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Going underground

By Ross Elliott - posted Tuesday, 20 July 2010


The Queensland State Government last week sought a bit of a fanfare about the possible construction of a new underground heavy rail line below the Brisbane CBD with a new underground station at Albert Street. The infrastructure commitment should be welcomed but before we get too excited, maybe we should first ask ourselves a few questions about the economics of it all?

The idea of new underground heavy rail lines to connect with the commuter rail system of south east Queensland isn’t new. I can even recall some 15 years ago proposing just that in a policy paper for the Property Council, which identified new stations in the CBD as a critical element in making use of rail transit more user friendly. The existing CBD stations, we argued, were barely CBD at all. Roma Street station is well off-centre, and “Central” station is inappropriately named because it is far from “central” to the core of CBD workers, students or regular visitors in modern Brisbane.

The “modern” Brisbane has concentrated its CBD workforce largely on the south eastern side of Queen Street, towards to the river. This large concentration of office and retail workers are prime candidates for public transport. They typically have regular work hours (great for service scheduling) and being concentrated in a CBD location, it works for the “hub and spoke” nature of public transport systems. But the location of the nearest rail station - Central - is just that bit of a stretch in hot or wet weather if it means walking 300 or more metres, up-hill, to get to your train.

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So logically a new underground station (or even two) which brings the convenience of commuter rail closer to the office should encourage more people to make use public transport. In terms of improved workplace amenity, the idea has plenty going for it. If you owned office buildings anywhere along the river edge of the Golden Triangle, you’d welcome this initiative with open arms and beg the government to fast track the proposal.

So it could indeed be a great idea. But there are few unanswered questions about the economics of heavy rail commuter transport which should deserve equally enthusiastic investigation of the evidence.

For starters, we don’t seem to have much of a plan when it comes to the real cost of public transport - especially the City Train network. The latest government figures show that every trip, by each and every commuter on the City Train network, is now subsidised to the tune of $10. That’s per trip, so for every daily return trip, the taxpayer is forking out more than $20 per commuter. And that’s after commuters have paid their fare - remember it’s only the subsidy. Worse news is that the numbers of patrons are falling - from 60.7 million to 57 million in a year. (Worth reading the article “Taxpayers' share of rail fares increases, while CityTrain passengers continue to decline” in The Courier-Mail, June 15, 2010).

The concern here would be that unless some of the fundamental economics of this failed pricing model are sorted, more commuters may only mean more subsidies and more taxes for the taxpayer. In short, there doesn’t seem to be an economy of scale: if more people caught the train under the present system, it could cost us more in subsidies, not less.

Ironically, an online poll taken in connection with the above story revealed that 79 per cent of respondents (out of 824) claim that train fares are already too high. This is especially ironic for two reasons: commuters with jobs in the CBD market are, on average, paid more than their suburban counterparts; and commuters who use the rail service are increasingly drawn from more affluent inner city and middle ring suburbs. The proportion of public transport users who begin their journey in low income, outer suburbs, is small compared to the increasing proportion of those who find it a handy (as opposed to necessary or low cost) way to get to work.

The evidence for this is found in studies by people such as Dr Paul Rees, School of Global Studies, Social Science & Planning at RMIT, and others. Various studies increasingly point to a rising correlation between rail (and tram in the case of Melbourne) use and proximity to central city workplaces. Put crudely, big chunks of that $10 each way subsidy are being paid for by low and middle income taxpayers with jobs in the suburbs (far from convenient train stations) so higher paid central city workers can have access to a convenient form of transport from their inner city or middle ring home, to work.

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As for the mooted new underground rail network, according to the Premier, it is going to service “Toowong, West End, the city, Newstead, Bowen Hills, Bulimba and Hamilton North Shore.” These are hardly what you’d describe as working class neighbourhoods.

A further question needs to be raised about the potential growth in commuter rail traffic, notwithstanding the convenience of a new CBD station. With the exception of the new line to Springfield, there are no new lines being laid and no new stations proposed. The catchment populations around the various train stations that form the City Train network are variously touted as “TOD” (transit friendly development) zones but other than this new denomination, there’s been precious little development activity to show for a decade of discussion.

Even with the best will in the world, simply building more housing around train stations won’t mean more commuters to the CBD because most of the jobs are in the suburbs in the first place. I am unaware of any State Planning Policy which aims to concentrate more office and retail workers in the CBD (indeed the pressure is on to decentralise). And without more workers in the CBD, there are simply not going to be more commuters wanting to go there. So you can have more housing around train stations throughout the metropolitan area but this won’t mean more people working in the city - unless there’s also going to be more jobs in the city (or the mode share rises).

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About the Author

Ross Elliott is an industry consultant and business advisor, currently working with property economists Macroplan and engineers Calibre, among others.

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