The IMF recently advised Australian governments to slow down infrastructure spending to curb inflation.
The alternative is to leave the heavy lifting to home owners with mortgages. The latest interest rate increase by the Reserve Bank delivers a potent message to light rail pundits: can Canberra afford to push on?
Light rail will not solve the public transport problem in the territory, and the burgeoning spend will contribute to increased inflation and higher interest rates. Not only home owners with mortgages but all territorians will suffer as a result.
Surveys and focus groups conducted years ago indicating support for the deployment of light rail in the ACT were clear on one thing.
Light rail was preferable to buses because trams were considered greener, but the tram stops had to be close enough to where people live.
Electric buses were mostly a pipe dream at the time the original surveys were conducted. And the first all-electric bus fleet was only deployed as recently as 2017 in Shenzhen, China, with the advent of BYD's K9 electric bus.
In 2023, there are numerous electric buses operating throughout Australia and Canberra, including the Chinese-made Yutong E12 electric bus and more recently the Australian-made Custom Denning Element series. Electric buses are now operational as a fleet option from both overseas and local manufacturers.
It would be interesting to see the survey results from territorians about light rail versus electric buses if the same surveys were conducted today.
Based on the consistency of previous results prioritising zero emissions, the inflexibility of light rail compared with electric buses and their zero-emissions credentials point to a very different result.
There are three major problems with light rail in the ACT. First, the cost of infrastructure is enormous compared with buses that can use existing roads.
To be sure, recharging infrastructure requires investment but not at the same scale as light rail.
Many of Sydney's public transport districts are supporting growing numbers of electric buses already.
Second, light rail works well where there are large numbers of people to move from point A to point B, such as from a railway station to an airport or from one airport terminal to another.
The ACT's trams can carry 200 passengers at once. However, the current trip from Gungahlin to Civic covers large areas where there are no houses, and only those living along the track benefit from the investment.
Third, light rail cannot be redeployed.
To make it the backbone for public transport in a geographically large but sparsely populated city like Canberra is not ideal.
Buses are necessary to bring passengers from the outlying suburbs to the light rail network.
But in addition to light rail's inflexibility, the disruption caused by tramway works earlier this year actually led to a reduction in bus services. This situation is far from ideal.
Of course, the light rail network was not meant to solve the territory's transport problem.
It was designed to encourage development along the tramway. This has the added bonus of increasing development and the associated economic benefits, as well as increasing ACT government revenues through a value-capture mechanism, such as land tax.
As the infrastructure increases the value of properties along the route, the amount of value 'captured' through land tax increases. Or so the story goes.
The reality has been very different and the assumptions behind the ACT government's business cases have not stood up to scrutiny from the ACT Audit Office.
The Canberra Times reported back in 2018 that the ACT would purchase 14 trams at a cost of some $65 million. Each tram would be capable of transporting up to 200 passengers at full capacity. Even using the dated figures, that works out to a cost to provide a service per passenger of $23,214.
Using a conservative retail price of $850,000 per electric bus carrying 69 passengers at capacity, that works out to $12,318 per passenger, or roughly half the cost of the trams.
This does not include the light rail infrastructure, but the additional bus drivers must also be considered in comparing the two.
But the major benefit is the flexibility of the electric buses. Using $65 million as a base line, rather than moving 2800 people along fixed routes with only 14 vehicles, electric buses could move 5244 people along some 76 different routes for the same initial outlay.
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In a city where trams are rarely operating at peak capacity, it is clear electric buses provide greater value for money.
With infrastructure spending driving up inflation at a time when we can least afford it, the odds are stacking up against light rail in the ACT.
Electric buses make much more sense. They can help curb inflation while also solving the territory's ongoing public transport problem.
- Dr Michael de Percy is senior lecturer in political science at the University of Canberra. He is a chartered fellow of the Chartered Institute of Logistics and Transport. Michael's blog Le Flâneur Politique and podcast on his research are available at politicalscience.com.au.
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