Commonwealth could be a big winner from Canberra light rail

Commonwealth could be a big winner from Canberra light rail

Commonwealth government property values between the city and Russell would increase by as much as 30 per cent if Canberra's light rail is extended, a federal parliamentary committee has heard.

The ACT took its efforts to sell the Turnbull government on a 3.2 kilometre extension of the city to Gungahlin line to federal Parliament's standing committee on transport, infrastructure and cities on Friday, arguing ageing office buildings along Constitution Avenue and undeveloped land in Russell would be significantly more valuable with tram connections.

Environment and Planning Directorate boss Dorte Ekelund. The government's plans for redevelopment of buildings at Anzac Park would benefit from the extended route being planned.

Environment and Planning Directorate boss Dorte Ekelund. The government's plans for redevelopment of buildings at Anzac Park would benefit from the extended route being planned. Credit:Melissa Adams

The proposed extension would include three passenger stops and could create about 5600 extra passenger trips each day, but Chief Minister Andrew Barr wants federal funding given the Commonwealth would be a key beneficiary.

ACT Environment and Planning Directorate boss Dorte Ekelund made the case as part of the committee's consideration of value capture plans from transport infrastructure. Value capture involves government efforts to capitalise on increases in property value created by infrastructure.


Value capture mechanisms the ACT could use include land tax, lease variation charges and stamp duties. The committee was told one impediment on capturing land value in the ACT is the government's inability to impose taxes on Commonwealth owned land.

Ms Ekelund told the committee the government's plans for redevelopment of buildings at Anzac Park east and west and unused land around the Defence precinct would benefit from the extended route being planned or in place. Mr Barr has previously estimated the financial benefit at about $85 million.

"A tram to Russell is also tantalisingly close to cross Kings Avenue bridge, close to Parliament House and to Barton and Parkes, as well as over to the airport," Ms Ekelund said.

The benefits could be wider than just property values.

She argued increased productivity through public transport use and effective connections between Canberra's main employment hubs would also increase workforce participation and lead to more income tax for the federal government.

Ms Ekelund, a former head of the federal government's Major Cities Unit, wouldn't discuss ongoing negotiations with the Commonwealth. Last month Mr Barr said extending tram services to Russell could depend on cash contributions made in the May federal budget or this year's federal election campaign.

The federal contribution for Russell is expected to be in the tens of millions of dollars but the government won't say the price the Canberra Metro consortium has put on the extension.

The chair of the committee, Sydney Liberal MP John Alexander, raised the prospect of "collective bargaining" with rolling stock producers overseas to provide cheaper vehicles for Australia's light rail projects and train lines.

Sydney and the Gold Coast are among other cities planning or extending light rail and Mr Alexander said Australia could eventually build its own vehicles when there was a critical mass domestically.

Engineers Australia Canberra division president Alan Thompson agreed the federal government could represent state and territory transport authorities in joint bids to get a better price for imported trains or trams.

"That idea of using one template, a rolling stock pattern, has actually worked in Australia," Mr Thompson said.

He said rolling stock orders had previously been "tacked on" to purchases made for Queensland's network.

"It is a different paint job, but essentially the same carriages internally and that got them a much better price. They were not so proud in that they had to have something different, they were happy to more or less go with the same product.

"Two Holdens, if you like, rather than one Holden and one Ford. That was a very good deal for them and I think the light rail rolling stock it would be a very similar proposition."

Ms Ekelund said the proposal was an interesting concept for the future, as the ACT government plans for a city wide network of trams over 25 years.

The consortium already has provisions for rolling stock, with trams to be made and maintained by Spanish firm Construcciones y Auxiliar de Ferrocarriles​, or CAF. The government plans to spend about $65 million on a fleet of 14 trams, each with capacity to carry 207 people.

CAF is also supplying six new trams for Sydney's inner west light rail.

Correction: An earlier version of this story incorrectly referred to Alan Thompson as a director of Engineers Australia.

Tom McIlroy is a political reporter for The Australian Financial Review in the federal press gallery at Parliament House.

Most Viewed in National