high speed train

With a federal election imminent the Coalition have been running hard on fear. Boats could be on the horizon, they’re saying. But how effective is fear? The lessons of the 2018 Victorian election must surely still be echoing around the Liberal party. 

Former Victorian Liberal leader Matthew Guy’s fear-focused election campaign eviscerated the Libs in Victoria and caused him to step down as leader. The lesson is one federal Liberals cannot ignore: what if fear is not enough?

The other big lesson from the state election, other than the limits of fear, is the importance of big infrastructure visions. Labor promised Melbourne an enormous and hitherto undreamed of scheme: a massive orbital rail loop connecting outer suburbs. The promise — which cannot be delivered for decades and is not considered a priority by infrastructure wonks — got a lot of positive attention. A lot.

Scott Morrison must be pondering the upcoming federal budget and figuring out how to get a bit of that positive reaction for himself.

The obvious federal equivalent? High speed rail. The plan to link Melbourne, Sydney and Brisbane with very fast trains already exists. It is an easy carrot to dangle. Indeed the federal Libs have form in this regard. Malcolm Turnbull floated dreams of high speed rail before the 2016 election, although the party walked it back afterward.

What really made Daniel Andrews ethereal idea seem more concrete was a map of the proposed links. Turnbull’s approach last time was to talk of funding mechanisms. That’s important but it is not electoral gold like a map that makes everything seem far more concrete. So let’s say an enormous high speed rail announcement is imminent, complete with gloriously detailed maps.

Should we see it as a disaster or a triumph? There are arguments on both sides.

Triumph:

  • Most high-speed trains are powered by electricity. High speed rail travel is much lower in carbon emissions than aviation.
  • Melbourne-Sydney is the second most popular air route pair in the world, serving 9.3 million trips a year.
  • The east-coast routes plausibly served by high speed rail have around 20 million passenger flights per year. If rail captures half of those trips it would have an excellent level of patronage: 27,000 passengers a day. Trains on Sydney-Brisbane and Sydney-Melbourne routes could depart in each direction every 30 minutes for 12 hours with 300 people aboard. That compares well. Spain’s AVE trains fit 300 people. (Although a Japanese Shinkansen can fit 1300.)
  • Rail competes with road as well as aviation, although less effectively — people who drive long distances may have low willingness to pay for a ticket, substantial luggage or a need for a car at their destination.
  • Rail terminates in the city centre giving most people better access to their destination than arriving at an airport.
  • High speed rail could make regional cities more attractive to live in, reducing congestion in the city. (Bonus: Nationals votes!)

Disaster:

  • Domestic aviation contributes 1.4% of Australia’s carbon emissions. High speed rail can be expected to replace perhaps one in every ten domestic flights. The carbon reduction of high speed rail is tiny compared to replacing one coal-fired power station.
  • The big question is whether high speed rail can win half of the people who currently fly. The issues are time and cost.
  • Australia’s big cities are far apart. It is 880km from Sydney to Melbourne. Brisbane to Sydney is 920km. London to Paris is 480km. High speed rail has a good advantage for trips of up to two and a half hours. Beyond that it gets murky. Melbourne-Sydney would be around three hours at 300km/h.
  • Europe’s systems look amazing but the conditions are very different. Spain alone is 40% smaller than NSW, with over 45 million people.
  • Serving regional towns will mean stopping frequently. You can run a mix of expresses and stopping trains only if you have a lot of patronage. This can become a vicious circle. Any political pledge to stop trains in sensitive rural seats could make the system less useful for long-distance travel.
  • $110 billion is a lot. Here’s a thought experiment to get a grip on it: imagine the government doesn’t want to recover the $110 billion cost of building the rail, just the interest payments on the debt. That’s around $3 billion a year. Assume a rail ticket is one-half profit (generous!). The system would need to make $6 billion a year in revenue to cover the $3 billion interest. If it does serve 10 million passengers it would need to charge each passenger $600. 
  • Clearly that does not compete with aviation prices. Ultimately the system would price train tickets much lower and the fares would likely cover operating costs only (and probably not even that). The $110 billion would likely be written off and ongoing subsidies required.
  • Doubtless the final cost would be more than $110 billion. A mega project without cost overruns is almost unheard of. In the worst-case scenario we don’t even get we were promised and we end up with a “multi-technology mix”, like the NBN.

Whether Scott Morrison pulls high-speed rail out of the bag this election or another politician does so next time, it’s worth bearing both the pros and cons in mind. High-speed rail is tantalising. But it has a risk of being an enormous white elephant.