Northlink - Getting SA on Track doc · 2019-05-17 · Northlink – Getting SA on Track A Feasible...

NORTHLINK – Getting SA on track

A Feasible Alternative for Freight Rail in South Australia

Prepared for the Northlink Reference Group, December 2010 by Town Planning HQ

Northlink Reference Group Members, 2010

Northlink – Getting SA on Track: Northlink Reference Group, December 2010

TABLE OF CONTENTS

1. Introduction 1.1 History of an Idea 1.2 Mitcham’s Research 1.3 Other Investigations 1.4 Trends Illustrate Imperative 2. Northlink Opportunity 2.1 The Opportunity 2.2 Federal Government Study 2.3 Dr Spiller’s Alternative View 2.4 Minister Conlon’s Response 2.5 Federal Treasury’s Stance 3. Wider Economic Benefits 4. Ways Forward Thanks to Mitcham Council for the use of the photograph on cover of this Report.

Northlink – Getting SA on Track


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1. Introduction 1.1 History of an idea Diversion of the Adelaide to Melbourne freight rail corridor away from the southern Adelaide Hills and inner city to a northern bypass from Murray Bridge to Two Wells was first mooted and explored 27 years ago. State and Federal Government investigations since 1983 include:

The northern rail bypass: was: originally proposed by Australian National in 1983.

The Rail Links Report to the SA Parliament by the Environment, Resources and Development Committee in 1999 outlined an alternative rail route around the Adelaide Hills.

The 2001 Australian Rail Track Corporation (ARTC) Interstate Rail Network Audit mentions a 180km bypass route for Adelaide passing though the northern Barossa.

The Centre for Industrial and Applied Mathematics (CIAM) at the University of South Australia, as part of the Rail Cooperative Research Centre, also investigated the issue (2001).1

The Federal Government commissioned GHD to prepare the Adelaide Rail Freight Movements Study which was completed in June 2010. Using a ‘traditional’ approach and a “rapid” cost benefit analysis that focussed primarily on the efficient movement of freight, GHD investigated five options for the freight rail alignment including retention and upgrading of the existing Adelaide Hills rail freight line and a ‘northern bypass’ and concluded the existing hills rail freight alignment would remain serviceable for at least 15-25 years.2

Disappointingly, and despite indications of significant long term benefits for regional and urban communities, neither the South Australian Government nor the Federal Government has expressed any support for the Adelaide northern rail freight bypass in either the medium or longer term and the opportunity seems to be again failing by the wayside.3

1 South Australian Rail Freight: A Bypass to Save the Heart of Adelaide (2007) published by Mitcham Community Rail Freight Task Force 2 GHD (2010), Adelaide Rail Freight Movements Study – Discussion Paper published by the Department of Infrastructure, Transport, Regional Development & Local Government (DITRDLG) (June 2010). 3 Federal Minister Albanese, Media Release, July 2010 which states “the Study’s key finding is that the existing line will have the capacity to handle the expected freight traffic up until at least 2025“.




1.2 Mitcham’s Research Since 2006 Mitcham Council and its community have actively campaigned for the northern rail freight bypass. Rigorous technical analysis of the infrastructure efficiencies of the current and proposed alignment is illustrated in the 68 page 2007 report by the Mitcham Community Rail Freight Task Force4. The same report indicates significant potential social and economic benefits of an Adelaide northern rail freight bypass. 1.3 Other Investigations Joining the campaign in 2010 were Adelaide Hills Council, Unley Council, District Council of Mallala, Rural City of Murray Bridge and the Regional Development Australia groups of Barrossa, Murraylands and Riverland and Metropolitan Adelaide. This group has become known as the ‘Northlink Reference Group’. Members have various complementary objectives and collectively recognize potential:

to deliver key regional strategy objectives, for example, outer urban employment nodes

that upgrade of the existing rail freight corridor through Adelaide would compromise diminish opportunities for further residential and business intensification and lifestyle improvements in these public transport rich areas.

To mitigate the serious detriment to residential amenity in these now heavily populated hills areas.

In March 2010 the Northlink Reference Group commissioned eminent Australian economist and town planner Dr Marcus Spiller of SGS Economics and Planning to prepare a review of the cost benefit analysis approach used by GHD and the Federal Government in the 2010 GHD/Federal Government report.5 Dr Spiller’s investigations throw into doubt the efficacy of the GHD approach particularly in terms of the “rapid” cost benefit analysis’ concentration on freight movement efficiencies and relative absence of cross-sectoral considerations, ie economic and social benefits for urban and rural communities. The April 2010 General Meeting of the Local Government Association of SA resolved to request the Association to lobby the State and Federal Governments to implement an Adelaide Rail Freight Northern Bypass either north or south of Truro as identified in the Adelaide Rail Freight Movements Study. 65 of 68 South Australian Councils voted in favour.6 Progress made by the Association is unknown.

4 South Australian Rail Freight: A Bypass to Save the Heart of Adelaide (2007) published by Mitcham Community Rail Freight Task Force 5SGS (2010), Adelaide Interstate Rail Freight: Brief for Strategic Assessment of Corridor Options published by the Northlink Reference Group, July 2010 6 The following Councils voted against the motion: Salisbury, Barunga West and Light Regional.




1.4 Trends Illustrate Imperative There is growing recognition of the economic (ecological) value of goods movement by rail. The projected increase in the frequency of freight movements by rail over the next 30 years is likely to result in between a doubling and quadrupling of existing movements 7 including within SA.

The long term outlook of the Australian Rail Track Corporation is for a significant increase in freight rail traffic. It is anticipated that movements could double by 2025 (172 per week or average of 25 per day) and potentially triple by 2040 (258 per week or average of 37 per day).

The Freight Rail corridor between Adelaide and Melbourne is already the busiest in Australia. There are currently 86 single stacked freight train movements per week (12 per day av.) of 1.5 kilometres length. This corridor services rail freight to and from Adelaide and Melbourne and moves traffic to each of these cities from the Perth and Darwin sectors.

Based on GHD study’s high case scenario, Adelaide bound/destination rail freight is likely to increase at 5% per year over a 30 year period. 4.6 times by the year 2039. That is 4.8 million tonnes of freight in 2010 to 22.2 million tonnes in 2039. This is five times the current haulage. Furthermore, the freight movement sector is demanding more efficient (faster, direct, cost limited) services. Operational efficiencies require freight rolling stock trucks to be double stacked, 1.8km in length and to be able to undertake haulage much faster. These trains can only be commissioned if significant funding is allocated to the construction of grade separation structures, passing loops, new bridges and tunnels throughout the Adelaide Hills and metropolitan area.

Concurrently Ballarat, Broken Hill and Mildura Rural City Councils have proposed the ‘National Link – Connecting Australia’s Rail Freight Network’ (GHD, 2008), The ‘national link’ would be built from Yelta (Mildura) Victoria to Menindee NSW and enables Adelaide to be bypassed for east – west and Melbourne – Darwin bound/originating freight movements. (Only Adelaide/Port Adelaide/South Australian bound or originating freight would need to enter Adelaide). Funding for a full feasibility study was made available by Infrastructure Australia (2010). If successful, the Geelong to Mildura and Menindee link would effectively remove the majority of rail freight business from the South Australian sector with considerable negative impact on major investments in our State. Further, cursory analysis suggests that if this realignment was realized the likelihood of the Adelaide to Melbourne rail freight corridor ever being diverted from Murray Bridge to Truro and Two Wells would be extremely low. So the future is staring us in the face. If we do not secure an alternate, Adelaide northern bypass route for rail freight, the business will either move from South Australia or we will be left with up approximately 300 longer, heavier, double stacked freight trains moving through the inner southern Adelaide Hills, inner suburbs and City area.

7 GHD (2010), Adelaide Rail Freight Movements Study – Discussion Paper published by the Department of Infrastructure, Transport, Regional Development & Local Government (June 2010).




2 Northlink Opportunity 2.1 The Opportunity With comprehensive economic analysis studying impacts beyond freight movement efficiencies and strong support from Regional Development South Australia and local Councils, there is opportunity to persuade Governments that the Northlink bypass is a sound long term investment for Australia’s Rail Freight Network that will facilitate both urban and regional growth. 2.2 Federal Government Study (2008-2010) Several options for reconfiguration of the interstate rail freight corridor traversing metropolitan Adelaide are under consideration by the Commonwealth and State Government. These options range from upgrading existing rail links which run through established residential and mixed use areas, including inner city suburbs, to schemes which would see ‘break of bulk’ points established to the north and south on metropolitan Adelaide’s periphery accompanied by a circumferential rail link which would avoid the need to take freight through central areas. Some of these options have been subjected to a cost benefit analysis (CBA) in the report on which has recently been released by the Commonwealth – Adelaide Rail Freight Movements Study (GHD, 2010). This report was prepared for the Department of Infrastructure, Transport, Regional Development and Local Government (DITRDLG). The Study identified 5 options for the alignment of the freight route from Murray Bridge to Adelaide, in addition to continuation of existing arrangements (base case), for the purposes of consultation. These options are illustrated below:




Figure 1 The existing rail route and possible bypass routes (Source: Figure 8 in DITRDLG Adelaide Rail Freight Movements Study: Final Report, GHD June 2010), p 19

The two seemingly ‘top’ options are Option 1 – existing alignment and Option 3 – Northern bypass south of Truro (now known as Northlink) although the report clearly states that “change to the status quo will not deliver a net economic benefit”. The Federal Government’s study details the works required to achieve the options as follows:

Option 1 – existing alignment upgraded, including passing loops, altered tunnels and grade separations (over/under passes) of roads and passenger rail (including Goodwood Junction)

Option 3 - bypass the existing Adelaide Hills section from just west of Murray Bridge, to travel south of Truro and to re-join the existing alignment near Two Wells. The route is mostly at ground level and on flat plains areas.




Cost estimates and attributes of all investigated alignments in accordance with the GHD cost benefit analysis are as follows:

8

The Federal Government’s study ultimately dismisses the option to build a ‘northern bypass’ by suggesting that the option is too expensive to be justifiable for social and other economic benefit.

8 GHD (2010), p 20




2.3 Dr Spiller’s Alternative View On behalf of the Northlink Reference Group Dr Marcus Spiller analysed the methodology used to deliver a cost benefit analysis of the options contained in the Adelaide Rail Freight Movements Study9. Dr Spiller advised that the CBA has a ‘traditional’ scope; that is, on the benefit side of the equation, it has focussed on time savings and other freight cost efficiencies which might be on offer. Offsetting these benefits are the increased capital and operating costs associated with the option in question, compared to a ‘base case’ or ‘business as usual’ scenario. Only a limited range of externalities, such as diminished (or improved) amenity in surrounding properties and reduced traffic delays for vehicles at level crossings, has been taken into account. In other words reported Dr Spiller, the analysis has taken a largely ‘intra-sectoral’ approach; it has treated impacts on freight sector as the prime consideration. Dr Spiller advised that a much broader perspective should be taken in the evaluation of the rail freight corridor options, with careful consideration being given to a range of ‘cross-sectoral’ issues. He said these include the differential impacts of the options on settlement patterns and regional productivity in industries other than those generating or receiving rail freight. The report by Marcus Spiller of SGS Economics and Planning casts doubt on the cost-benefit analysis approach used by the Federal Government.

“the cost benefit analysis outlined in the Adelaide Rail Freight Movements Study (GHD, 2010) does not take into account the wider economic benefits of the options, including longer term impacts on shaping urban settlement and building human capital in Adelaide and surrounding regions. This is despite the fact that the Commonwealth Treasury and Infrastructure Australia have highlighted the importance of wider economic benefits in project evaluation.”10

Dr Spiller goes on to say:

“The State Government’s recently adopted 30 Year Plan for Greater Adelaide implicitly recognises that a more compact, transit oriented city will improve equity of opportunity and boost business productivity and human capital through improved connectivity. To this end, it proposes a clear shift in the pattern of growth of the city so that 70% of additional housing needs will be met from within the existing urban footprint by 2038 (p 60). On the face of it, rail freight options which compromise urban intensification opportunities within transport and jobs rich areas would appear at odds with these strategic planning objectives. It is important that project evaluation tools properly address such objectives.”11

9 Dr Marcus Spiller (July 2010) 10 Dr Marcus Spiller (July 2010), p 2 11 Dr Marcus Spiller (July 2010), p 12




The Spiller report argues that there is prima facie case that cross sectoral benefits (and costs) are likely to be of a considerable scale in some instances, to the point where the outcomes from a cost benefit analysis of traditional scope cannot be relied upon to deliver the most efficient deployment of the Commonwealth and State resources available for investment in the SA interstate rail freight system. The assessment undertaken by the Federal Government’s consultants, GHD, involved two steps.

A. A ‘strategic fit analysis’ was undertaken initially. This involved a qualitative appraisal against a set of policy objectives relating to economic, social and environmental performance.

B. The second step involved application of a ‘standard’ CBA, carried out in accordance

with guidelines published by the Australian Transport Council in 2006. This is an excessively narrow scope for such a potentially strategic project. However, it was flawed because it excluded Wider Economic Benefits such as

human capital impacts equity impacts and urban consolidation benefits.

In summary, the “rapid” cost benefit analysis outlined in the Adelaide Rail Freight Movements Study (GHD, 2010) does not take into account the wider economic benefits of the options, including longer term impacts on shaping urban settlement and building human capital in Adelaide and surrounding regions. This is despite the fact that the Commonwealth Treasury and Infrastructure Australia have highlighted the importance of wider economic benefits in project evaluation. In Dr Spiller’s view it cannot be confirmed that none of the options (outlined in the GHD study) are warranted in economic terms, particularly those options which involve diversion of freight traffic around the metropolitan area, until the WEB’s, human capital, equity and urban consolidation impacts of the various options have been analysed, quantified and, if possible, monetised. Dr Spiller recommends a further study of a cross-sectional analysis/cost benefit analysis be undertaken. He says that this report is essential to provide tangible evidence as to what the northern bypass can achieve and that the analysis will underpin the project’s rationale and will help to influence key audiences.




2.4 Minister Conlon’s Response State Minister for Energy, Transport and Infrastructure was issued with a copy of Dr Spiller’s July 2010 Paper. In a letter to Minister Albanese of 14 July 2010 regarding the matter of the Adelaide Rail Freight Movements Study, Minister Conlon states:

“DTEI has examined Dr Spiller’s report and considers that this report may be of value to Infrastructure Australia’s work on wider economic benefits.

“I would appreciate if you could forward the enclosed report to Infrastructure Australia and ask them to consider it, and the inclusion of wider economic benefits, in analysing the long term need for an Adelaide Hills …”12.

No further advices have been received from the Federal or State Government although it is understood that neither Government has formally endorsed Northlink (northern bypass) as the preferred route. 2.5 Federal Treasury’s Stance

In a March 2010 speech by Dr Ken Henry, the Secretary of the Federal Treasury said: ....... Getting it right with cities and infrastructure has significant potential, not just from a pure economic perspective, but also from a social and environmental sustainability perspective. Getting it wrong is likely to be very costly socially and environmentally. It is easy to observe some undesirable outcomes already manifest in some of Australia's cities, with inadequate infrastructure and chronic congestion. ........ And as stated in the 2010 Infrastructure Australia guidelines for funding:

“To win Infrastructure Australia support, urban infrastructure proposals will need to be well integrated with surrounding land use, and will need to leverage high quality, higher intensity land use outcomes that maximise the benefit of the infrastructure investment and contribute to a more compact, sustainable and diverse urban form. Proponents will be encouraged to pursue opportunities that deliver on multiple national priorities for cities, such as leveraging concurrent outcomes for increased productivity; improvements to public transport operations and accessibility; provision of opportunities for affordable, diverse and age-friendly housing; showcasing water, energy and other sustainability innovations; and adapting to climate change impacts.”13

12 Hon. Patrick Conlon MP letter to Hon. Anthony Albanese MP, 14 July 2010 13 Infrastructure Australia, (2010) Getting the Fundamentals Right For Australia’s Infrastructure, p20




3.0 Wider Economic Benefits The following key benefits of Northlink, beyond the efficient movement of freight, have been identified by the Northlink Reference Group members:

Job Creation Competitive Advantage Community Building

Further explanation of benefits is provided below:

Relieved of the nuisance of heavy rail freight movements, the latent agglomerative tendencies in inner Adelaide – associated with the superior accessibility and effective density of this part of the city - will be able to assert themselves.

As distribution of jobs, or the transport system is adjusted to build ‘effective density’, a city can gain a competitive advantage.

Northlink can change the distribution of future employment growth, to favour freight transfer locations in regional and outer urban areas where a realigned rail freight corridor intersects with highways and freeways.

Northlink – the alignment for rail freight away from the Adelaide Hills - will complement and enhance the 30-Year Plan for Greater Adelaide as well as the principles of the newly-established Integrated Design Commission and targets of the South Australia’s Strategic Plan.

Northlink is much more than a railway line – it’s an artery that will sustain planned and strategic regional growth

Northlink will have significant benefits for metropolitan Adelaide – it will allow our public train system to operate more efficiently and free up strategic parcels of land for quality place making

Northlink is all about enlivening and sustaining better regional communities including by enabling a tourism link into the Barossa Valley

Northlink will create and keep jobs in South Australia

We must lift eyes beyond the next 25 years. We must make the right decision today to make sure we are not lumbered with an inefficient freight rail system beyond 2025 or, worse still, being cut right out of the national freight rail system14

Major infrastructure projects, such as the Adelaide rail freight initiative, have impacts well beyond the interests of Government transport agencies.

Evaluation should consider impacts on a range of policy objectives relating to urban and regional settlement patterns, economy-wide productivity enhancement and human capital development.

14 By the Victorian proposal for a national rail link from Medindee NSW to Geelong via Mildura, 2010




4.0 Ways Forward During 2007 to2010 Mitcham Council and latterly the Northlink Reference Group helped to caused some shift in Government thinking towards a northern bypass for a freight rail corridor in South Australia. This shift has been demonstrated to be inadequate to secure firm commitments and funding. A concerted, and most targeted effort is required in 2011. The following is recommended:

Regional Development South Australia endorse the Northlink bypass and work to activate support at a Federal Government level

Endorsing Councils provide support and assistance to the RDSA in its endeavour to gain Federal Government support

Presentation be made to the Integrated Design Commissioner of South Australia in endeavour to gain South Austrlian Government support

The Communications Strategy prepared by Ball Consulting be implemented15 and/or used as a key reference in accordance with the objective to focus the State and Federal Governments on the proposal’s benefits

The Northlink Reference Group or RDSA be adequately funded to fulfil 2010 tasks A strategic plan for 2011 be developed by the coordinating organisation

In his report to the Northlink Reference Group, Dr Spiller advised that given the excessively narrow scope of the Adelaide Rail Freight Movements Study “rapid” CBA, SGS Economics believe it would be prudent to prepare a complementary analysis according to the following broad methodology.

Specification of alternative metropolitan urban development scenarios under the different rail freight options, covering the distribution of jobs and housing at a suitable small area level (e.g. travel zones).

Specification and analysis of appropriate travel time matrices (houses to jobs) for these various scenarios, to measure agglomeration effects.

Identification of a comprehensive impacts table covering metropolitan 'city shaping' impacts.

Quantification of amenity and urban consolidation benefits. Quantification of productivity and human capital development benefits, using

techniques sourced in Graham (2006).16 This is a once in a life time social and economic development opportunity for South Australia that should be enabled by progressive State and Federal Governments.

15 Ball Communications, July 2010, Realignment of Freight Rail 16 SGS Economics, July 2010




REFERENCES

Ball PR (July 2010) Communications Strategy for Realignment of Freight Rail for Northlink Reference Group, 2010. Department of Planning and Local Government - South Australia (2009) The 30 Year Plan for Greater Adelaide. GHD (2010) Adelaide Rail Freight Movements Study – Final Report published by Department of Infrastructure, Transport, Regional Development & Local Government (June 2010). Government of South Australia (2007) South Australia’s Strategic Plan. Henry, K. (2010) To Build, Or Not To Build: Infrastructure Challenges in the Years Ahead and the Role of Governments; Address to the Conference on the Economics of Infrastructure in a Globalised World: Issues, Lessons and Future Challenges, 18 March 2010. Infrastructure Australia (2010) Getting the Fundamentals Right for Australia’s Infrastructure Priorities, 2010. Dr Marcus Spiller (July 2010) Adelaide Interstate Freight Rail: Brief for Strategic Assessment of Corridor Options for Northlink Reference Group, 2010. South Australian Rail Freight: A Bypass to Save the Heart of Adelaide (2007) published by Mitcham Community Rail Freight Task Force, 2007.

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