introduction · on electric traction using traditional steel wheels on rails, but with a range of...

High Speed Rail Phase 2 / 45

Introduction

Populationandemploymentgrowthwillcontinue AstrategicstudyoftheimplementationofaHightochallengethecapacityofexistingtransport SpeedRail(HSR)networkontheeastcoastnetworksandpublicinfrastructurealongtheeast ofAustralia(thestudy)wasannouncedbythecoastofAustraliaoverthecomingdecades1.Travel MinisterforInfrastructureandTransport,theontheeastcoastofAustraliaisforecasttogrow HonAnthonyAlbaneseMP,inAugust2010.steadilyataround1.8percentperyearoverthe ThisstrategicstudyinvestigateswhetherHSRnext20years,increasingbyapproximately60per couldplayaneffectiveroleinhelpingtomeetcentby20352.By2065,travelontheeastcoastwill futuretraveldemand.Itisanticipatedthatthehavemorethandoubled,from152milliontripsin studywillinformtheAustralianGovernment’s,2009to355milliontrips3. andstateandterritorygovernments’,consideration

ofthenextstepsforHSR4.

1 AustralianBureauofStatistics(ABS)mid-rangepopulationprojections(cat.no.3222.0)estimatethatbetween2011and2050,thepopulationwillgrowby37percentinNSW,49percentinVictoriaand80percentinQueensland.

2 Basedonforecastpopulationandincome(GSP/capita)growth.SeeChapter 2fordetaileddiscussionontheforecasttravelmarket.3 Growthinthebasetravelmarketontheeastcoastcomprisinginter-regionalandinter-citytripsandexcludingcommutingandother

localtravel.Thebasetravelmarketisforecasttogrowat1.8percentperyearfrom2009to2035,1.5percentperyearfrom2035to2050and1.0percentperyearfrom2050to2065.SeeChapter 2formoredetails.

4 HighSpeedRailStudyTermsofReference,DepartmentofInfrastructureandTransport,21October2010.

Chapter 1 Introduction

Thefirstphaseofthestudy,whichwaspublishedinAugust2011:• Providedanassessmentofthelikelyrangeofcosts.• Identifiedpotentialcorridorsandstations.• Estimatedthepotentialfuturemarketdemand

forHSR.• Consideredpotentialsocialandregionalimpacts.

InNovember2011,theDepartmentofInfrastructureandTransport(theDepartment)appointedtheAECOMConsortium5toundertakephase2ofthestudy.Thissecondphasebuildsonthefirstphase,butisconsiderablybroaderandmoredetailedinitsobjectivesandscope,andhasthereforerefinedmanyofthephase 1estimates.

ThesecondphaseofthestudyhasexaminedinmoredetailtheissuessurroundingthepotentialintroductionofHSRandhasconsideredalternativetechnologies,corridors,alignmentsandstationlocationstodesignapreferredHSRsystemfortheeastcoastofAustralia.Phase2hasalsoincludedacomprehensiveeconomic,financial,environmentalandsocialappraisalofthepreferredHSRsystem,includingarigorousassessmentofpotentialfuturedemand,togetherwithanappraisalofalternativeinstitutionalandgovernancearrangementsthatwouldsupporttheimplementationofHSR.

1.1 Background to HSR

1.1.1 What is HSR?HSRisgenerallydefinedasapurpose-built,fixed-trackmodeoftransport,capableofspeedsofatleast250kilometresperhour,usuallyoverlongdistances.Ittypicallyoffersservicesbetweenmajorcities,occupyingthesametravelmarketasaviation,butalsoprovidesopportunitiesforintermediatestopsinregionalareas.HSRcanalsoprovidecapacityforfastcommuterrailservicesfromoutermetropolitanareastocitycentres.

OriginatinginJapaninthe1960s,HSRsystemsnowoperatein14countries:Japan,Italy,France,Germany,Spain,Switzerland,thethreeBeneluxcountries(Belgium,Netherlands,Luxembourg),China,UnitedKingdom,Korea,TaiwanandTurkey.TherapidincreaseofHSRinrecentdecadesisevidencedbytheincreaseintotalglobalkilometresofHSRtrack,fromjustover1,000routekilometresin1980,tomorethan15,000routekilometresin20116.ThegrowthinHSRisillustratedinFigure 1-1.

MostHSRsystemsoperateonpurpose-builttracksatmaximumspeedsofbetween250and300 kilometresperhour,withsomemorerecentsystemsoperatinginexcessof300kilometresperhour.ServicesinSpainandFrancehavecommercialoperatingspeedsof310kilometresperhourand320kilometresperhour,respectively7.AllHSRsystemscurrentlyinoperationarebasedonelectrictractionusingtraditionalsteelwheelsonrails,butwitharangeoftrackandtraintechnologyoptions8.WhilemostHSRservicesrunondedicatedHSRtracks,someHSRtrainsalsouseshortsectionsofconventionaltracksatlowerspeeds,suchasatentriestocitiesorextendingfromadedicatedline.

5 ComprisingAECOM,Grimshaw,KPMG,SKM,ACILTasman,Booz&CompanyandHyder.6 DerivedfromTheWorldBank,High speed rail: the fast track to economic development?,2010(updated).7 Commercialoperatingspeedisthemaximumoperatingspeedincommercialservice.8 MaglevormagneticlevitationtechnologysystemsareexcludedfromthisdefinitionofHSR.


Figure 1-1 Growth in route kilometres of HSR (1964-2011)

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1.1.2 Why people choose HSRAccording to a paper prepared for the European Community (EC) on the effectiveness of HSR in relation to its competitiveness with air, based on a review of eight European HSR routes, the main factor driving HSR market share (as long as rail had a competitive service frequency) was the

rail journey time10. The time required for airport check-in and other procedures prior to departure was considered part of the journey time, and the absence of these procedures on HSR was seen as a competitive advantage.

9 The World Bank, loc. cit.10 Steer Davies Gleave (for the European Commission), Air and Rail Competition and Complementarity, 2006.


Figure 1-2 Relationship between journey time and market share for HSR

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Figure 1-2 presents international data showing that the shorter the HSR journey time, the higher its market share. Each point represents a city to city journey time and HSR share, based on data on operating HSR services collected and provided in the EC report, the Arup-TMG East Coast Very High Speed Train Scoping Study (VHST) and Nash11. Further detail is provided in Appendix 1A.

Beyond door-to-door journey time, international research shows that a range of other factors also influence people’s choice of travel mode:• The convenience of accessing one mode versus

another (for example, journey times to airports versus journey times to an HSR station).

• Price and ticket conditions, including the availability of alternative lower-priced modes such as bus (coach) and car.

• Reliability and punctuality, particularly considering current congestion at airports and on motorways in some countries.

• On-board service quality (although this may be becoming less important as common service attributes begin to appear on both air and HSR services in some markets)13.

1.2 Approach to the studyThe purpose of phase 2 is to advise the Minister for Infrastructure and Transport on 12 matters (‘the study objectives’). Six interrelated technical modules, as illustrated in Table 1-1, combine to address these study objectives in two parts:1. Definition of the preferred HSR system for the

east coast of Australia.2. Appraisal of the preferred HSR system.

11 Arup and TMG (unpublished, for the Department of Transport and Regional Services), East Coast Very High Speed Train Scoping Study Phase 1 – Preliminary Study Final Report, November 2001.

Nash, HSR Overseas experience Report, High Speed Rail Study Phase 1, 2011.12 ibid.13 Steer Davies Gleave (for the European Commission), loc. cit.


Table1-1 Phase2studymodules

Module Study objectives

System definition

1 Marketneedsandprojections

Projectedtraveldemandintheeastcoastcorridor.

2Developmentofalignmentandstations

ThepreferredHSRsystem,includingcorridor,alignment,transportproductsandsystemspecifications.

TheoptimalHSRprogramforstagingthephysicalconstructionandprovisionofservicesonthepreferredHSRsystem.

3 HSRsystemsdevelopment

HSRsystemalternativesthatcouldbestservetheprojectedtravelmarketeffectively,andtheaggregateandsegmentedtraveldemandandmarketsharesthatcouldbeservedbyeach.

System appraisal

4Environmental,socialandeconomicappraisal

Thespecificenvironmental,socialandeconomicimpactsoftherecommendedHSRprogram,theireffectoncommunitygroups,andtheoverallnetcostorbenefitofthoseimpactstoAustralia.

Thenature,extentandvalueofanyopportunitycreatedforanintegratedHSR/corridorregionaldevelopmentconcept.

ThenatureandcostofanycomplementaryaccessprojectsandtheircontributiontoachievingtheassessedperformanceoftheHSR program.

Thefinancingneeds,financialperformanceandcommercialviabilityoftheHSRprogram.

5 Financialappraisal

needs Anycommercialfinancinggapandwaysoffundingandfinancingsuchagap,includingthroughpublic-privatefinancingandfunding partnerships.

ThekeyriskstotheHSRprogramanditssuccessfulperformance,theimplicationsoftheserisksandpossiblemitigationmeasures,ifany.

6Institutionalappraisalandimplementationplan

Themostappropriateinstitutionalframeworkforgovernance,planning,procurement,construction,operationandregulationoftheHSR program.

AneffectiveimplementationplanforcreatingtherecommendedinstitutionalframeworkanddeliveringtheHSRprogramandforsecuring,ifmerited,anintegratedHSR/corridorregionaldevelopment concept.

ThemodulesandtheirassociatedinterrelationshipsareshowninFigure 1-3withthearrowsindicatingthemoduleinterdependencies(i.e.thekeyinformationthatpassesbetweenthemodules).Theapproachtakenineachmoduleisdescribedfurther.


Figure 1-3 Phase 2 modules and interdependencies

Market needs and projections

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Development of alignment

and stations

HSR systems development

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implementation plan

Financial needs appraisal

Environmental, social and economic appraisal

654

Market requirements

HSR fare and service characteristics

User benefits

Environmental impacts

Financial performance

and funding needs

Preferred HSR system revenues, operating costs

and capital costs

Cost

Optimal HSR program

Definition of the preferred HSR system

Appraisal of the preferred HSR system

1.2.1 Definition of the preferred HSR system

Module 1 – Market needs and projectionsDemand models were developed to forecast the likely future travel market on the east coast of Australia and the potential future demand for HSR, based on the likely attractiveness of travel via a future HSR system compared to travel via alternative modes. The first year of HSR operations

was designated as 2035 for assessment purposes, and a long-term horizon of 50 years was adopted, consistent with Australian Transport Council (ATC) guidelines.

For the purposes of demand modelling, the base year was 2009 and three forecast years were established (2035, 2050 and 2065) for which detailed forecasts were developed. Forecasts without HSR (the ‘base case’) and with HSR (the ‘reference case’) were then derived for each year of


theevaluationperiod.Demandforintermediateyears(between2035and2065)wasderivedbyinterpolation,andforyearsthroughto2085byextrapolation.

Primarymarketresearchwasundertakentosupportthedevelopmentofthedemandmodelsandtodefinevariousinputstotheappraisal(suchasthevalueoftimefortravellers).

HSRfaresweremodelledonaperkilometrebasis(incorporatinga‘flagfall’andadistancecomponent)andsetsuchthattheywerebroadlycomparablewithcorrespondingforecastairfaresontheSydney-MelbourneandBrisbane-Sydneyairroutes.Accesscostssuchastaxifares,airportandstationparkingchargesandmetropolitanbusandrailfareswereassumedtoremainconstantinrealterms.

Forecastswerepreparedforthereferencecase(i.e.withHSR)aspartofthecentralcaseforevaluationpurposes,andforarangeofsensitivities.Anassessmentwasmadeofthepotentialinter-cityandregionalmarketsforHSR,brokendownbybusinessandleisuretravel.Inadditiontoforecastinginter-capitalandregionaltravel,potentialdemandforhighspeedcommuterserviceswasinvestigatedintwocorridors–Newcastle-SydneyandBrisbane-GoldCoast.Newcastle-CentralCoast-SydneyislikelytobethebiggestcommutermarketontheHSRnetwork.Underfareassumptionsconsistentwithconventionalcommuterservices(i.e.withsubsidies),therewouldbeademandfortheseservices.However,theseserviceswouldnotcontributetothefinancialperformanceofHSR,norwouldtheybethesourceofanysignificantincrementaleconomicbenefitinthecost-benefitanalysisofHSR.CommuterdemandwasthereforeexcludedfromthedemandforecastsinChapter 2andthefinancialandeconomicappraisalsinChapters 7and8,althoughitwasallowedforinthecapacityplanning.

Module 2 – Development of alignments and stationsThedevelopmentofalignmentandstationlocationoptionshadtobecompatiblewithdeliveringthenecessarysystemperformancetomeetmarket

needswhilealsoensuringtheenvironmental,socialandeconomicsustainabilityofthesystem.Alargenumberofalternativealignments(upto50foreachregionalalignmentsection)andstationlocationsweretested,withthepreferredalignmentandstationlocationsselectedbasedonabalanceofconstructionandoperatingcosts,userbenefits(e.g.relativejourneytimes)andenvironmental considerations.

Regionalstationlocationswereselectedonthebasisofpotentialdemand.Similarly,stationsontheperipheryofthecapitalcities(otherthanCanberra)wereselectedonthebasisoftheiraccessibilitytothepotentialmarket.

Astrategicenvironmentalassessmentframework,consistentwithAustralianGovernmentguidelines,wasdevelopedanditskeyprinciplesincorporatedintheselectionofthepreferredalignmentandstationlocationstoreducethepotentialfornegativeenvironmentalimpacts.ThefindingsoftheassessmentarereportedinAppendix 5C.

Rationale for tunnellingJourneytimesthatarecompetitivewithotherformsoftransportarekeyforHSRifitistosecureasustainablemarketshareandreliablerevenuebase.InternationalexperienceshowsthatHSRjourneysoflessthanthreehourstendtoattractover50percentshareofthetravelmarket.ThisisillustratedinFigure 1-2.

Torealisethesecompetitivetimes,HSRinAustralia,becauseofthelongdistancesbetweencentres,mustbeabletoachieveanaverageoperatingspeedofmorethan250 kmperhour.Thisisreliantontrackgeometrythatiscapableofaccommodatingthesespeeds.Existingroadandrailalignmentswerenotconstructedforthesespeedsandtheirgeometryisinadequate.WereHSRtofollowexistingtransportcorridoralignments,speedrestrictionswouldbenecessary,withanassociatedincreaseinthetransittimeoftheservice,totheextentthatitwouldnotbecompetitive,particularlyinservingthelongdistanceinter-citytravelmarket.

Indenselypopulatedareas,thetrackgeometryrequiredtoachievespeedsof250kilometresper


hourwouldmakeasurfacealignmenthighlydisruptive,wouldrequireextensivelandacquisition(andassociatedcosts),andwouldresultinnoiseimpacts,communityseveranceandpoorvisualamenitytoalargenumberofpeople,particularlywhenpassingthroughthemiddleandinnersuburbsofthecapitalcities.

Tunnellingwasthereforeconsidered,inadditiontowhereitwasrequiredbytheterrain,inlocationswherenodedicatedsurfacerouteprovidingtherequiredoperatingspeedcouldbecreatedwithoutunacceptabledislocationand/orenvironmentalcosts.

Module 3 – HSR system development ThedesignofthepreferredHSRsystemwasbasedonthepremisethatanyfutureHSRsystemwouldneedtobecomeaneffectivecomponentoffutureintegratedtransportnetworksontheeastcoast14.AcentralconsiderationwastheneedtoensurethattheHSRwoulddeliveraneffectiveandaffordabletransportsolutionthatwasattractivetocustomers.Toachievethis,HSRfareandservicecharacteristics,suchasend-to-endjourneytimes,wouldhavetobecompetitivewithalternativemodes,particularlyairtravel.

Forthepurposesofthedemandassessmentandappraisal,averagefaresforHSRbusinessandleisuretravelweredesignedtobecompetitivewith,andcomparableto,airfaresonthemaininter-capitalroutes,aftertakingintoaccountrelativeaccesstimesandcosts.Forexample,thereferencecaseassumestheaverageHSRsingle(one-wayin$2012)economyfarebetweenSydneyandMelbournein2065wouldbe$141forabusinesspassengerand$86foraleisurepassenger.Thisvariationreflectsthetendencyforpassengerstravellingforbusinesstopaymoreforaticketthanthosetravellingforleisure(aresultofthebookingmethodsused,thehighertendencyofbusinesstravellerstopurchaseflexibletickets,andthetendencytotravelatpeaktimes).Thecorrespondingaverageairfares(one-wayin$2012)in2065wereestimatedas$137and$69respectively.Inpractice,arangeoffares

wouldbeoffered,targetedtomarketsegmentsandinfluencedbyseatutilisationpatternsandcompetitivepressures,asiscurrentlythecasewiththeairlines,wherecurrentairfarespaidforinter-citybusinesstravelcanvaryfromtheoverallaveragebyasmuchas65percent.Sensitivitytestsalsoconsideredaveragefaresupto30percentand50percenthigher,aswellas50percentlowerinthecontextofapricewarwiththeairlines.

Forinter-capitalmarkets,reliableHSRtransittimesofuptothreehoursbetweenthecitycentres(Sydney-MelbourneandBrisbane-Sydney)wereconsideredcompetitivewithairtravel,oncealljourneycomponents(suchastraveltime,waitingtime,check-intime,accesstimeandinterchanges)weretakenintoaccount.ThesetargettransittimeswerethenusedtodefinetheHSRsystemrequirementsformaximumandaverageoperatingspeedsandreliability.

ThisinturnrequiredatechnicalassessmentoflikelyHSRtechnologies,withthetechnicalcomponentsofthesystem–includingthetracktypeandgeometry,powersupply,signallingandthetrainitself–allcombiningtodeliverthedesiredHSRsystemperformance.

Thetechnicalcomponentsofthesystem,combinedwiththepreferredalignmentsandstationlocations,thendeterminedthecostofconstructingafutureHSRsystem.CostcomponentsweredevelopedfromAustralianunitcostsandbenchmarkedagainstinternationalHSRsystems,takingaccountofarangeofmanufacturers’deliveredcostsforexistingHSRsystemsandreflectingtheuseofprovenHSRsystemtechnology(suchastraincontrolandpowersupplysystems)andtrainsetsalreadyinservice,andreadilyavailable.Nonewtechnologywasassumed.

Indicativeserviceplans,includingservicetypes(inter-capitalexpressservicesandregionalserviceswithintermediatestops)andservicefrequenciesrequiredtomeetprojecteddemand,weredevelopedandusedtoinformtheassessmentofoperatingcostsandtherequirednumberoftrainsets.

14 DepartmentofInfrastructureandTransport,Request for tender for the second phase of a strategic study into the implementation of a high speed rail network on the east coast of Australia,PartA:StatementofRequirements,Canberra,2011.


1.2.2 Appraisal of the preferred HSR systemTheappraisalofthepreferredHSRsystemfirstrequiredanunderstandingofthelikelyfuturetravelmarket,includingconsiderationoflikelyfuturetraveloptionswithoutHSR(thebasecase),andthealternativefuturewithaninvestmentinHSR(thereferencecase).Bycomparingthebasecasewiththereferencecase,theincrementalcostsandbenefitsofafutureHSRsystemareabletobeassessed.

Development of the base caseThelong-termhorizonforthestudyrequiredassumptionsandforecastsextendingwellbeyondexistingtransportandlanduseplansoftherelevantjurisdictions.Therefore,asetofassumptionswasdevelopedtoreflectthelikelyfuturewithoutHSR,basedforthemostpartonexistingpolicysettings.Theseassumptionswerethenreviewedtoensurethat,whenextrapolatedoveranextendedperiodoftime,theydidnotresultinimplausibleoutcomes.

Thebasecaseassumesthat,withoutHSR,travellersontheeastcoastwillcontinuetorelyonexistingmodesoftransport:• Aviationwillremaintheprimarymeansof

transportforlongdistanceinterstate(andsomeinter-regional)trips.

• Road-basedtravelandprivatevehicleusagewillremaintheprimarymodeforconnectionswithandbetweenregionalcentres.

• Publictransportwillplayanincreasinglyimportantroleinmeetingtraveldemandwithincitiesservedbyconventionalrailandbus transport.

Forroadandrailmodes,thebasecaseassumesthatgovernmentswillcontinuetoaugmentsupplybyprovidinginfrastructureandservicestomeetdemand.Foraviation,giventheuncertaintyaroundthefutureofairportcapacityintheSydneyregion,thebasecaseassumesthattherewillbenoadditionalinvestmentinairportcapacityintheSydneybasinandthatairportservicelevelswithintheSydneyregionwillbecomeincreasinglyconstrained.

AsoutlinedwithintherecentAustralian/NSWGovernment Joint Study into Aviation Capacity in the Sydney Region(hereafterreferredtoastheJointStudy),demandforaviationservicesintheSydneyregionisexpectedtodoubleto88millionpassengertripsperyearby2035,andthendoubleagainby206015.Sydney(KingsfordSmith)Airportdoesnothavethecapacitytomeettheexpecteddemand,leadingto:• Slowerandmoreunreliableairjourneytimesas

airlinesandairportsarefacedwithhigherlevelsofcongestion.

• Anincreasingrequirementforairpassengerstoshifttheirtraveltimebecauseofalackofcapacityattheirpreferredtraveltime.

• Anincreasingnumberoftravellerswhoareforcedtotravelbyothermeansorwhodonottravelatall(otherwiseknownasunmetorsuppresseddemand).

TheJointStudy’sprojectionhasaddedcomplexitytothemodellingofthebasecasetotakeaccountofsomeoftheconstraintsatSydneyAirport.Giventhelikelysignificanceofthisprojection,asensitivityanalysiswasdevelopedandtestedwhichallowedforadditionalaviationcapacityinSydneyandremovedtheeffectsofunplanneddelaysfromthedemandmodelling.

Development of the reference caseForthepurposesofappraisal,areferencecasewasdevelopedaspartofthecentralcaseforevaluationandcomparisonagainstthebase(withoutHSR)case.Thereferencecaseincorporatestheprimaryassessmentoffuturedemand,revenues,operatingcostsandcapitalcostsforthepreferredHSRsystem.

Sensitivity analysisReflectingtheinherentuncertaintyofassumptionsthatunderpintheappraisaloflong-terminfrastructureprograms,theappraisalwascomplementedbyanumberofalternativescenariosandsensitivitytests,asillustratedinFigure 1-4.

15 AustralianGovernmentandNSWGovernment,Joint Study on aviation capacity in the Sydney region,Canberra,2012.


Figure 1-4 Phase 2 alternative scenarios and sensitivity tests

Base case(without HSR)

Reference case(with HSR)

Demand assessment

Economic appraisal

Financial appraisal

Sensitivity tests

Alternative scenarios

• Higher/lowercapitalandoperatingcosts

• AlternativeHSRfareassumptions

• AviationsectorresponsetoHSR

• Additionalaviationcapacity

• Alternativedemandmodellingassumptions

• Alternativevaluesoftime

• Loweconomicgrowth

• Higheconomicgrowth

Central case for evaluation

In this context, a scenario is a projection based on a set of internally consistent assumptions and parameters, in this case, variations to the reference case that represent an alternative outcome.

Sensitivity tests are generally variations to a single assumption or parameter, to assess their importance to the modelling and its outputs. In this study, some sensitivity tests have varied more than one assumption.

Two alternative economic scenarios were developed, one unfavourable and one favourable to HSR: • The ‘low growth’ scenario assumes lower

economic and population growth (relative to the reference case). This scenario results in lower overall demand for transport and thus lower demand for HSR. Per capita GDP growth rates are assumed to be 0.3 per cent per year lower than the reference case, and


populationgrowthwithinthestudyarea • Applyingaweightingof1.0tothetimetakenisassumedtobe51percentbetween2010 toaccessandegresstheprincipalmodeofand2065,comparedto72percentinthe travel,comparedtotheweightingof1.4usedinreference case. thereferencecase.Thisreducesthebenefitsof

• The‘highgrowth’scenarioassumesthatthe HSRincomparisontoairtravel,butincreasesAustralianeconomyexperiencesstronggrowth thebenefitsofHSRincomparisonwithintothefuture,withhighpopulationgrowth. car travel.Thisscenarioresultsinhigheroveralldemand • Lowervaluesoftime.GiventhelongtimefortransportandthushigherdemandforHSR. horizonfortheassessmentofHSR,growthinPercapitaGDPgrowthratesareassumedto thevaluesoftimeovertheevaluationperiodbe0.3percentperyearhigherthaninthe wasconsideredappropriate.However,economicreferencecase,andpopulationgrowthwithin evaluationofrailandroadprojectsinAustraliathestudyareaisassumedtobe103 percent doesnotusuallyuserealincreasingvaluesbetween2010and2065,comparedto72per oftimeinappraisal,andthistestassumedcentinthereferencecase. fixed values.

• Lowdemandandhighcosts,leadingtoasetInadditiontothetwoalternativeeconomicofcircumstancesthatisunfavourabletoHSR.scenarios,severalsensitivitytestsweredevelopedThistestcombinedadditionalaviationcapacitythatassessedtheimpactofalternativeassumptionsintheSydneyregion,a30percentincreaseinandforecastingmodelparametersontheeconomicpre-riskcapitalcosts,lowgrowthscenarioandaandfinancialresults.Thetestsundertakenassessed50percentincreaseinHSRfares.theeffectsof:

• Higher(+30percent)capitaland• AllHSRfaresincreasedby30percentwithaoperating costs.correspondingdecreaseinHSRdemand.

• Lower(−10percent)capitalandoperatingcosts.• AllHSRfaresincreasedby50percentwithacorrespondingdecreaseinHSRdemand. Economicresultsforallthesensitivitytestswere

• CompetitivepricingbetweenHSRand presentedusingbothafourpercentdiscountrateaviationwhenthelineopensbetweenSydney (thereferencecaseassumption)andanalternativeandMelbourne,withbothairfaresandHSR rateofsevenpercent.Somesensitivities,suchasfaresassumedtobereducedby50percentfor higherfares,haveapositiveimpactonthefinancialtwo years. resultsbutanegativeimpactontheeconomic

• AdditionalaviationcapacitywithintheSydney results(withhigherfares,fewerpeopleusetheregion,whichremovesthenegativeeffectsof system).Thesetrade-offswereexploredthroughtraveltimeonflightsto/fromSydneyfrom theappraisal.thereferencecase,andassumesthereisno Finally,inadditiontothegrowthscenariosandunmet demand. thesensitivitytestsoutlinedabove,alternative

• AdditionalaviationcapacitywithintheSydney stagingassumptionsweretestedtodetermineregion,combinedwith30percentincrease thepreferredstagingfortheHSRprogram.Thein HSRfares. followingchangesintheassumedtimingofHSR

• Settingthealternativespecificconstant(ASC) developmentwereassessed:withinthedemandmodeltozero.TheASC • Acceleratedroll-out,bringingtheconstructionquantifiesthepreferenceforHSRasatravel timelineforwardbyfiveyears.moderelativetoairforinter-cityandlong • Deferredroll-out,pushingtheconstructionregionaltrips,andrelativetorailforshort timelinebackbyfiveyears.regionaltrips,overandabovethemeasurableimprovementsinlevelofservice.


Module 4 – Environmental, social and economic appraisal

TheCBAwasundertakeninreal2012terms,(expressedas‘$2012’) utilisingadiscountrateoffourpercentwithabaseyearof2028.Adiscountrateofsevenpercentwasalsotested.Wherenecessary,costsandbenefitsforearlieryearshavebeenescalatedto$2012usingtheConsumerPriceIndex(CPI).

TheconstructionofanewHSRsystemtohelpmeetfuturetraveldemandwouldinfluencethefuturedevelopmentofcitiesandregions,aswellaswherepeoplechoosetoliveandwork.TheappraisalofHSRthereforealsoconsideredtheopportunitiesforfutureurbanandregionaldevelopment,andtheimplicationsforthewaytransportsystemsmightevolveanddeveloptomeetfuturedemand.

AnassessmentoftheenvironmentalimpactsofHSRwasintegratedintotheevaluationofalignmentoptionsandstationoptionsusingaGeographicInformationSystem(GIS)toolkitthatidentifiedsitesofecologicalandheritagevaluealongtheHSRalignmentoptions.Theseassessmentswerecombinedwithotherconsiderations,suchasengineeringparameters,constructability,cost,anduserbenefits,todeterminethepreferredalignmentandstationlocations.Inaddition,theassessmentofenvironmentalissuesassociatedwithHSRaddressednoiseandvibration,energyuse,carbonemissions/greenhousegasconsiderations,theimplicationsofclimatechange,andthepromotionofecologicallysustainabledevelopment.

ThelikelysocialimpactsofafutureHSRprogramwereidentifiedthroughcasestudiesintothreekeyareasbasedonresearchandstakeholder consultation:1. Workforceandcommunitydevelopment.2. Accesstohealthandotherpublicservices.3. Tourism,recreationandsocialinclusion.

InsightsfromthecasestudieswereusedtooutlinethepotentialsocialimpactsofafutureHSR system.

AstandardCostBenefitAnalysis(CBA)wasundertakentoprovideacomprehensiveassessmentofthecostsandbenefitstousersandoperatorsofHSRovertheevaluationperiodfrom2035to2085.Itincludedanassessmentofexternalities,suchasenvironmentalimpacts,accidentcostsavingsanddecongestionbenefits.TheCBAestablishestheoveralleconomicmeritofafutureHSRprogramandguidesdecisionsontheoptimalstagingoftheHSRprogram.

Module 5 – Financial needs appraisalFinancialmodellingofthereferencecasewasundertakentoassessthepotentialfinancingneeds,financialperformanceandcommercialviabilityoftheHSRprogramovertheevaluationperiodfrom2035to2085,havingregardtotheproposedstagingofthepreferredHSRsystem.

Futurecostsandrevenueswereexpressedin$2012pricesdiscountedtofinancialyear2028,theassumedcommencementofmainconstructioncompatiblewithstartingoperationsin2035.Airfareswerereducedinrealtermsby0.5 percentperyearuntil2015andheldconstantthereafter,consistentwiththeassumptionsaboutairfaresintheJointStudy.Labour-relatedoperatingcostswereassumedtoincreaseinrealtermsby0.2 percentperyear,withactualrealwageincreasesoffsetbyproductivityimprovements.Fuelpriceswereassumedtoincreaseinrealterms,althoughmuchoftheincreasewouldbeoffsetbyefficiencyimprovements.Futurebudgetaryimpactsforgovernmentswereassessedbasedontheprojectedfuturecashflows,whichincorporatedallowanceforrisk.


Module 6 – Institutional appraisal and implementation planAppropriategovernanceandinstitutionalarrangementswouldneedtobeestablishedtoensurethat,ifadopted,theHSRprogramissubjecttoproperpublicoversight,iseffectivelyandefficientlydelivered,andmeetsitsobjectives.Specificgovernancearrangementsweredeveloped,havingregardtothemulti-jurisdictionalnatureofafutureHSRprogramandthepotentialroleofthepublicandprivatesectors.

AnimplementationplanwasdevelopedforthepreferredHSRsystemthattookaccountofthestaginganalysis,theeconomicandfinancialappraisalsandtheproposedgovernanceanddeliverymodelforHSR.TheplanalsoconsideredadditionalpreparatoryworkrequiredbygovernmentsbeforeanyformaldecisiontoproceedwiththeconstructionofanHSRsystem.

1.2.3 Optimism bias and how it is addressedInternationalexperienceofmajorinfrastructureprojectshasfoundthereisatendencyforprojectcoststobeunder-estimated,andtrafficprojectionsandbenefitsover-estimated,comparedtoactualoutcomes16.SomemajorgreenfieldinfrastructureprojectsinAustralia(e.g.anumberofprivatelyfinancedtollroadprojects)17havesimilarlysufferedfromover-estimatedtrafficprojections.Thesemajorprojectsmaybedescribedashavingsufferedfroman‘optimismbias’.

Tomitigatetheriskofoptimismbiasinthisstudy,anumberofsafeguardswereadopted:• SpecificsurveysoftheAustraliantravelmarket

wereconductedtotestthevalidityofinternationalexperienceintheAustraliancontext.

• TheresultsoftheAustraliandemandanalysiswereassessedagainstactualinternational

traveldemandoutcomes.Theresultswerealsosubjectedtoindependentpeerreview18.

• TheaveragepricesassumedtobechargedfortravelonHSRweremarket-basedandderivedfromanalysisofwhatwouldbenecessarytocompetewithairtravelinparticular.Thefarestookintoaccountbothcurrentandprojectedfaresandcostsforothermodes,principallyaviationandcar.

• TheinfrastructureconstructioncostestimatesweredevelopedusingAustralianobservedunitrateswhereverpossible,inabottom-upprocess,andbenchmarkedagainstrecentdomesticandinternationallyobservedrates.

• Thephysicalandenvironmentalconstraintsofproposedalignmentswerebuiltintotherouteselectionprocesstoavoidareaswherethereisahighriskofcostescalation.

• Technologysystems(suchastraincontrolandpowersupplysystems)androllingstockcostestimateswerebasedonknowntechnologiesthatarecurrentlyinuseandtookaccountofarangeofmanufacturers’deliveredcostselsewhere.

• Trainoperatingcostswereestimatedfromanindicativeoperatingplan,usingunitcostrates,reflectingAustralianmarkets.

• Ariskassessmentwasundertakentoarriveatrisk-adjustedcostandrevenueestimates.

• AwiderangeofsensitivitytestswereundertakentoassesstheimpactthatalternativeassumptionswouldhaveontheCBAresults,includinghigherandlowercapitalcostestimatesandhigherandlowerdemand forecasts.

16 Flyvbjerg,Holm,andBuhl,How(In)accurateAreDemandForecastsinPublicWorksProjects?TheCaseofTransportation,Journal of the American Planning Association,Vol.71,No.2,Spring,2005,pp.131-146.

17 BureauofInfrastructure,TransportandRegionalEconomics(BITRE),Review of Traffic Forecasting Performance: Toll Roads,2011.GHD,An investigation of the causes of over-optimistic patronage forecasts for selected recent toll road projects,2011,http://www.infrastructure.gov.au/infrastructure/public_consultations/patronageforecasting.aspx.

18 TheInstituteofTransportStudies,UniversityofLeeds,UK.


1.3 Structure of the report Theremainderofthisreportisorganisedasfollows:

Chapter 2 Chapter 9

Discussesthefuturetravelmarketintheeast Presentsanappraisalofregionaldevelopmentcoast corridor. effectsandopportunities.

Chapter 3 Chapter 10

DescribesthepreferredHSRsystem,including Identifiespotentialgovernanceandinstitutionalthetransportproductsproposedtoservethetravel structuresandtheregulatorymechanismsrequiredmarket,thesystemspecifications,operations fordeliveryofanHSRprogram.andmaintenancefacilities,andsystem-widegreenhousegasandnoiseimpacts. Chapter 11

Chapter 4 PresentspotentialdeliverystructuresforanHSRsystem,discussingtherolesofthepublicand

PresentsthepreferredHSRroute,withconclusions privatesectorsandstrategiesforprocurementonalignmentsandstationlocations. andpackaging.

Chapter 5 Chapter 12

PresentstheproposedHSRstationsinmore Presentsanimplementationplanforthedeliveryofdetail,describinginparticularhowHSRwouldbe afutureHSRprogram.integratedwiththemajorcapitalcitytermini.

Chapter 6

DefinesthepossiblestagingforimplementinganHSRsystem,withafocusonthefirststage.

Chapter 7

PresentsthecapitalandoperatingcostsofHSR,discussesthecommercialperformanceofthepreferredHSRsystemandsummarisesthefinancialperformanceandrisk.

Chapter 8

PresentstheeconomicappraisalofthepreferredHSRsystemusingaconventionalCBAanddiscussesthelikelyflow-oneffectstothe

Theresponsestoindividualstudyobjectivescanbebroadereconomy.foundinthechaptersandappendiceslistedinTable 1-2.

Thereportissupportedbyappendices,organisedas follows:Group1–Travelmarkets.

Group2–PreferredHSRsystem.

Group3–PreferredHSRalignment.

Group4–Costandprogram.

Group5–Environmental,socialandeconomicappraisal.

Group6–Commercialappraisal.

Group7–Procurement,institutionalappraisalandimplementationplan.


Table1-2 Locationofresponsestothephase2studyobjectives

Study objectives Response

Theprojectedtravelmarketintheeastcoastcorridor. Chapter 2 Group 1 appendices

HSRsystemalternativesthatcouldservetheprojectedtravelmarketeffectivelyandtheaggregateandsegmentedtraveldemandandmarketsharesthatcouldbeexpectedtobeattainedbyeach.

Chapter 3 Group 1 and 2 appendices

Theand

preferredHSRsystemsystemsspecifications.

includingcorridor,alignment,transportproducts Chapters 3, 4 and 5 Group 2 and 3 appendices

TheoptimumHSRprogramforstagingthephysicalprovisionofservicesonthepreferredHSRsystem.

constructionand Chapter 6 Appendix 4A

Thespecificenvironmental,socialandeconomicimpactsoftherecommendedHSRprogram,theirincidenceoncommunitygroups,andtheoverallnetcostorbenefitofthoseimpactstoAustraliacomparedtothebasecase.

Chapters 4, 8 and 9 Group 5 appendices Appendices 4B and 4C

Thenature,extentandHSR/corridorregional

valueofanyopportunitydevelopmentconcept.

createdforanintegrated Chapter 9

Thenatureandcostofcomplementarytoachievingtheassessedperformance

accessofthe

projectsandtheirHSRprogram.

contribution Chapter 5

Thefinancingneeds,HSRprogram.

financialperformanceandcommercialviabilityofthe Chapter 7 Group 6 appendices

Anygap,

commercialfinancinggapandwaysofincludingpublic-privatefinancingand

fundingfunding

andfinancingpartnerships.

sucha Chapter 7 Group 6 appendices

ThekeyriskstotheHSRprogramandimplicationsoftheserisksandpossible

itssuccessfulperformance,themitigationmeasures,ifany.

Chapter 7 Appendix 6C

Themostappropriateinstitutionalframeworkforgovernance,planning,procurement,construction,operationandregulationoftheHSRprogram.

Chapters 10 and 11 Appendix 7A

AneffectiveimplementationplanforcreatingtherecommendedinstitutionalframeworkanddeliveringtheHSRprogramandforsecuring,ifmerited,anintegratedHSR/corridorregionaldevelopmentconcept.

Chapter 12 Appendix 7B

introduction · on electric traction using traditional steel wheels on rails, but with a range of...

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