ES-17:• Thelowgrowthscenarioassumeslower

economicandpopulationgrowth(relativetothereferencecase)resultinginloweroveralldemandfortransportandthuslowerdemandforHSR.ItassumespercapitaGDPgrowthratesareassumedtobe0.3percentperyearlowerthanthereferencecase,andpopulationgrowthisassumedtobe51percentbetween2010and2065,comparedto72percentinthereferencecase.

• ThehighgrowthscenarioassumesthattheAustralianeconomyexperiencesstronggrowthintothefuture(highGDPgrowth),withhighpopulationgrowth.ThisscenarioresultsinhigheroveralldemandfortransportandthushigherdemandforHSR.PercapitaGDPgrowthratesareassumedtobe0.3percentperyearhigherthaninthereferencecase,andpopulationgrowthisassumedtobe103 percentbetween2010and2065,comparedto72percentinthereferencecase.

• Higher(+30percentand+50percent)HSRfares.

• Anaggressivecompetitiveaviationresponsewhichresultsina50percentreductioninfaresfortwoyears.

• AdditionalaviationcapacitywithintheSydneyregion,whichremovesthenegativeeffectsoftraveltimeonflightsto/fromSydneyfromthereferencecase,andassumesthereisnounmetdemand.

• AdditionalaviationcapacitywithintheSydneyregion,combinedwith30percentincreaseinHSRfares.

• Lowdemandandhighcosts(describedabove).• Modechoicemodelsensitivities(including

alternativespecificconstants(ASCs),access/egressweightingandvaluesoftime).

• Higher(+30percent)capitalandoperatingcosts.

• Lower(−10percent)capitalandoperatingcosts.


FigureES-16 Impactofalternativeassumptionsontheeconomicresults(EIRR)

EIRR (%)

Low

cas

e

Hig

h ca

se

HSR

fare

s +3

0%

HSR

fare

s +5

0%

Com

petit

ive

avia

tion

resp

onse

Add

ition

al

avia

tion

capa

city

Com

bine

d av

iatio

n ca

paci

ty a

nd H

SR

fare

s +3

0%

Acc

ess/

egre

ss

set t

o 1.

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HSR

ASC

s se

t to

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Cos

ts +

30%

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dem

and

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osts

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Fixe

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lue

of ti

me

8

9

10

7

6

5

4

3

2

1

0

Reference case=7.6%

5.9%

7.4% 7.2%6.9%

7.3% 7.4%

3.8%

6.0%6.1%

8.2%

9.4%

7.1%7.6%

FigureES-17 Impactofalternativeassumptionsonthefinancialresults(realFIRRposttax)

FIRR (%)

Low

cas

e

Hig

h ca

se

HSR

fare

s +3

0%

HSR

fare

s +5

0%

Com

petit

ive

avia

tion

resp

onse

Add

ition

al a

viat

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Com

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iatio

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SR

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s +3

0%

HSR

ASC

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Fixe

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and

/ hi

gh c

osts

Cos

ts -1

0%

Cos

ts +

30%

43210-1-2-3-4-5-6-7-8-9

Reference case=0.8%

-0.8%

-9.8%

1.8%2.0%

3.0%2.3%

1.9% 0.3% 0.6% 0.6% 0.6% 0.5%0.8%

-10

Executive Summary

Environmental and social assessmentAstrategicenvironmentalassessmentframework,consistentwithAustralianGovernmentguidelines,wasdevelopedanditskeyprinciplesincorporatedintotheselectionofthepreferredalignmentandstationlocationstoreducethepotentialfornegativeenvironmentalimpactsshouldtherebeadecisiontoproceedwithHSR.

ApreliminarystrategicassessmentoftheenvironmentalandsocialaspectsofaHSRsystemontheeastcoastwasundertakenforthreereasons:• Toensurethatenvironmentalfactorswere

integratedintothedevelopmentoftheHSRsystem,includingdecisionsaboutthecorridorselection,alignment,stationlocationsanddesignfeatures.

• ToensurethattheoverallHSRsystemisconsistentwithprinciplesofecologicallysustainabledevelopment.

• Toidentifyimportantenvironmentalandsocialissuestobefurtherinvestigatedandassessedintheimplementationphases,shouldadecisionbemadetoproceedwithHSR.

TheassessmentoftheenvironmentalimpactsofHSRwasintegratedintotheevaluationofalignmentoptionsandstationoptions,usingaGeographicInformationSystem(GIS)toolkittoidentifypotentialecologicalandheritageinteractionsandlanduseplanningconstraintsandopportunitiesassociatedwiththevariousoptions.Theseevaluationswerecombinedwithotherconsiderations,suchasengineeringparameters,constructability,costanduserbenefitstodeterminethepreferredalignmentandstationlocations.

ThepreferredHSRalignmentandstationswereselectedtoavoid,whereverpossible,significantimpactsoncommunitiesandecologicalandheritageresources.ResidualimpactswouldbemanagedbymitigationstrategiesdevelopedduringtheconceptanddetaileddesignphasesofHSRdevelopment,shouldadecisionbemadetoproceedwithHSR.Thisisastandardpracticeforlargeinfrastructureprojects.Wherenecessary,offsetsfornaturalenvironmentscouldalsobeused.

Inaddition,theassessmentofenvironmentalissuesassociatedwithHSRhasaddressednoiseandvibration,energyuseandcarbonemissions/greenhousegasconsiderations,theimplicationsofclimatechange,andthepromotionofecologicallysustainabledevelopment(ESD).Additionaldetailedinvestigationswouldberequiredacrosseachofthesedisciplines,shouldgovernmentsdecidetoproceedwithHSR,tominimisetheenvironmentalimpactsandmaximisepotentialpositiveoutcomes.

Thesocialimpactshavebeencanvassedthroughtheme-basedcasestudiesintothreekeyareasidentifiedthroughresearchandstakeholderconsultation:a. Workforceandcommunitydevelopment.b. Accesstohealthandotherpublicservices.c. Tourism,recreationandsocialinclusion.

ThecasestudieshighlightthatHSRcouldpotentiallyhavearangeofbothpositiveandnegativeimpacts.

Broader impacts of HSRImpacts on regionsInternationalevidencedemonstratesthatHSRcancontributeto,butisnotalwaysacauseof,regionaldevelopment.ImplementationofHSRwouldsignificantlyimproveaccessibilitybetweencapitalcitiesandregionalcentresandwouldprovidethepotentialforsignificantregionaleconomicdevelopment.However,theextenttowhichregionaltownsandcitiesservedbyHSRtakeadvantageofthatpotentialwoulddependon:• Supportiveandalignedregionaldevelopment

policiesattheCommonwealth,stateandlocallevels.

• Theavailabilityandappropriateapplicationofinvestment.

• MetropolitanandregionalplanningpoliciesthatencourageandsupportnewdevelopmentinregionalcentreswithHSRstations.

• ThetimingofHSRopeninginrelationtobroadeconomictrends.


Robustandpragmaticplanningwouldberequiredtodeterminehowtheseinitiativesshouldbedevelopedandwhatoutcomesshouldbepursued.Inpart,theyareassociatedwiththenatureandscaleoftheproposedHSRnetworkandrequireforecastingresponsesandconditionsmanyyearsintothefuture.Theyarealsouncertain,however,becausetheywouldrequireresponsesfromoutsidethetransportsector.Theywouldneedbusinessestochangehowtheyoperate,investmentstoswitchtonewlocations,andtouriststochangetheirtravelpatterns.

AninvestmentofthemagnitudeandnatureofHSRcouldalsohaveunintendedconsequencesandimpacts,suchascausingsmallregionalcitiestolosejobsandresidentstonearbyregionalcentreswithHSRstations.Thesenegativeimpactswouldneedtobemanagedthougheffectiveregionaldevelopmentpolicies,earlyandcarefulplanningtopositionlocalbusinessesforchange,andappropriatehumanandcapitalinvestmentincomplementaryassets.

TogainpositiveandsustainedbenefitsfromHSR,regionalcommunitiesalongthecorridorswouldneedtofollowdeliberatestrategies.HSRisnotapanaceaforregionaldevelopmentbut,whencoupledwithappropriatestrategiesandplans,itcouldhaveapositiveimpactonregionalcommunitiesovertime.

InexaminingthepotentialimpactsofHSR,theinherentuncertaintiesneedtobeacknowledged.However,withproactiveandpositiveresponsesfromkeystakeholders,theimplementationofHSRcouldresultinimprovementsinregionalproductivity,changestotouristspendingpatternsand,forregionsclosertothecapitalcities,changestocommutingpatterns.Emerginginternationalevidencesuggeststhatwidereconomicimpactsattheregionallevelmaybegeneratedbyregionalaccessibilityimprovements,thoughquantitativeestimatesoftheseareconsideredneithersufficientlycertainnorrobustforinclusioninthemaineconomicassessment.

Impacts on citiesHSRcouldhavewidereconomicimpactsoncitiesthroughitsimpactoneffectiveemploymentdensity,thatis,bybringingplacesofresidenceandemploymentclosertogetherbyareductionintraveltimes.Benefitscanthenariseinanumberofways:• Itiseasiertomatchworkerstospecific

vacanciesandtofindemployeeswithappropriateskills.

• Itenablesgreaterspecialisationofsupply,leadingtomoreefficientproductionofgoodsandprovisionofservices.

• Itleadstoknowledgespill-over(i.e.greateropportunitiesforformalandinformalcontactthroughincreasedaccessibility).

• Employeeshaveagreaterchoiceofjobs.• Thereismorecompetitionbetweencompanies

andbetweenindividuals.

AstheHSRsystemisconstructed,accessibilitytomajorcitiesfromareassuchastheCentralCoast(toSydney)andtheGoldCoast(toBrisbane)wouldimprove,allowingemployerstoaccessalargerlabourpoolandprovidingemployeeswithawiderchoiceofemployers.Internationally,positiveeconomicbenefitshavebeenattributedtosuchimpacts,socalledagglomerationbenefits,andincludedinthequantitativeassessmentofthebenefitsofinvestmentsintransportinfrastructure.However,asnotedabove,becauseoftheuncertaintyoftheseeffectsinthecurrentcontext,noadjustmentstotheeconomicreturnshavebeenmadefortheminthisstudy.

Impacts on the national economyAlthoughthemajorityofbenefitsofHSRwouldaccruetousersofthesystem,HSRwouldhaveapositivenetimpactonthesizeofthenationaleconomy,withGDPestimatedtobe0.1percenthigherrelativetothebaselinein2085.

HSRwouldalsoraisetheoveralllevelofinvestmentinAustralia.In2036,HSRinvestmentwouldrepresent0.8percentofaggregateinvestmentintheeconomy,andwouldaveragearound0.4percentduringtheconstructionperiodasawhole.TheassumptionthatHSRwouldbefinanceddomesticallymeansthat,toaccumulate

Executive Summary

therequiredHSRcapitalstock,someofAustralia’spoolofinvestmentwouldbechannelledintoHSRinsteadofelsewhere.Thisinvestmentsubstitutioneffectproducesanegativeimpactontheeconomy,sinceitassumesthatinvestmentwouldbedivertedawayfromsectorswithahigherfinancialreturnthanwouldbeachievableforHSR(whichisprojectedtoachieveonlya0.8percentfinancialrateofreturnoncapitalinvested),loweringAustralia’saveragereturnoninvestment.Otherthingsbeingequal,andintheabsenceofhigherproductivitybenefitsgeneratedbyHSR,thiswouldlowerconsumptionandGDP.However,businesstraveltimesavingsgeneratedbyHSRareestimatedtoincreaselabourproductivity,whichoverthelongtermdrivesgainsinGDP,offsettingthenegativeinvestmentimpacts.

TheinvestmentimpactsofHSRwouldbedifferentifitwereassumedtobefinancedbyborrowingfromforeignsources.Therewouldbelesscrowdingoutofhigherreturncapital,butcostsinvolvedwithservicingtheforeigndebtwouldbeincurred.

RealconsumptionisestimatedtodecreaseduringtheconstructionofHSR(untilaround2056).Post2056,realconsumptionbeginstoincreaserelativetothebaselineasbenefitsstarttoflowfromtheoperationofHSR.AsinvestmentinHSRtailsoffandproductivitygainsflowfromtheoperationalphase,resourcescanberedirectedtootherinvestmentusesandtoconsumption,andnationalincome(movingcloselywithGDPduetotheassumptionofdomesticfinancing)beginstoincreaseandmoveabovethebaseline.

Similarly,theinvestmentsubstitutioneffectmeansthatHSRwouldimpacteachoftheAustralianstatesindifferentways.Allelsebeingequal,anincreaseininvestmentinonestate,forexample,wouldresultinareductioninthelevelofinvestmentacrosstheremainingstates.InthecaseofHSR,theimpactoneachstatereflectsthestrengthofinvestmentinandoperationofHSR,andtheconcentrationofindustriesthatcompeteforHSRinputswithineachstate.

Basedontheseassumptions,NSW/ACTisexpectedtobetheprimarybeneficiarystatefromHSRduetothesubstantialinvestmentitreceives.

TheexpansioninNSW/ACT’sGSPwouldcomeatacosttotheotherstates,whichwouldsharetheburdenofreducedinvestmentinothersectors.ProductivitygainsarealsoexpectedtobeconcentratedinNSW/ACT,althoughtherewouldstillbesufficientgainsinVictoriaandQueenslandtoyieldapositiveGSPimpact.

TheconstructionofHSRdrawslabourintoNSW/ACTandawayfromotherstates.TheassumedconstraintonlaboursupplymeansthatthebulkoftheexpansioninconstructionsectorlabourrequirementsinNSW/ACTwouldhavetobeoffsetbycontractionsinothersectors,leadingtovaryingimpactsonemploymentbystatesimilartoimpactsonGSPbystate,butwithlessintensity.

Whilebeyondthescopeofthemodelling,alternativefundingarrangementsinvolvingadifferentsharingofthefinancingofHSRwouldclearlyalterthepatternofgainsandlossesindifferentregions.

Implementing a future HSR programRoles of the public and private sectorsTheAustralianGovernment,ACTGovernmentandrelevantstategovernmentswouldneedtohaveacentralroleinthedevelopmentofHSR.ThiswouldbeduebothtoitsstrategicnatureandtothefactthattheAustralianpublicwouldhavetofundmostoftheinfrastructure.Governmentswouldowntheinfrastructureandwouldhaveanobligationtoensurethatitwasefficientlyandeffectivelyprovidedandused.

Withaninitialcapitalcostinexcessof$100billion,afutureHSRprogramwouldbeoneofthelargestinfrastructureprogramseverundertakeninAustralia.Itssizewouldchallengetheresourcesofthesupplierindustry,bothdomesticallyandglobally,withonlyalimitednumberoforganisationshavingthefinancialcapacityanddepthofskillsandresourcesavailabletocompeteforthelikelysizeofworkspackages.Toachievevalueformoney,governmentswouldneedtocarefullypackageandstagetheprocurementtoensurecompetitivebidswereachievedfor


eachpackage.Governmentwouldneedtoretainsomeoftherisksaroundtheintegrationofthecomponentparts,buttheseriskscouldbemitigatedthroughrigoroustechnicaloversight.

GovernmentswouldretainanongoingroleinthestewardshipoftheHSRsectorafterconstruction,toensuretheobjectivesandeconomicbenefitsoftheHSRprogramwereachieved.ThisrolewouldinvolveprovidingoversightofthedeliveryofHSRservicesagainstagreedpriceandservicequalitymetrics,whilebeingcarefultoavoidconstrainingthemarketagilityandinnovationofthosemanagingthetransportservices.Governmentswouldalsoberesponsibleforsafetyandenvironmentalcompliance.

Theprivatesectorshouldbecloselyinvolvedinabroadrangeofroles:• Designandconstructionofcomponentsofthe

HSRinfrastructurenetworkundercontracttogovernments.

• Developmentofstationprecinctsinpartnershipwiththerelevantgovernment.

• Supplyofrollingstock(trainsets)andthesignallingandcommunicationssystems.

• ControlandoperationofHSRtrainstodeliverhighstandardtransportservicestothepublic.

• MaintenanceoftheHSRsystem.

DevelopmentofHSRstations,andassociatedcommercialopportunities,wouldofferanopportunityforprivatefinance.Apublic-privatepartnershipmodelisenvisagedforgreenfieldstationdevelopments,withtheprivatesectorpartneringwiththerelevantstateorterritorygovernmentforCBDstationdevelopments.

Underthepreferredmodel,HSRtrainserviceswouldbecontractedtoaprivatesectoroperatorthroughoneormoreconcessionarrangements.TherewouldbeseparateconcessionsforLine1andLine2,eachbeingacombinedexclusiveconcessionforinter-capitalexpressandregionalservicesonthatroute,althoughasingleoperatorwouldnotnecessarilybeprecludedfromoperatingbothconcessions.Theconcessionholder(s)wouldoperatethetrainservices,controlthemovementoftrainsthroughthenetworkandmaintaintheHSRnetwork.

ThepreferredmodelforAustraliahascommonelementswithmanyoftheworld’sHSRlines,althoughoverallitisperhapsclosesttotheJapanesemodelfornewHSRlines.InJapan,asinglestate-ownedentity(JRTT)isresponsibleforthedevelopmentandstrategicmanagementoftheHSRnetwork,butoperationoftrainservices,controlofthemovementoftrainsandmaintenanceoflinesiscarriedoutby(mainly)privatesectortrainoperatingcompaniesservingparticularhighspeedroutesonanexclusivebasis,forwhichtheypayJRTTafeeforuseoftheline.

Delivering the public sector components of a future HSR programIfadopted,afutureHSRprogramwouldbedevelopedindiscretephases,startingwithinitialfeasibilitystudiesandinvestigations,leadingontoconstructionandoperationoftheHSRsystem.Fourseparatephasescanbeidentified,asillustratedinFigure ES-18.

Executive Summary

FigureES-18 FourphasesoftheHSRprogram

1Preparation & corridor protection

2Detailed planning & procurement

3Construction

4Operation

Figure ES-19

ThefirstphaseinafutureHSRprogramwouldbeapreparationandcorridorprotectionphase,whichwouldprecedeaformalcommitmenttobuildtheHSRsystem.Thisphasewouldprovidethenecessarypolicyfoundationfortheprocurement,constructionandoperationofafutureHSRprogram.Itwouldrequirealignmentbetweentheparticipatinggovernmentsontheprogramobjectives,mechanismsandtimeframesforresolvingissues,andthedeliveryofenablingregulationorlegislation.

Theproposedmodelforpursuingmulti-jurisdictionalagreementsofthetypeneededtosupporttheHSRprogramistoadopta‘gatedapproach’usingaseriesofformalagreements.Eachformalagreementintheprocesswouldneedtobeinplacepriortoprogressingtothenextstage,ensuringalignmentofgovernmentsatcriticalmilestones.ThefirstgatewouldbeaMemorandumofUnderstanding(MoU)betweentheAustralian,ACTandstategovernmentstoformalisetheengagementontheHSRprogramandtosetouttheresponsibilitiesoftheparties,theprocesstobefollowedandthetimelinesforresolvingissues.Subsequentgateswouldinvolveformalinter-governmentalagreements(IGAs),firsttoprotectanHSRcorridorandlatertodevelopandimplementastageorstagesofHSR.

OncethereisamandatetoimplementapreferredHSRsystem,apublicly-ownedHSRdevelopmentauthority(HSRDA)wouldbecreatedtodevelop,procureandintegratetheHSRsystem,includingprocuringandowningtherequiredland.Asinglecoordinatingauthority,withappropriateprofessionalmanagementexpertise,wouldberequiredtoeffectivelyandefficientlyprogressthedetailedplanningrequiredtodevelopandprocureanHSRsystem(theHSRDAwouldlaterevolveintoanHSRdevelopmentandmanagementauthorityintheoperationalphase,andwouldprepareandmanagetrainoperationsconcessions).TheHSRDAcouldbeownedjointlybytheAustralianGovernment,ACTGovernmentandrelevantstategovernments.


Next stepsIfitweredecidedthatthecaseforHSRontheeastcoastofAustraliahassufficientmeritforfurthergovernmentactiontobetaken,thereareanumberofimmediatenextstepsintheprocessthatcouldleadtoadecisiontoprotecttheHSRcorridorandpossiblytoadecisiontoimplementHSR.

TheimmediatenextstepfollowingcompletionoftheHSRstudyistoconfirmtheAustraliangovernment’sinterestincontinuingthenecessarypreparatoryworkstoinformaformalministerialdecisiontoproceed.

Followingadecisiontoproceed,anMoUwouldbesignedtoallowplanninganddevelopmentwork,includingcorridorprotection,tocommence.GovernmentswouldneedtocommitresourcesandfundingtothedevelopmentanddeliveryofthearrangementsundertheMoU.

TheMoUwouldinitiateanumberofactivities,includingsiteinvestigationsnecessaryforcorridorprotectionandpreparationoftheIGAtoprotecttheHSRcorridor.TheaimoftheIGAwouldbetoformalisethecommitmenttotheprotectionoftheHSRcorridorbyrezoning,resuming,purchasingorholdinglandwithinthecorridor.

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