Download File - High Speed Rail for Australia

Extracts from recent letters to Ministers and senior people
General
With respect, may I add another serious issue, one that has come before Mr Turnbull already. He
approved a study by the Parliamentary Committee on Infrastructure, Transport and Cities, on a key
aspect, established on 1 December.
The issue is High Speed Rail in Australia. You should understand, as few do, that it is not just a
railway. It is about lifting the Australian economy, maintaining liveability of Australia as the
population doubles and halving the inordinately high cost of inter-state road freight, there-by
increasing productivity, competition and international competitiveness of Australia significantly.
What inter-state freight that should be carried by sea is carried by rail. What should be carried by rail
is carried at excessive cost by road. Transport is Australia’s biggest un-comparative advantage.
The first thing to note is that an undertaking of this size should not be a bureaucratic project by
government. It would be too complex, less customer oriented, and would risk massive time and cost
over-runs. The second is that the Federal Government can initiate a commercial project by private
enterprise. The third is that a private HSR project would be very profitable with an excellent return
on investment. (These are necessary to assure the Government that it would not need to take-over a
loss making enterprise later.)
The latter point is fundamental. The assurance would be secured through the role of public service
leadership in focusing the will and effort of public servants on effectively ensuring fast-track
approvals, and on coordination in building and operating the project. This would include well
designed financial, taxation and value capture policies and their successful application. The private
project could not go on without Government cooperation, commitment and positive attitude to
these policies.
Mr Turnbull’s MP study is into the value capture obtainable from transport and HSR infrastructure. It
is a first step by a government towards building HSR. It recognises that value capture would be a
critical component of making net investment financially viable, the project bankable and HSR
successful. It has large cost/benefit advantages. It is a major technical disruption.
There is one serious investment that has positive implications for Treasury, Infrastructure, Regional
Development, Transport, Major Projects, Productivity, Innovation, Energy, Environment, Cities,
Attorney General, Defence, and indeed Infrastructure Australia.
This investment is to build High Speed Rail (HSR) and Fast Freight Rail (FFR) side-by-side at the same
time between Melbourne, Sydney and Brisbane. It would stimulate economic growth in Australia
and create many jobs on the east coast. HSR and FFR would be a practical and high return major
infrastructure project, the finance for which could be accommodated with a positive and confident
approach by Government.
Transport
May I commend a major infrastructure project that would develop the regions and stimulate
economic growth?
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High Speed Rail (HSR) and Fast Freight Rail (FFR) built together side-by side between Melbourne,
Sydney and Brisbane would be a substantial investment that would kick-start more private
investment and get going higher than average growth.
HSR would redistribute a large proportion of the inexorable population increase to regional cities
outside the major cities. It would contain congestion and maintain liveability in all the cities.
FFR would halve the cost and delivery time of general freight between Melbourne, Sydney and
Brisbane. It would increase domestic competition and enhance the competitiveness of exports.
HSR and FFR would be a high return major infrastructure project, the finance for which could be
accommodated with a positive and confident approach by Government.
Innovation and productivity
The Government is seeking greater application of innovation and technology to industry to promote
faster economic growth and more productivity. Probably the biggest single introduction of new
technology in Australia would be High Speed Rail together with Fast Freight Rail built side-by-side at
the same time between Melbourne, Sydney and Brisbane.
HSR and FFR would be very competitive, introduce huge improvement in productivity and stimulate
more innovation and productivity. They would transform the transport industry.
The economy can be stimulated to higher than average growth by large scale private investment in a
major infrastructure project with positive, confident Government action to guarantee its private
finance.
Greater economic growth is sought by the Government in large part to recover the rate of
improvement in national productivity. Capital productivity is the main form missing as investment,
which is its primary source, is low and falling.
High Speed Rail and Fast Freight Rail would be a very large private investment that would provide
probably the greatest increase in productivity of any single new project in Australia.
HSR would be competitive with air and FFR would be very competitive with inter-state road freight.
FFR would halve the cost and delivery time of freight between Melbourne, Sydney and Brisbane.
The economy can be stimulated to higher than average growth and thereby improved productivity
by large scale private investment in this major infrastructure project with positive, confident
Government action to guarantee its private finance.
Competition
One of the biggest dis-functional competitive situations in Australia is in transport.
As I said in my recent book: “What should be carried by sea is carried by rail. What should be carried
by rail is carried by road.”
The High Speed Rail (HSR) and Fast Freight Rail (FFR) Project would not only transform competition
in the transport industry, it would stimulate investment and economic growth at a time when they
are needed.
HSR would redistribute much of the inexorable population increase from cities to regional areas
thereby reducing congestion and maintaining liveability.
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FFR would halve the cost and delivery time of general freight between Melbourne, Sydney and
Brisbane. It would increase domestic competition and enhance the competitiveness of exports.
HSR and FFR would be a high return major infrastructure project, the finance for which could be
accommodated with a positive and confident approach by Government.
Fiscal policy
It is recognised that greater economic growth is the prime objective of the Government. Many
positive moves are being made to promote it. However, fiscal policy is hamstrung by government
debt and monetary policy is ineffective in the current circumstances in driving greater growth.
This Gordian knot can be cut decisively and have a serious expansionary impact on the economy.
The economy can be stimulated to higher than average growth by large scale private investment in a
major infrastructure project with positive, confident Government action to guarantee its private
finance.
The High Speed Rail together with Fast Freight Rail side-by-side and built at the same time would be
very competitive and would add to national productivity. It would underwrite greater international
competitiveness.
The major puzzle for Australia today is: how to really stimulate economic growth? Above average
growth would facilitate budget repair.
The answer proposed here is an extraordinary, very large, privately financed infrastructure project.
I recently wrote to the Prime Minister outlining the proposal which was in effect a summary of my
book (copy of letter attached). Subsequently I wrote to all Federal Members of Parliament urging
them to investigate it with appropriate Ministries and to talk to the Prime Minister (copy of letter
attached). They may well enquire about your views.
It seems appropriate to let you know of this and give you an opportunity to prepare deeply insightful
advice. A copy of the book entitled ‘High Speed Rail for Australia-Now’ is enclosed.
I should note that 24 years ago, Treasury rejected the original private enterprise VFT project when it
was asked to reschedule the disbursement of tax revenue that would be generated (not to decrease
it or subsides it). It did so as a result of its view that the passenger projections were too optimistic.
In hind sight, the recent Government HSR Study found that passenger numbers in its 2011 base year
would have been 20% more than the 1991 projection. They were 30% higher in 2016, the last
common year of projections. Australia would have been a better place had the VFT gone ahead 24
years ago.
National security and defence
Security organisations and forces maintain Australia’s nation security and internal integrity.
If one of the smallest buildings in Australia were physically or electronically, overtly or covertly
disabled, Australia would be seriously disrupted. The building is the Sydney Airport control tower.
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If the High Speed Rail (HSR) and Fast Freight Rail (FFR) project were built between Melbourne,
Sydney and Brisbane, it would connect all major airports on the east coast to the Sydney CBD. It
would not be as vulnerable to attack.
HSR and FFR would be built side-by-side at the same time. FFR would carry general inter-state
freight. HSR would carry passengers and time-sensitive freight. FFR would travel at an average speed
of 125km/hr and HSR at 350km/hr. They would be very competitive, gain a large share of the air and
inter-state road freight market. It would be a viable project.
HSR and FFR would be a high return major infrastructure project, the finance for which could be
accommodated with a positive and confident approach by Government.
The purpose of Defence and the Military is to maintain peace through effective capabilities and
meaningful deterrent.
Removal of an Australian defence weakness would turn it to a strength. If one of the smallest
buildings in Australia were physically or electronically, overtly or covertly disabled, Australia would
be seriously disrupted. The building is the Sydney Airport control tower.
If the High Speed Rail (HSR) and Fast Freight Rail (FFR) project were built between Melbourne,
Sydney and Brisbane, it would connect all major airports on the east coast to the Sydney CBD. It
would not be as vulnerable as KSA.
HSR and FFR would be built side-by-side at the same time. FFR would carry general inter-state
freight. HSR would carry passengers and time-sensitive freight. FFR would travel at an average speed
of 125km/hr and HSR at 350km/hr. They would be very competitive, gain a large share of the air and
inter-state road freight market and have a high return. It would be a viable project.
Should hostilities break out, the existence of HSR and FFR would be a form of insurance against KSA
disruption. In addition, troops could be moved quickly inter-state by HSR. Defence materiel and
supplies could be transported rapidly by FFR, unaffected by weather. The project would cut demand
for petroleum fuel imports and in effect extend Australia’s low 21day strategic fuel stock.
Energy
The most efficient use of energy in Australia is fundamental in these times of global warming.
The electric High Speed Rail (HSR) and Fast Freight Rail (FFR) are together a major infrastructure
project that would significantly cut air and inter-state road freight petroleum fuel usage on the east
coast. It would greatly reduce the demand for imports of fuel and in effect extend Australia’s low
21day strategic fuel stock.
The small incremental increase in electricity demand from HSR and FFR would be more than offset in
essence by the incremental increase in renewable energy supply through what would amount to
direct action.
HSR and FFR would be a high return major infrastructure project, the finance for which could be
accommodated with a positive and confident approach by Government.
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Environment
May I commend a major project that at a stroke would transform Australia’s co₂ production from oil;
capital city congestion and liveability; and also national productivity and international
competitiveness?
High Speed Rail (HSR) together with Fast Freight Rail (FFR) built side-by-side and at the same time
between Melbourne, Sydney and Brisbane would be highly competitive. The project would cut truck
and aviation fuel consumption substantially. It may be the biggest single direct action in Australia. It
could be operational by 2022.
The small incremental increase in electricity demand from HSR and FFR would be more than offset
by the incremental increase in renewable energy supply. In effect, HSR and FFR would be totally
green.
HSR would redistribute much of the inexorable population increase from cities to regional areas
thereby reducing congestion and maintaining liveability.
FFR would halve the cost and delivery time of general freight between Melbourne, Sydney and
Brisbane. It would increase domestic competition and enhance the competitiveness of exports.
HSR and FFR would be a high return major infrastructure project, the finance for which could be
accommodated with a positive and confident approach by Government.
It is well known that High Speed Rail would be good for the environment. It would be doubly so if
Fast Freight Rail were built side-by-side and at the same time as HSR. It would take many inter-state
semi-trailers off the road.
The HSR/FFR Project is practical and fundable with private finance. It would be better done privately
than not at all.
PJK ©10.1.16