Page 3150 - Week 10 - Wednesday, 24 September 2014
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Of course, the operational cost of light rail must be considered alongside the capital cost of the project. First the government told us that light rail would cost $614 million. The Chief Minister then said that this figure would have to be inflated to 2014 dollars, and that cabinet’s tolerance was in that order. She was, however, then to be corrected by the Minister for Capital Metro, who said that the costs had to be inflated when the trams began running some time in 2019 or 2021.
Last week the minister finally confirmed an updated cost of $783 million after pooh-poohing my presumption that it would cost around $800 million. Conveniently, the minister did not include the cost incurred by the Capital Metro Agency in this updated figure, so the true cost of light rail is now over $826 million and counting.
When you combine the capital cost and the operational cost, you can see that this project does not stack up for the ACT. $826 million and counting in capital cost, plus $35 million each year in operational costs, is a huge amount. At this rate, light rail will cost the territory $1 billion by 2025. However, we know a cost blowout is inevitable. It always happens with this government. This is the trademark of the ACT Labor government and, in particular, this minister.
What does this grand investment return to the people of Canberra? We know that just 13,700 people will catch the tram, according to the government’s figures, which are not necessarily backed up by MyWay. Of course, only 3,500 people are predicted to catch the tram in the morning peak. This is less than one per cent of Canberra’s population using the tram to get to work or school each weekday morning. Worse still, these numbers are a generous guess by the Capital Metro Agency. The Canberra Times reports this morning that only 8,000 people are using ACTION buses along Northbourne Avenue, while only 2,600 people are using ACTION buses on Northbourne Avenue in the morning peak.
The minister likes to promote the jobs that will be one of the great benefits of this project. The reality, as admitted in the government’s own report, is that only 10 per cent of these jobs will be new to Canberra. The remainder of the jobs will largely be pre-existing jobs which would have been relocated from elsewhere in the territory and in fact will restrict development and activity in other areas of Canberra—as stated in its own report.
The minister also likes to promote the redevelopment of Northbourne Avenue. However, the government does not need light rail to redevelop Northbourne Avenue. We have seen this with Space and Space 2, Axis, the IQ apartments, the Haig apartments and many other apartments. In fact, just about all the land privately held up and down Northbourne Avenue has been developed to a very high density. It is, in fact, only the ACT government’s own land immediately on Northbourne Avenue which is severely under the density which we have seen elsewhere on the avenue.
Ultimately, this light rail project is not a good investment for Canberra. The government was told in 2012 that an investment in the bus network was cheaper and provided double the economic benefits. The Productivity Commission, the Centre for International Economics, and Infrastructure Australia have also said that this idea does not stack up. Yet the government has recklessly committed to this project so it can retain power.
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