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Brisbane and Sydney transport experts share doubts about light rail benefits

Transport experts from Brisbane and Sydney have endorsed criticism of the business case of the city-to-Gungahlin light rail project, saying wider economic impacts and land use benefits were an "incredibly high" portion of the model.

Institute of Transport and Logistics Studies director Professor David Hensher said the reliance on those factors for almost three fifths of the projected benefits – taking the benefit to cost ratio from 0.5 to 1.2 – were questionable.

"We've looked at studies in Sydney which would suggest wider economic benefits would scale up the benefits by 17 per cent," he said.

"There's then a huge amount of land use benefits being justified, I've never seen them that high before, and I doubt if [they] are going to make up such a big difference."

The ACT government released an expert review of the tram's business case on Tuesday, 18 months after it was written, in an attempt to counter criticism from a Grattan Institute report released the day before.

The government-commissioned review by European transport consultant Professor Roger Vickerman concluded the business case overall was sound, careful and robust, and gave a "reasonable estimate" of the impact on the corridor.

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The Grattan report criticised the 2014 business case's 1.2 benefit-cost ratio estimate, as it included land use benefits and wider economic impacts which it said were "typically excluded from project evaluations by Infrastructure Australia because the risks of overestimating them are so high".

Griffith University's Urban Research Program deputy director Matthew Burke, a strong supporter of the Gold Coast light rail project, said the numbers were an argument against the "expensive model" in the key northern Canberra corridor.

"Even for a transport project in Australia, that [1.2] is especially low," he said.

"Too great a share of the benefits for stage one are accrued to the wider benefits, many of which really only open if you get extension of the light rail system through the rest of the city."

Associate professor Burke said light rail generally had good returns in the very-long term, but he could not see how the stage one corridor could materially change the game with the volumes of people it would carry.

Professor Vickerman, consistent with the government's first commissioned review into the business case, said the methodology used to deliver the 1.2 ratio was sound.

Capital Metro Minister Simon Corbell said the light rail business case was a robust and conservative document which the two reviews, by leading independent transport experts, had found to meet best practice international standard.

"As per Infrastructure Australia's most current guidelines, the business case included Wider Economic Benefits in order to fully and accurately capture the benefits of the project," he said.

"Their guidelines do not highlight any risks to presenting WEBS in the analysis of benefits to a project, provided they are subject to correct interpretation, accurate calculation, and disclosed separately as they are in the Capital Metro business case.

"The quantification of land use benefits for inclusion in the economic appraisal has been done to IA guidelines."

Construction of the second stage of the Gold Coast light rail was due to begin this month, with nearly 22,000 passengers using stage one daily, associate professor Burke said.