Australia bets on high speed rail line as a housing crisis fix

[SYDNEY] For decades, building a high-speed rail network in Australia has been derided as a financially flawed fantasy, even as Sydney’s population strains at the seams and housing prices soar. The affordability crisis is now spurring Prime Minister Anthony Albanese’s government to bet on a A$94 billion (S$85 billion) fix.

Plenty of people still don’t believe that the bullet train vision, which has a history of false starts, will materialise. But the new High Speed Rail Authority has now been given an unprecedented US$462 million preparatory budget, and a man in charge whose curriculum vitae includes projects such as Hong Kong’s Eastern Harbour Crossing and the Sydney Harbour Tunnel.

“Everything has come together – and we’ve got a government that wants to do it,” Tim Parker, the first head of Australia’s High Speed Rail Authority, said in an interview. “This can be delivered, and should be delivered.”

The 64-year-old Parker and his team now have two years to design, plan, and prepare construction contracts for a 194 km line between Sydney and Newcastle. The high-speed train would slice as much as two hours off the trip, connecting the two largest cities in Australia’s most-populous state in just 60 minutes. 

More boldly, it dangles a solution to a housing crisis that successive governments have failed to resolve, and that has put home ownership out of reach for many younger Australians. By shortening commuting times from Sydney, super-fast trains could liberate workers from one of the world’s least-affordable property markets, according to the business case for the new line. While final government approval will be required, Albanese has already said the numbers stack up. 

The Sydney-Newcastle link could spawn 160,000 new homes, 99,000 jobs and inject A$250 billion into the economy over half a century, according to the business case. 

If successful, the Sydney-to-Newcastle link would be just the first step. The government’s ultimate vision is for bullet trains to barrel down 1,800 km of Australia’s east coast as fast as 320 kmh, changing travel patterns and work habits on a strip where most of the population lives. By 2060, high-speed rail could connect Brisbane, Sydney, Canberra and Melbourne, more than halving travel times in Australia’s most densely populated travel corridor. 

However, given the history of false dawns, the concept of a high-speed Sydney-to-Newcastle connection, with its estimated A$94 billion price tag, has inevitably been met with wariness. Large infrastructure projects in Australia are plagued by cost blowouts and delays, with even a recent upgrade to intercity trains in New South Wales costing hundreds of millions of dollars more than initially planned, and starting four years behind schedule. 

Public scepticism follows repeated fruitless proposals over 40 years to introduce super-fast trains in Australia, and multimillion dollar scoping studies that went nowhere. Detractors have argued there are too few passengers to justify high-speed rail, and that generations of future Australians will end up footing the bill.

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There’s no shortage of overseas cautionary tales, either. The UK’s High Speed 2 rail line has been beset by political rows, delays and spiralling costs. Trains are expected to run slower than planned, on a shrunken network, and years later than first envisaged. Similarly in California, the estimated cost of a long-delayed high-speed rail link between Los Angeles and San Francisco has ballooned.

The engineering requirements on the Sydney-Newcastle stage alone are staggering.

The connection calls for 115 km of twin-bore tunnels, and 38 km of bridges and viaducts. Dozens of boreholes have already been drilled along the route to gauge the necessary depths of tunnels. Drill rigs have also taken rock and sediment samples on the Hawkesbury River, the major waterway that serves as Sydney’s northern perimeter, and on the Brisbane Water estuary. 

Any stage of the 1,800 km network would also involve large-scale land and property acquisitions to secure a corridor for the line.

But Australia’s latest plan to introduce super-fast trains finally has political and financial backing on an unprecedented scale.

“This is a project whose time has come,” Catherine King, Australia’s infrastructure and transport minister, said in April at a public briefing to potential contractors. “High-speed rail is economically viable for Australia, it is technically feasible and it is a nationally significant investment.”

As Parker sees it, the A$660 million allocated for preparatory work is a down payment that makes it hard for the government to reverse course.

“It’s a huge investment,” said Parker, who worked at Sydney Metro, the biggest expansion of the city’s public transport network in decades, before joining the High Speed Rail Authority. “They’ve put their money where their mouth is.”

The first contracts put out to tender in April included the construction of about 35 km of twin tunnels, and the supply of trains.

Academics say Australia’s growing population, as well as persistent housing crises in major cities, now tip the scales in favour of high-speed rail compared with during the 1980s. The potential for fast rail to create affordable homes outside Sydney is the biggest prize of all, said Samad Sepasgozar, an associate professor at UNSW Sydney who specialises in infrastructure and construction risk.

“That’s the big thing at the moment,” he said. “Right now, the most viable solution is developing a region rather than focusing on one city.”

Sepasgozar still sees plenty of potential stumbling blocks, including the significant tunneling requirements on the Sydney-Newcastle link. There’s also no guarantee the project would deliver its promised benefits, or that new governments will continue to fund it, he said. Australia’s three-year election cycle could see three or more different administrations in office before the first high-speed link is complete.

The route from Newcastle to central Sydney is estimated to cost A$61.2 billion. Extending the line to the new Western Sydney International Airport would add A$32.4 billion to the bill. 

The rail authority makes even bigger claims about the benefits of the 1,800 km Melbourne-Brisbane high-speed line. By 2086, the network would boost the Australian economy by A$1.7 trillion, the authority says. That’s more than half of Australia’s current gross domestic product of A$2.8 trillion.

Slow travel

To anyone travelling between Sydney and Melbourne these days, it’s clear there’s room for improvement.

Rail passengers currently endure an 11-hour, twice-a-day service, sometimes switching to a bus for part of the 900 km trip. The alternative for most people is to buy a plane ticket. The 90-minute air route is one of the busiest in the world and a profit engine for Qantas Airways, with return economy fares at times exceeding A$1,000.

By contrast, the 1,300 km high-speed rail journey from Beijing to Shanghai takes less than 4-1/2 hours, with dozens of services each day.

Parker says it’s a myth that Australia doesn’t have enough people to service high-speed rail. The population density between Newcastle and Sydney is 624 people per square kilometre, according to the rail authority. That’s more than double the UK, France and Spain, and almost twice as much as Japan, which all have high-speed networks, the authority says. 

As he draws up his plans, Parker says he’ll “copy shamelessly” from models in Europe, Japan and China. The key to success is for the government to commit to the project in its entirety, and then build a little at a time, he said.

While Parker is still working on a funding strategy, he expects the solution will be a combination of government and private-sector financing. With annual outlays of between A$5 billion and A$10 billion, Australia could have a 1,800 km high-speed network in 30 years, he said.

Not that Parker will be around to oversee the rollout. He says the Sydney-Newcastle link is likely to be his last mega project.

“No failures yet,” he says. “I don’t intend to make this one any different.” BLOOMBERG