EVENTS AND DEBATES

The slow death of a Very Fast Train: government resistance to a privately funded transport innovation*

CHRIS PARIS

Introduction

This paper examines the rise and fall of the proposal to develop a Very Fast Train (VFT) between Sydney and Melbourne. The proposed train system, which was to have been funded, built and managed entirely by the private sector, would have comprised the development and operation of a fast, wheel-on-rail passenger system with some freight capacity.

The proposal to develop a VFT between Sydney and Melbourne received strong public support, especially in Canberra, but opposition was also both strong and vociferous. No governments were prepared to make any financial commitment to the proposal; rather, they insisted that if the project were to go ahead it should be funded entirely by the private sector. The proposal is currently on ice and does not look like proceeding in the near future at least. Its demise was due to a combination of government reluctance to embrace the proposal and the restrictive taxation treatment of private investment in new infrastructure provision in Australia. If the proposal should be revived, then many controversial issues which were not fully debated or resolved would ensure lively debate for some years to come. In particular, the potential environmental impact of the train and the question of land acquisition would be sure to stimulate long and heated confrontation.

Background to the VFT proposals

The idea of developing a new high-speed rail link between Sydney and Melbourne was initiated by researchers in the Commonwealth Scientific and Industrial Research Organization (CSIRO). Inspired by innovations in France and Japan, and growing worldwide interest in rapid intercity railway technology, they explored the possibility of connecting Sydney and Melbourne, via Canberra, with a state-of-the-art railway carrying both passengers and freight (Wild et al., 1985). They argued that a new fast train system would be economically viable and technically feasible. The project, moreover, could be undertaken

* An earlier version of this paper was presented to the Pacific Rim Council on Urban Development Conference, Vancouver, Canada, October 1991. I am grateful to Mr John Hughes for the preparation in ‘Mac’ form of Figure I ; and to an anonymous referee for constructive suggestions.

624 ELlents and debates

with only a small number of imported components whilst creating some 25,000 jobs during the construction phase (ibid.).

Wild et a f . (1985) argued that a fast train service would both improve intercity communications and relieve pressure on the domestic air travel system. It could also reduce the need for heavy reliance on road traffic, both for passengers and freight, as well as eliminating or at least delaying the need for expensive new air traffic related infrastructure.

The federal government did not take up the running on the CSIRO scientists’ proposal. Most federal government departments were cautious, arguing that the idea needed very thorough examination before government could come out in support. State governments, too, were reluctant to get involved. Two main factors explain such caution. First, the construction and equipment of a fast train system would involve enormous capital investment, at a time when all governments have been anxious to reduce rather than increase public sector capital expenditure. Second, most Australian railways are run by governments at varying levels of loss, and so there was a fear that the operation of a new train system would also result in a long-term need for public subsidy.

The private sector, however, took a much more positive attitude. Leading Australian companies TNT Australia Pty Ltd and Elders IXL, together with the Japanese-owned Kumagai Australia Group, formed a Joint Venture in 1986 to explore the possibilities of the VFT project. In 1987, after a positive pre-feasibility study, they were joined by ‘The Big Australian’, BHP Pty Ltd.

The idea of a large-scale privately funded transport infrastructure initiative marked a potential break with tradition. It was agreed early on that the VFT would be a wholly private venture. Governments would have to be involved in land acquisition, but all capital funding would be the responsibility of the private sector. Large-scale private sector infrastructure development in Australia previously had been limited to resource-related projects, mainly iron ore, coal, oil or natural gas. Most large-scale transport infrastructure provision in Australia, such as railways, port facilities, roads and airports, had been the preserve of the public sector since the nineteenth century and all passenger railways are run by governments.

A senior BHP executive became director of the VFT project and an office was established in Canberra to run feasibility studies and to take the project from the idea stage through to reality. There were some changes in the membership of the joint venture between 1986 and 1991, most notably the withdrawal of Elders IXL in 1990 and the departure of TNT early in 1991. No definite reasons were publicly announced for the withdrawal of Elders IXL and TNT. The consensus among commentators, however, was that both companies were worried about the continuing uncertainty over the proposal and also that they had hoped for significant tax breaks to be associated with the project. The other joint venturers, however, remained confident that other participants were very interested in joining, especially if government support, primarily in terms of special taxation arrangements and easing land acquisition, were forthcoming.

Federal cabinet eventually issued a statement indicating support for the concept in 1989. The main reason for cabinet support was the view of the then prime minister, Bob Hawke, that this project could have a positive impact on the economic development of south-eastern Australia. Even so, all governments made it clear that the project would require 100% private sector funding and that they would not be prepared to subsidize either the construction or operation of the VFT.

After a series of preliminary studies, the proponents of the VFT considered that the project should proceed to final impact studies. They sought a new form of taxation treatment to enable their proposed corporate structure to be developed. Despite ‘in principle’ support for the VFT from Bob Hawke, however, the federal government rejected the Joint Venture’s proposal regarding special taxation treatment of its infrastructure investment. The Joint Venture has been disbanded and its Canberra offices were closed on 12 September 1991.

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Debates and issues

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Community attitudes to the VFT There was very strong support for the proposal, especially in Canberra and other towns on the proposed route, such as Wagga Wagga and Goulburn. The Canberra business community was a strong supporter of the proposal, emphasizing job creation during the construction phase, the potential longer-term enhancement of business opportunities in Canberra and the need to improve Canberra’s access to the rest of Australia. The government and most citizens of the Australian Capital Territory (ACT) supported the idea. Local government councils along the proposed route anticipated short-term job creation and long-term economic development associated with the train. Most unions came out strongly in support, although the Australian Railways Union was wary of a large private sector venture.

Train journeys from Canberra to either Sydney or Melbourne are at present a cross between a joke and a nightmare. The distance of 200 miles between Canberra and Sydney is an endurance test of 5-6 hours in archaic coaches with only the most basic services. There is no direct train from Canberra to Melbourne; instead a 30-mile bus trip connects Canberra with the Sydney -Melbourne railway.

Most business travel connecting with Canberra, including that of federal government officials and elected representatives, is done by plane. Air travel time is much quicker than train travel times, but considerably more expensive, even after recent deregulation of air fares. Actual travel times have to include frequent delays caused by Canberra’s winter fog and year-round congestion at Sydney airport. Taxi trips between airports and downtown Sydney and Melbourne are slow and tortuous at peak hours. Intercity bus services are faster than trains, but the quality of service is unsatisfactory for most business travellers. There was thus very strong support among Canberra’s business and government travellers for a fast train connecting the national capital to Sydney and Melbourne.

Many other people, however, strongly opposed the VFT proposal. Criticism spanned the political spectrum and raised questions about the technical and economic viability of the proposal as well as its environmental impacts. Some submissions to a federal Senate inquiry were worried that the private sector might leave the project half-finished and that governments would have to finish the project at public expense (Senate Standing Committee on Transport, Communications and Infrastructure, 199 1). Other critics suggested that the VFT would not be viable economically and that public subsidy would be required to operate the service (Swan, 1991a). Some critics argued that the economics of the VFT proposal depended on capturing enhanced land values which would arise in areas adjacent to VFT stations. Other critics of the VFT, associating it with the proposed ‘Multi-Function Polis’ (MFP), opposed what they term ‘economic imperialism’ and Japanese investment in Australia generally (David and Wheelwright, 1989).

Public perceptions of the VFT, however, were mainly supportive. A survey commissioned by the VFT proponents, but undertaken independently by the Roy Morgan Research Centre in November 1990, found strong public approval of the VFT. The survey comprised telephone interviews of 1009 people in Sydney, Melbourne and country areas of New South Wales and Victoria. Sixty-five percent were in favour of the VFT with 23% undecided and only 13% against. Wide publicity had been given to the idea of the VFT and so it is reasonable to consider that most people would have heard of the project if only because of the strength of feeling expressed by those groups who were antagonistic to the proposal. Under these circumstances, the survey data indicate that the ratio of support to opposition was remarkably high. At the very least, there was no widespread public opposition to the VFT in the two states most likely to be affected.

The most important anticipated advantages of the VFT, identified in the survey, were quicker journey times (48 % of respondents), relative cost advantage over flying (2 1 %) and removing vehicles from the roads (9%). The Federal Shadow Minister for Land

626 Events and debates

Transport publicly supported the proposal and most state governments, although expressing some reservations, gave support in principle.

What route and why? The development of the VFT would have required the construction of a new line, largely separate from the existing rail network. This meant that the route to be taken between Sydney and Melbourne did not need to be determined by existing rail routes and so could be considered from fresh. Two alternatives were considered, comprising ‘coastal’ and ‘inland’ routes (see Figure 1). Factors involved in route selection included engineering considerations, cost, scope for extension (to Adelaide and/or Brisbane) and potential passenger demand as well as public opinion and interest group concerns.

The initial idea of the VFT had included a preferred ‘coastal’ route from Sydney to Canberra, passing near the ski fields of the Snowy Mountains, crossing the Snowy River near Orbost and proceeding near the Victorian coast via Dandenong to Melbourne. This suggestion aroused strong opposition, mainly expressed in terms of the possible environmental impact. Such opposition was largely defused late in 1990, when the VFT Joint Venture Management Committee unanimously decided on the alternative ‘inland’ route. Economic viability studies commissioned by the VFT consortium had estimated that construction costs would be considerably higher on the coastal route and that the inland route would be likely to generate higher passenger demand, partly through linking in with established growth patterns in Wagga Wagga, Albury-Wodonga and towns in north-east Victoria. The inland route, moreover, would have involved a much easier passage through the northern, rather than eastern, suburbs of Melbourne.

The Chairman of the VFT Joint Venture claimed that the strong environmental

Scale

~-kms

Figure 1 Alternative ‘inland’ and ‘coastal’ routes

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opposition to the coastal route had not been a critical factor in the selection of the inland route, although one component of the extra costs of the coastal route would have been measures to mitigate environmental damage (VFTNews 4,4-5) . The inland route, finally, left open the possibility of developing a direct link from Sydney to Adelaide, via a new branch line from Seymour, thus avoiding expensive new work in western Melbourne.

Economic, jnancial and taxation considerations Economic, financial and taxation aspects of the VFT proposal were intimately connected. Clearly, the viability of the VFT would depend on the relationship between costs, both of initial construction and also recurrent expenditure, and revenues. The extent to which feasibility studies indicated economic viability, therefore, would be critical in any private sector investment decisions. Such cost-revenue analyses, however, were also highly sensitive to the distribution of costs and revenues over time, especially regarding the high-cost, nil-revenue construction stage.

The taxation treatment of initial investment, therefore, was an important element in such calculations. The joint venturers asked for special taxation treatment of investment expenditure during the construction phase of the VFT. They argued that the long lead times between commencement of construction and generation of income, under existing taxation arrangements, made the project very difficult to fund. Investors, including large financial institutions, would be more prepared to become involved, the joint venturers argued, if they could get tax breaks during the construction period. In particular, the joint venturers considered that federal government acceptance of their taxation proposals would indicate fundamental support for the project and thus further encourage additional institutional investment.

The VFT Joint Venture argued that the vast scale of the capital investment, some A$12 billion (or approximately $US9 billion), required the formation of a new consortium with a separate identity from the founding joint venturers.

Two economic studies had been commissioned as part of the VFT pre-feasibility study: a cost-benefit study and an economic impact study. These both came down conclusively in favour of proceeding towards more detailed developmental work. The cost-benefit study argued that the expected rate of return, at 16%, was more than sufficient to justify going ahead (VFTNews 4, 1). The economic impact study concluded that the VFT would have a considerable net benefit on the Australian economy. The chief executive of the VFT claimed that these studies showed that the VFT proposal was ‘shaping up as a step in the right direction for Australia’ and that the project would reinvigorate the nation’s public transport infrastructure.

Some critics of the VFT proposal argued, by way of contrast, that demand would fail to match projections and that the Federal Government would have to subsidize continuing operations. Peter Swan, Professor of Management, Law and Economics at the Australian Graduate School of Management, ,University of New South Wales, was one of the most prominent and persistent critics of the VFT proposal. He argued (1991a) that no independent study had been undertaken to examine the assumptions ‘pouring forth from the VFT’s well-oiled publicity machine’. Some of Swan’s graduate students undertook an analysis of the VFT proposals and he cited their work to conclude that VFT should really stand for ‘Vitally Flawed Thinking’. He argued that the cost-benefit study was flawed by an underestimation of the probable long-term fall in domestic air fares resulting from deregulation. The anticipated revenue figures, he therefore argued, were not realistic. Swan claimed that, if the VFT proponents really believed their own studies, then they would be prepared to risk their own capital in the development of the project. Instead, he argued, their case for new taxation treatment of initial investment amounted to special pleading. Rather than putting their own capital at risk, he suggested, the VFT consortium wanted a government underwriting guarantee. He commented that the VFT had lost two of its major joint venturers and that ‘neither of the remaining active backers,

62 8 Events and debates

BHP and Kumagai, has agreed to provide debt or equity capital beyond the VFT evaluation itself‘.

The VFT’s chief executive, Alan Castleman (1991), responded vigorously. He argued that Swan and his students underestimated the size of the likely demand and overestimated the extent to which deregulation would lead to cheaper real air fares in the longer term. He also suggested that many VFT passengers would take shorter trips than the full Melbourne-Sydney journey, thus generating revenue which had not been considered in Swan’s analysis. He claimed that many financial institutions in Australia and overseas were interested in coming into the project, but that they were awaiting a decision on the taxation treatment of the investment.

It is impossible to know, under the present circumstances, whether there would have been sufficient investor interest if the taxation question had been resolved. In a rejoinder to Castleman, Swan (1991b) argued that the crucial factor in the debate was that deregulation of airlines would result in the removal of ‘the enormous and extensively documented inefficiencies in the existing major airlines’. He maintained that there would not have been a strong economic case for investing in the VFT, even if the taxation proposal had been accepted. The VFT revenue projections had been based on assumptions about trade-offs that passengers will make between journey time and travel cost.

Two crucial elements in this debate are the relative costs of travel between the cities and the amount of time spent travelling. The VFT consortium had suggested an economy fare of $130 from Sydney to Melbourne, which compared very favourably with the $200 air fare (at 1990 prices). Swan’s fundamental criticism of the VFT proposal was that airline deregulation will result in permanently lower air fares and that the VFT consortium would not have been able to generate sufficient numbers of travellers at the projected price.

The air journey takes about one hour (from take-off to landing) compared with an anticipated three-hour rail trip. Actual travel times between CBDs, however, should include travel time to the airports as well as an element for delays caused by weather or traffic volume, especially at Sydney airport. Swan’s critique of the VFT proposal did not appear to consider such factors. Although it may be difficult to incorporate such considerations into a cost-benefit equation, it does appear likely that many travellers would prefer the greater reliability and comfort of a single journey by train to the congestion of city traffic getting to and from the airports. Another complicating factor here, however, would be the possible impact on overall travel times of high-speed links between CBDs and airports in Sydney and Melbourne.

Some of the possible benefits of the VFT proposal would have accrued to the community rather than to the VFT consortium. There could have been reduced road and air traffic congestion in Sydney and Melbourne and reduced energy consumption by train compared to aircraft and private cars. Arguments about overall public benefit, however, were not sufficient to convince governments of the need for any direct involvement in the VFT .

The then Federal Treasurer, Paul Keating, was opposed to special taxation treatment for the VFT project, arguing that it would compromise the neutrality of the tax system (Wallace, 199 1). Gossip in Canberra bureaucratic circles, moreover, suggests that another senior and influential minister was strongly opposed to the VFT, partly from ideological opposition to large private sector development, but also because he feared that the VFT would attract so much of the limited available investment capital that little would be available for preferred projects in his portfolio. As has been noted already, the federal government in early 1991 rejected the case for special taxation treatment which had been made by the joint venture.

Land acquisition Questions of how land would be acquired, and what methods of compensation would be used, remained undecided throughout the life of the proposal. Such topics had generated

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uncertainty and localized opposition to the VFT and could have become extremely contentious if the project had moved from draft to detailed stage.

The Joint Venture proposed at one stage that the VFT should be able to capture some of the enhanced land values due to the development. This prompted angry outbursts from landowners and councils along the two alternative routes. In November 1990, the Joint Venture noted that the precise alignment had not been determined and that the next step was to conduct detailed engineering and environmental studies within a 10-kilometre wide corridor, in consultation with local councils. Only after such studies, and if a final decision was taken to proceed, would it be possible to identify precise parcels of land for acquisition. At that stage, therefore, landowners would be offered ‘fair market prices or full compensation where relevant’. Meanwhile, i t was noted that ‘the precise details of the acquisition and compensation were still to be discussed with governments’ (VFT News 4 , 5 ) . This process would almost certainly become one of the most contentious of all the issues involved if the project should ever be revived.

Potential impact on the regional physical environment Much early opposition to the idea of the VFT came from environmental groups. They argued that the VFT would cause noise pollution, have adverse small-scale local environmental effects, including the creation of a continuous barrier to fauna, and also raise problems regarding bushfires. The ACT VFT Advisory Committee emphasized the need for detailed environmental impact assessment and the introduction of guidelines to remove or mitigate potential adverse environmental impacts. Most of all, environmental groups were opposed to the southern section of the route initially proposed. The area known as East Gippsland is of high environmental quality, with wilderness and valued coastal and wetland amenity. Many of the loudest opponents of the VFT have claimed that it would cause environmental damage; one even claimed that it would be ‘a disaster of almost unparalleled dimensions’ (Rundle, 1990: 12).

These issues were not resolved, mainly because no full environmental impact analysis was made. The overall case in favour of the VFT, therefore, has also remained undeveloped. This certainly could have included its advantages in terms of reducing vehicle emissions, fuel consumption and road congestion.

If the VFT proposal should ever be revived, of course, the strong possibility remains that some environmental groups will oppose it whatever route is chosen. The grounds of their opposition will depend on their strategic assessment of the impact of their arguments. At the same time, however, it is certain that many trade unions will strongly support the project. The ‘green’ vote was considered by many commentators to have been crucial in the re-election of the last Australian Labour Party (ALP) federal government led by Bob Hawke. In particular the ALP encouraged voters who intended to give their first preference to Democrats or ‘green’ candidates to give their second preference to the ALP on the grounds that it was more sensitive environmentally than the Opposition (Australia has a transferable voting system.) Since that election, however, the recession has deepened, unemployment has risen and there has been a change of federal ALP leadership. The new Keating government is under ever-strengthening pressure from its strongest financial supporters, the unions, to wqigh the need for job creation more heavily than environmental considerations. This conflict cannot go away: only the currency of various issues and the terms and forms of the debates will change.

Potential impact on the rest of the transport system This issue was raised in some of the discussions about the VFT but it was neither fully explored nor resolved. One of the groups to examine this question was the ACT VFT Advisory Committee with a brief to examine the VFT proposals from an ACT perspective. The Committee (1991: 20) argued that, in the absence of the VFT development and on the basis of recent and anticipated trends, the ACT ‘faces the prospect of a modest

630 Events and debates

deterioration in the quality of air services, a significant deterioration of passenger and rail freight services, and a road system that while improving could be even more heavily used than at present.’ The Committee urged the VFT Joint Venture to give additional consideration to freight traffic, but decided overall that a strong case existed in terms of transport economics to encourage the VFT.

No serious attempt was made by governments or the VFT Joint Venture to relate debates about a series of major projects, including the VFT, Sydney’s proposed second airport and strategic metropolitan and regional development. The development of Sydney’s second major airport, at Badgery’s Creek in western Sydney, was given the go-ahead late last year by the federal government. Again, this was without any comprehensive attempt to assess overall communications and transportation priorities. This raises a general problem about infrastructure investment in Australia: the complexities of intergovernmental relations which are exacerbated by political differences between the various federal and state governments. No adequate machinery exists for the coordination of major infrastructure projects. Although these problems are neither unique nor confined to federal states, they are given added momentum in a political environment within which three levels of government constantly vie for both votes and investment.

Decision-making has been piecemeal and ad hoc, and often includes an element of intergovernmental rivalry and point-scoring. For example, shortly after the VFT headquarters in Canberra were closed down, the New South Wales government announced that it would conduct a feasibility study into running a high-speed tilt-train between Sydney and Canberra. It was claimed that this could cut that journey to about two hours. The NSW Minister for Transport claimed that ‘the Very Fast Train was clearly doomed because of the enormous capital expenditure needed to get it up and running including the laying of tracks . . . But here we have what we like to call the VAT, the Very Achievable Train, and the Federal Government is being typically apathetic’ ( f i e Australian, 18 September 1991,2). If this project should proceed, then it could inhibit a revival of the VFT proposal by attracting a large part of its anticipated market.

The VFT could undoubtedly play a vital role in the development of an integrated regional transport system in south-eastern Australia. A branch line could connect the second Sydney airport to the CBD, as well as linking with Melbourne’s international airport. High-value freight could be carried outside of peak passenger travel times, linking city centres with each other as well as international airports. In the absence of the VFT, there is little prospect of much change from the current system based heavily on road haulage, inefficient trains and slow car-based intra-city passenger traffic.

Potential impact on the economic geography of SE Australia Supporters of the VFT believed that it would greatly improve connections between Sydney, Canberra and Melbourne as well as other nodes on the new rail system. It was also argued that the VFT would enable regional growth centres to be developed within an integrated transport system. This never became a central issue, but it is most likely that the VFT would have enabled further development in areas served by stations.

Radical critics argued that the VFT proposal and the proposed MFP were linked attempts (if not actually a conspiracy!) to change south-eastern Australia through major private sector development (James, 1990). Regarding the proposed VFT and MFP as technocratic utopias, Frankel (1990: 219) scornfully claimed that their supporters ‘are locked into a high-tech and market-dominated version of the present system’.

Sir Peter Abeles, Chief Executive of TNT, was quoted as suggesting that the VFT would contribute to ‘the restructuring of our sociological and economic structure of the east coast’ (cited in both Ferris, 1990, and Broughton, 1990). Radicals argued that such restructuring would be self-evidently undesirable. Most commentators, however, including trade unionists and residents in rural areas near the proposed route, welcomed the idea

Event 63 1

of development, especially as it would create jobs during a period of high unemployment and could generate more work long into the foreseeable future.

There was short-lived interest in decentralization during the Whitlam Federal Government in the mid-l970s, but since that time the main population trend in the interior has been out-migration. There are strong growth pressures today throughout much of the eastern coastal zone of Australia as well as in the outer suburban fringes of Sydney and Melbourne. South-east Queensland is emerging as a major growth conurbation and will probably have superseded the Melbourne metropolitan region by 2025. One of the probable by-products of the VFT would have been to channel some of this growth towards inland nodes, although an extension from Sydney to Brisbane could also have reinforced current processes of urban and regional restructuring and the shift of population to the north. The federal government has recently been taking a renewed interest in urban and regional development, although there have been no suggestions about decentralization policies. The VFT could be an important element if any such ideas were again to come into fashion, although government support for the proposal could then take quite different forms.

Relations between Australia and the Paci’c region Australia needs to be able to compete and trade with the dynamic growth regions to its north. The VFT could have been part of a competitive and integrated south-eastem Australian region, which, despite the rapid growth of south-eastern Queensland and northern New South Wales, will continue to house the great majority of the Australian population. The current transport system is overloaded, often inefficient and expensive. One of the proponents of the VFT concluded that its demise marked a sad day for the future of Australia within our region:

Australia’s self-imposed failure to keep up with the rest of the world is even more vivid when one looks at the exciting high-speed rail developments in Europe, North America and Asia. That just leaves us with the banana republics to keep up with . . .

Confidence in our image as a target for investment . . . will be badly damaged if we cannot see through a pacesetting project which is obviously critical to our future. If we cannot provide for our own future and seize opportunities for advancing Australia we cannot expect others to take an interest in our well-being. (Crawford, 1991)

Conclusions: opportunity lost - a dream derailed

Many of the debates about the viability and potential impact of the proposed VFT remain unresolved. Much uncertainty remains, in particular, about the cost-benefit relations between train and air travel, not least regarding the medium- and long-term impact of deregulation on the cost of air travel.

The environmental impacts of the VFT remain hypothetical, although the decision to go for the inland route removed the first and strongest environmental objection to the proposal. If the project had not been abandoned, however, it is almost certain that other environmental arguments would have been used to oppose it. On the other hand, there would also have been extremely detailed environmental impact assessments and other environmental factors would have come into play, not least the provision of non-polluting rapid transport between Sydney and Melbourne which would remove both traffic and pollution from a stressed transport system.

The VFT Joint Venture argued that governments’ reluctance to support their proposals was a major factor in their abandoning the project. Despite the confidence of the Joint Venture, prominent economic analysts doubted whether other investors would be attracted into the project even if the case for special taxation treatment had been successful. Such

632 Events und debates

criticism, when added to doubts about the economic viability of the project, may have convinced governments of the need for a cautious approach.

There was a change of leadership of the federal ALP government shortly before Christmas 1991. After months of tension, an unsuccessful spill in the middle of the year and endless media speculation, Bob Hawke was replaced by the former Treasurer, Paul Keating. Keating has recently announced a four-year plan aimed at boosting the economy, espcially through encouraging private investment with the intension of stimulating job creation. This will involve stronger support for large-scale development projects. The modified tax treatment of private investment projects, however, has not been sufficient to generate renewed enthusiasm on the part of the VFT proponents. Even if the taxation question should be resolved, then greater Federal Government commitment and better inter-governmental coordination would be required before the project could go ahead. Prime Minister Keating’s package, moreover, includes an element of new investment in existing public rail systems; this, too, could discourage a revival of the VFT proposal.

In view of the present abandonment of the project, and in the absence of environmental impact studies, all these debates and uncertainties remain unresolved. Even if the new federal government were to give the VFT a green light, it is unlikely that this project could become operational much before the end of the century. The dream of a Very Fast Train between Sydney and Melbourne, for the time being at least, has been derailed. Most Australians may come to regret this lack of vision before too long.

Chris Paris, Department of Social Administration and Policy, Magee College, University of Ulster, Northland Road, Londonderry BT48 7JL, N . Ireland

References ACT VFT Advisory Committee (1991) Report on the Very Fast Train Project, ACT VFT Advisory

Broughton, A. (1990) Supertrains and supercities. In James (1990). Castleman, A. (1991) Deriders can’t derail fast train. The Australian, 18 June, p. 11. Crawford, I . (1991) Rejection of tax proposals derails the VFT. Canberra Times, 14 August, p. 9. David, A. and T. Wheelwright (1989) The third wave. Left Book Co-operative, Sutherland, NSW. Ferris, P. (1990) A flawed project, filling a national void. In James (1990). Frankel, B. (1990) Towards an alternative Australia. In James (1990). James, P. (ed.) (1990) Technocratic dreaming. Left Book Club, Melbourne. Rundle, G . (1990) Australia’s deliriosa firiosum. In James (1990). Senate Standing Committee on Transport, Communications and Infrastructure (199 1) Aspects of

Swan, P. (1991a) Vitally Flawed Thinking. The Australian, 17 June, p. 9. - (1991b) Letter to the editor. The Australian, 3 July, p. 8. Wallace, C. (1991) The textbook begins to fray around edges. The Australian, 17 April, p. 30. Wild, J.P., J.F. Brotchie and A.J. Nicolson (1985). A high-speed rail link: Sydney, Canberra,

Melbourne. Paper given at the Conference of The Institute of Engineers, Australia, 17- 19 June 1985.

Committee, Canberra.

the proposal for a Very Fast Train. Australian Senate, Canberra.