James Glover is a regular contributor to the Stubborn Mule who tries, whenever possible, to incorporate back of the beer coaster calculations in his posts. Here his beer coaster helps him skewer the prospects of high speed rail in Australia.
Don’t get me wrong–I love trains. I have caught trains around Europe and even the train from Sydney to Melbourne just for the pleasure of it. My favourite train journey, from London to Edinburgh up the east coast, was made particularly memorable one trip because I was (a) sitting in First Class (as usual), and (b) sharing a booth with two particularly rotund members of the House of Lords including Lord Lawrence “Mad-Eye” Mooney. So, whatever you do please don’t accuse me of trainist tendencies.
With that in mind, you would think I’d be excited by the release of a government report into building a high-speed train line from Melbourne to Sydney and from Sydney to Brisbane, via Newcastle and the Gold Coast. Sadly however the report recommending construction of this train line contains figures which crush any chance of this actually happening. The estimated cost of the build is $100 billion and there would be an estimated 54 million passengers per year. So how does that work out on a beer coaster? To convert $100 billion to an equivalent annual funding cost we just work out how much the government would pay, perpetually, to borrow this amount. At current government long-term yields of 6.00% this represents an annual interest cost of $6 billion. If the government wanted to pay back the capital in 25 years, a typical benchmark for infrastructure projects, the annual payments would increase to about $8 billion. So, calling it 50 million passengers a year, represents a cost per passenger of $160 per trip. That doesn’t seem so bad given that the cost of a one-way plane ticket between Sydney and Melbourne is about $200-400.
Is this just a coincidence? Sadly, no. It appears the planners have flipped the beer coaster over to its dark rum-soaked side to work out how many passengers they would require to make the project commercially feasible and competitive against air travel. It’s a time honoured trick but one that doesn’t stand up to closer scrutiny. In the interest of beercoasternomics and because a Google search failed to find the answer, I estimate the daily number of air passengers between Sydney and Melbourne. Turning to webjet.com, I counted 75 flights from Melbourne to Sydney on a Wednesday. From memory a typical plane on that route has about 40 rows and 6 passengers per row or about 250 passengers. That represents a total of fewer than 20,000 passengers per day. Double that for the return journey and add 25% for the numbers travelling to and from Brisbane. Let’s call it 50,000 passengers per day. Over a whole year our generous estimate of airline passenger numbers Sydney-Melbourne-Brisbane is 20 million. I’m guessing it is really no more than 5 million a year but lets call it 20 million anyway. Even at that figure it falls far short of the 50 million required to make the high-speed rail line economically viable. So why have the planners been so brazen in their estimate? That becomes clear if we used a still optimistic but realistic figure, in my opinion, of say 2 million potential rail passengers a year (which is still over 5000 per day), then the average cost of each passenger, one-way, would be $4,000! I rarely approve the use of
“dead dog’s dicks” exclamation marks [strikethrough courtesy of a prudish editor], but really!!! Should this line ever get built I will be a frequent and enthusiastic user of it. $150 for $4,000 value is the sort of bargain that would make a late-night shopping channel host blush.
I suspect by including a few commuter stops at the beginning and end of their trips such as Brisbane to Gold Coast and Sydney to Newcastle and maybe even a new commuter line or two, e.g. Sydney to Epping, they have boosted the overall passenger numbers. But then those people are hardly going to pay over $150 for a short trip. The majority of the cost will still be borne by the (maximum) 2 million intercity travellers. Though even including short trip passengers 50 million seems excessively high until you realise it is really just the figure they need to make the numbers work.
So, sadly, the numbers don’t add up. I won’t comment on the politics except to say the feasibility study is one of promises the Labor Party made to get Greens’ support to form a government. Nor will I comment on the claims that there are hidden environmental and economic benefits. High speed rail in Australia is the classic white elephant which, according to Wikipedia, was a gift made by Thai Kings to obnoxious courtiers to bankrupt them due to the high cost of maintenance of these sacred pachyderms. Some will bring up the precedents of Europe or Asia, but there you have either cheap labour and government requisitioned land or a high density of large cities. Australia has none of these.
As The Clash so prophetically sang: it’s a train in vain.