MEETING AUSTRALIA’S 2025 LAND TRANSPORT CHALLENGES Scott Martin1, Philip Laird2

1 University of Canberra, ACT, AUSTRALIA 2 University of Wollongong, NSW, AUSTRALIA

Corresponding Author: scott.martin@canberra.edu.au

SUMMARY

In May 2015, Infrastructure Australia released its draft National Infrastructure Audit that highlighted the need for Australia to respond to future population growth and increasing demands for and congestion of land transport and other infrastructure networks.

This paper proposes that in light of the Audit’s findings, policy makers must give more attention to both improving rail infrastructure and new methods of transport pricing to effectively manage the effects of future population growth and high costs of road congestion. Pricing methods include congestion pricing and mass-distance-location pricing that were both raised in the 2004 AusLink White Paper.

In managing the land transport effects of population growth and network congestion, this paper outlines the need by the mid-to-late 2020s for new major urban rail capacity projects to be completed such as Melbourne Metro and new rail crossings of Sydney Harbour and the Brisbane River. For freight, it makes the case for constructing an inland railway between Melbourne, Parkes and Brisbane and improving the East-West rail corridor to North American Class I railroad standards. Regional rail networks linking grain areas to ports will also need upgrading, and more gauge standardisation will be needed. The benefits of new and improved rail infrastructure will include less road congestion, improved safety, reduced dependence on imported oil and fewer greenhouse gas emissions.

1. INTRODUCTION

In May 2015, Infrastructure Australia (IA) released its draft Australian Infrastructure Audit [1]. Like previous IA audits, it addresses the nation’s energy, water, telecommunications and transport infrastructure needs across a 15-year time horizon.

The Audit’s findings highlight the need to increase the capacity of the land transport network as a response to population growth and congestion. This paper suggests that Australia’s political leaders and policy makers must give more attention to both improving rail infrastructure and establishing a new regime of land transport pricing than in previous decades. Any new land transport pricing regime must reduce dependence on ‘blunt’ instruments such as registration and fuel excise and include congestion pricing on urban roads and mass-distance-location pricing for articulated trucks.

In providing the improved rail infrastructure to meet Australia’s land transport challenges to 2025 and beyond, this paper recommends:

• increasing passenger rail capacity on theinner cores of urban rail networks in Brisbane, Melbourne and Sydney;

• upgrading the East-West mainline railcorridor and construction of theMelbourne-Brisbane Inland Railway toNorth American Class I standards, and

• renewing regional rail lines that linkprimary production areas to ports andselective gauge standardisation for betterintegration with the national rail network.

The long-term benefits to Australia’s economy, society and environment from a fit-for-purpose national rail network for both urban passengers and freight are noted as including reduced road congestion, improved safety, reduced dependence on imported oil and reduced greenhouse gas emissions.

2. NOTATION

Australasian Railway Association (ARA) Australian Rail Track Corporation (ARTC) Australian Transport Council (ATC) Billion tonne kilometres (btkm) Bureau of Infrastructure Transport & Regional Economics (BITRE) Engineers Australia (EA) Infrastructure Australia (IA) National Transport Planning Taskforce (NTPF) Vehicle kilometres travelled (VKT)

3. BACKGROUND

Australia’s land transport strategy has been the subject of numerous studies over the last three decades. Such studies go back over at least 20

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years from the 1994 report of the National Transport Planning Taskforce [2]. Its main report had 16 recommendations to improve transparency (including better data), regulation and investment in land transport infrastructure.

Over 20 years later, most of these recommendations remain valid. As noted by the Taskforce there remains a need for: “… work to be vigorously pursued to ensure the best transport solutions for Australia into the twenty first century...” and “...Perpetuation of existing arrangements will condemn the nation to ineffective results.”

Since the mid-1990s, Australian governments have continued their path dependency in transport infrastructure by investing heavily in road supply, with little attention to managing demand through road pricing or providing credible alternatives to roads for passenger and freight movement. In order to augment the supply of urban roads, some financially-constrained state governments have turned to toll roads, funded by PPPs (Public-Private Partnerships), with arguably mixed results including four ‘failed’ toll road projects.

Rail reform in the 1990s has also posted an arguably mixed set of results, including the formation of the Australian Rail Track Corporation (ARTC) with some gains, above-rail privatisation with very mixed results, greater investment in urban rail and the completion of the Alice Springs Darwin railway in 2004. Overall, there has been an ongoing over-reliance on "existing arrangements" in Australia’s rail sector.

There have been further warnings given since the mid-1990s. By way of example, in 2002, the then Secretary of the Australian Treasury, Dr Ken Henry [3] noted the projected increases in urban traffic and interstate road freight raised "important issues"; also "Not dealing with these issues now amounts to passing a very challenging set of problems to future generations”.

The 2015 IA Audit [1] noted that on mid-range projections, Australia’s population is projected to grow by 38 per cent from 22.3 million in 2011 to 30.8m in 2031. Most of this growth is expected to occur in Sydney, Melbourne, Brisbane and Perth. IA’s audit highlights the need for Australia to respond to population growth and increased land transport network congestion. The Audit estimates the cost of congestion on urban roads alone was estimated to rise by 290 per cent over 20 years, from $13.7b (2011) to $53.3b by 2031 without remedial action.

From the Audit’s 81 findings, only five specifically relate to rail, namely:

• long-term funding constraints will continue to challenge the ability of governments to

provide fit-for-purpose freight rail infrastructure, particularly landside access to ports and regional branchlines constrained by low-capacity track and bridges (findings 46 & 57).

• traffic demand on many key urban rail (and road) corridors will exceed capacity by 2031 (finding 49), and;

• traffic demand for freight rail infrastructure will continue to grow, particularly for bulk commodities, hauls between ports and inland terminals and for longer-haul intermodal and general freight (findings 53 & 54) [1].

4. THE NATIONAL ROAD NETWORK

In the past 20 years, the road freight task performed by articulated trucks (including B-Doubles and road trains), rigid trucks and light commercial vehicles has increased from about 119 billion tonne kilometres (btkm) in 1994-95 to an estimated 203 btkm in the 12 months ended 31 October 2014 (with the articulated truck freight task increasing from 89 btkm to around 161 btkm). Australia’s truck and light commercial fleet has increased its vehicle kilometres travelled (VKT) over this period by over 73 percent, from 38.4 billion VKT in 1994-95 to 66.54 billion VKT in 2014-15 [4].

To accommodate this growth in road freight task over the 20 years since 1994-95, road funding by all three levels of Australian governments has increased in relative terms from below one percent of GDP to over one per cent of GDP. This funding is for enhancing capacity on existing roads, building new roads and the increasingly important task of maintaining the mature network of existing roads. In the early 1990s, the total cost of road vehicle operations, including road construction, and maintenance, congestion and road trauma was around $80 billion a year or about 11 per cent of GDP [5]. If these costs have remained a constant proportion of GDP, the total cost of roads and road use is now over $170 billion a year [6].

During this period, Australia’s road network has reached maturity, particularly for freight haulage with the extension of the National Highway system into Australia’s capital cities and the connection of airports, ports and major urban arterial road and freeway links to the national network. This has taken place alongside the continuous improvement and upgrading of the National Highway system to accommodate increasingly heavy articulated truck traffic and the total reconstruction of the Hume Highway between Sydney and Melbourne into a modern, dual carriageway road.

MEETING AUSTRALIA’S 2025 LAND TRANSPORT CHALLENGESScott Martin1, Philip Laird2

1 University of Canberra, ACT, AUSTRALIA2 University of Wollongong, NSW, AUSTRALIA

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This significant investment in the National Highway network has meant a progressive increase of heavy vehicle mass limits and axle loadings across the network to provide publically-funded roads that offer similar, if not better freight carrying capacity to most of the publically-funded rail network. The most common heavy articulated vehicle in Australia is a 19 metre-long 6-axle semi-trailer, with a general mass limit (GML) of 42.5 tonnes, with axle group loadings of 16.5 tonnes (2-axle) and 20 tonnes (3-axle). A 25-metre long 9-axle B-Double has a GML of 62.5 tonnes with similar 2- and 3-axle group loadings [7]. These are equal to or better than the prevailing axle loadings on many Australian branch line railways. On National Highway routes where Higher Mass Limits (HML) higher loadings apply, HML axle group loadings of 17 tonnes (2-axle) and 22.5 tonnes (3-axle) are as good or better than some mainline railways, particularly Queensland’s North Coast Line and Victoria’s broad gauge network and close to the maximum 23 tonne axle loading applying on most of the Defined Interstate Rail Network.

Much of the expansion of Australia’s road network has been directly or indirectly funded across all three levels of government by the federal government, whose ability to recover the costs of road construction and maintenance has been constrained by the removal of indexation on fuel excise (between 2000/01 to 2014/15) and a reduction in real terms of federal registration and road user charges. A report prepared for Infrastructure Australia noted that Australia's three levels of government and the private sector are now spending more than $20 billion a year on road construction and maintenance and, “between 2008-09 and 2011-12, over $4.5 billion more was spent on roads than was raised in almost all road taxes and charges” [8].

There is a clear and pressing need to better recover the costs of road construction and maintenance from road user in Australia. The situation is so broken that any change to the existing system would be an improvement.

Australia’s current road pricing regime is based on three revenue streams that are notional road user charges:

• an excise on petrol and diesel fuel;

• vehicle registrations collected by state and territory governments, and

• a road user charge (RUC) collected by the federal government and distributed to states and territories.

The current regime is viewed as unfair and inequitable in three key areas:

• It recovers well below the true cost of road use by heavy trucks hauling large distances each year;

• User charges (registration and fuel excise) from cars and light vehicles effectively cross subsidise heavy vehicles;

• The heaviest trucks travelling the longest distances on the national highway system pay less than lighter vehicles travelling on urban and regional roads

The current road pricing regime is also a significant competitive disadvantage for rail freight, with research showing that while heavy vehicle user charges account for only 5 to 10 per cent of costs of freight carried by road, compared to user charges making up 30 per cent of the cost for freight carried by rail [9].

Since the announcement of the COAG road reform plan in 2007, progress has stalled on reform of road user charges through the introduction of mass-distance-location (MDL) charging. MDL charging would provide a more equitable system for road users, particularly in reducing cross-subsidies between cars, light vehicles and heavy vehicles. It would also provide an effective way to manage demand for the busiest parts of the road network through price signals. Introduction of MDL charging would also place heavy vehicles on similar regulatory and pricing frameworks to rail freight and other infrastructure utilities (gas, water, electricity), provide better cost recovery models for road use and a more transparent road infrastructure investment process.

In July 2015, South Australian Premier Jay Wetherill proposed a trial of MDL charging for heavy vehicles in that state as a precursor to a national road user charging system [10]. He believes this will better price the true costs of road use, create a more level playing field between road freight and rail freight and provide a more transparent model for road funding. This need for road pricing reform (including MDL charging for heavier trucks) is backed by an Infrastructure Australia report which also considers the current outlay on roads, which is set to grow even larger at the expense of federal funding of urban rail, is a "road spend [that] can only be described as hideously inefficient" [8].

Although many road projects, including the total reconstruction by 2013 of the Hume Highway to modern engineering standards have positive benefit-cost ratios (BCRs) and make made solid contributions to the national land transport network, other publically-funded road projects have been more questionable, with low BCRs and diminishing returns on investment.

MEETING AUSTRALIA’S 2025 LAND TRANSPORT CHALLENGESScott Martin1, Philip Laird2

1 University of Canberra, ACT, AUSTRALIA2 University of Wollongong, NSW, AUSTRALIA

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For example, the upgrading of the Pacific Highway between Sydney and Brisbane to dual carriageway standards shows that upgrading the heavily trafficked sections of the Pacific Highway in NSW have positive BCRs, however lightly trafficked sections were assessed in 2011 as having a BCR of just 0.8. This led Infrastructure NSW to state in 2012 that "Given competing priorities for NSW and Commonwealth Government funds, the high cost and relatively limited benefits of these remaining sections raises questions"…as to whether the ongoing allocation of funds to this highway would be better directed to other roads" [11]. Or for that matter, railways.

Similarly, privately funded urban road projects have not always been the best way to allocate investment in land transport. Between 2005 to 2012, there were no fewer than four failed tollway projects (Sydney's Cross City Tunnel in 2005 and Lane Cove Tunnel in 2007, then Brisbane's Clem 7 in 2010 and Airport Link in 2012) and one (Melbourne’s EastLink) requiring refinancing. Court cases were heard during 2014 and 2015 over excessively high patronage projections by consultants for the Lane Cove Tunnel and Clem 7 project, with extensive damages awarded.

It is considered in some quarters that Australia has reached the end of the modernist era of road construction based on traffic modelling predicting expansionary trends of increased car use and road congestion. Indeed, Professor Peter Newman from Curtin University describes three major urban road projects currently under consideration in Australia as “...the last gasp of the old era... the East West Link in Melbourne, the Connex West (sic) in Sydney, the Perth freight link, these are billions and billions of dollars being thrown at a problem that is disappearing” [12].

At the same time as the road freight task has continued to rise, private car use as measured by vehicle kilometres travelled (VKT) has effectively ‘peaked’ over the last decade. In Australia, average per capita car VKT had fallen back to early 1990s levels by 2011. Despite the strong growth in Australia’s road freight task, average per capita VKT for all vehicle types in Australia had peaked in 2004 and by 2015 had declined to levels not seen since 1999 [13]. These trends are consistent with the ‘Peak Car’ phenomenon identified in Europe, North America, Japan and New Zealand [14].

There are a range of potential reasons for the stagnation in Australia’s average per capita VKT, particularly a range of long-term ‘weak signal’ trends, including demographic change (Generation Y’s opting out of driving at higher levels than earlier generations, as Baby Boomers transition out of driving) [15], petrol price fluctuations and continued

weak economic conditions are also viewed as important factors affecting road use [16].

The gathering strength of these ‘weak signals’ on vehicle use have clear implications for Australian governments and policy makers, particularly in jurisdictions where land transport strategies focus on continued road-building and subsidies for car use at the expense of passenger and freight rail infrastructure and services. As a result, the development and implementation of major new road and rail projects by governments and increasingly from the private sector require greater critical examination and scrutiny, particularly for road projects with marginal or even negative cost-benefit ratios.

5. THE NATIONAL RAIL NETWORK

Unlike Australia’s road network, Australia’s rail network has been fully exposed to microeconomic reform and competition policy since the 1990s. Illustrating the differences between the ‘reformed’ environment for rail freight compared to road, it is instructive to recall that user charges account for only 5 to 10 per cent of costs of freight carried by road, compared to around 30 per cent of the costs of the equivalent freight carried by rail [9].

A comprehensive audit of Australia's mainline rail networks was given in commissioned work for the 1994 National Transport Planning Taskforce [2] that included by two carefully formulated competitive goals for rail freight. This was followed by the Australian Parliament’s 1997 Tracking Australia report which found, inter alia, that the existing mainline interstate track is in urgent need of upgrading, or that "rail will continue to deteriorate” to the point that intercity rail will become "irretrievable" [17].

At a historic 'Rail Summit' in September 1997, the Australian Transport Council (ATC) of federal and state ministers agreed to adopt certain measures with a view to making "...dramatic improvements in the performance of interstate rail" in order to overcome the present situation where rail has "...failed to compete effectively with road transport" and rail "...has not realised its potential contribution to the national economy". The measures included average speeds for freight trains with 21 tonne axle loads, of 80 km/h as a five year goal, and 100 km/h as a 'longer term' goal [18].

Since then, a range of reports have recommended that Australia’s state and federal governments adopt measures to improve the productivity and performance of interstate rail, most notably the 2001 ARTC Track Audit [19]. The ARTC Track Audit is now mainly remembered now for making a robust case for increased investment in mainline rail tracks, including the South Sydney Freight Line

MEETING AUSTRALIA’S 2025 LAND TRANSPORT CHALLENGESScott Martin1, Philip Laird2

1 University of Canberra, ACT, AUSTRALIA2 University of Wollongong, NSW, AUSTRALIA

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(completed in 2013), Melbourne-Brisbane deviation and track straightening options and an early report on the feasibility of the Inland Railway.

The need to upgrade not only existing interstate rail track, but also regional rail, and rail connections to ports, was addressed in some detail in a 2007 Parliamentary Committee report [20].

A 2010 Engineers Australia Infrastructure Report Card noted: "Rail has been given a D+ rating. … The low rating has been given on the basis that urban rail networks cannot cope with demand. There is a need for a high speed rail network along the eastern coast of Australia to ease airport congestion and to reverse the trend of declining regional rail utilisation, which is resulting in more road traffic…" [21].

In addition "Improving the efficiency and productivity of existing rail networks is a challenge in many jurisdictions. For instance, increasing train length, load capacity, operating speed and turnaround time will require considerable improvements in rolling stock, below-rail infrastructure, and port-rail connections and intermodal hubs. The investment to achieve improvements will require substantial investment over at least a decade."

The Infrastructure Report Card also considered that it is "essential to increase rail freight to accommodate the greater freight task…" and to this end, it is necessary to improve the interstate and regional freight lines, plus develop multi-use intermodal terminals. Improved separation of freight and passenger trains is "particularly needed in Sydney and Brisbane" [21].

A CORE 2014 paper by Imrie outlined in some detail the failure to achieve the 1997 ATC rail targets despite the extensive federal government investment through ARTC to upgrade the interstate mainline rail network on existing (and often substandard) alignments [22].

Another paper delivered at CORE 2014 by Laird (prepared independently of Imrie’s), found that on the North-South corridor linking Australia’s three largest cities, rail’s share of land freight has gone backwards since 1989, and that measured against five criteria (axle loads, average speeds, containers, longer crossing loops and a second transcontinental route), the Class I mainline rail network of Canada (both historical peer and global economic competitor to Australia) is now superior to Australia’s interstate mainline rail network [23].

In order to deal with the issues affecting the interstate rail network and the unfavourable comparisons to both the Australian road network and overseas rail networks such as Canada and the United States, the authors propose that action

be taken to address the biggest barriers to improving Australia’s rail network:

5.1 Reduced Transit Times

Rail transit times have remained essentially static for over 20 years, particularly on the north-south (Melbourne-Sydney-Brisbane) corridor (but also on the East-West) and still short of the initial ‘5-year’ ATC targets set in 1997. Imrie’s paper argues that adopting the ATC’s longer-term average transit time ‘stretch’ targets would make rail more competitive with road and increase rail’s contestability of medium haul freight, particularly intermodal [22]. Laird makes the point that some track straightening on mainline track is also needed for appreciable faster transit times [23].

5.2 Higher Axle Loadings

The ability to increase axle loadings to maximise the amounts of freight consigned by rail is a vital competitive advantage over road transport and one that providers shippers with an ability to fill high capacity wagons and containers to maximum levels, particularly for mineral and agricultural products. Upgrading bridges, formations, ballast and rails on the interstate network and key feeder lines to provide a minimum 25-tonne axle load (TAL) at average speeds of 100km/h, with a long-term target of 30 or 32.5 TAL at an average speed of 100km/h are critical. Ensuring rail upgrades like Victoria’s Murray Basin Rail Project are built to higher (25 TAL) standards than at present would send an important signal to drive improvements on other key corridors such as Maroona-Portland [24].

5.3 Improved Structure Clearances

Improving structure clearances to 7.1 metres above rail height east of Adelaide (SA) and Parkes (NSW) by 2030 would provide a medium-term option for double stacking containers in well wagons between Melbourne, Parkes and Brisbane on the Inland Railway. While selected deviations and/or daylighting of tunnels between Melbourne – Adelaide and Sydney-Parkes would provide similar capability on ‘legacy’ interstate routes. Improved clearances on non-interstate network lines would, at a minimum preserve future network options for carrying maxi-cube (10’ 6” height) containers.

5.4 Increased Network ‘Reach’

Broadening the catchment of the national rail network could help overcome the isolation of some of Australia’s most productive agricultural and mining regions to key local and export markets, either through gauge standardisation, reinstating closed lines or construction of new lines. Victoria’s Murray Basin Rail Project is a good example of achieving this goal. As a result of such works, regional locations with rail access to multiple ports

MEETING AUSTRALIA’S 2025 LAND TRANSPORT CHALLENGESScott Martin1, Philip Laird2

1 University of Canberra, ACT, AUSTRALIA2 University of Wollongong, NSW, AUSTRALIA

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could become increasingly attractive as bases for industrial and agribusiness firms.

5.5 Network Redundancy

Construction of the Inland Railway between Melbourne and Brisbane to modern standards guaranteeing reduced transit times, higher axle loadings, consistently high reliability and improved structure clearances would be the most important work undertaken here. Creating an alternative to the legacy coastal route would go a long way to improving rail’s competitiveness with road for freight and provide increased reach for the national rail network into regional Australia.

In addition to completion of an inland railway between Melbourne, Parkes and Brisbane to standards of performance better than those prevailing on the national highway network, there is much needed upgrading work to ensure that interstate rail freight has an ongoing future in Australia as opposed to putting ever more loads on interstate highways. These are addressed below.

6. URBAN RAIL TRANSPORT

The increases in urban rail patronage since 2002 have been substantial. By way of example, in the ten years from 2002-03 to 2012-13, heavy rail patronage in the five mainland capital cities increased by some 34 per cent to 659m trips ; then to 672m trips in 2013-14) and light rail went up over these ten years some 28 per cent (to 191m trips) [25]. Rail patronage increases exceeded population growth in the five cities’ of 17 per cent over the same period and was exceeded growth of vehicle kilometers travelled (about 16 per cent) in Australia's capital cities over the same period.

Looking ahead over the next ten years, there are a number of rail projects already under construction or advanced planning. Apart from the Moreton Bay Rail Link (due to open in 2016) these include:

Inner Urban Rail Capacity Projects

Sydney’s North West Metro. At 36 km in length, it includes the existing Chatswood-Epping line in tunnels followed by a further 15km of twin tunnels, a viaduct to Rouse Hill and a stabling area. The new line will use automated single-deck trains and is due to open in 2019 at an estimated cost of $8.3 billion. Pending the long-term lease of the NSW electricity distribution network, the state government will then proceed with a 30km ‘City and South West Metro from Chatswood to Bankstown, providing a new relief line on the lower north shore, a second rail crossing of Sydney Harbour (tunnelled), new CBD and inner city stations and conversion of the

existing Sydenham – Bankstown line. This project is due for completion by 2024.

Melbourne Metro, a nine-kilometre long underground rail line that will increase capacity on the inner core of Melbourne’s rail network, connecting the north/west and south/east rail lines with a new, high-capacity link with five stations in the CBD and inner suburbs. Construction is due to start in 2018 and is projected to cost up to $11 billion. Since the 2015 change of Prime Minister, there are still question marks over how much federal funding the project may secure.

Cross River Rail, a second rail crossing of the Brisbane River that will increase capacity on the inner core of the city’s rail network and provide additional capacity for Beenleigh and Gold Coast line trains. After two changes of government and changes in scope and route, the current government has returned to the pre-2011 concept design, but finalised plans and costings have not yet been revealed.

Other important urban rail projects include:

The 12-km long Sydney and South-East Light Rail to run from Circular Quay to Kingsford and Randwick via the University of NSW. At a cost of over $2 billion, it is due to become operational by 2019. The gradual rescoping of the project to accommodate longer and larger light rail vehicles indicates this project was underspecified and that a future heavy rail option may be required on this corridor by mid-century.

Perth's $2 billion Forrestfield-Airport Link project will provide an important heavy rail link to Perth’s airport and major commercial sites around it. With construction due to start in 2016, the first trains are scheduled to run on the line in 2020.

7. OTHER RAIL UPGRADES

Attention will also be required to other rail track. Setting aside High Speed Rail proposals, the subject of no fewer than four major studies [26] in the past 20 years, other rail network upgrading opportunities have been identified, including:

• Speeding up interurban passenger rail in Greater Sydney, Greater Melbourne and Southeast Queensland with improved track and new rolling stock to increase average speeds and reduce transit times between major regional cities and Sydney, Melbourne and Brisbane.

• Improvement of key regional passenger rail corridors to medium speed (200km/h) rail standards, particularly the Sydney –

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1 University of Canberra, ACT, AUSTRALIA2 University of Wollongong, NSW, AUSTRALIA

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Canberra, Melbourne – Albury and Perth – Bunbury corridors using a combination of new and existing alignments and new rolling stock.

• Urban rail capacity enhancement through improved separation of freight and passenger trains. In Sydney this would be assisted by completion of the Maldon-Dombarton rail link and the planning and implementation of the Western Sydney Freight Line.

• Further upgrading Queensland’s North Coast Line to modern standards including curve easing, realignments, bridge replacement and deviations (with some options identified in the 2015 Queensland Draft Infrastructure Statement) to allow for faster, longer trains at higher axle loads;

• The continuing rehabilitation of grain lines to allow longer, higher-capacity trains, preferably with co-investment from grain handlers to lift grain supply chain productivity through increased silo capacity, rail loading speeds and silo-port cycle times;

• Residual gauge standardisation in Victoria and South Australia, particularly as the Murray Basin Rail Project nears completion and in Queensland to maximise the reach of the Inland Railway.

8. A PIPELINE OF OPPORTUNITY In late 2015, the Australasian Railway Association (ARA) released its Pipeline of Opportunities document that outlined the rail industry’s 20-year infrastructure plan out to 2035 and sequenced over 60 rail projects in Australia and New Zealand in a phased order of delivery [27]. The lead author of this paper developed the Pipeline while working at the ARA in conjunction with ARA’s passenger, freight, contractor and constructor members and other industry stakeholders.

Many projects discussed in this paper were identified in the Pipeline as important to the industry’s future, particularly key capacity enhancement projects for freight and the new urban heavy and light rail projects. The work done on the ARA’s Pipeline of Opportunities was provided as part of its submission to Infrastructure Australia informing IA’s 15-year Infrastructure Plan released in early 2016.

9. LEVELLING THE PLAYING FIELD

The longstanding lack of competitive neutrality between road and rail for land freight does adversely affect rail and its finances, along with

significant impacts on Australia’s economy, society and environment. Competitive neutrality includes both government provision of infrastructure and access pricing, while the question of over-regulation of rail freight and the under-regulation of road freight remains.

The National (Road) Transport Commission which since its formation in 1991 (as NRTC and then the NTC from 2004) has favoured a methodology that the Productivity Commission noted as being “conservative” [28].

Indeed, little has changed since as observed by the Industry Commission's Annual Report for 1991-92 that due to the NRTC charges The result is that some vehicles - the heaviest travelling long annual distances - will meet less than 20 per cent of their attributed costs. …The charges, as recommended, will therefore potentially distort the long-haul freight market as rail reforms take effect."

A further aspect of competitive neutrality is the NTC and government active support for heavier trucks, while the Australian Transport Council’s 1997 goals for faster and heavier freight trains remain elusive. NTC support for even heavier trucks prompted a November 2010 ARA press release ‘NTC Lost on transport and sustainability’ that effectively called for the NTC to review its approach and take another look at rail.

The 2010 EA Infrastructure Report considered that the relative low pricing of road freight was noted and ensuring 'user pays' is an issue "that will need to be addressed sooner rather than later." [21]

Present road pricing within Australia results in a disincentive to invest in new railway track, or to upgrade substandard existing track. Three areas of reform are suggested to moderate road vehicle usage demand and generate more funds for infrastructure include: a short-term increase in fuel excise and in the medium-term, implementing congestion charging in major cities (as noted in the 2004 AusLink White paper); and mass-distance-location pricing for heavier articulated trucks.

A cautionary tale on further rail privatisation may also be noted [29]. One of the poorer results to date in Australia occurred in 1997 with the sale of the Tasmanian Rail system. The track, and later the trains, ended up back in the public sector at great cost. The Victorian non-urban track lease also returned to public hands at much cost, whilst the management of the West Australian below rail lease remains problematic.

Accordingly, any future rail privatisation proposals in Australia should be subject to rigorous scrutiny. In regards to the future of ARTC, while the long-term lease of the Hunter Valley coal network may be viable, the case for the interstate network in the present road-rail environment is less viable.

MEETING AUSTRALIA’S 2025 LAND TRANSPORT CHALLENGESScott Martin1, Philip Laird2

1 University of Canberra, ACT, AUSTRALIA2 University of Wollongong, NSW, AUSTRALIA

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10. SOME RECENT RAIL PROJECTS

Rail projects completed by 2012, and their costs, were considered by the Productivity Commission [30] and also by Martin [31] who looked at 28 passenger rail projects (22 heavy rail and 6 light rail) constructed between the year 2000 and 2012. Attention was also given to the significant additional costs imposed by tunnelling, citing three examples where costs exceeded $100 million per kilometre (Sydney Airport, Epping Chatswood, and the short tunneled approach to Perth Station for the Perth-Mandurah Railway). In addition, rough cost benchmarks were given for electrification, amplification and extension of rail track.

During 2011-12, a NSW Parliamentary Inquiry was held into "Rail Infrastructure Project Costing in New South Wales". The main finding was that it cost slightly more (as opposed to a strong perception by some inquiry participants than it cost much more) to build railway infrastructure in New South Wales than other jurisdictions in Australia, with nine recommendations given for Transport for New South Wales to better control costs.

On a different basis, Laird examined four rail projects since the early 1990s that have delivered good outcomes in a timely manner [32]. These were Queensland Rail’s Mainline Upgrade of the 1990s, the Alice Springs to Darwin railway (completed 2004), Victoria's Regional Fast Rail (2006) and the Perth to Mandurah Railway (opened 2007). Three expensive major rail projects were also outlined: Epping to Chatswood (2009), Cronulla-Sutherland part duplication, (2010), and, the Southern Sydney Freight Line (2013). Each of the three projects in Sydney faced delays and combined cost escalations in the order of $2 billion.

There is increasing evidence that transport infrastructure projects with the best benefit/cost ratios are those that seek to optimise and improve existing networks. This knowledge is important in debates on how to improve economic productivity through investment in transport infrastructure [33]. Evidence from the UK demonstrates that lower-cost/higher-benefit network improvements and optimisation strategies can be implemented faster at lower cost with higher economic benefits than higher-cost/lower-benefit ‘mega projects’ [34].

In an environment with tightly constrained funding sources (particularly through regional, state and national budgets), network optimisation strategies offer a viable strategy for maximising the capacity of existing urban heavy and light rail systems at a cost significantly lower than investment in major new infrastructure. It is often difficult for rail operators to advance network optimisation proposals to bureaucratic and political levels of government. This is particularly the case where institutional preferences favour the building of new

infrastructure projects over improvements to existing systems, or where confusion exists between political and economic outcomes [33].

11. CONCLUSIONS

The costs imposed on Australia by an unbalanced system of transport planning and the consequent deficiency of the national rail network includes an over-dependence on road transport to move people and freight, with large hidden subsidies for road use and unsustainable transport greenhouse gas emissions and consumption of imported liquid fuels. Despite evidence from a series of reports going back at least two decades, from 1994’s National Transport Planning Taskforce to 2015’s Infrastructure Australia National Infrastructure Audit, the belief still holds sway among Australia’s political leaders and governmental decision makers that path-dependent, ‘business as usual’ models of road-based transport planning and financing will suffice in meeting the nation’s transport needs. This is despite rapidly increasing populations and transport network congestion in major cities.

Over the last 20-years, a number of weak signals have been building among the background noise alerting perceptive listeners that the post-war model of road-based transport planning and financing no longer work. To change paths and provide Australia with a transport network fit for purpose and in a state of good repair that allows the nation to face the challenges of the 21st Century, a range of reforms are needed.

Firstly, reform the funding mechanism for roads away from taxes masquerading as user charges toward a system that recovers close to the true cost of road use.Secondly, reform the rail access pricing model to provide incentives for above-rail and below-rail operators to increase performance and productivity and create positive cashflows to help fund incremental upgrades to the rail network. Finally, use the new land transport funding model to better develop rail-based alternatives to urban passenger transport and improve the national rail freight network.

ACKNOWLEDGEMENTS

The first author acknowledges the assistance given by the Australasian Railway Association and the second author the University of Wollongong. Both authors thank the Railway Technical Society of Australasia and conference organisers for the opportunity to present the paper along with their respective organizations and the unknown referee for their comments and suggestions. The views expressed remain the authors’ and are not necessarily shared by the above organisations.

MEETING AUSTRALIA’S 2025 LAND TRANSPORT CHALLENGESScott Martin1, Philip Laird2

1 University of Canberra, ACT, AUSTRALIA2 University of Wollongong, NSW, AUSTRALIA

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MEETING AUSTRALIA’S 2025 LAND TRANSPORT CHALLENGESScott Martin1, Philip Laird2

1 University of Canberra, ACT, AUSTRALIA2 University of Wollongong, NSW, AUSTRALIA

RBroc

SUPPORTED BY

PLATINUM PARTNER

HOST SPONSORS