20/03/2015 - 12:20

MAX or Mad Max? That is the question

20/03/2015 - 12:20

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‘What is the difference between a steel wheel and a rubber wheel?’ That has been one of the responses offered to (over)simplify the debate over light rail and bus rapid transit in Perth.

‘What is the difference between a steel wheel and a rubber wheel?’ That has been one of the responses offered to (over)simplify the debate over light rail and bus rapid transit in Perth. My answer suggests it’s not really a question of light rail or bus modes, it’s a question of types of urban development – rail-based or road based, and they are very different.

In cities around the world for the past 50 years, urban development has been road-based, with a base assumption that most people will drive (with the remainder catching busses, where offered).

In recent years there has been a revival of rail-based urban development, due to the fact it helps reduce traffic, creates more walkable and lively places to live and work and, importantly attracts developers and financiers to enable denser, mixed-use development.

MAX was designed to do this. We had the debate about development types along with mode types, though it’s often forgotten when we come to delivery. Transport engineers and planners are not trained to deliver different urban development; they are trained to get people efficiently from A to B. To them, the suggestion of a difference between a steel wheel and a rubber wheel is ridiculous.

But there is a difference in the quality of the ride, the speed and hence capacity, and in the noise and air quality related to rubber-wheeled transport; the result is that there are different urban outcomes. Rubber wheeled transport does not create dense mixed-use urban centres. We have examined examples around the world and there are none that can be claimed to have resulted in focused urbanity. Thus developers, banks and governments have returned to light rail and heavy rail to help regenerate urban centres. Rubber-tyred cities continue to be dominated by cars and urban sprawl.

The rubber-tyred urban development I am calling the ‘Mad Max’ option remains alive and well in Perth.

Mad Max is the apocalyptic movie directed by George Miller featuring a young Mel Gibson and based around the idea that warring gangs fighting over the last remaining oil will turn our cities into fortresses. It was an extreme vision of how car dependence can deteriorate even further than our present sprawling areas.

We may not yet be fighting over oil, but Perth’s car dependence is growing. And it will continue to do so if we further develop the sprawl from Myalup to Lancelin with nothing but car-dependent housing. This extreme sprawl vision is how the Committee for Perth have suggested we may end up by 2050 if we do not change policies.

The planners in Perth know that we must redevelop and create activity centres, but they do not control the decisions on transport. Transport planners do not see that, by their modal choices they are also creating two possible urban outcomes – MAX or Mad Max-type urban development.

The solution can be to bang heads together, and some ministers have tried that. My solution and the one Infrastructure Australia tried to get Australian state governments to adopt is to have the private sector involved in the planning stage, as well as the delivery and operations.

Light rail lends itself to private sector involvement but only if the land development outcomes being sought are built into the whole project. The model for IA’s approach was the Gold Coast Light Rail, as it was to run through areas with potential for redevelopment. Thus the funding was given based on a PPP process seeking expressions of interest from private bids to design, finance, build, own, operate and develop land as a basis for funding.

Government base funds and a general set of guidelines were delivered and bids were sought. Five consortia from around the world competed on this basis and included all the worlds’ main consulting groups and expertise in light rail.

However the group of transport experts (mostly main roads engineers) set up by the Queensland government to deliver the light rail argued that they did not have the expertise to manage the land development part of the exercise. They appealed to the three levels of government to avoid this approach and all three complied, including establishing an annual transport levy across the whole Gold Coast local government area.

The private sector consortia were well prepared for the land development option, but of course went ahead without it (and Keolis won and delivered a first-class light rail).

Communications Minister Malcolm Turnbull recently declared it as the best light rail he has ever seen. As soon as the route was announced, developers from around the world bought up all the best sites and are now delivering them. This is the way to do it if you have tax funds to provide the capital and the operational expenses.

I believe the Mike Nahan, Colin Barnett, and Transport Minister Dean Nalder when they say we do not have sufficient government funds for a light rail in Perth. However I don’t believe that this means we then have to take second best. The rubber wheel option is different and it is never going to do what we need in Perth. We need to be brave enough to go for the best option via a PPP approach.

Perth can go for a full private sector approach that integrates redevelopment into every stage of the project. Call for an EOI based on design, build, finance, own and operate but make sure this includes land development options. This would help to create funds that can be used to finance and to operate the system.

Government needs to contribute a base grant and an operational fund that could be more specifically focused along the areas where the benefits are most experienced, and hence the land values will go up most. Private expertise will ensure that the best sites are chosen for the light rail route.

These land value increases will flow through present taxes into Treasury and can be set aside in a ‘light rail fund’ for ongoing operations and/or for raising finance. The approach is called Tax Increment Financing and it enables infrastructure to be built where it can be shown that the taxes would not have been generated without it. A bus, instead of a light rail, would not generate such land value increases and hence the extra tax revenue would not flow.

For Perth, there is a real choice over steel or rubber-wheeled development. Do we want to go one step further than the Gold Coast, building light rail in partnership with the private sector? Do we want light rail, which will provide urban redevelopment opportunities and make our city vibrant and our economy more efficient? Or do we want a second rate transport solution that produces second-rate urban outcomes?

Peter Newman

Professor of Sustainability

CUSP, Curtin University

P.Newman@curtin.edu.au

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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