Acting CEO Speech: International Convention Centre Sydney, AusRAIL Conference 2019

Malcolm Southwell

Malcolm Southwell
Acting CEO, National Faster Rail Agency
4 December 2019

AusRAIL Conference 2019

Good morning, and thank you Danny, your ARA team and the AusRail team for the opportunity to be here today.

AusRail is always a wonderful occasion for the rail industry to share and learn from each other, and I always enjoy attending, although it is my first time speaking.

It was fascinating to hear the update from Richard on Inland Rail and the work, alongside the ARTC, being done to improve freight movement nationally. Having been involved a little with the Inland Rail project a few years ago, it is great to see this important project underway.

I’d also like to recognise Mr Shukuri-san who we will hear from shortly regarding Japan’s rail experiences. 

Before I begin, I would like to acknowledge the Traditional Owners of Country on which we meet today, the Gadigal of the Eora Nation as the traditional custodians of this land. We recognise their continuing connection to land, waters and culture and pay our respects to their leaders past, present and emerging.

The focus of my presentation today will be on the Australian Government’s national vision for delivering faster passenger rail services between our largest capital cities and their surrounding regional centres. 

Firstly, a little about population growth and congestion

Our cities are growing rapidly. They are a key driver of economic success and support the majority of our population, employment and economic growth.

  • Our population is expected to reach 33 million people by 2040 (footnote 1) and most of the 6.6 million new Australians will settle in our five ‘major’ capital cities.
  • Around 64 per cent of us live in capital cities - we are one of the most urbanised nations in the world (footnote 2). 

We are facing some big challenges as a result of this growth - most notably growing congestion in our cities and issues with housing supply and affordability.

  • Infrastructure Australia estimates the cost of road and public transport congestion in Australia’s major cities will more than double from around $19 billion in 2016 to reach almost $40 billion by 2031 (footnote 3).
  • Over 80% of the estimated $21 billion increase in transport congestion costs will occur in Greater Sydney, Greater Melbourne and Southeast Queensland (footnote 4). A consequence of agglomeration and the gravitational pull of these economic powerhouses.

A little about the role of the NFRA and the Faster Rail Plan

With proper planning and investment there remains significant opportunities to be realised, particularly for the regional economies surrounding our major cities.

The Prime Minister and Minister Tudge have placed the Australian Government’s 20‑year Faster Rail Plan at the centre of their population strategy for this reason.

The Government has established the National Faster Rail Agency to deliver the Plan.

It intends to better align future population growth with long term infrastructure investment - through faster more efficient and reliable rail connections along strategic corridors that link our major cities and growing regional centres.

This type of investment has the potential to take population pressures off our major cities and strengthen economic ties with regional areas.

Faster rail will facilitate improved access to employment, affordable housing, lifestyle amenity and services.

Business Cases are an important element of our work

The Agency is already investigating faster rail opportunities between Sydney and Newcastle, Melbourne and Greater Shepparton, and Brisbane and the regions of Moreton Bay and the Sunshine Coast.

Business cases for these corridors are expected to be finalised by the end of the year.  We will then be in a position to provide advice to Government. 

Funding for business cases for five more corridors was announced in the Federal Budget earlier in 2019.

We are working with relevant states to commence these business cases, including:

  • Sydney to Wollongong in the Illawarra region
  • Sydney to Parkes (via Bathurst and Orange),
  • Melbourne to Traralgon in the Gippsland region 
  • Melbourne to Albury-Wodonga; and
  • Brisbane to the Gold Coast.

These corridors were identified based on their potential to support growing population movements.

For example with Newcastle:

  • In 2017 over 480,400 people lived in the Newcastle-Maitland region, with the population growing at 1.1 per cent per annum (footnote 5).
  • Newcastle-Maitland produced $34 billion in Gross Regional Product in 2016-17 (footnote 5).
  • The business case underway for this corridor shows there is potential to reduce rail travel times between Sydney and Newcastle from approximately 3 hours to 2 hours.

If we look at Wollongong:

  • Wollongong has a population of 298,400 with an average population growth of 1.1 per cent over the last decade (footnote 5).
  • Wollongong is a strong regional economic centre with a Gross Regional Product of more than 14 billion – underpinned by an established business environment, alongside advanced manufacturing, trade and logistics (footnote 5).
  • Currently approximately 17 per cent of the local population travel to Sydney to work (footnote 5).
  • A faster rail connection between Sydney and Wollongong could reduce journey time along the corridor from approximately 1.5 hours to just over an hour. Lastly, Gold Coast:
  • The Gold Coast region has experienced some of the fastest population growth in the country, at around 2.3 per cent per annum over the past 10 years. The Gold Coast and Tweed Heads collectively have a population of 662,700 (footnote 5).
  • The Gold Coast has a thriving economy which has diversified from construction and tourism to a knowledge based economic environment with strengths in health, ICT, education, sport, marine and film production. The Gross Regional Product of the Gold Coast was $32 billion in 2017 (footnote 5).
  • Improvements in the capacity of the rail line between the Gold Coast and Brisbane would reduce overcrowding during peak periods and potentially help reduce congestion on the M1 Motorway. Journey times could also be significantly reduced.

Looking now at the Geelong region and further afield

The Australian Government has committed $2bn to deliver faster rail between Melbourne and Geelong and we are working with the Victorian government to deliver this commitment.

Geelong is one of the fastest growing regions in Australia, growing around 2.7 per cent in the three years to June 2017.

Population growth in Greater Geelong is forecast to continue to be strong over the next 20 years (albeit at a slower rate of 1.8 per cent) (footnote 6).

Transport connectivity between Melbourne and Geelong is constrained by existing infrastructure and rail investment has not kept up with population growth.

These constraints have a range of flow on effects, including hampering regional development and increasing road congestion.

A faster rail service between Geelong and Melbourne will have major benefits for those living along the corridor, including quicker access to work and services in both locations, greater choice around housing and eased road congestion.

We will also be working with state and territory governments, industry and stakeholders to identify additional rail corridors that would benefit from faster rail services.

This work will inform our advice on an Investment Strategy for faster rail corridors. As part of this we will look at how we can stage the delivery of faster rail, link future expenditure to investment need, and consider the impact of market pressures.

I’ll touch on faster rail and links to regional development

We acknowledge a view that better connectivity could further facilitate the agglomeration effect of capital cities, and can in some circumstances lead to regional towns becoming dormitory suburbs of the larger cities.

The Agency is aware of these concerns and as part of our work we will look for the opportunities where faster rail works so that the economy and job markets in major regional towns are strengthened and not diminished.

We are talking to regional centres about the challenges and opportunities faster rail would bring to their economy.

Faster rail will go some way to alleviate the population pressure in our cities. In comparison to other countries around the world, Australia is quite unique as we have a relatively large land mass, but are one of the most urbanised nations, meaning we have a low population density. For example: Australia has 3.2 persons per sq.km compared to for example:

  • USA  36 people per sq.km
  • France 122 people per sq.km
  • UK 275 people per sq.km
  • Japan 347 people per sq.km (footnote 7)

[Population density; Worldbank data (people per sq. km of land area) 2018]

This low population density creates challenges for the economics of investing in transport infrastructure but also creates opportunities to address population pressures in capital cities if we can make regional centres attractive.

For example, lowering operating costs for enterprises in regional towns could attract businesses to their area. Faster rail could provide these businesses with access to labour markets in the capital cities and provide opportunities for the economic development of regional towns.  

We are not just about building fast rail to any town in the hope that it works, rather, we are taking an evidence-based approach to the development of fast rail so that it delivers results for regional communities, supporting population growth, the economy and jobs while helping address congestion.

Professor Andrew McNaughton of the UK, who is also working with the NSW Government on their faster rail plans has publicly noted that reducing transit times to one hour or less is a particular ‘sweet spot’ for improved access to higher paid jobs in capital city CBDs and increased economic development in regional cities (footnote 8).

There is evidence of this effect in Australia. In Geelong, rail was instrumental in maintaining the attractiveness of the city following the large and sudden downturn in the manufacturing sector.

Research and modelling undertaken by Vietch Lister Consulting for the agency has shown that the emergence of strong employment centres able to attract service jobs was greatly facilitated by the provision of efficient rail services (footnote 9).

  • A faster rail service averaging up to 160 km/hr could further reduce travel times from around one hour, to closer to half an hour (footnote 5).
  • This would enable more commuters to travel along the rail corridor, take pressure off the congested road corridor, as well as increase growth opportunities and the economic potential of Geelong (footnote 5).

I’ll briefly mention High Speed Rail and interoperability

High speed rail along the east coast of Australia has been debated by governments and stakeholders for many years.

Studies conducted between 2010 and 2013 on high speed rail between Melbourne, Canberra, Sydney and Brisbane found that it would have an estimated construction cost of $114 billion (in 2012 dollar terms) (footnote 10). Noting current construction market pressures and inflationary impacts, this figure will have increased significantly in today’s terms and could be as high as $150 to $200 billion.

Whatever the amount, this represents a significant opportunity cost and obviously needs to be considered against all the other projects making a call for a share of taxpayer funds. 

Infrastructure planning and development needs to be viewed in the Australian context – we have large distances, relatively small regional populations, and the expectation of high living standards.

The Government has indicated that its clear policy intent is focused on connecting major capital cities to surrounding regional areas via faster rail.

This will support the immediate challenges that our cities and regions face around congestion and travel times and also help support regional centres that surround our capital cities.

We are not ignoring the future though. We have started a conversation with states on the east coast about interoperability and standards for faster rail projects to avoid a repeat of the break of gauge issues for passenger rail services between jurisdictions – whether it be physical or technical.

In time, the NFRA will provide advice to Government on options to future proof corridors for high-speed rail, including the need for technical guidelines, corridor planning and protection. It’s part of our mandate and part of our considerations as we address the immediate challenges.

Concluding words

Before concluding I wanted to highlight what an exciting time it is to be involved with faster rail opportunities in Australia.

The Australian Government’s faster rail plan and associated investment strategy present a major opportunity to enable long-term economic development in our regions, alleviate population pressures on our cities and allow people better access to jobs, housing, lifestyle amenities and services.

To realise these opportunities, all three levels of government will need to work together as partners. I stress this point.

My Agency is buoyed by this important opportunity to oversee the development and implementation of the Government’s 20 Year Faster Rail Plan. We are cognisant that the work of our Agency has a direct impact on the lives of all Australians.

Ultimately our advice to government will influence and shape into the future how people live, move and connect with each other and their links to the cities and our regions. This is no simple task and requires considerable debate and important dialogue from all sides of the equation.

We are still very new, but through ongoing conversations with our key stakeholders including those in regional communities, we acknowledge community sentiment that consideration needs to extend well beyond just building a new rail line and train station. It requires a comprehensive approach to address congestion, population growth and to capitalise and build on the economic potential of our cities and the surrounding regions.

We will work with state and territory governments in the development of business cases, ensuring that the transport and population policy objectives are met. The evidence base development in the business cases will be used to inform the investment strategy that will consider priorities and staging opportunities on each corridor to deliver a faster rail network for Australia.  

It has been a pleasure to speak to you today about faster rail opportunities in Australia. It is a program that I am excited about and I believe that if we get it right, we will make a real difference to people’s lives.

I’d like to thank AusRAIL for inviting me to share how the National Faster Rail Agency is supporting economic growth and social opportunity through faster rail connections between major capital cities and growing regional centres.

Thank you for your time.

Footnotes:

  1. Australian Bureau of Statistics (2018), 3222.0 - Population Projections, Australia, 2017 (base) – 2066 [Series B Projection].
  2. Australian Government (2019), Planning for Australia’s Future Population.
  3. Infrastructure Australia (2019), An Assessment of Australia’s Future Infrastructure Needs: The Australian Infrastructure Audit.
  4. Infrastructure Australia (2019), Urban Transport Crowding and Congestion: The Australian Infrastructure Audit 2019 – Supplementary Report.
  5. Australian Government (2019), Faster Rail Plan.
  6. Australian Government (2019), Infrastructure Pipeline, Geelong Fast Rail. 
  7. Worldbank Data (2018), Population Density (people per sq. km of land area).
  8. McNaughton, A (2019), The Geography of Time: How faster rail changes the economic and social landscape, [Webinar], Railway Technical Society New Zealand.
  9. Veitch Lister Consulting (2019), Unpublished Research for National Faster Rail Agency.
  10. Department of Infrastructure, Transport, Cities and Regional Development (2013), High Speed Rail Study Phase 2 Report.