Gungahlin tram debate derails rational arguments

“The controversy in regard to ­‘Automobiles v. Rails’ is not by any means new,” John Monash wrote in a letter to The Argus in March 1904.

“The steel-rail track has had the best of the argument,” Australia’s greatest engineer and military commander decided.

“The necessity for ‘steering’ an automobile is one of its most serious objections.”

As it turned out, the freedom to steer a car wherever one may wish has given private transport a strong competitive advantage over public transport for the best part of a century. Individual lives are not easily synchronised with timetables and not all businesses and homes are close to a railway track. Yet bizarrely the fixation with steel that led Australia to over-invest in railways and under-invest in roads in the early years of the 20th century has returned. Anti-car campaigners are demanding we rip up roads and median strips to install the 19th century technology of tramways.

“The rubber-wheel option is never going to deliver the regeneration that many of Australia’s ­cities need,” writes Peter Newman, Professor of Sustainability at Curtin University.

Newman, a former member of Infrastructure Australia’s council, is a crusader for the Gungahlin tram, a 12km light rail track the ACT government wants to build with assistance from the Commonwealth government. Newman thinks this 19th ­century technology is the way of the ­future. It will spawn “centres of people-intensive urbanism” that require “spatially intensive modes of transport like rail, walking and cycling”.

Dedicated bus ways along Canberra’s well-proportioned boulevards could transport passengers to many more destinations more frequently at a fraction of the cost. If the city is congested in what passes for peak hour in the ACT, why not carve a couple more lanes from Northbourne Avenue’s expansive median strip? What does the national anthem says about boundless plains to share?

Yet for Canberra sophisticates, the vision of their city as the Budapest of the south is enticing. As the Greens say, we must think of the Gungahlin tram not just as an infrastructure proposal but as “an invitation to take the next step toward a more livable, socially inclusive and sustainable community”.

It is also an invitation to spend a heap of public money, since if running urban tramlines were a viable business someone other than the government would be prepared to risk their money.

We do not yet know how much public money will be needed to correct this perceived market failure. The business case claims Canberra’s green elephant will cost less than $800 million but the iron law of megaprojects is that they cost much more and are used far less than the prospectus claims. The Bligh Labor government committed to fund the Gold Coast tram on the assumption it would carry 50,000 passengers a day. Campbell Newman’s LNP government took a hard-headed look and slashed the figure in half. Yet even that proved bullish; passenger numbers since the tram started running 11 months ago are less than 20,000 a day.

Five years ago the G-Link was forecast to cost $949m. The final construction bill is believed to be in the vicinity of $1.3 billion.

Economist Bent Flyvbjerg’s 2007 study of global urban rail projects found on average that patronage was overestimated by 37 per cent and costs were underestimated by 45 per cent. One explanation, says Flyvbjerg, is that managers suffer from what psychologists call the planning fallacy. “Decisions (are) based on delusional optimism rather than the rational weighting of gains, losses and probabilities,” he says.

Another explanation is that megaprojects are sources of inestimable pleasure to the political and professional classes. Politicians luxuriate in the “political sublime ... the rapture politicians get from building monuments to themselves and their causes,” says Flyvbjerg. Businesses and trade unions rejoice in the“economic sublime” — the glee they derive as recipients of lavish budgets.

Politicians and consortia amplify the benefits of projects simply to justify the decision they have already made in their heads. Flyvbjerg calls it “strategic misrepresentation” but suggests it could also be called “lying”.

The Gungahlin tram has failure written all over it. It will travel at an average speed of 30km/h — somewhat slower than George Stephenson’s Rocket at the 1829 Rainhill trials. The journey from Gungahlin to Civic will take 25 minutes, the same time as the bus.

The business case released last year predicts the tram will yield $5.5m in fares in its first year of operation, which appears to be about a third of its projected operating and maintenance costs. Add to that the construction and financing costs bundled into a 20-year-contract, and the ACT government will be up for $80m to $100m a year, a subsidy per journey of more than $17.

The official business plan, on the other hand, claims the tram will return $1.20 of value for every $1 spent. To arrive at this implausible conclusion the authors make a series of extraordinary assumptions.

Canberra residents and businesses will be $222m better off because of the time they will save. Other transport benefits, healthier lifestyles and “amenity and reliability benefits” are assumed to save another $184m.

Another $578m in benefits — three fifths of the total — is thrown in for what David Hughes, a former ACT Treasury official, describes as “unsubstantiated and implausible claims” in a business case he summarises as“fantasy”.

Rational arguments are all but useless, however, against la-la economics designed to buttress a sentimental longing for a city of low-carbon regularity and simplicity.

The tram’s proponents refuse to accept that buses are better suited to Canberra’s circumstances. They hate the fact that 92 per cent of Canberrans get to work on their own steam and see the Territory’s high rate of vehicle ownership — 1.8 cars for every household — not as a virtue but a vice.

Nick Cater is executive director of Menzies Research Centre.