FEATURE CARGO-CULT RAILWAY PROPOSALS

Mega-railway projects defy economics, logic and reason, argues John Nestor

ega-railway projects attract been put aside for ‘detailed planning and work on politicians. Some, such as the community consultation.’3 Alice Springs to Darwin link, Railway proposals in this country often claim get built. Others, such as a that railways lead to economic progress. Like many proposal floated in the late fallacies, there is a grain of truth in this idea: in the 1980s to build a high-speed passenger railway nineteenth century, the introduction of railways M 1 between and Melbourne, do not. In that almost always led to signifi cant economic progress case, the absurdity of investing billions of dollars in the areas they served. By the early twentieth so people could do the trip in several hours more century, this was more nuanced. In general, the than the plane, but at higher cost per passenger later a rural railway was built in , the journey, won out and the proposal died. more likely it was to close because it served little However, proposals for mega-railway schemes economic or social purpose.4 continue to recur. Recent proposals include a Investment in transport is widely regarded as new east-west transcontinental railway across the being of particular importance in improving the tropics, a new railway connecting Melbourne and Australian economy’s competitive position, not Brisbane, and the Maldon-Dombarton Railway to mention improving the quality of life. But through the southern Sydney Catchment Area. building or improving railways involves huge costs The Department of Transport and Regional which cannot be diverted to another purpose if not Studies released its North-South Rail Corridor Report successful. We should therefore carefully analyse (2006) (DOTARS Report) in September of last any proposals, especially since they virtually always year. The Report examined a number of proposed involve large government subsidies which may routes for an inland (Melbourne-Brisbane) railway, and compared them with various large investments in the existing railway. The possibility of building John Nestor holds an MBA from the another railway from Melbourne to Brisbane and Australian Graduate School of Management. the central Queensland coast, using and upgrading He has been involved in non-profit work in some sections of the various inland branch railways, Australia and the United States for 20 years, was received enthusiastically in some circles. The but previously worked for the former NSW National Party Federal Secretariat, for example, Public Transport Commission’s Rail Division. issued a news release headed ‘Inland Railway a His published articles include ‘Taken for a 2 Route to Economic Prosperity’. Though stressing Ride on the VFT’, Policy Report (a predecessor that the railway would depend on commercial of Policy), (December–January 1988–89). support, Prime Minister John Howard indicated in May 2007 that the government would help the project in an ‘appropriate way’. A spokesman Endnotes for this article can be for the Transport Minister said that money had found at www.policymagazine.com.

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not all be immediately apparent. We should also (Newcastle) will need some augmentation in the be aware that vested interests may stand to make future. But to claim that this suggests that a whole large gains if railways are built, even if they are in new Melbourne-Brisbane railway be built is like no way successful. suggesting that road congestion at Chatswood The reasons given for the proposed inland means a new expressway should be built from railway tend to vary in the telling, but chiefl y seem Melbourne to Brisbane. to be two: it is claimed that the present railway route from Melbourne through Sydney to Brisbane But to claim that this suggests that a is nearing saturation, with the proposed railway necessary by 2019 because the existing railway whole new Melbourne-Brisbane railway will by then be operating at capacity, and that be built is like suggesting that road the proposed inland railway would reduce freight congestion at Chatswood means a travel times and so enable railways to gain more new expressway should be built from high-priority freight. Melbourne to Brisbane. Melbourne-Brisbane rail capacity While there are certain places in the Sydney Time savings metropolitan area, and between Sydney and The DOTARS Report examines three possible Newcastle, where, if predictions as to total freight inland railway routes; but each of these three is traffi c and rail’s share of it are realised, there will separately examined on the basis of routes via be capacity constraints, this is certainly not the Shepparton and via Albury, so there are actually six case for the railway as a whole. For example, the possibilities. Also, the results are compared with a existing timetable shows there to be only three highly upgraded version of the present Melbourne- Melbourne-Brisbane regular freight trains per day Brisbane via Sydney line. in each direction.5 Contrary to the enthusiasm for the proposed Of course, there are trains moving between inland railway by its supporters, the report fi nds other points on this railway; but even the Marulan- that the economic cost/benefi t for every proposal Moss Vale section, the busiest non-CityRail part of examined, is negative.6 Of the proposals which the Melbourne-Brisbane line (except for the short signifi cantly reduce the freight train travel times, Waratah-Maitland line, which has four tracks), the existing coastal route gives the lowest (that is, currently operates at a fraction of its capacity. closest to zero) negative economic cost/benefi t Such is the paucity of traffi c that the double track fi gure. The coastal route is estimated to give a from Junee in southern NSW to Goulburn, was freight travel time of 26 hours, at a cost of $1.5 proposed to have one track removed some years billion and with a negative economic cost/benefi t ago, though this has not been carried out. By of $251 million. No consideration is given to the standards of single track American railroads, lesser investments in the present line, but it would or those of north-western Australia, the present be expected that the economic cost/benefi ts for Melbourne-Brisbane line is barely used. smaller investments would still be negative but Let me hasten to add that there are sections closer to zero.7 of the present railway which will exceed optimal Construction of the far western inland (via capacity, given traffi c growth, in the near or more Albury) route is estimated to allow a freight travel distant future. One of these is the southern entry time between Melbourne and Brisbane of 20.6 into Sydney, where freight traffic has become hours. Adding the report’s estimate of six hours constrained because CityRail has greatly increased for truck pickup and delivery, it would allow rail its commuter trains. The Australian Railway to compete door-to-door with existing trucks for Track Corporation (ARTC) will this year build a time-sensitive freight.8 At a cost of $3.1 billion, single-track 30 km line exclusively for its freight this gives a negative economic cost/benefit of trains from Campbelltown to near the existing $1.24 billion. Chullora terminals. Suggestions have been made This is at fi rst sight better than the $10.2 billion that the line between Sydney and Broadmeadow required to achieve approximately the same time

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result on the existing coastal route via Albury. But time it is fi nished, road improvements will not have if the question is rephrased to ask, should a new reduced truck travel times, and that the level of railway route be added to existing lines, with the truck door-to-door service and reliability, will not attendant higher continuing maintenance costs, to negate any remaining rail transit time advantage. allow the rail sector to compete in an area where The report is asking for a huge commitment in it has been losing market share for many decades, return for very contingent outcomes. the economic cost/benefi t answers an unequivocal ‘no’. The report concedes ‘The ability of rail to Multiple use infrastructure provide these services in the future appears limited On the other hand, incremental investments in the even with planned transit time and reliability present coastal route (via Sydney), have a number of improvements.’9 advantages not completely obvious from the report. It has been suggested that railways need vast Unlike the far western route, almost the entire investments to compete with trucks. Certainly, the coastal route is used for signifi cant other traffi c; percentage of all freight carried by rail is low: It any infrastructure improvements would benefi t has fallen to 9% between Melbourne and Sydney. these other traffi cs. For example, infrastructure The proposed inland railway would do nothing improvements between Sydney and Newcastle, for transport between Australia’s two largest cities; under certain circumstances, could improve by doubling the Melbourne-Brisbane railway the large commuter and intercity passenger kilometres to be maintained (that is, the inland traffi c, general freight and so on. Infrastructure Railway and the present route) there would in improvements between Sydney and Goulburn fact be less money available for the existing route’s would benefi t commuter passenger traffi c, freight maintenance and improvement. The proposed and passenger traffi c on the Sydney to Canberra inland railway would be entirely single-track, and Sydney to Perth freight traffi c routes. The which would mean throughout their journeys report notes that ‘… a targeted investment of up to trains would have to stop and wait at passing $1.5 billion on the existing coastal route (beyond sidings. Since the report lists lack of reliability as an the current ARTC upgrade program) which would important reason for lack of use of rail for priority concentrate on relieving congestion in the area freight,10 a single-track railway stretching through to the north of Sydney, could produce a better sparsely populated western NSW is unlikely net present value than the $1.5 billion option’ to improve on-time performance. In fact, any [of the report].12 Such improvements within say attempt by rail to recapture priority freight, given 200 kilometres of Sydney would almost certainly the culture of the Australian rail infrastructure be made in conjunction with existing lines, so providers, seems fraught with diffi culty.11 the report, which considers the effect on Sydney- Brisbane traffi c only, understates the economic and social value of improvements, which would Any attempt by rail to recapture also benefi t other freight traffi c and especially priority freight, given the culture of the commuter traffi c. Australian rail infrastructure providers, All things being equal, it makes sense to seems fraught with difficulty. concentrate all possible traffi c on fewer routes so that these can be equipped with the best track, signaling and crossovers to facilitate the most To this we could add that road transport would expeditious movement of traffi c. If traffi c builds up not cease to improve its service, especially if the suffi ciently, double track might be justifi ed; double rail sector were to threaten to take a signifi cant track is far more effi cient than two different routes amount of its lucrative time-sensitive freight. All of single track because to the extent that trains in all, we should be extremely wary of investing move at about the same average speed (which on large sums of public money (directly or via taxation modern railways is closer to the case than in the concessions, and so on) into the expectation that past), there will be none of the delays that are the rail sector can achieve the predicted fi ve hours inevitable on single track railways, like the proposed travel reduction Melbourne-Brisbane, and by the inland railway. On a single track railway with any

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given level of investment, the more successful it A railway from the main Southern Line to Port is in attracting extra traffi c, the slower will be the Kembla makes a lot of sense; so much, in fact, that average train speed. This is because each additional one was built in 1932. It connects Port Kembla train places a time burden on every train travelling directly with Moss Vale, where the main Southern concurrently in the opposite direction, no matter line runs to Maldon and other points. The proposal is how much excess capacity the line has available. to build a second railway which is somewhat shorter, There are a large number of small possible but considerably steeper against loaded trains (2% deviations which could improve freight (and grade for the proposed line, 1.33% on the existing passenger) travel times on the existing Melbourne- line). Since the line would be used almost entirely Sydney-Brisbane Route, and it would be interesting for heavy bulk goods like coal, replacing a longer, to have economic assessments of them. easy-graded railway by a somewhat shorter steeper one, goes against all logic in railway economics. The Impact on rural centres proposed railway is also single track (about half the There is generally a great deal of enthusiasm in rural present one from Maldon through Moss Vale to centres about the possibility of the inland railway Port Kembla is double track). Add to this the detail going through their town. In times long past, the that the proposed railway goes centrally through the railway coming to town meant hundreds of jobs as Sydney catchment area, and that the present railway track maintainers, train operating staff and the large would need to be kept open for other traffi c anyway, range of trades necessary to keep steam locomotives and you have a scenario that defi es logic. There have in service. Their wages expanded the local economy even been suggestions that the proposed Maldon- considerably. While there might be some local jobs Dombarton Railway would serve a social purpose in construction or reconstruction in connection as a passenger train route between Wollongong and with the inland railway, there is unlikely to be much Campbelltown. However the journey time, via the effect on local economies at all, once the railway circuitous, single track line would be several times opens. Modern railways operate from metropolitan longer than the present bus route. cities and a very few other large centres; permanent Again, the existing railway is operating at well track workers are very few and periodic maintenance below capacity. If traffi c builds up, incremental workers move around the state. Even operating investments like duplicating sections of remaining staff work over very long sections and sometimes single track would improve operating effi ciency remain on the train in a crew sleeping car. Rural beyond that attainable on two separate single-track residents expecting a bonanza from the proposed routes inland railway should view Tarcoola, South Australia as a cautionary tale: once a town of over Conclusion a thousand, its present population is one family; its But of course defying logic has never stopped school, swimming centre, police station and hotel extravagant and needless railway projects in the all closed; yet it is located at the most important past. Part of the problem is undoubtedly that vested strategic railway junction in Australia, where the interests follow narrow expectations of personal or Adelaide-Darwin line junctions from the Sydney- corporate gain at the expense of taxpayers. People Perth line.13 make decisions based on incorrect knowledge; and with the sums involved, spreading disinformation The Maldon-Dombarton railway may well be profi table for those who expect to gain. Another railway proposal which seems impossible But it seems too that there is something hidden in to decently bury is the Maldon-Dombarton the collective and personal psyche of many people: Railway, running south-east from the outer Sydney A sort of cargo cult vision of the railway bringing area to near Port Kembla. Some construction was prosperity and betterment to town and village. carried out a generation ago before there was a Against this, what chance has mere economics, logic change in government and the truth dawned on or reason? someone in authority that it would serve no useful purpose. However, further development at Port Kembla has it back in the news.

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Endnotes:

1 John Nestor, ‘Taken for a Ride on the VFT’, Policy Report 4:6 (December/January 1988–89), pp 12–15. 2 The Nationals, ‘Inland Railway a Route to Economic Prosperity’, 7 September 2006, www.nationals.org.au/news/default.asp?action=article&ID=1880. 3‘Government denies roads money is a slush fund’, Sydney Morning Herald online, 10 May 2007. 4 Examples of rural railways in built after 1900, which had a short and unsuccessful life, included the Roslyn-Taralga, Gulgong- and Booyong-Ballina lines, but other examples abound. 5 See Australian Rail Track Corporation, Timetable Version 1 Effective 28th May, 2006, pp S1–S106 available on the Corporation’s website, www.artc.com.au/nsw/toc-manual.htm. 6 The full tabulation appears in Chapter 7 of the DOTARS (Department of Transport and Regional Services), North- South Rail Corridor Study 2006 (Canberra: DOTARS, 2006). It is also noted that ‘The results on a Net Present Value basis are negative for all rail options’: DOTARS, Background Briefing—10 Key Points About the North-South Railway Corridor Study (Canberra: DOTARS, 2006), p 3, available at www.auslink.gov.au/publications/reports/north_south_corridor.aspx. 7 The Report considers three investment scenarios on eight possible Melbourne-Brisbane rail routes (including the existing one). These are, to invest $1.5 billion on each route, $3 billion on each route, and an unconstrained amount necessary to get the minimum practical freight train travel time. For this reason, there is no direct comparison possible with, say, spending nothing on the present route, or less than $1.5 billion. See DOTARS, Background Briefing. 8 Notice that the Report seems to assume a static world outside the rail industry, where road improvements do not allow quicker truck transport than exists at present. Also, there seems no consideration of the strategic reaction of truck operators facing a new rail service threatening to take their high-value time sensitive freight. Both assumptions seem unrealistic. 9 DOTARS, North-South Rail Corridor Study 2006, ch 3, pp 3–16. The Report is referring directly to the express freight sector, but the same is likely to apply to most time-sensitive freight. 10 See DOTARS, Background Briefing, p 1. 11 In general, investments in existing railways in Australia have not led to faster trains. To take just one example, the fastest passenger trains between Sydney and Newcastle now take longer than they did before the Second World War, in spite of gigantic investments in the route’s infrastructure and trains. See Australian Railway Historical Society Bulletin XX(new series):385 (November 1969), p 257, which shows that the fastest passenger trains between Sydney and Newcastle in 1940 took 2 hrs and 20 mins; the present timetable, available at www.cityrail.gov.au.info/timetable, shows that no existing services are even close to this time. 12 See DOTARS, North-South Rail Corridor Study 2006, ch 8, pp 8–7. 13 Telephone conversation with the proprietor of the Kingoonya Hotel, SA, 10 February 2007. I had tried to contact the proprietor of the Tarcoola Hotel, where I stayed some years ago, but my informant confirmed that the hotel—the last public service in Tarcoola—had closed some years ago, shortly after the opening of the new railway from Tarcoola to Alice Springs.