Feature: High-speed rail

Property prices around connected high speed rail stations are expected to skyrocket.

High-Speed Rail

Australia still slow over high-speed rail

The value of high-speed rail was enhanced recently by a new study which shows that funding for such projects could come from the increased values of property surrounding the lines.

One of the great frustrations faced by the rail sector is that Australia still does not have a high-speed rail (HSR) system, despite many arguments backing its introduction.

Now a new study by the University of NSW has further affi rmed the many benefi ts of HSR, not the least of which is its impact on land values.

It comes in the wake of claims by the Rail, Tram & Bus Union and mobility leader Alstom that the time is opportune now for the foundations for such systems to be laid, as reported in the previous issue of Rail Express.

The UNSW paper – High-Speed Rail Value Uplift: Preliminary Investigation Report – says property prices around connected rail stations would increase by potentially up to $140 billion, which in turn could be dedicated to funding HSR construction.

Released by the UNSW City Futures Research Centre (CFRC), it calculates estimated growth – or ‘value uplift’ – in land values due to the HSR and suggests adopting policies that funnel economic growth from the HSR towards offsetting its costs would see taxpayers share the benefi ts of land value increases while reducing the pressure on Governments to fi nance it.

According to report estimates, the land surrounding a number of stations along the proposed HSR line on the east coast would experience a signifi cant value increase – between $48 billion to $140 billion, in the population growth scenarios used in the report. The projections on both infrastructure-related uplift for existing residential properties from improved accessibility and planning-related value uplift from land rezoned to residential use around the stations.

CFRC director Professor Christopher Pettit carried out the research alongside postgraduate researchers Will Thackway and Reg Wade through the Value Australia project, which has received funding support through the federal government’s Cooperative Research Centre Project (CRC-P) program. The project uses the power of data analytics and artifi cial intelligence to provide insights into Australia’s property market.

“We’ve put together this report for policymakers and decision-makers to explore these growth scenarios and make informed decisions based on big data and analytics,” Pettit said.

“There are a lot of opportunities around the HSR for Australia to build stronger connectivity between cities and inject signifi cant wealth and job opportunities into the regions. The numbers in the report confi rm and help quantify that considerable potential.”

The researchers calculated value uplift from improved accessibility by applying a particular coeffi cient, based on international case studies, on the total value of existing residential dwellings within the catchment area of proposed regional HSR stops.

The value uplift from planning control changes was calculated by subtracting the development costs from each area’s expected new dwelling values to obtain the residual land value (RLV) per new dwelling. The projected RLV for each area was then multiplied by a range of population growth scenarios to get the fi nal fi gures.

“We expect the values to be a conservative approach to estimation and that the total value uplift could actually be higher,” Pettit said. “This is while still factoring in a profi t for the developers after all the external costs, including stamp duty, legal fees and building costs.”

The report says the value uplift, as a direct result of the HSR and population growth in surrounding areas, can be captured with various policies known as ‘value capture.’

While the concept isn’t new – it partially funded the Sydney Harbour Bridge’s construction – it has been used to fund many major rail projects abroad. Recently, the Crossrail project in the UK (the Greater London Authority) implemented a Business Rate Supplement, which is expected to generate £4.1 billion ($7.7 billion), contributing substantially to the total cost of the whole project of £14.8 billion ($27.9 billion).

Betterment levies, developer charges or taxes on property transactions are among the various mechanisms available to secure some of the benefi ts delivered by public investment. For the HSR in Australia, just how much value uplift can be captured comes down to the value

High-Speed Rail

The Queensland Government is funding faster rail infrastructure.

capture policy frameworks and structure put in place.

“If you were to capture a substantial proportion of this value uplift, it could pay for a huge amount of the HSR,” Pettit said. “You would be looking at tens of billions of dollars just from the residential value uplift alone, without even factoring in commercial, industrial and other beneficiaries.

“Some of that value capture could also be used to invest into housing affordability schemes. It doesn’t necessarily all need to go towards the infrastructure.”

SYDNEY TO NEWCASTLE

Indeed, calls for HSR in Australia are nothing new, with the concept under investigation since the early 1980s.

Every Federal Government since this time has investigated the feasibility of constructing rail systems with speeds above 200 kilometres per hour, but to date nothing has ever gone beyond the detailed planning stage.

With a Federal election looming this year, the concept has again been put forward as a carrot for voters, with the Opposition vowing to make fast rail connections between Sydney, the Central Coast and Newcastle a reality by assigning top priority for a new High-Speed Rail Authority (HSRA).

Labor leader Anthony Albanese said his party, if elected, would provide a $500 million down payment in his first budget to start corridor acquisition, planning and early works. It will work closely with the New South Wales Government, which had already identified the project as a key priority.

“During our last period in Government, we invested more in rail projects than all previous governments combined,” he said.

The Phase 2 study report into high-speed rail commissioned by Albanese when he was Infrastructure Minister identified Sydney to Newcastle as forming the first component of an eventual line to Brisbane.

He said he would establish the HSRA as a statutory agency and issue a clear statement of expectations for it to begin work on the Sydney to Newcastle corridor as a matter of priority.

The line would include stops in the Central Coast, with Wyong and Gosford as obvious possibilities.

“We recognise the potential of our regions and the vibrant jobs and lifestyle options they offer all Australians,” he said.

“And with the population of the Hunter Valley and Central Coast forecast to grow by close to 200,000 people by 2040, Labor knows that planning for our medium to long term future requires vision, dedication and a commitment to work cooperatively with the states and territories.”

The NSW Government’s projections show the population of the Central Coast and the Hunter Valley is already growing by about 200,000 by 2040, making better transport connections a necessity.

Albanese said Labor shared the NSW government’s vision of a brighter future for the regions, with fast rail connections offering people more choice of where to live and work.

“Fast and high-speed rail connections are not short-term political fixes, they are the kind of significant nation-building projects visionary governments invest in,” he said.

“This line will be built with the capacity for trains to run up to and over 250kmh. This would slash journey times from Sydney to Newcastle from over two and a half hours to just 45 minutes. Travel from Sydney to Gosford would take only half an hour.

“Given that this is a staged project with a long-term focus, the new HSRA would work collaboratively with the NSW Government to determine the best way of delivering the project, whether that be a phased faster rail approach or an immediate provision of HSR services.”

While the Sydney to Newcastle route is a priority, the HSRA would continue work on advancing other sections of the line, eventually connecting Melbourne, Canberra, Sydney and Brisbane.

At the 2019 NSW State Election, then premier Gladys Berejiklian promised that her government would start work on a faster rail network. It looked at three options for fast rail services to regional centres: 1. Faster rail: speeds of 160-200km/h, requires track improvements on existing routes. 2. Fast rail: speeds of 200-250km/h, requires new rolling stock on a mixture of new and upgraded track sections. 3. High-speed rail: speeds surpassing 250km/h, expected to require a new dedicated and purpose-built line.

INFRASTRUCTURE AUSTRALIA

Infrastructure Australia, the nation’s independent infrastructure advisor, has already advocated for governments to engage in protection and early acquisition of key infrastructure corridors.

Infrastructure Australia Chairman Mark Birrell identified the east coast high speed rail corridor as the “most urgent priority for protection”, due to its proximity to major population centres. Corridor protection and early acquisition can reduce the costs of major projects and minimise the need for underground tunnelling.

The organisation’s 2021 Australian Infrastructure Plan recommends that the Australian Government invests in faster rail, fast rail and high-speed rail infrastructure.

It also believes the Commonwealth should take the lead on confirming the long-term interoperability requirements for fast rail, faster rail and high-speed rail lines that cross state and territory borders.

This will ensure consistency across jurisdictions on technical standards for tracks, operator training and communication and signalling systems.

THE CORRIDOR CONCEPT

As it stands, the incumbent Federal Government prefers picking specific corridors for fast rail projects.

Urban Infrastructure Minister Paul Fletcher said during Albanese’s term as infrastructure

minister from 2007 to 2013, he could have started work on rapid rail.

“If he was serious about delivering highspeed rail, he had plenty of time to get work under way. All he actually delivered was a study that did not exactly give the project a glowing bill of health,” he said.

“If you want to talk about high-speed rail from Melbourne to Brisbane, then you need be honest with the Australian people about how much it is going to cost.

“What Albanese has promised would on any credible estimate cost between $200 billion and $300 billion. That huge spend has to be paid for by the taxpayer, including taxpayers in Adelaide, Cairns, Darwin, Hobart or Perth, who may never use it.

“The Coalition is already delivering a 20-year faster rail plan to deliver faster rail journey times along strategic corridors connecting major regional centres with capital cities. Faster rail has the potential to deliver more sooner across multiple corridors, and at a more affordable cost.”

The National Faster Rail Agency was established on 1 July, 2019 to work with state and territory governments to deliver the plan, which includes a $2 billion commitment to faster rail between Geelong and Melbourne and funding to develop business cases for strategic corridors in NSW, Victoria, Queensland and Western Australia.

In the 2021-22 Budget, the Government committed $178.1 million towards preconstruction activities for the Kuraby to Beenleigh section as part of the Logan to Gold Coast Faster Rail project.

In the west, Australia’s largest state is using the funding to develop a strategic business case that will investigate options to provide faster passenger rail services from Perth to the city of Bunbury, about 200 kilometres away.

Identifying existing constraints and determine future demand and operational requirements, it will include a planning and investment program that will identify potential projects, cost and staging options to help guide future investment decisions.

The project will also consider population growth, travel patterns, private sector financing opportunities and access to jobs, services and affordable housing.

The strategic business case, estimated to cost $8 million, will determine the economic, environmental and social costs and benefits of improved passenger rail services between the two cities. WA will cover half the costs.

The strategic business case began on 11 August, 2021 and is expected to be completed in mid-2023.

QUEENSLAND FAST TRACKS TO FAST RAIL

Meanwhile, the case for faster rail in Queensland has been given further impetus with the impending Olympic and Paralympic Games in 2032, which has prompted the need for supporting infrastructure.

Upgrading road infrastructure to connect large population centres like Brisbane and the Gold and Sunshine Coasts will only create induced demand and a favourable environment for cars, resulting in more traffic gridlock.

High speed rail and fast rail not only moves large amounts of people around quickly, but

The Labor Party is promising to establish a High-Speed Rail Authority. also mean long distances are no longer a problem. More train services can be added to scale up capacity, saving space on existing roads for essential services.

Recognising this, the Queensland Government has committed an additional $1.121 billion to deliver faster rail services between Brisbane, Logan, Beenleigh and the Gold Coast. As the first piece of Olympics transport infrastructure, Premier Annastacia Palaszczuk said the major project would see more tracks laid and level crossings removed to support faster, more frequent train services.

“To ensure South East Queensland can continue to grow, we must keep evolving our rail network so it plays a bigger role in moving people from A to B,” she said.

“We continue to see progress made on the transformational Cross River Rail project, which this investment will complement – meaning faster, more frequent journeys.”

Transport and Main Roads Minister Mark Bailey said trains between Kuraby and Beenleigh currently share a single track in each direction.

“We are limited in the number of peak services we run each day, but by duplicating the track between Kuraby and Beenleigh stations, we can increase capacity through the region,” he said. “Local motorists will also benefit with five level crossings to be removed and nine stations will be upgraded – vastly improving the amenities available to local commuters.”

The move has been welcomed by the Australasian Railway Association (ARA) , with Chief Executive Officer Caroline Wilkie saying faster rail would have a transformative impact on the region.

The ARA’s Faster Rail Report, released in 2021, confirmed the need for urgent action to deliver faster, more reliable and more frequent services between capital cities and regional centres.

“Investment in faster rail on routes like Brisbane to Gold Coast will make it easier for people to leave the car at home for their daily commute or weekend away,” Wilkie said.

“It will not only speed journey times, but increase flexibility for customers by enabling more trains, more often along the route.

“The global experience tells us faster rail drives urban renewal along the rail corridor, creating the opportunity for new housing and business precincts beyond capital city centres.

“With the Olympics just around the corner, faster rail will help showcase the very best Queensland has to offer and drive new development and growth long after the Games are over.”