Image from Consolidated Land and Rail Australia

It’s back – now better than ever! This time, high-speed rail could solve Australia’s housing affordability problems!

Australian capital cities are facing challenges of diminishing housing affordability, increasing urban congestion, a perceived infrastructure shortfall and growing inequality, yet regional cities are declining.

A recent House of Representatives committee report explored the potential to address these challenges with new urban development opportunities unlocked by large transport projects, such as the east coast high-speed rail.

Michael Brown

The report followed a 2013 study, HSR Phase 2, which recommended a high-speed rail route eventually linking Brisbane and Melbourne, staged capital expenditure totalling $114 billion and completion by 2065.

How to fund the line has vexed its supporters for 30 years. The problem looks particularly difficult against a political context of unreflective budget deficit concerns, rising populist disdain for the recommendations of urban “elites”, increasingly fractious government, yet the need for long-term bipartisan commitment for large and complex projects.

The parliamentary committee examined ways to overcome these concerns through “value capture”; by linking property development to infrastructure funding. Its recommendations are cautious but the overall logic is well illustrated in a recent proposal from Consolidated Land and Rail Australia (CLARA).

CLARA aims high: they “…seek to undertake a re-balancing of our settlement and deliver new ways of imagining, planning and building cities, transport and infrastructure”.

CLARA proposes, firstly, that new cities can be formed and flourish along their proposed high-speed rail route, bypassing existing settlements and, secondly, that the resultant land value uplift can be captured to fund the project with no call on the public purse. This funding model is similar to Hong Kong’s urban MTR system but closest to 19th century American railroad construction in its rural-to-urban imagination.

The proposition sounds compelling but contradictions soon emerge.

Firstly, can – or should – eight new cities be built and flourish along the proposed route? The success of new towns worldwide has certainly been patchy; recall Elizabeth, Monarto and the Multi Function Polis in South Australia.

CLARA describes Sydney and Melbourne as already “overcrowded” on the one hand but also as having very low densities.

Though admiring the city-making transport planning within London and Paris, CLARA proposes instead to develop eight remote cities.

CLARA’s cities-plus-rail dyad claims to solve urban growth problems in major cities yet each proposed “smart city” would be an independent integrated living and working entity, impliedly not requiring CLARA’s high-speed rail. How then does CLARA propose that ongoing high-speed service will be funded?

Is it good policy to allow peri-urban settlements to rely solely on a single privately owned railroad to access city jobs?

After travelling by fast train to the main cities for work, wouldn’t CLARA’s residents then face the same intra-urban congestion motivating the entire project? Who then picks up the tab to decongest the city and fulfil CLARA’s promise of rapid access to jobs?

Against these observations, State policies urge the obvious: increased densities in existing cities, where people actually want to live and work and where existing transport infrastructure can be expanded more cheaply. Leave high-speed rail to improve intercity connectivity.

Second, there are problems with funding and relationships with government. Can CLARA actually capture sufficient land value to avoid calls on the public purse?

CLARA’s capital-raising depends on the long-term attractiveness of its proposed regional cities yet urban success is beyond its direct control. The HSR Phase 2 study observed that European and UK regional cities experienced mixed fortunes after the introduction of high-speed rail. How then might CLARA attract sufficiently low-cost funding to make its 30-year project viable? If not, will CLARA then seek government-backed low-interest finance?

Why not align the route and add CLARA’s new city-oriented settlements to existing rural towns, as HSR Phase 2 recommends? Though many have struggled, at least these towns are more economically vibrant than paddocks. The answer is funding – CLARA would not make as much from land value uplift. But won’t CLARA’s goal to maximise funding then defeat its goal to provide attractive lower cost land outside the major conurbations?

It appears that CLARA may seek government powers to acquire land compulsorily under non-market conditions. In Sydney, compulsory acquisition powers for private development have aroused stiff opposition, not least because they are inequitable and distort land markets.

Previously wary about value capture, why would any Australian government suddenly adopt then immediately transfer this funding power to a for-profit entity such as CLARA, rather than deliver even wider public benefits directly?

Should government intervention be monetised and therefore treated as an in-kind subsidy in cost-benefit analyses? Should these calculations also include any government support for regional economies bypassed by CLARA’s infrastructure?

All these contradictions originate in the foundation concept of CLARA. If we accept that the primary role of infrastructure is to help cities grow, CLARA reverses the logic by inventing cities to pay for infrastructure – it’s a bit like a tail wanting to grow a dog.

Both CLARA and the HSR Phase 2 study largely agree on the benefits of high-speed rail. Yet, as government would need to support CLARA’s approach, the hurdle of long-term bipartisan commitment applies to both CLARA and public funding for high-speed rail.

But if high-speed rail is conceived as a “city shaping” endeavour, rather than just a “project”, do other delivery pathways open up?

City shaping envisions projects as components of a larger entity – the city. Integration is the key to genuinely city shaping projects. Poorly integrated “silo” projects result in fragmented cities, as far too many urban motorway projects illustrate. Well-integrated projects are also cheaper when they “lean” on complementary projects that deliver even greater urban benefits when combined.

If a standalone commitment to high-speed rail faces intractable hurdles, what if its delivery was explored conceptually from the other end – how it might be integrated into the city? Are there complementary projects currently underway that could support high-speed rail and ultimately lower combined overall costs if a decision is eventually made to build it?

In Sydney there are at least two.

First, the NSW and Australian governments are jointly exploring what rail services should be provided to and near the proposed Western Sydney Airport. One option is a direct rail express service, the character and route of which approximates high-speed rail. Could this service be configured to mesh with high-speed rail in the future? Are there cost savings to both if this were to occur? If so, could a decision to build high-speed rail actually be accelerated?

Secondly, UrbanGrowth NSW is exploring redevelopment within the Central Station to Eveleigh corridor, but is not explicitly exploring the benefits of a high-speed rail terminus.

A recent report by SGS Economics compared the size of Australia’s city economies to Asian counterparts. Sydney’s is comparable to Malaysia’s or Hong Kong’s while Melbourne, with a population of some four million, has an economy equivalent to Bangladesh’s, which has a population of 156 million.

The main long-term benefit of high-speed rail is to improve intercity connectivity and hence combined urban productivity, which is why Malaysia and Singapore are investing in high-speed rail. Of relevance to Sydney, the Singapore terminus station is being conceived as an anchor to a new business precinct.

If a decision is eventually made to build high-speed rail, Central Station could become the front door to Sydney’s airports, the nation’s capital and the economies of Sydney and Melbourne.

A simple change of strategic direction could allow UrbanGrowth to consider the benefits of a high-speed rail terminus and precincts designed to capture the economic benefits from greater intercity connectivity.

The Simpsons Monorail episode famously crystallised public cynicism about transport projects. High-speed rail in Australia has attracted similar scorn.

The ABC’s Utopia team archly conjectured that though 95 per cent of Australians might support high-speed rail, the five per cent of dissenters merely comprised “… engineers, economists, experts in transport …”.

These spoofs ring particularly true when large infrastructure projects are built as isolated urban baubles rather than as thoughtful complementary investments to grow Australia’s urban productivity.

How much Australia will benefit from high-speed rail depends on how intelligently it is integrated. In the event that high-speed rail is never built, anticipatory planning for it may come at additional cost, but this should be weighed against the likely cost of delivering high-speed rail alongside contemporaneous projects that ignore its possibility.

Mike Brown has worked in New South Wales local and state government in planning, urban design, and strategic roles for 15 years. He recently completed a Masters of Urban Policy and Strategy at the University of New South Wales.

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  1. Great article.
    HSR may at some point be viable, but connecting NSW/ACT with fast regional rail should be the immediate priority. Of course, we cannot connect NSW with viable higher speed rail until 1) there is agreement of where these trains stop in metropolitan Sydney i.e. Not Central 2) Govt allocates investment in strategic regional track alignment to enable breakthroughs in journey time and 3) Framework established whereby Value Capture can contribute without dictating the strategy.

  2. No mention of BZE’s Zero Carbon Australia High Speed Rail Plan which costed the rail at $30b less than the Commonwealth’s plan….