LINKING THE ILLAWARRA Improving the region’s transport connectivity

Thinking business

Disclaimer This report has been prepared by PricewaterhouseCoopers (PwC) at the request of the Illawarra Business Chamber (IBC) in our capacity as advisors in accordance with the Terms of Reference and the Terms and Conditions contained in the Consultant Agreement between the IBC and PwC. The information, statements, statistics and commentary (together the ‘Information’) contained in this report have been prepared by PwC from publicly available material and from discussions held with the IBC. PwC may in their absolute discretion, but without being under any obligation to do so, update, amend or supplement this document. PwC have based this report on information received or obtained, on the basis that such information is accurate and, where it is represented by the client and other stakeholders as such, complete. The Information contained in this report has not been subject to an Audit. The Information must not be relied on by third parties, copied, reproduced, distributed, or used, in whole or in part, for any purpose other than detailed in our Consultant Agreement without the written permission of the IBC and PwC.1

Illawarra Business Chamber

1 Liability limited by a scheme approved under Professional Standards Legislation

Illawarra Business Chamber

PwC i Foreword

A recent survey of members of the Illawarra Business Chamber (IBC) found that over 95% of businesses want to see better transport links to Sydney. Inefficiencies in transport links drive up the costs of doing business in the Illawarra and compromise future opportunities for market expansion. There are strong concerns that without effective planning and action now to address this issue, the projected expansion in the passenger and freight movement task over the next 20 years will see the transport and logistics costs for business increase significantly. High quality transport connectivity is critical to the movement of people to work and hence to a productive labour market. For the Illawarra which is transitioning to a more knowledge intensive and service based economy this relationship between connectivity and efficient labour market functioning increases in importance. It is clear that ensuring ongoing improvements in the Illawarra’s transport infrastructure is critical to supporting the projected service sector and knowledge based growth of the regional economy. This study assesses the transport connectivity between the Illawarra and Sydney by identifying the existing challenges and showing how connectivity and economic outcomes relate to benchmark regions identified in NSW, Victoria, Queensland and internationally. Uniquely, this study develops an evidence base analysis of what the problem is that needs to be solved – rather than justifying a specific road or rail project as the solution. By assessing the network coverage and service quality this study finds that the Illawarra has the lowest transport connectivity, scoring 25 – 30% lower than the Australian benchmark regions. This is driven by: materially lower overall connectivity between the Illawarra and Sydney than that between the Australian benchmark regions and their respective proximate major metropolitan centre; inadequate cover of the rail freight network; and the topographical constraints of the main freight corridor which increases the cost of moving freight. Given the Illawarra is the third largest economy in NSW, with strong labour market links as both an employment generator for surrounding regions and also supplying skilled workers for the Greater Sydney area, the scale of potential benefits from improving the transport connectivity is significant. This study shows that improved connectivity across the Illawarra network to match the level of its benchmark peers alone would reduce travel and freight costs by at least $150 million per annum in addition to broader benefits from enabling greater access to employment opportunities, increasing population and creating additional business and trade opportunities. Improving transport connectivity internally and externally to the region is not only important to helping the economy diversify towards knowledge and service-based sectors, but is also one of the key tools for addressing the low labour force participation rate and average household incomes experienced in the Illawarra. This report found that in “examples in other vehicle-dependent economies in transition have shown that low levels of connectivity can negatively affect these indicators where they are seen to act as a barrier to connecting the ‘right people with the right jobs in the right places.’” This study highlights some significant transport connectivity deficiencies and articulates some challenges and opportunities in improving the transport connectivity of the Illawarra. On behalf of Illawarra businesses, I wish to acknowledge the work of PricewaterhouseCoopers, the Illawarra Business Chamber and the NSW Business Chamber in conducting and investing in this important piece of research. The NSW Government, regional and local stakeholders all need to work together to identify priorities and solutions to capture the potential benefits of improved transport connectivity in order to ensure the future growth and prosperity of the Illawarra.

Sue Baker-Finch President, Illawarra Business Chamber

Illawarra Business Chamber

PwC ii Executive summary

Executive summary

Members of the Illawarra Business Chamber (IBC) continue to voice concerns that the cost and time taken to move people and goods is currently too high. The Chamber considers that addressing these concerns should be a priority. Connectivity is a key facet of regional competitiveness. For instance, the Grattan Institute’s Productive Cities report suggests that ‘connectivity is crucial to efficient labour market functioning and will increase in importance as the economy becomes more knowledge intensive.’2

Although manufacturing historically has accounted for the highest proportion of output, recent growth of the Illawarra region is strongly focused on service-based industries. As such, improving the transport connectivity of the Illawarra is central to supporting its future growth given, the importance of transport connectivity to these sectors. The size of the Illawarra’s economy underscores the relevance of this investigation for NSW: the region produced $16.5 billion of output in 2012-13, which accounts for 3.5% of the NSW economy.3

However, both the labour force participation rate and average household incomes in the Illawarra are clearly below those in the benchmark regions. It would be difficult to attribute this performance wholly to the relatively low level of connectivity. However, examples in other vehicle-dependent economies in transition have shown that low levels of connectivity can negatively affect these indicators where they are seen to act as a barrier to connecting the ‘right people with the right jobs in the right places’

Message 1:

Accessing jobs and trading opportunities in Sydney already costs Illawarra residents and businesses around half a billion dollars a year. Without action, the time and out of pocket costs are expected to increase to at least $690 million pa by 2031.

This study develops an evidence base which assesses the transport connectivity between the Illawarra region and Sydney. Connectivity is defined in terms of road and rail network coverage and service quality, for both freight and passenger transport tasks.

A range of indicators are used to qualitatively rate (and convert to a numerical score between 1 and 5) to compare overall connectivity in and to/from the Illawarra region. The results of the assessment are summarised below.

2 Grattan Institute 2013, Productive cities: Opportunity in a changing economy, May, Carlton, Victoria, p.41.

3 PwC GEM analysis

Illawarra Business Chamber PwC iii Executive summary

Table ES 1: Illawarra connectivity scores

C0nnectivity attribute External Internal Total Sydney CBD  Sydney Wollongong  Wollongong  Wollongong  Wollongong  Wollongong  Wollongong  Shellharbour Shellharbour Sydney CBD Sydney Sutherland Ingleburn Bowral Nowra

Origin-Destination

Road coverage 4.1 3.0 4.0 3.9 4.0 3.3 3.8 3.7

Rail coverage 5.0 5.0 3.0 3.0 1.0 1.0 3.0

Freight rail coverage 1.0 1.0

Network Coverage 4.6 2.0 4.5 3.5 3.5 2.2 2.4 2.6

Road speed (passenger) 2.0 1.0 1.0 1.0 2.0 3.0 2.0 1.7

Road speed (freight) 2.0 2.0

Public transport speed 3.0 3.0 2.0 3.0 4.0 2.0 2.8

Public transport quality 4.3 4.3 3.0 2.8 2.0 2.5 3.1

Service Quality 3.1 1.5 2.8 2.0 2.6 3.0 2.2 2.2

Weighted Scores 2.9 1.8 2.7 2.1 2.4 2.1 1.8 2.4 Source: PwC analysis and estimates

Message 2:

Our assessment of the Illawarra’s connectivity reveals strengths and weaknesses. While the region is served by a reasonably comprehensive road and rail network, the low speeds on those networks are a major weakness. The scores for road user speed are consistently low across all external trip origins and destinations. This has a significant negative impact on the economic productivity of the region given that private trips account for a large proportion of the transport task. In particular, the connectivity performance between Sydney and Wollongong is mixed. Road and rail network coverage is strong, with scores of 4 and 5, respectively. Public transport speed and quality are average with scores between 3 and 4. However, road user speed is particularly poor, with a score of 1. The analysis also highlights a particular weakness in the Illawarra’s freight connectivity, particularly to Sydney’s west and southwest.

To identify the economic effects of differences in connectivity, the scores above are compared to scores in four benchmark regions. Comparison of the Illawarra with the four regions demonstrates that the Illawarra has the lowest overall connectivity (2.4 out of 5). The Illawarra’s score of 2.4 is 25-30% lower than the scores in the other Australian benchmark regions. The Illawarra’s low connectivity score is driven by both poor performances in network coverage and service quality.

The results are summarised in the table below.

Illawarra Business Chamber PwC iv Executive summary

Table ES 2: Comparison of the Illawarra’s scored connectivity with benchmark regions

Central Gold Illawarra Coast Geelong Coast Lille

Road coverage 3.7 3.5 3.4 3.8 4.3

Rail coverage 3.0 5.0 3.4 3.0 5.0

Freight rail coverage 1.0 4.0 3.0 4.0 5.0

Network Coverage 2.6 4.2 3.3 3.6 4.8

Road speed (passenger) 1.7 1.5 2.3 1.8 3.7

Road speed (freight) 2.0 2.6 3.7 3.8 4.4

Public transport speed 2.8 3.2 3.8 2.6 4.2

Public transport quality 3.1 4.2 2.7 3.7 4.0

Service Quality 2.2 2.6 3.1 2.9 4.1

Weighted Scores 2.4 3.4 3.2 3.3 4.4 Source: PwC analysis and estimates

Message 3:

The assessed overall level of connectivity between the Illawarra and Sydney is materially lower than that experienced between the Australian benchmark regions and their respective CBDs. The inadequate coverage of the freight rail network and the topographical constraints of the main road freight corridor increase the cost of moving freight between the Illawarra and Sydney. Relatively high public transport journey times, particularly for rail, impact negatively on the productivity of commuters who seek access to the employment centres in Sydney. The Illawarra region is also an important employment generator. Around 10,000 workers travel from outside the region to jobs in the Illawarra – particularly from the Southern Highlands, the Shoalhaven and Sydney’s west and southwest. Improved connectivity will be crucial in ensuring the Illawarra retains access to specialist expertise, particularly in the health sector.

The high level economic impacts of (relatively) poor connectivity in the Illawarra region are highlighted by comparing the key economic, industry and land use indicators in the Illawarra with those exhibited by the benchmark regions. These indicators are summarised below.

Relative to the other benchmarked regions, the Illawarra has the highest output per employee ($160,000) and a relatively low unemployment rate (6.7 per cent) compared to similar regions, such as the Central Coast and Gold Coast (6.9 per cent and 7.4 per cent respectively). However, the participation rate and household income are the lowest of all regions. Improved transport connectivity can bring more people closer to more jobs to capitalise on the economic opportunities offered in the Illawarra.

Illawarra Business Chamber PwC v Executive summary

Table ES 3: Benchmarking regional economic outcomes

Australian Central Gold averages Illawarra Coast Geelong Coast and totals Lille*

Economy

Population, 2011 (‘000s) 336 322 256 527 21,508 1,208

Output, FY13 ($bn) 16.5 12.5 11.8 26.5 1,521 €97

Growth in output, FY01 28 28 39 56 43 to FY13 (% real)

Output per employee, 160 152 144 159 186 FY13 ($ ‘000s)

Industry

Labour force, 2011 147 141 121 257 10,658 526 (‘000s)

Participation rate, 2011 51.2 56.0 59.5 62.1 61.4 69.4 (%)

Unemployment rate, 6.7 6.9 5.3 7.4 5.6 14.5 2011 (%)

Average household 923 1,003 1,079 1,173 1,234 €444 income, 2011 ($/week)

Out commuting, 2011 14.2 23.1 15.0 14.4 7.9 (%)

Land use

Urban density, 2011 1,400 700 500 1,800 6,600 (persons/km2)

Apartments (% of total 12 7 8 19 14 42 dwellings), 2011

Housing construction 250 290 680 750 41,870 activity, 2011 ($m)

Commercial construction 200 160 620 490 26,660 activity, 2011 ($m) * All statistics for Lille are for 2010; not all statistics are available on a comparable basis. Sources: PwC GEM analysis, ABS Census 2011, ABS National Regional Profile 2011, Australia, Bureau of Transport Statistics 2011, France National Institute of Statistics and Economic Studies (INSEE) 2010, Nord France Invest, Welcome to Lille Region 2011

Illawarra Business Chamber PwC vi Executive summary

Message 4:

A high value, service based economy is usually accompanied by a relatively high public transport mode share. The Illawarra region’s aspirations in this regard could be challenged by slow public transport journeys and infrequent services. This challenge is reflected in the scoring analysis which indicates that all internal origins and destinations fare poorly (scores below 3) in terms of public transport quality. This can negatively impact on labour force participation rates and incomes as the ‘right people’ are prevented from accessing the ‘right jobs in the right places’. For example, the lowest score (2) for public transport quality is exhibited by ‘Wollongong-Nowra’ and will act as a disincentive for Nowra residents to access jobs in Wollongong. Given the relatively dense land uses in the Illawarra and the physical constraints affecting main road corridors, this will further depress economic productivity as peak period congestion worsens over time.

The benchmarking of the Illawarra’s connectivity against Australian peers highlights a number of areas for improvement of the Illawarra’s transport network and services. Everyone will have a view on the right solution to the connectivity problems affecting the Illawarra region. However, it is clear that ‘doing nothing’ is not sustainable. The benchmarking exercise highlights that the Illawarra’s connectivity is around 25% worse than its peers and that the costs of moving passengers and freight between the Illawarra and Sydney are in the order of $550 million per year.

Message 5:

Improved transport connectivity could provide a boost to the Illawarra economy by expanding employment opportunities and making it an attractive place for residents and businesses alike.

If the connectivity of the Illawarra was improved to the level of its peers, the potential scale of the benefits could be in the order of $150 million per year, which reflects shorter journey times and lower freight costs. Not included in this estimate which could have an impact on the magnitude of potential benefits are in-commuting costs, internal road freight costs and rail freight costs. Broader benefits would flow through:

• Enabling greater access to employment opportunities • Making the Illawarra a more attractive place to live • Making the Illawarra a more attractive place to work and do business. Message 6:

The size of the Illawarra economy is growing and the relative contribution of certain sectors is changing over time. Therefore, a multi-modal transport package is required to address the Illawarra’s main connectivity problems. Project proposals targeted at addressing these problems need to be affordable and generate net benefit for the community.

Illawarra Business Chamber PwC vii

Contents

Executive summary i

1 Why transport connectivity matters 1

1.1 Background 1

1.2 How does transport connectivity influence economic outcomes? 1

1.3 Scope and objectives of this study 2

1.4 Our approach 3

2 Connectivity in the Illawarra 4

2.1 The Illawarra in profile 4

2.2 The connectivity problem: high travel costs 9

2.3 Assessing the connectivity and economic outcomes for the Illawarra region 12

3 Benchmarking the Illawarra’s connectivity 18

3.1 Benchmark regions 18

3.2 The Illawarra connectivity compared to benchmarks 18

3.3 Economic outcomes 20

4 Opportunities for the Illawarra region 23

4.1 Transport opportunities and challenges 23

4.2 Economic opportunities and challenges 24

4.3 The way forward 26

Appendix A Methodology 29

Appendix B Profiles for benchmark region 32

Illawarra Business Chamber

PwC i

1 Why transport connectivity matters

1.1 Background The Illawarra Business Chamber (IBC) is committed to improving the local business environment by representing the concerns of business to all levels of government. For example, between 2012 and 2013, the IBC made submissions concerning Transport for NSW’s (Draft4 and Final5) Long Term Transport Master Plan, Draft Port and Freight Strategy6 and the Illawarra Regional Action Plan7. The common thread in these submissions is that improving transport links to/from (and within) the Illawarra region is essential to diversifying the economy to include more high value, services based activity. In particular, the IBC notes that: ‘Transport is a major enabling infrastructure which, if designed well and operated, can drive regional economic growth’. This position is supported further by the findings of the IBC’s Small Business Barometer: What’s Impacting the Illawarra?8 Responses to surveys undertaken as part of this study indicate that the cost and time taken to move people and goods between centres of production and various market places could be made more efficient with investment in major roads, rail and airports. At best, a business as usual response to the highlighted connectivity issues will increase the financial and community cost of moving people and goods to/from the Illawarra. At worst, inefficient transport links will constrain the social and economic development of the Illawarra region. 1.2 How does transport connectivity influence economic outcomes? Clearly identifying the connectivity ‘problems’ experienced by Illawarra residents and businesses before investing in transport projects is crucial to ensuring an adequate return on tax-payer and/or private sector funds. Some of these problems in the Illawarra region are highlighted in Transport for NSW’s Illawarra Regional Transport Plan. These are summarised in Table 1.

4 Illawarra Business Chamber 2012, NSW Long Term Transport Master Plan – Illawarra Components, A Submission by the IBC, April, Wollongong, NSW, http://www.nswbusinesschamber.com.au/NSWBC/media/Ilawarra/Advocacy/Transport-Master- Plan-submission-final.pdf

5 Illawarra Business Chamber 2012, Illawarra Business Chamber – Comments on the Draft NSW Long Term Transport Master Plan, A Submission by the IBC, October Wollongong, NSW, http://www.nswbusinesschamber.com.au/NSWBC/media/Ilawarra/Advocacy/Follow-up-submission-IBC-final.pdf

6 Illawarra Business Chamber 2013, The Illawarra Business Chamber submission to: Transport for NSW Draft Port and Freight Strategy, Illawarra Business Chamber, Wollongong, March 2013, http://www.nswbusinesschamber.com.au/NSWBC/media/Ilawarra/Advocacy/IBC-Submission-NSW-Port-and-Freight- Strategy-130315.pdf

7 Illawarra Business Chamber 2012, The Illawarra Business Chamber submission to the Illawarra Regional Action Plan, Illawarra Business Chamber, Wollongong, April 2012. http://www.nswbusinesschamber.com.au/NSWBC/media/Ilawarra/Advocacy/Letter-Submission-Wollongong-City-Council.pdf

8 Illawarra Business Chamber 2013, Small Business Barometer: What’s Impacting the Illawarra?, Final Report prepared by IRIS Research, August, http://www.nswbusinesschamber.com.au/NSWBC/media/Ilawarra/Advocacy/POL-1621_Thinking-Business- Impacting-the-Illawarra-FINAL.pdf

Illawarra Business Chamber

PwC 1 0BWhy transport connectivity matters

Table 1: A summary of connectivity challenges to and within the Illawarra Challenges to and from the Illawarra Challenges within the Illawarra • Geographical constraints, including • Seasonal tourism demands that challenging topography and steep generate peak transport demands grade, with poor stability on all between towns in the region and escarpment crossings cause congestion • Limited east-west road connections • Improving transport connections to the coast across the region, particularly in an east-west direction • Growing freight task on both road • Improving connections between and rail networks, including Wollongong and growth areas to the expansion and growth at the Port of south of Lake Illawarra Port Kembla • Train travel time to and from the • Reducing car dependency Sydney Metropolitan Area • Seasonal and event-based tourism • Increasing land use development transport demand and required infrastructure to support growth • Road safety • Road safety

Source: NSW Government 2014, Illawarra Regional Transport Plan, March Debates on the best modal solutions can obscure the real reason why these problems should be addressed, i.e. connectivity is crucial to the economic and social health of regions. In 2013, the Grattan Institute’s Productive Cities9 report commented that: ‘Connectivity is crucial to efficient labour market functioning and will increase in importance as the economy becomes more knowledge intensive. Yet we rarely evaluate our transport system on the basis of the proportion of jobs, or type of jobs, it enables people to reach from different locations. Rather than accessibility and connectivity, the focus is generally on mobility, and in particular, speed (reduced travel times)’. Improved connectivity is a means to an end. As the structure of the Illawarra’s economy changes over time to focus on the service sectors, these ‘economic ends’ will increase in value. Improved connectivity will contribute to maximising the net benefit of trips being undertaken for business (including high value activities requiring access to Sydney airport), education and tourism purposes. As such, improving the transport connectivity of the Illawarra is central to supporting its future growth. 1.3 Scope and objectives of this study The key outcome sought from this study is an evidence base which can be used to assess the transport connectivity between the Illawarra region and Sydney. The evidence base will: • Highlight the ‘problems’ associated with the current level of connectivity to and within the Illawarra region • Draw out the economic implications of these problems by showing how connectivity and economic outcomes relate in benchmark regions.

9 Grattan Institute 2013, Productive cities: Opportunity in a changing economy, May, Carlton, Victoria, p.41.

Illawarra Business Chamber PwC 2 0BWhy transport connectivity matters

The specific project objectives include: • Assessing the current level and cost of connectivity between the Illawarra and Sydney • Benchmarking comparable cities to assess a reasonable level of connectivity, to enable improved economic outcomes for the Illawarra. • Identifying opportunities for business and the economy arising from improving connectivity and addressing connectivity gaps. This report focuses only on transport connectivity provided by road and rail, rather than infrastructure connectivity between cities and regions which also includes telecommunications, energy and water. 1.4 Our approach Transport connectivity for a region such as the Illawarra is a multi-dimensional concept. This study considers connectivity from two perspectives. The first considers the economic costs associated with major connections between the Illawarra and Sydney, which relate to the out-of-pocket and time costs of passenger and freight movements. The second develops a more comprehensive set of attributes of connectivity that can be assessed across a range of origin-destination (OD) corridors, both within the region, and connections to Sydney. This approach allows the Illawarra’s connectivity to be benchmarked against other similar regions to gauge relative performance. The approach requires the definition of a number of attributes that draw out the main dimensions of connectivity. The attributes are grouped under two main headings: • Network coverage – these attributes assess the standard and extent of the road and rail networks in place to provide connectivity • Service quality – these attributes assess the quality of connectivity from the freight and passenger customer perspectives, including speed and reliability. Publicly available transport data supports the assessment of each benchmark region’s connectivity on a comparable basis with the Illawarra. The study also considers the economic outcomes of the Illawarra region relative to benchmark regions to understand to what extent the quality of transport connectivity influences the structure and performance of regional economies. The results suggest areas for improvement in transport connectivity and opportunities for the economy.

Illawarra Business Chamber PwC 3

2 Connectivity in the Illawarra

2.1 The Illawarra in profile 2.1.1 Location The Illawarra region is located 70 km south of the Sydney CBD. It covers an area of 2,300 square km10, extending from Helensburgh to Nowra along the coast (Figure 1). This incorporates the cities and towns of Wollongong, Shellharbour, Kiama, and the Shoalhaven. The region defined by its narrow coastal plain, with the Illawarra escarpment to its west, and the Royal National Park separating the region from Greater Sydney to its north.

Figure 1: Map of the Illawarra region

Source: NSW Government 2014, Illawarra Regional Transport Plan, March, p. 3 (extract)

The region’s proximity to Sydney drives strong demand for improved inter-regional transport links. With the current transport infrastructure and congestion levels during the morning peak, it currently takes 90 minutes to drive to Sydney CBD and 96 minutes on the

10 ABS 2013, National Regional Profile 2007 to 2011, cat. 1379.0. See Appendix A for detailed definition of regional coverage.

Illawarra Business Chamber

PwC 4 1BConnectivity in the Illawarra

train. Kingsford Smith international Airport is located approximately 85 kms from Wollongong, and takes approximately 70 minutes to drive, with rail access via Wolli Creek taking around 90 minutes. This access to Sydney’s international Airport is important for trade and tourism links.

The demand for transport access to Sydney CBD will increase as Sydney’s footprint grows. The NSW Government is looking to south west Sydney to support a large proportion of forecast growth in jobs and housing development. The Illawarra stands to play an important role in delivering on the NSW Government’s ‘polycentric’ approach to future land use planning for growth centres.

2.1.2 Demography At 2011, the Illawarra had a population of around 340,000, which makes it the State’s third largest city with around 5% of the NSW population.11 Around a third of residents living in urban areas are concentrated in and to the direct north of Wollongong city. This marks a suburban population density of around 1,400 people per square km for the strip north of Port Kembla and an urban population density of 2,700 people per square km in Wollongong’s core.12 These densities are comparable to the outer and middle suburbs of Sydney respectively.

The NSW Government expects that, based on recent growth, the population in the Illawarra will increase by around 18% in the two decades to 2031.13 The region is als0 characterised by an ageing population. Around 17% of residents are aged 65 and over.14 This proportion is 3 percentage points higher than the national average and 2 percentage points higher than the NSW average.

2.1.3 Transport The bulk of the region’s population is currently served by mostly north-south road and rail connections across the coastal areas and onwards to Sydney.

The main road corridor in the region is the M1 (Princes Motorway) and A1 (Princes Highway). Northwards to Sydney there is M1 motorway access from Wollongong to Waterfall. From Waterfall, the A1 continues north east towards the coast through Sutherland and crosses the Georges River through to Hurstville. It connects to the M5 East providing access to Sydney Airport and on to the M1 through to the CBD. Travel times between Waterfall and the CBD slow due to the high levels of congestion and lack of motorway access along this route.

From Nowra in the south, the A1 passes through Berry, Kiama, Shellharbour, Dapto and Port Kembla (providing access to the Port via Five Islands Road and Grand Pacific Drive). South of Wollongong significant upgrades are currently being undertaken to the Princes Highway to build a bypass at Gerringong and Berry. Western access from Wollongong and North Wollongong is provided through the Illawarra escarpment (Figure 2).

11 ABS, 2014, Regional Population Growth, Australia, 2012-13, cat. 3218.0

12 ABS, 2014, Regional Population Growth, Australia, 2012-13, cat. 3218.0

13 NSW Government, 2013, The Illawarra over the next 20 years: A Discussion Paper, August

14 ABS 2013, National Regional Profile 2007 to 2011, cat. 1379.0

Illawarra Business Chamber PwC 5 1BConnectivity in the Illawarra

Figure 2: Major road corridors in the Illawarra

Source: Roads & Maritime Services, 2014, Alpha Numeric route numbers - A new Road Numbering System, Illawarra NSW map

The region is also serviced by the Eastern Suburbs/Illawarra Rail Line which supports suburban services from Central to Waterfall (21 stops with major interchanges at Hurstville and Sutherland). The South Coast Line supports intercity services south beyond Waterfall to Wollongong (including a spur line to Port Kembla) with the line terminating at Bomaderry (Figure 3). Between Thirroul and Waterfall the Illawarra line follows the escarpment which is a steep and winding route. This, in addition to the single track along some parts of the line necessitates slow train speeds, resulting in average speeds of 50km/hr.

A further dedicated freight line (operated by the Australian Rail Track Corporation) connects the Illawarra to the Southern Highlands via Moss Vale. The freight line primarily services

Illawarra Business Chamber PwC 6 1BConnectivity in the Illawarra

movement of goods to and from the Port of Port Kembla, including coal and grain. Rail freight services also operate on the passenger network outside peak commuting periods.

Figure 3: Illawarra and South Coast Lines

Source: NSW TrainLink, 2014, Intercity Trains Network (extract)

The Illawarra escarpment limits the number and directness of east-west transport connectivity to three main road connections to the Southern Highlands and southwest Sydney (Picton Road, Appin Road and the Illawarra Highway). Similarly, east-west rail connections are limited to the highly indirect dedicated freight line to Moss Vale.

2.1.4 Commuting patterns The majority of the Illawarra’s working population work within the region (Figure 4). However, around 15% of the Illawarra’s working population commute outside of the region for work purposes (Table 2).15 These ‘out commuters’ travel distances between 50km (to the Sutherland Shire and Sydney Outer South West e.g. Campbelltown) and 100km (to Sydney CBD) to reach their work destination. While most travel is by car, around a fifth of these out- commuting trips are estimated to be by rail. This rail share is expected to be significantly higher for origins and destinations that are relatively well served by rail services, such as Wollongong-Sydney CBD.16

15 PwC analysis of Bureau of Transport Statistics, 2011, Journey to Work statistics

16 TfNSW, 2012, Long Term Transport Master Plan, p. 220

Illawarra Business Chamber PwC 7 1BConnectivity in the Illawarra

Figure 4: Journey to work for Illawarra residents, 2011

Source: Transport for NSW, 2014, Illawarra Regional Transport Plan, p. 5

Table 2: Inter-regional travel for work into and out of the Illawarra, 2011 Number of out Number of in Destination commuters commuters Sydney City and Inner South 5,600 150 Sutherland Shire 3,450 950 Sydney Outer West 3,200 1,400 Elsewhere in Greater Sydney 6,700 1,050 Southern Highlands & remainder of Shoalhaven 1,200 5,050 Elsewhere in Greater NSW 700 500 Outside NSW 0 550 Total inter-regional commuters 20,850 9,650 Source: PwC analysis of Bureau of Transport Statistics, 2011

Table 2 also highlights the strength of the Illawarra region as an employment generator. Around 10,000 workers travel from outside the region to jobs in the Illawarra – particularly from the Southern Highlands, the Shoalhaven and Sydney’s west and southwest.

Illawarra Business Chamber PwC 8 1BConnectivity in the Illawarra

2.1.5 Freight movements Transport for NSW has identified the major freight flows through the Illawarra region: coal trains from the state’s Central West for export via the Port of Port Kembla17, as well as movements between the Illawarra and Sydney, and between the Port of Port Kembla and elsewhere in the Illawarra (Figure 5).

These movements alone total around 23 million tonnes per annum and, other than the coal and other bulk movements, are mostly road-based.18 In addition to these longer-distance movements, the Illawarra economy is supported by frequent local road freight journeys, particularly in the urbanised area of Wollongong. This includes locally produced coal, which is transported by road to the Port of Port Kembla.

Figure 5: Major freight movements within and through the Illawarra

Source: Transport for NSW, 2014, Illawarra Regional Transport Plan, p. 6 2.2 The connectivity problem: high travel costs This section estimates some of the costs associated with the Illawarra’s current levels of passenger and freight connectivity with Sydney and how these may increase in the future. The cost estimates are limited to specific movements to indicate the magnitude of these costs, rather than accounting for all costs incurred by travellers to, from and within the Illawarra.

17 In 2012/13 Port Kembla had a total trade volume of 28.9 million tonnes, which comprised of 10.2 million tonnes of imports and 18.7 million tonnes of exports (Port Kembla Port Corporation, 2013, 2012/13 Annual Report, p.3.). This throughput is expected to increase significantly over the coming years, with the NSW Port and Freight Strategy forecasting total freight task across NSW will double by 2031.

18 NSW Ports, 2014, Five year port development plan, March

Illawarra Business Chamber PwC 9 1BConnectivity in the Illawarra

2.2.1 Passengers Illawarra-based commuters travelling between Sydney and the Illawarra region incur out-of- pocket costs and time costs to access work. The degree of connectivity between the regions clearly affects these costs and the quality of life enjoyed by out commuters.

PwC estimates that the Illawarra-Sydney commuters incur costs between $20 and $50 per trip, or between $10,000 and $30,000 per annum, in time and out-of-pocket costs when travelling by car or public transport (Table 3).19 Interestingly, due to the longer travel time on the rail journey and the public subsidy on rail fares, the travel time costs represent the largest proportion (80%) of total journey costs for rail commuters, compared to 40% for road commuters. For the Illawarra’s 20,000 out commuters, these costs are therefore estimated at around $450 million per annum. High travel costs also affect the Illawarra’s estimated 10,000 ‘in commuters’, though these have not been estimated here.

Faster rail links to Sydney would decrease travel time costs, though may come at an increase in fares. While faster road links to Sydney would reduce both car operating costs and travel times.

Table 3: Commuter costs from Wollongong to Sydney, one-way and annual 2014 dollar values per traveller

Destination Sutherland Sydney CBD Travel mode Car Rail Car Rail Out of pocket cost - $ per trip (operating / parking $19 $5 $33 $7 costs, rail fares) Time cost – mins per trip 50 79 90 113 (generalised* minutes) Total cost - $ per trip $31 $24 $54 $34 (generalised* costs) Total cost - $ per year $15,500 $12,100 $27,200 $17,100 (generalised* costs) Total cost ($m per year) $450m * ‘Generalised minutes’ reflect both the absolute travel times (in vehicle and accessing stations) and travellers’ relative dislike of waiting for services and accessing stations compared with time spent in the rail vehicle or a car. ‘Generalised costs’ values generalised minutes using a personal perception of travel time costs (here $14 per hour) Sources: PwC estimates based on Google Maps and Sydney Trains data; TfNSW, 2013, Principles and Guidelines for Economic Appraisal; and ATC, 2006, National Guidelines.

2.2.2 Freight Businesses and consumers relying on the 7 million tonnes per annum of freight moved between the Illawarra and Sydney incur significant costs of these road and rail movements. These costs come in the form of time costs (wages) and vehicle operating costs for freight.

As with much of NSW, road freight makes up the majority of movements between the Illawarra and Sydney.20 This freight would be carried by a range of heavy vehicle types and between a variety of specific sub-regions of Sydney and the Illawarra. As such, estimates of

19 Costs are for Wollongong to either Sutherland or Sydney CBDs. Times and distances are based on Google Maps estimates. Fares are for mix of annual tickets and peak returns, taken from Sydney Trains. Valuations based on TfNSW, 2013, Principles and Guidelines for Economic Appraisal of Transport Investment and Initiatives, Economic Policy Strategy & Planning, March, Appendix 4 and Australian Transport Council, 2006, National Guidelines for Transport System Management in Australia, Volume 4.

20 By mass, road accounts for 63 per cent of the freight task in NSW and average load per vehicle on rail is significantly higher than for road (TfNSW, 2013, NSW Freight and Ports Strategy, November, p. 23)

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freight costs are necessarily only indicative of the magnitude.21 Nevertheless, PwC has estimated road freight costs for Sydney-Illawarra movements at around $100 million per year (Table 4).

Table 4: Illawarra-Sydney road freight costs, annual estimate in 2014 dollars

6 axle truck B-double

Vehicle type Assumed average payload per 12 20 vehicle (tonnes per trip)* Task (million tonnes per year) 3.5m 3.5m Trips (per year) 292,000 179,000 Distance (million km per year) 23.3m 14.4m Cost – vehicle operating ($m $47.0m $35.5m per year) Travel time (hours per year) 320,000 197,000 Cost – driver wages ($m per $8.7m $5.3m year) Total cost ($m per year) $56m $41m * Around 50% of maximum payload under General Mass Limits to account for some degree of empty running and ‘space constrained’ loads. Sources: Australian Trucking Association, 2010, ‘Truck Impact Chart; Transport for NSW, 2014, Illawarra Regional Transport Plan, Google Maps, Austroads, 2012, Guide to Project Evaluation, Part 4: Project Evaluation

The estimated costs are necessarily low as they only cover a subset of the freight task. For example rail freight costs are expected to be high (particularly when movements are highly constrained during peak periods), while the road freight costs within the Illawarra are not captured either.

2.2.3 Future travel costs All other things being equal, population growth in the Illawarra means that the amount of travel between the Illawarra and Sydney will increase. Historically, the transport task associated with both passenger and freight has grown more strongly than population.22 The freight task in particular has responded to economic growth as the search for productivity gains has encouraged greater use of just-in-time inventory management and other freight- intensive approaches that can lower unit costs across supply chains.23

Based on some high level assumptions regarding future growth in the task, costs are estimated to increase by at least a quarter by 2031 to over $690 million per annum (Table 5). The freight transport costs are expected to grow more strongly at 32% as the freight task is expected to grow more rapidly than the passenger task as incomes increase in the future. A more comprehensive estimate of transport costs would find that the additional demand on the existing network would result in significant levels of congestion (and public transport

21 These estimates rely on assuming 80km journeys at average speeds of around 70km/hour, with freight split equally between 6- axle articulated vehicles (semi-trailers) and b-doubles.

22 Bureau of Transport and Regional Economics, 2007,

23 TfNSW, 2013, NSW Freight and Ports Strategy, November

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crowding) that would add considerably to these total costs.24 As such, these estimates are considered conservative.

Table 5: Illawarra-Sydney transport costs, annual estimates in 2014 dollars

2014 2031* % change Passenger cost $450m >$560m 25% Road freight costs $100m >$130m 32% Total transport costs $550m >$690m 26% * 2031 estimates based only on the forecast increase in task, rather than a value that incorporates congestion (and crowding) associated with the increased demand. Sources: PwC estimates based on Google Maps and NSW TrainLink data; TfNSW, 2013, Principles and Guidelines for Economic Appraisal; ATC, 2006, National Guidelines; Australian Trucking Association, 2010, ‘Truck Impact Chart; Transport for NSW, 2014, Illawarra Regional Transport Plan, Austroads, 2012, Guide to Project Evaluation, Part 4: Project Evaluation; car and train passenger trip growth forecasts from Bureau of Transport Statistics, 2012, Statistics in TransFigures Travel Forecasts 2006-2036; Bureau of Infrastructure, Transport and Regional Economics, 2010, Road Freight Estimates and Forecasts in Australia, Research Report 121 for Sydney and Rest of NSW freight forecasts.

Message 1:

Accessing jobs and trading opportunities in Sydney already costs Illawarra residents and businesses around half a billion dollars a year. Without action, total time and out of pocket costs are expected to increase to at least $690 million per annum by 2031.

2.3 Assessing the connectivity and economic outcomes for the Illawarra region This section describes how the methodology described in Chapter 1 and Appendix A is applied to estimate an overall qualitative score for the Illawarra region’s connectivity with Sydney and to set out the main economic outcomes experienced by the region. The approach requires that specific connectivity points are defined to reflect the overall picture.

2.3.1 Connectivity points To represent overall internal and external picture of the Illawarra region’s transport connectivity, seven representative Origin-Destination (OD) points are defined (Table 6). These ODs are identified as major people and freight movement corridors between the Illawarra and Greater Sydney (for external ODs) and between regional centres of the Illawarra region (for internal ODs).

24 TfNSW (2012, Long Term Transport Master Plan, p. 220, Figure 6.5) highlights that even with the proposed road upgrades in place, several sections of roads are expected to be above their practical capacity. Congestion hot spots are particularly prominent between Wollongong and Shellharbour on both sides of Lake Illawarra.

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Table 6: The Illawarra’s connectivity points

External Internal connections Origin - Destination connections Origin- Destination To a near-side Wollongong  To a regional centre Wollongong  metropolitan hub Sutherland Shellharbour For freight movements Wollongong  To a regional centre Wollongong  Nowra Ingleburn To a metropolitan CBD Wollongong  Sydney To a regional town Wollongong  Bowral CBD To a metropolitan CBD Shellharbour  Sydney CBD Source: PwC

2.3.2 Transport connectivity Using the methodology described in Chapter 1 and Appendix A, PwC has qualitatively scored each of the identified transport connectivity attributes from 5 (high connectivity) to 3 (average connectivity) to 1 (poor connectivity) to make an assessment of the transport connectivity experienced by each of the ODs, and hence for the region as a whole.

The scoring analysis focuses on connectivity on primary routes between identified origins and destinations. It does not seek to provide a network-wide analysis. It is acknowledged that freight and passenger flows will occur on other routes and connectivity performance on other routes may vary from the scores identified below.

The assessment for each Illawarra OD relies on the definition of a number of attributes that draw out the main dimensions of connectivity. The attributes are grouped under two main headings:

• Network coverage – these attributes assess the standard of the network in place to provide connectivity and is comprised of: – Road coverage: measures the standard of road available to freight and private vehicle users and the extent of this standard between ODs

– Rail coverage: measures the level of connection in terms of travellers’ proximity to and coverage of active passenger rail links between ODs

– Freight rail coverage: measures the level of freight rail connectivity based on the extent and directness of rail coverage.

• Service quality – these attributes assess the quality of connectivity from the freight and passenger customer perspectives:

– Road speed (passenger): reflects travel times by combining a measure of peak-period traffic congestion and road directness

– Road speed (freight): reflects travel times by combining a measure of non-peak traffic congestion, road grade (steepness) and directness

– Public transport speed: reflects public transport travel times by combining measures of service speed, route directness, stopping patterns etc.

– Public transport quality: measures the quality of public transport services from a customer perspective, which is important in determining the effectiveness of the region’s rail network. This reflects the ‘ease of use’ of public transport by capturing services’ frequency, number of transfers required, reliability, etc.

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Each attribute was given a score out of 5, where 5 reflects high connectivity, 3 for average connectivity, down to 1 for poor connectivity. More detail of how the scale was derived for each attribute is found in Appendix A.

Table 7 summarises the scores for each of the ODs for the Illawarra region. Scores for network coverage and service quality are compiled and averaged for each internal and external OD. Overall, the Illawarra scores 2.6 for network coverage and 2.2 for service quality. However, there is significant variation across the ODs and attributes.

Table 7: Illawarra connectivity scoring output

C0nnectivity attribute External Internal Total Sydney CBD  Sydney Wollongong  Wollongong  Wollongong  Wollongong  Wollongong  Wollongong  Shellharbour Shellharbour Sydney CBD Sydney Sutherland Ingleburn Bowral Nowra

Origin-Destination

Road coverage 4.1 3.0 4.0 3.9 4.0 3.3 3.8 3.7

Rail coverage 5.0 5.0 3.0 3.0 1.0 1.0 3.0

Freight rail coverage 1.0 1.0

Network Coverage 4.6 2.0 4.5 3.5 3.5 2.2 2.4 2.6

Road speed (passenger) 2.0 1.0 1.0 1.0 2.0 3.0 2.0 1.7

Road speed (freight) 2.0 2.0

Public transport speed 3.0 3.0 2.0 3.0 4.0 2.0 2.8

Public transport quality 4.3 4.3 3.0 2.8 2.0 2.5 3.1

Service Quality 3.1 1.5 2.8 2.0 2.6 3.0 2.2 2.2

Weighted Scores 2.9 1.8 2.7 2.1 2.4 2.1 1.8 2.4 Source: PwC analysis and estimates

Regarding network coverage, the Illawarra scores relatively highly for road coverage, as most ODs enjoy freeway standard road connections at least part of the way (except in the southern end of the region where most connections are to an arterial standard). Similarly, passenger rail coverage is strong as many of the main population centres are served by direct rail connections.

Shellharbour suffers from the disconnection between the town centre and the rail station at Oak Flats, a distance of around 5 km that would need to be covered by connecting bus or car access.

In particular, the scores for road user speed are consistently low across all external trip origins and destinations. This has a significant negative impact on the economic productivity of the region given that private trips account for a large proportion of the transport task.

The lack of a direct rail connection between Wollongong and Bowral means that (except via an indirect Sydney connection) rail is essentially not available. Rail freight connectivity for

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the selected freight OD is rated as poor due to the extremely indirect routing along the freight rail corridor (over three times longer than the straight line distance).25

For transport service quality, relatively high levels of congestion experienced between Wollongong and Sydney lowers peak hour commuting speeds for many ODs. Outside peak periods, when most freight movements occur, the Illawarra escarpment particularly constrains freight speeds for north-south and east-west connections.

Public transport services offer ‘average’ speeds (measured as ‘straight line’ speed) to most ODs, though the quality of services varies considerably across the region. Wollongong- Sydney ODs enjoy direct and relatively reliable rail services, while poorer scores for Shellharbour, Bowral and Nowra reflect the need to change between bus and rail services and relatively low service frequencies.

Geographically, the following origins and destinations are worthy of a focused review:

• Wollongong to Sydney – a high level of passenger rail coverage indicated by a score of 5 but poor road passenger speeds indicated by a score of 1

• Wollongong to Nowra – lowest overall intra-regional score due to poor rail coverage (score = 1) and poor public transport quality (score = 2)

• Wollongong to Bowral – poor passenger rail coverage (score = 1) and relatively poor public transport and road user travel speeds (score = 2).

Message 2:

Our assessment of the Illawarra’s connectivity reveals strengths and weaknesses. While the region is served by a reasonably comprehensive road and rail network, the low speeds on those networks are a major weakness. In particular, the scores for road user speed are consistently low across all external trip origins and destinations. This has a significant negative impact on the economic productivity of the region given that private trips account for a large proportion of the transport task. The connectivity performance between Sydney- Wollongong is mixed. Road and rail network coverage is strong, with scores of 4 and 5, respectively. Public transport speed and quality are average with scores between 3 and 4. However, road user speed is particularly poor, with a score of 1. The analysis also highlights a particular weakness in the Illawarra’s freight connectivity, particularly to Sydney’s west and southwest.

2.3.3 Economic outcomes This study seeks to understand the extent to which the highlighted transport connectivity problems for the Illawarra affect the region’s economic outcomes. The size of the Illawarra’s economy underscores the relevance of this investigation for NSW: the region produced $16.5 billion of output in 2012-13, which accounts for 3.5% of the NSW economy. 26 This makes the Illawarra the third largest regional economy in NSW after Greater Sydney and the Hunter.

The real value of the Illawarra region’s output has grown by 28% since financial year 2001 (FY2001), slightly outperforming the growth of the Greater Sydney economy, which has

25 Under an alternative scoring system, the OD would score poorly as rail freight movements via the Sydney passenger rail network are constrained to outside the peak commuting periods.

26 The Illawarra’s out-commuters also contribute to the output in the Sydney area, among other places (PwC GEM analysis)

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grown by 24% over the same period.27 More recently, growth in Greater Sydney was 1.8% from FY2012 to FY2013, compared to 2.6% for the Illawarra.28

Illawarra businesses span a broad range of industries. While manufacturing still accounts for the largest share of output by value, recent growth has been almost entirely driven by the services industry (Figure 6).

The ten largest industries employed 78% of the region’s workforce in FY2013, with healthcare, retail trade and education employing the largest share. The healthcare industry in the Illawarra has grown 87% since FY2001, driven in part by demands from the region’s ageing population, with the Illawarra’s over 65s proportion expected to increase from 17% to 23% by 2031.29

Figure 6: Industry size and growth, ten largest industries* by gross value added

2.0 Healthcare and Social Bubble size reflects Assistance total employees FY13 Manufacturing

Public Admin and Safety 1.5

Education and Training Financial and Insurance 1.0 Services Mining Transport, Postal and Retail Trade Warehousing

0.5 Construction

$bn) FY13, (GVA Size Industry Professional, Scientific and Techincal Services

0.0 -4% -2% 0% 2% 4% 6% 8% 10% 12% Industry Growth (compound annual growth rate in GVA, 2001-2011)

* Red bubbles denote services sectors Source: PwC GEM analysis

While the level of output per worker is still below the NSW average, the Illawarra’s labour productivity has grown by 0.9% per annum over the past 10 years, which is comparable to productivity growth in NSW and Sydney of 1.0% and 0.9%, respectively (Figure 7). The Illawarra’s labour productivity growth has been largely driven by agriculture, construction and transport, postal and warehousing industries.

27 PwC GEM analysis

28 PwC GEM analysis

29 NSW Government, 2013, The Illawarra over the next 20 years: A Discussion Paper, August, p. 12

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Figure 7: Growth in labour productivity (output per worker)

1.2% NSW 1.0% Illawarra Greater 0.8% Sydney 0.6% 0.4% 0.2% 10Compoundyear

Annual GrowthRate 0.0% 0 50 100 150 200 250 Output per worker FY 13 ($ thousands)

Source: PwC GEM analysis

Overall, the Illawarra economy has performed solidly as it transforms from being led by manufacturing to being a modern services economy. As the structure of the Illawarra’s economy changes over time to focus on the service sectors, the economic ‘ends’ that transport connectivity serves will increase in value. Improved connectivity will contribute to maximising the net benefit of more high value trips including for business (including high value activities requiring access to Sydney airport), education and tourism purposes.

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3 Benchmarking the Illawarra’s connectivity

3.1 Benchmark regions The first step in identifying the economic effects of differences in connectivity involves selecting regions against which the Illawarra’s connectivity can be benchmarked. PwC, in consultation with IBC, selected four regions. The regions chosen for this study are:

• Central Coast, NSW • Geelong, Victoria • Gold Coast, Queensland • Lille30, France.

The benchmark regions were selected on the basis that their distance from a major metropolitan city is similar to the distance between the Illawarra and Sydney. The benchmark regions also have similar population numbers and share certain socio- demographic characteristics. We also sought to provide geographical diversity, including an international example, while having an eye on data availability. 3.2 The Illawarra connectivity compared to benchmarks Using the scoring methodology described in Appendix A, the connectivity of the four benchmark regions are measured and compared to the performance of the Illawarra (shown above in Table 7). The results are shown below in Table 8.

30 Lille is a city in the North of France. It is the principal city of the Lille Métropole, the fourth-largest metropolitan area in France after those of Paris, Lyon and Marseille. Lille is situated in French Flanders, on the Deûle River, near France's border with Belgium.

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Table 8: Comparison of the Illawarra’s scored connectivity with benchmark regions

Central Gold Illawarra Coast Geelong Coast Lille

Road coverage 3.7 3.5 3.4 3.8 4.3

Rail coverage 3.0 5.0 3.4 3.0 5.0

Freight rail coverage 1.0 4.0 3.0 4.0 5.0

Network Coverage 2.6 4.2 3.3 3.6 4.8

Road speed (passenger) 1.7 1.5 2.3 1.8 3.7

Road speed (freight) 2.0 2.6 3.7 3.8 4.4

Public transport speed 2.8 3.2 3.8 2.6 4.2

Public transport quality 3.1 4.2 2.7 3.7 4.0

Service Quality 2.2 2.6 3.1 2.9 4.1

Weighted Scores 2.4 3.4 3.2 3.3 4.4 Source: PwC analysis and estimates

The results in Table 8 reveal some interesting insights:

• The Illawarra has the lowest overall transport connectivity score among the benchmark regions. The Illawarra’s score of 2.4 is 25-30% lower than the scores in the other Australian benchmark regions. This underperformance increases to nearly 50% when its connectivity is compared with Lille.

• The Illawarra has the lowest overall network coverage mostly due to poor rail freight connection. However, the Illawarra enjoys a similar level of road and (passenger) rail network coverage as the other Australian benchmark regions, with all four regions having access to a freeway standard road corridor and a passenger rail network which is accessible to the main urban population areas.

• All regions experience similarly low levels of road network service during the morning peak. Both congestion (particularly for the Gold Coast) and corridor width and grade (for the Illawarra) constrain morning peak travel speeds.

However, a number of important differences in connectivity are highlighted in the benchmarking:

• Freight rail coverage: Despite all having access to freight rail networks (whether dedicated freight lines or shared with commuter services) the Illawarra region scores poorly on the ‘rail coverage’ attribute as the current connection between Wollongong and major industrial land uses in Sydney’s southwest is indirect (161km compared with a direct distance of 48km).

• Road speed (freight): Road freight movements in the Illawarra are less efficient than benchmark regions. Mount Ousley Road is the only suitable access route for Higher Mass Limit (HML) vehicles into the Illawarra and it forms the main freight, commuter and tourist route. The route is affected by the steep and geologically unstable Illawarra escarpment. The grades along some parts of this road corridor have a significant negative impact on travel speeds and heavy vehicle operating costs.

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• Public transport speed: Despite having train stations in many key regional centres, the Illawarra region has relatively slow rail and bus services compared with the benchmark regions. For example, a typical rail journey time of 90 minutes or more between Wollongong and Sydney is compared with around 70 minutes between Geelong and Melbourne over similar ‘straight line’ distances. The Gold Coast scores worse than the Illawarra as the alignment of the southern stations on the Gold Coast rail line require bus and walk transfers to key destinations on the Gold Coast (e.g. Broadbeach and Surfers Paradise) of around 30 minutes.

• Public transport quality: The Illawarra performs relatively well in terms of public transport quality. This is mainly due to favourable rail service reliability. However, this strength is somewhat offset by the low frequency of public transport services, even in peak times.

Further information on the analysis of the strengths and weaknesses of each of the benchmark regions can be found in Appendix B.

Message 3:

The assessed overall level of connectivity between the Illawarra and Sydney is materially lower than that experienced between the Australian benchmark regions and their respective CBDs. The inadequate coverage of the freight rail network and the topographical constraints of the main road freight corridor increase the cost of moving freight between the Illawarra and Sydney. Relatively high public transport journey times, particularly for rail, impact negatively on the productivity of commuters who seek access to the employment centres in Sydney. The Illawarra region is also an employment generator. Around 10,000 workers travel from outside the region to jobs in the Illawarra – particularly from the Southern Highlands, the Shoalhaven and Sydney’s west and southwest. Improved connectivity will be crucial in ensuring the Illawarra retains access to specialist expertise, particularly in the health sector.

3.3 Economic outcomes The high level economic impacts of (relatively) poor connectivity are highlighted by comparing the key economic, industry and land use indicators in the Illawarra with those exhibited by the benchmark regions. The performance against these economic indicators in the Illawarra and the benchmark regions is shown below in Table 9.

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Table 9: Benchmarking regional economic outcomes

Australian Central Gold averages Illawarra Coast Geelong Coast and totals Lille*

Economy

Population, 2011 (‘000s) 336 322 256 527 21,508 1,208

Output, FY13 ($bn) 16.5 12.5 11.8 26.5 1,521 €97

Growth in output, FY01 28 28 39 56 43 to FY13 (%)

Output per employee, 160 152 144 159 186 FY13 ($ ‘000s)

Industry

Labour force, 2011 147 141 121 257 10,658 526 (‘000s)

Participation rate, 2011 51.2 56.0 59.5 62.1 61.4 69.4 (%)

Unemployment rate, 6.7 6.9 5.3 7.4 5.6 14.5 2011 (%)

Average household 923 1,003 1,079 1,173 1,234 €444 income, 2011 ($/week)

Out commuting, 2011 14.2 23.1 15.0 14.4 7.9 (%)

Land use

Urban density, 2011 1,400 700 500 1,800 6,600 (persons/km2)

Apartments (% of total 12 7 8 19 14 42 dwellings), 2011

Housing construction 250 290 680 750 41,870 activity, 2011 ($m)

Commercial construction 200 160 620 490 26,660 activity, 2011 ($m) * All statistics for Lille are from 2010; not all statistics are available on a comparable basis. Sources: PwC GEM analysis, ABS Census 2011, ABS National Regional Profile 2011, Australia , Bureau of Transport Statistics 2011, France National Institute of Statistics and Economic Studies (INSEE) 2010, Nord France Invest, Welcome to Lille Region 2011

This analysis does not seek to evaluate and attribute the economic uplift of a specific solution to a specific connectivity problem. Therefore, the framework above may not capture the full extent of the economy-wide relationships between connectivity and economic performance. However, it does show that the results are mixed. A relatively high level connectivity does not necessarily lead to a commensurate uplift in performance across all economic indicators.

However, the results in the table do highlight some interesting outcomes and observations:

• The economic output of the Illawarra does compare favourably with most of the Australian benchmark cities, in part due to the somewhat higher population (other than relative to the Gold Coast), and also due to the presence of high value mining and manufacturing. However, the discussion earlier in this report notes that the contribution

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of the high value service sectors is only developing. This development may be jeopardised given the current public transport journey times and frequencies between the Illawarra and Sydney and that, elsewhere in Australia, the development of high value service sector activities has been accompanied (and facilitated) by a relatively high public transport mode share.

• Both the labour force participation rate and average household incomes in the Illawarra are clearly below those in the benchmark regions. It would be difficult to attribute this performance wholly to the relatively low level of connectivity. However, examples in other vehicle dependent, economies in transition have shown that low levels of connectivity can negatively impact on these indicators where they are seen to act as a barrier to connecting the ‘right people with the right jobs in the right places’.

• Residential land uses in the Illawarra are relatively dense. This is reflected in the relatively high proportion of apartments (second only to the Gold Coast). At face value, these types of land uses can be relatively more efficient compared with dispersed land uses. One of the key benefits is that the supply of public transport coverage is more cost effective and hence, the productivity of commuting and leisure trips can be increased. This is particularly important given that the Illawarra, like most of the benchmark cities, suffers from road congestion during the peak periods. However, the benefits of having easy and quick access to the rail or bus network can be eroded by long journey times or infrequent services. This can deter passengers from using the ‘accessible’ public transport network and sustain high car mode share. Given the density of the Illawarra’s residential land uses, this will only exacerbate peak period congestion on the major intra and inter- regional road corridors.

Message 4:

A high value, service based economy is usually accompanied by a relatively high public transport mode share. The Illawarra’s aspirations in this regard could be challenged by slow public transport journeys and infrequent services. This can negatively affect labour force participation rates and incomes as the ‘right people’ are prevented from accessing the ‘right jobs in the right places’. Given the relatively dense land uses in the Illawarra and the physical constraints affecting main road corridors, this will depress economic productivity as peak period congestion worsens over time.

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4 Opportunities for the Illawarra region

4.1 Transport opportunities and challenges The benchmarking of connectivity against Australian peers highlights a number of areas for improvement of the Illawarra’s transport network and services. These are summarised below in Table 10.

Table 10: Transport problems and opportunities for the Illawarra

Problems Opportunities and challenges Poor freight rail coverage • Construction of a more direct dedicated rail • Indirect dedicated connection between corridor Wollongong and major industrial land uses • Negotiation of more dedicated freight ‘paths’ in Sydney’s southwest on the shared passenger network • Shared passenger rail network with no dedicated freight paths Below average road travel speeds • Improvements in road journey times would • Commuters experience slow journeys benefit current and future commuters and accessing work in Sydney and within the freight movements Illawarra • The Illawarra escarpment presents cost and • Freight journeys are negatively affected by engineering challenges for improving road steep terrain through the Illawarra outcomes escarpment • Slow road travel speed times due to a lack of motorway access from Waterfall to Sydney CBD

Below average passenger rail speeds • Existing rail infrastructure could be • Commuters, as well as business and leisure upgraded to deliver significant travellers experience slow journey times improvements to the accessibility to services when accessing Sydney and employment offered by the Illawarra • The Illawarra escarpment limits the additional speed that can be provided at low cost Poor public transport frequency • Existing rail infrastructure could be used • Several major communities in the Illawarra more intensively to provide greater experience long waits between bus and train connectivity during the peak and non-peak services periods • The Illawarra escarpment limits the additional capacity that can be provided at low cost Source: PwC analysis

The benchmarking exercise highlights that the Illawarra’s connectivity is around 25% worse than its peers. Analysis in Chapter 2 estimates that the costs of moving passengers and freight between the Illawarra and Sydney are in the order of $550 million per year. If the opportunities highlighted in Table 10 could be realised – and hence bring the Illawarra up to the connectivity level of its peers – the potential scale of the benefits could be in the order of $150 million per year, which reflects shorter journey times and lower freight costs (Table 11). Not included in this estimate which could have an impact on the magnitude of potential benefits are in-commuting costs, internal road freight costs and rail freight costs.

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Table 11: Potential cost savings from transport connectivity improvement for the Illawarra

2014 2031* Current connectivity Passenger cost $450m >$560m Road freight costs $100m >$130m Total $550m >$690m Potential improvement 25% Passenger cost savings $110m >$140m Road freight cost savings $25m >$30m Total $135m >$170m * 2031 estimates based only on the forecast increase in task, rather than a value that incorporates congestion (and crowding) associated with the increased demand. Sources: PwC estimates and sources as per Tables 3 to 5. 4.2 Economic opportunities and challenges Based on our analysis of the benchmark economies, an improvement in connectivity might offer broader economic opportunities and challenges for the Illawarra.

Greater access to employment opportunities – as people are better able to connect with local jobs and jobs in Greater Sydney, there may be a number of effects:

• Greater participation in the labour market – The Illawarra’s labour force participation is well below that of its peers, suggesting some proportion of the community may be able to obtain jobs if transport connectivity were improved.

• A potential increase in the number and proportion of employees ‘out commuting’ – the share of commuters making daily journeys could increase if transport connectivity were improved. On the one hand, this outflow can be considered as a loss of skilled labour to Illawarra businesses, but on the other hand, this represents a gain to the households and the broader NSW economy as labour is effectively matched to its most productive use.

• Opportunities for higher incomes for Illawarra based commuters and Illawarra businesses – as noted above, being able to access a greater number of jobs increases the likelihood that commuters will be able to find a higher paying job that best uses their skills. If these commuters reside in the Illawarra, then a portion of this higher income will be contained in the local economy.

Making the Illawarra a more attractive place to live

• Faster population growth – better connectivity could encourage people who may otherwise choose to live elsewhere (e.g. in Greater Sydney or the Central Coast) to live in the Illawarra.

• Industry opportunities – the greater population in the Illawarra would increase the scale and type of opportunities for Illawarra businesses. For example, in the transition, the higher population will drive residential and commercial construction opportunities. Larger populations also create sufficient demand for larger scale services such as major music and sporting events, as well as opportunities to deliver more services to consumers (e.g. cafés, restaurants, professional services).

• Land use challenges and opportunities – faster population growth gives the Illawarra an opportunity to build on its strength of population density, which can drive the viability of improving public transport and the urban realm, as well as harnessing economies of scale

Illawarra Business Chamber PwC 24 3BOpportunities for the Illawarra region

in public expenditure. At the same time, if not planned well, the population growth can manifest as urban sprawl with its associated infrastructure costs and car dependency.31

Making the Illawarra a more attractive place to work and do business

• Deeper labour market – a higher population in the Illawarra will increase the potential pool of labour available to local businesses. Though some new residents may be attracted to the Illawarra as a result of connectivity to jobs in Sydney, as the Illawarra economy evolves, Illawarra businesses will be able to compete with Sydney businesses for these employees. With more (and higher-skilled) employees in the labour catchment area the productivity of the Illawarra businesses is expected to improve.

• Attracting businesses and government – discretionary location decisions of businesses and government are, among other things, influenced by a region’s connectivity and labour market. Better connectivity (internally and with Sydney) will encourage business headquarters and government departments to locate in the Illawarra to tap into the labour market and take advantage of its accessibility to clients and other networks. In particular, improved connectivity will help the Illawarra play its part in realising (and containing) the broader benefits of the NSW Government’s Decade of Decentralisation policy.

• Attracting talent to the Illawarra region – as the economy experiences greater growth in service based industries the Illawarra improved transport connectivity will encourage skilled labour that resides outside the Illawarra to work in the region until the Illawarra develops enough critical mass and demand for those skills to reside in the region.

• Encouraging business and tourism visitors to the region – better connection with airports will make access to the Illawarra for business and university conferences, as well as for tourism, an easier option.

• Freight efficiency and volumes – better internal and external connections for freight will lower the costs of doing business. This connectivity will also support the growth of the Port of Port Kembla by increasing its attractiveness of as an import and export point.

Message 5:

Improved transport connectivity could provide a boost to the Illawarra economy by expanding employment opportunities and making it an attractive place for residents and businesses alike.

31 See, for example, The CIE and Arup, 2012, Costs and benefits of alternative growth scenarios for Sydney, prepared for NSW Planning and Infrastructure, August

Illawarra Business Chamber PwC 25 3BOpportunities for the Illawarra region

4.3 The way forward

Everyone will have a view on the right solution to the connectivity problems affecting the Illawarra region. Transport projects in the Illawarra region need to be considered as to which will provide opportunities to address connectivity problems identified in this study. Further analysis is needed to identify which transport projects will yield the highest net benefit for the region.

Message 6:

The size of the Illawarra economy is growing and the relative contribution of certain sectors is changing over time. Therefore, a multi-modal transport package is required to address the Illawarra’s main connectivity problems. Project proposals targeted at addressing these problems need to be affordable and generate net benefit for the community.

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Appendices

Appendix A Methodology 29

Appendix B Profiles for benchmark region 32

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Appendix A Methodology

1 Defining the Illawarra region The Illawarra is defined as comprising 25 SA2s32, extending from Helensburgh in the north to Nowra in the south, and bounded by the Illawarra Catchment Reserve to the west. These SA2s are defined below in Table 12.

Table 12: Definition of the Illawarra study region

Illawarra SA2s Albion Park – Macquarie Pass Kiama Albion Park Rail Kiama Downs – Minnamurra Balgownie – Fairy Meadow Kiama Hinterland – Gerringong Berkeley – Warrawong – Windang North Nowra – Bomaderry Berry – Kangaroo Valley Nowra Corrimal – Tarrawanna – Bellambi Port Kembla Industrial Culburra Beach Shellharbour – Flinders Dapto – Avondale Shellharbour – Oak Flats Figtree – Keiraville Thirroul – Austinmer – Coalcliff Helensburgh Unanderra – Mount Kembla Horsley – Kembla Grange Warilla Illawarra Catchment Reserve Wollongong Woonona – Bulli – Russell Vale Source: ABS, 2011, National Regional Profile

2 Connectivity attributes This analysis uses two overarching attributes to measure transport connectivity between an OD: transport coverage and service quality. These are measured using a number of metrics, as listed below, which are used to develop a total average score for connectivity.

Transport coverage measures the extent of network coverage across the region. The transport coverage indicators are:

• Road coverage: measures the standard of road available to freight and private vehicle users and the extent of this standard between ODs

• Rail coverage: measures the level of connection in terms of travellers’ proximity to and coverage of active passenger rail links between ODs

• Freight rail coverage: measures the level of freight rail connectivity based on the extent and directness of rail coverage.

32 Australian Bureau of Statistics defined Statistical Area Level 2s (SA2s). The SA2 is the lowest level for which Estimated Resident Population (ERP), Health and Vitals and other non-Census ABS data are generally available. The aim of the SA2 reporting unit is to represent a community that interacts together socially and economically.

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The service quality attributes measured include:

• Road speed (passenger): reflects travel times by combining a measure of peak-period traffic congestion and road directness

• Road speed (freight): reflects travel times by combining a measure of non-peak traffic congestion, road grade (steepness) and directness

• Public transport speed: reflects public transport travel times by combining measures of service speed, route directness, stopping patterns etc.

• Public transport quality: measures the quality of public transport services from a customer perspective, which is important in determining the effectiveness of the region’s rail network. This reflects the ‘ease of use’ of public transport by capturing services’ frequency, number of transfers required, reliability etc. 3 Connectivity metrics Each of the seven attributes above is measured using a set of metrics. The connectivity for each region is scored from 5=high connectivity to 1=poor connectivity. The metrics by attribute and scoring methodology are summarised in Table 13.

Table 13: Explanation of scoring methodology for connectivity attributes

Attribute Metric Scoring method Road Percentage of journey between OD that is able to 5 = freeway coverage be completed by: freeway, arterial road or other 3 = arterial road roads. 1 = other road Rail Journey between OD able to be completed by 5 = centre-to-centre coverage rail: centre to centre rail connection, nearby rail 3 = nearby connection or limited rail connectivity e.g. 1 = limited significant car/bus access required. Freight rail OD has freight rail access score based on rail Scores range from: coverage directness: the ratio of rail distance to straight 5 = direct line distance 1 = indirect Road speed Straight line distance divided by time: AM peak External ODs Internal ODs (passenger) average speed (km/h) 5 = 80.1+ 5 = 65.1+ 3 = 60.1-70 3 = 45.1-55 1 = <50 1 = <35 Road speed Composite of: a) Scored as above (freight) a) Straight line distance divided by time: non- b) Scores range from: peak average speed (km/h) 5 = flat b) Maximum terrain: assessment of length and 1 = extended sections of steep severity of terrain traversed terrain Public Straight line distance divided by time: shortest External Internal transport public transport time (km/h) 5 = 55.1+ 5 = 30.1+ speed 3 = 35.1-45 3 = 20.1-25 1 = <25 1 = <15 Public Composite of: a) 5 = service every <10 mins, 3 = transport a) Service frequency: AM peak (min) every 20-30 mins, 1 = every quality b) Transport mode used: train or bus >50 mins c) Number of transfers between services b) 5 = high speed train, 3 = train, 1 required = bus only d) Rail reliability (% of services arriving within c) 5 = 0 transfers, 3 = 1 transfer, 1 6 minutes of schedule) = 2 transfers d) 5 = >99%, 3 = 90-95%, 1 = <85% Source: PwC

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4 Scoring metrics Unweighted scores are estimated by drawing on publicly available data (e.g. travel times from Google Maps, public transport operator annual reports, and public transport timetables) and consultant judgement (e.g. assessments of terrain). Scores are then weighted equally to produce Transport Coverage and Service Quality scores. These scores are colour- coded to assist comparison. This scale ranges from 5=high connectivity to 1=poor connectivity as displayed in Table 14 below.

Table 14: Scoring output for connectivity attributes Score Output 5

4

3

2

1

Source: PwC

5 Economic outcomes The key macroeconomic indicators used in this study, including output, industry gross value added and employees are sourced from PwC’s Geospatial Economic Model (GEM). GEM uses ABS and industry data to calculate economic output for 2,214 locations that make up Australia.

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Appendix B Profiles for benchmark region

PwC, in conjunction with IBC, selected four benchmark regions to compare to the Illawarra. The benchmark regions are selected on the basis that their distance from a major metropolitan city is similar to the distance between the Illawarra and Sydney. The benchmark regions also have similar population numbers and share certain socio- demographic characteristics. The regions also provide geographical diversity, including an international example, while having an eye on data availability. Table 15 defines these regions.

Table 15: Benchmark regions Region Area measured Central Coast ABS - Statistical Area Level 4, including Gosford and Wyong Geelong ABS - Statistical Area Level 4, including Barwon West, Geelong and Surf Coast – Bellarine Peninsula Gold Coast ABS - Statistical Area Level 4, spanning along the coastal plain from Jacobs Well – Alberton in the north to Coolangatta in the south Lille INSEE - Arrondissement Sources: ABS National Regional Profile 2011, INSEE 2010

1 Central Coast, NSW The Central Coast is located north of the Sydney CBD. The residential population is concentrated around the urban areas of Gosford and Wyong. The size of the Central Coast’s economy was $12.5bn in FY13, accounting for 2.6% of the NSW economy.

The M1 (F3 Freeway) and Central Coast rail line connects the Central Coast to Greater Sydney and Newcastle. Connectivity points for the Central Coast are located along the region’s passenger rail corridor (see Table 16). It is also important to note that nearly a quarter of the region’s residents out commute for work. The results of the scoring for the Central Coast region is summarised below in Table 16.

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Table 16: Central Coast connectivity scores

Connectivity attribute External Internal Total Hunter Valley Valley Hunter Sydney CBD Sydney Gosford  Gosford  Gosford  Gosford Newcastle Newcastle Wyong  Wyong   Port WoyWoy Hornsby Gosford of

OD

Road coverage 4.6 3.9 4.4 3.2 3.4 1.3 3.5

Rail coverage 5.0 5.0 5.0 5.0 5.0 5.0

Freight rail coverage 4.0 4.0

Network Coverage 4.8 4.5 4.7 3.6 4.2 3.2 4.2

Road speed (passenger) 2.0 1.0 1.0 3.0 1.0 1.0 1.5

Road speed (freight) 2.6 2.6

Public transport speed 3.0 3.0 2.0 5.0 3.0 3.2

Public transport quality 4.3 4.0 4.3 4.0 4.3 4.2

Service Quality 3.1 2.7 2.4 2.8 3.3 2.8 2.6

Weighted Scores 3.0 2.7 2.7 3.2 2.8 2.2 3.4 Source: PwC analysis and estimates

The Central Coast scored the highest in terms of transport connectivity for an Australian benchmark region. Most of the ODs, particularly external, scored well given travellers had access to a high standard freeway spine through the region. It also scored well in terms of transport quality, with travellers having access to high frequency, reliable rail services along an alignment which minimised the number of transfers. However, connectivity on the road network suffers due to traffic congestion in peak periods. The connectivity scores for the Central Coast region are compared with the Illawarra below in Table 17.

Table 17: Comparison of Central Coast with the Illawarra Central Illawarra Coast Road coverage 3.6 3.5 Rail coverage 3.7 5.0 Freight rail coverage 1.0 4.0 Network Coverage 2.7 4.2 Road speed (passenger) 1.7 1.5 Road speed (freight) 2.0 2.6 Public transport speed 2.8 3.2 Public transport quality 3.2 4.2 Service Quality 2.3 2.6 Weighted Score 2.5 3.4 Source: PwC analysis and estimates

The overall transport connectivity score for the Central Coast is materially higher than for the Illawarra. This difference is largely attributable to the quality and coverage of the public transport network, particularly rail, in the Central Coast.

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2 Gold Coast, Queensland The Gold Coast is located in south-eastern Queensland. The city is 94 km south of the Brisbane. It is the second most populous city in the state, the sixth most populous city in the country.

The size of the Gold Coast’s economy was $26.5bn in FY13, accounting for 9.1% of Queensland’s economy. The top five industries: construction, healthcare, retail trade, manufacturing and financial and insurance services accounted for 45.5% of the region’s output for FY13. The results of the connectivity scoring for the Gold Coast region is summarised below in Table 18.

Table 18: Gold Coast connectivity scores

Connectivity attribute External Internal Total Beenleigh Beenleigh  Beenleigh Coolangatta Broadbeach Broadbeach Broadbeach Broadbeach Broadbeach Broadbeach Broadbeach Brisbane  Brisbane Helensvale Nerang  Nerang Brisbane Brisbane Acacia Acacia Ridge CBD CBD  



OD

Road coverage 3.9 4.7 4.4 4.7 2.4 2.8 3.8

Rail coverage 3.0 5.0 3.0 3.0 1.0 3.0

Freight rail coverage 4.0 4.0

Network Coverage 3.5 4.9 3.7 4.3 2.7 1.9 3.6

Road speed (passenger) 2.0 1.0 2.0 3.0 1.0 2.0 1.8

Road speed (freight) 3.8 3.8

Public transport speed 3.0 2.0 3.0 2.0 3.0 2.6

Public transport quality 3.3 4.3 3.5 3.5 4.0 3.7

Service Quality 2.8 2.4 2.8 3.4 2.2 3.0 2.9

Weighted Scores 2.4 2.8 2.5 3.9 1.8 1.9 3.3 Source: PwC analysis and estimates

The connectivity performance across Gold Coast ODs is mixed. Travellers between most of the external ODs enjoy access to high standard roads. However, this coverage is somewhat offset by the impacts on travel times of traffic congestion during peak periods. Passenger rail coverage is moderate except for Beenleigh which is connected to the CBD by the Beenleigh rail line. The moderate coverage results in negative impacts on public transport speeds through the need for interchanges, particularly between Broadbeach and Coolangatta. The connectivity scores for the Gold Coast region are compared with the Illawarra below in Table 19.

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Table 19: Comparison of Gold Coast with the Illawarra

Illawarra Gold Coast Road coverage 3.6 3.8 Rail coverage 3.7 3.0 Freight rail coverage 1.0 4.0 Network Coverage 2.7 3.6 Road speed (passenger) 1.7 1.8 Road speed (freight) 2.0 3.8 Public transport speed 2.8 2.6 Public transport quality 3.2 3.7 Service Quality 2.3 2.9 Weighted Scores 2.5 3.3 Source: PwC analysis and estimates

Like the Central Coast, the overall transport connectivity score for the Gold Coast is materially higher than for the Illawarra. This difference is largely attributable to the region’s direct access (via flat terrain) to the Acacia Ridge terminal which is the primary road/rail freight node servicing domestic rail freight movements to/from the Brisbane area and regional Queensland. 3 Geelong, Victoria The Geelong metropolitan area is the second most populated area in Victoria and the largest non-capital city. It is located 75 km south-west of Melbourne. The size of Geelong’s economy was $11.8bn in FY13, accounting for 3.5% of Victoria’s economy. This makes Geelong Victoria’s largest regional centre. The manufacturing industry plays a major role in the economy having contributed $1.2bn to the region’s output in FY13. The results of the connectivity scoring for the Geelong region is summarised in Table 20.

Table 20: Geelong connectivity scoring output

Connectivity attribute External Internal Total North Shore North Queenscliff Geelong  Geelong  Geelong  Geelong  Geelong  Geelong  Melbourne Melbourne Melbourne Werribee Ballarat CBD Port Port

OD

Road coverage 4.2 2.4 4.6 4.3 2.0 2.7 3.4

Rail coverage 5.0 1.0 5.0 5.0 1.0 3.4

Freight rail coverage 3.0 3.0

Network Coverage 4.6 1.7 4.8 3.6 3.5 1.9 3.3

Road speed (passenger) 3.0 3.0 2.0 2.0 1.0 3.0 2.3

Road speed (freight) 3.7 3.7

Public transport speed 4.0 4.0 4.0 2.0 5.0 3.8

Public transport quality 2.8 2.0 3.5 3.3 2.0 2.7

Service Quality 3.3 3.0 3.2 2.8 2.1 3.3 3.1

Weighted Scores 3.1 1.9 3.1 3.2 2.1 2.0 3.2 Source: PwC analysis and estimates

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The connectivity performance across Geelong ODs is also mixed. Travellers between most of the external ODs enjoy access to high standard roads except between Geelong and Ballarat where the main road corridor is highway standard, rather than freeway or motorway standard. This is also the case for road corridors in the internal ODs. Where rail coverage exists, it is of a high standard. From a scoring perspective, this offsets the very low scores for rail coverage to Ballarat and Queenscliff where there is no effective public transport coverage. From a service quality perspective, road speed scores are constrained given that the majority of road corridors are highway grade and public transport quality is impacted by the large number of transfers required to complete a journey and low service frequencies between the ODs. The connectivity scores for the Geelong region are compared with the Illawarra in Table 21.

Table 21: Comparison of Geelong with the Illawarra

Illawarra Geelong Road coverage 3.6 3.4 Rail coverage 3.7 3.4 Freight rail coverage 1.0 3.0 Network Coverage 2.7 3.3 Road speed (passenger) 1.7 2.3 Road speed (freight) 2.0 3.7 Public transport speed 2.8 3.8 Public transport quality 3.2 2.7 Service Quality 2.3 3.1 Weighted Score 2.5 3.2 Source: PwC analysis and estimates

The overall transport connectivity score for Geelong is materially higher than for the Illawarra. Again, the key driver of this difference is the region’s direct access (via flat terrain) on freight rail and road between Geelong and the Port of Melbourne. Public transport speeds are also materially higher. 4 Lille, France Lille is a city in Northern France, and is the capital of the Nord-Pas-de-Calais region, with the Eurostar high speed train connecting Lille with three major European CBDs: Paris, London and Brussels. The city of Lille is the second most populated and demographically youngest region in France.33 The development of Euralille, an urban quarter in the centre of Lille, has contributed to an urban population density of 6,500 people per square km, with 76% of dwellings being apartments.34

The results of the connectivity scoring for Lille is summarised in Table 22. The connectivity performance of Lille is very strong, with high scores across most ODs and attributes. Direct, fast and high standard road and rail links serve most ODs, with the exception of the Lille- Roubaix road connection being only to an arterial and local standard. On all dimensions Lille’s connectivity is scored as superior to the Illawarra’s (Table 23).

33 Nord France Invest, Welcome to Lille Region, 2011

34 France National Institute of Statistics and Economic Studies (INSEE) 2010

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Table 22: Lille connectivity scores Connectivity attribute External Internal Total Brussels Roubaix Lille Lille Lille Lille Lille Lille Lille Lille Calais Arras Paris Lens

     

OD

Road coverage 4.3 4.7 4.9 4.6 2.4 4.6 4.3

Rail coverage 5.0 5.0 5.0 5.0 5.0 5.0

Freight rail coverage 5.0 5.0

Network Coverage 4.7 4.8 4.9 4.8 3.7 4.8 4.8

Road speed (passenger) 3.0 4.0 5.0 5.0 2.0 3.0 3.7

Road speed (freight) 4.4 4.4

Public transport speed 4.0 5.0 5.0 3.0 4.0 4.2

Public transport quality 3.5 3.8 4.5 4.0 4.3 4.0

Service Quality 3.5 4.3 4.8 4.7 3.0 3.8 4.1

Weighted Scores 3.2 3.6 3.9 4.8 2.6 3.3 4.4 Source: PwC analysis and estimates

Table 23: Comparison of Lille and the Illawarra

Illawarra Lille Road coverage 3.6 4.3 Rail coverage 3.7 5.0 Freight rail coverage 1.0 5.0 Total Network Coverage 2.7 4.8 Road speed (passenger) 1.7 3.7 Road speed (freight) 2.0 4.4 Public transport speed 2.8 4.2 Public transport quality 3.2 4.0 Total Service Quality 2.3 4.1 Overall Transport Connectivity 2.5 4.4 Source: PwC analysis and estimates

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Illawarra Business Chamber The Illawarra Business Chamber (IBC) is a member-based not for profit business support organisation.

As the leading business organisation in the region, the IBC is committed to representing the interests of its members by providing a powerful voice to all levels of Government and key decision makers on behalf of the Illawarra region and its business community.

Through our association with the NSW Business Chamber, we are able to provide local businesses with an unparalleled range of business support products and services across the Illawarra region, an area that covers the local government areas of Wollongong, Shellharbour, Kiama, Shoalhaven, and Wingecarribbee.

The IBC is represented on the NSW Business Chamber State Council, and in turn at a Federal level through the Australian Chamber of Commerce & Industry (ACCI).

The Illawarra Business Chamber is governed by a Board of Directors elected by members at the Annual General Meeting in October each year. Our focus is Connecting, Supporting & helping Illawarra Businesses grow.

Street Address Level 1, 87-89 Market Street Wollongong NSW 2500

ABN 54 081 424 437

Postal Address Level 1, 87-89 Market Street Wollongong NSW 2500

DX 15232 t 4229 4722 f 4229 6392 e [email protected]

August 2014

Invigorating business

Call (02) 4229 4722 illawarrabusiness.com.au