Don’t get too excited about Melbourne’s suburban rail loop - Grattan Institute

Published in The Age, Tuesday 12 March

The $50 billion suburban rail loop burst onto the scene last August, and Melburnians show every sign of loving it. Even if people don’t personally expect to use it, they still hope it will get other people off the roads.

But before you get too excited, consider whether this project is worth chewing up a generation’s worth of transport investment. There are plenty of reasons to be sceptical about this grand plan for a massive rail tunnel looping through the middle-ring suburbs.

First and foremost is whether the project is really needed. Melbourne is very car-dominated, with 72 per cent of people driving to work. While that figure is down from 77 per cent a decade ago, it’s still true that driving remains the most convenient option for most people. The new rail loop will encourage more people onto public transport only if it is as convenient as driving.

Will it get people to work more quickly? Contrary to popular belief, commute times in Melbourne have barely changed in the past 15 years, even in the face of record population growth. Half of us spend no more than half an hour getting to work; a quarter spend no more than 15 minutes, and 90 per cent spend no more than an hour. Getting to work was only marginally quicker in 2002 than in 2016. Instead of letting their commute times blow out, people make other changes: they move home, they change where they work; they work more from home; or they change their method of travel.

And it’s not as if the rail loop stations are going to be in suburbs that are job hotspots. The 15 suburbs that will get a new station have only 9 per cent of Melbourne’s jobs between them. Jobs in Melbourne are very spread out, once you go beyond the 15.5 per cent in the CBD, Docklands and Southbank. Only three other suburbs have more than 1.5 per cent of the city’s jobs: Dandenong, with 3.2 per cent, Richmond, 1.8 per cent, and Clayton, 1.7 per cent.

Champions of the project may argue that surely the government should be commended for committing to a business case before starting to build. But this ignores the big difference between running a business case before a decision to invest, compared to running a business case after that decision has been announced, with no small fanfare, and taken to an election. Not to mention the fact that the Andrews government has chosen a project that is not in Plan Melbourne and not been recommended by either Infrastructure Victoria or Infrastructure Australia.

Projects announced like this are riddled with risks. Grattan Institute research shows projects announced close to an election have cost overruns 23 per cent higher, on average, than similar projects announced at other times. Don’t be surprised if it happens with suburban rail: experts usually cost a kilometre of rail tunnel at $1.1 to $1.3 billion, and we’re up for close to 90 of them, along with 15 new or upgraded stations.

Finally, think of what else we could do with $50 billion, or whatever the cost of the suburban rail loop turns out to be. For that kind of money, we could fund Uber trips for the next 20 years for everyone who works in one of the 15 suburbs nominated for a new station. Or we could have an awful lot of timetabling improvements, high-capacity signalling, station and interchange upgrades, electrification of the Melton, Clyde and Wallan lines, and other improvements – in other words, the important but less glamorous projects that Infrastructure Victoria advises will actually keep this city moving over the next 30 years.