ACT light rail faces more cost blowouts

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ScreenHunter_06 Jun. 06 09.33

By Leith van Onselen

The Canberra Times is running an article today suggesting that the $600 million-plus 12-kilometre light rail project connecting Gungahlin in the north and Civic, which is expected to commence construction in 2016, could face significant cost blowouts due to the exorbitant costs of relocating underground pipes and wires, as well as trees:

In a Senate Estimates hearing on Tuesday, Liberal senators suggested the cost of relocating underground wires and pipes along Northbourne Avenue would make the project financially prohibitive.

National Capital Authority chief planner Andrew Smith could not comment on this but said the costs of doing this “are very very significant”…

Mr Snow, who said trees added complexity to putting a light rail line down Northbourne Avenue, also said “trams and trees are not completely incompatible”.

Regular readers will know that I view the ACT light rail project as an egregious waste of taxpayer’s money and a textbook case of infrastructure pork.

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The project only came to fruition because Labor lacked the numbers to form government and needed to gain support from the Greens sole MLA, Shane Rattenbury, who held the balance of power. And the 12 kilometre rail link from Gungahlin to Civic was the bargaining chip used.

Anyone who has spent a large amount of time in Canberra (I lived there for three years) would recognise that it is totally unsuitable for a dedicated (and costly) light rail service. Canberra is the most decentralised city in Australia, with its small (circa 360,000) population spread-out around five primary employment centres: Civic (the tiny CBD), the Parliamentary Triangle, Belconnen, Woden, and Tuggeranong. Gungahlin in the far north is also emerging as the city’s sixth node.

Canberra’s housing and employment, therefore, lacks density. It is also serviced by the nation’s best road system. Accordingly, the overwhelming majority of Canberrans drive their cars to/from work. Yet, for those that require it, Canberra’s bus system (Action) operates well given the capital’s geography and demography.

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Put simply, Canberra lacks the population base or density to make such a light rail project viable from either an economic or social perspective.

A far better alternative to improve public transport access to Canberrans would to expand existing bus services across the entire city, rather than engaging in expensive politically motivated projects like this.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.