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Costs count against rail

TRANSPERTH’S Perth Urban Rail Development unit figures from April 2000 show the annual net recurrent cost to government over 30 years for operating and capital was at least $80.6 million – based on the (then) proposed cost of $941 million.

Already that total cost has climbed substantially to about $1.2 billion, as the rail route has been changed to go down the Kwinana Freeway.

Add in private infrastructure funding and rolling stock leasing and the capital outlay could fall to as little as $253 million, but Treasurer Eric Ripper, or whoever succeeds him, will still have to find $86.7 million a year to service that line, the figures suggest.

This is all to service an estimated 13,210 passengers a day buying return tickets to travel during a two-hour morning peak period by 2006, via Kenwick, which was the Court Government’s preferred route.

This amounts to a whopping $6056 per passenger for that year, based on an $80-million-a-year cost. Over 250 or so working days it amounts to $24 per passenger.

By comparison, the Department of Transport says the existing commuter train infrastructure handles 31.1 million passenger journeys a year at a net cost of $85 million (after taking away $26 million in revenue). Assuming most of these represent two trips per person, the average cost per return journey is $5.47 to handle at least 42,000 commuters a day.

Perth’s buses cost $130 million a year (net of $39 million in revenue) and take around 52 million passenger journeys. On the same basis, the cost per return journey is $5 to carry at least 71,000 commuters per day.

But that is the operational side of the business.

A PURD comparison of the bus and rail routes shows a there is a big difference when commercial cost of capital are used, over and above the “base case”, which was to do nothing more than add some extra bus services.

An evaluation at a 7 per cent discount rate showed that the bus option had a positive net present value, whereas the rail option did not reach a positive NPV until a lower cost of capital was considered.

This included a figure of $519.7 million for user benefits for the train line, two and a half times that provided by the bus.

User benefits include travel times, lower costs to rail users from reduced car use (double those for bus converts), additional revenue and lower long-term operating costs for rail.

Of course, these figures were crunched before the Kwinana busway was completed and were based on the Kenwick route, rather than the more expensive yet arguably more beneficial route over the Narrows.

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