Should Shorten fund Melbourne’s suburban rail loop?

With the federal election only a few days away, Opposition Leader Bill Shorten promised that if he wins on Saturday, he'll contribute $10 billion toward the cost of the $50 billion suburban rail loop promised by Premier Daniel Andrews last year, also when an election was in the offing.

It's an easy promise to make because it's almost entirely phantom money. A Shorten government wouldn't be called on to pay anything substantial until after the subsequent federal election in 2022. Even then, the promised $10 billion funding is spread over the 15-year period to 2036. In political terms that's the never-never.

It's not surprising that such an easy promise is also a grossly irresponsible one. There's no business case to support this mammoth investment and no tick of approval from either Infrastructure Australia or Infrastructure Victoria. Mr Shorten and Mr Andrews are prepared to commit an unprecedented sum of public money on a project that's completely unproven.

Neither of them know if the benefits will exceed the costs. But they certainly know it makes sense politically:

The proposed suburban rail loop would pass through the Labor-held seats of Isaacs, Hotham, Jagajaga, Cooper, Wills, Maribyrnong and Gellibrand, as well as through or near the boundaries of the Liberal-held electorates of Goldstein, Chisholm and Menzies. But Labor strategists believe the line is also a vote winner in other inner-city Liberal seats because it promises to ease congestion.

The two leaders aren't deterred by the absence of evidence. They've fabricated figures to support their electoral objectives. The key one is the assertion that the 90 km loop will carry 146 million passengers per year in 2050 when it's fully completed.

Is 146 million p.a. a credible claim? Consider that Melbourne's entire electrified rail network, consisting of 16 lines and 220 stations, currently carries an average of 240 million passengers per year. That's for a network that's focussed on the giant job and activity concentration in the CBD, where high parking charges and traffic congestion make public transport very attractive compared to driving.

Assuming continuation of the trend in train patronage over the last 10 years, that would increase to around 305 million passengers annually by 2050 (though only 265 million p.a. if based on the trend over the last three years).

The claim of 146 million passengers p.a. is preposterous given the loop is a single suburban line, has only 15 stations, and wouldn't pass through any activity centres that are even remotely as large or dense as the CBD. It's a ludicrously big number that had to be invented to justify such a gigantic outlay.

Let me be clear that improving public transport, including orbital travel, is important, but the suburban rail loop is a solution that at this time is way too big and expensive relative to any reasonable estimation of likely demand. It should be on a plan as possibly required some time in the future, but it shouldn't be a current political commitment.

There are more pressing and more plausible priorities for expenditure of scarce public dollars on this scale. They include upgrades to signalling, track duplications, extensions of electrification, additional rolling stock, and discrete projects like Melbourne Metro 2.

It would be possible to double the size of Melbourne's tram fleet with 500 new triple-carriage e-class trams for circa $7.5 billion. The size of the existing tram network could be doubled to 500 km of double track, providing scope for more orbital routes, for around $30 billion.