RAIL - Back On Track Forum

Quote from: #Metro on March 07, 2024, 17:14:28 PMWow. Page 25 shows all BCRs are well below 0.5 and that is true even at a very favourable 4% discount rate. 

yes, the price of their delays.. costs.
It was always going to be a battle as public transport is subsidized in Queensland.
In the end it is what is needed.
That's why we pay taxes, for things we need.

Also answers why they stopped the duplication  after Beerburrum. The 2010 report said no Camcos needed for another 20 years, and that was a pretty major reason for doing the duplication.

Quote from: Gazza on March 07, 2024, 17:29:03 PMAlso answers why they stopped the duplication  after Beerburrum. The 2010 report said no Camcos needed for another 20 years, and that was a pretty major reason for doing the duplication.

Gazza, they stopped the rail duplication in April 2009.
It was required for freight up to Cairns - not for the CAMCOS corridor.

Yeah but it would have cemented the decision not to do the 2nd stage.

No, that report came out in 2010, sometime after the decision to break the then $298m contract in April 2009.

Please don't attempt to rewrite history with your personal speculation.

It had nothing to do with the then CAMCOS rail option.
Govt reports bear its purpose clearly and CAMCOS wasn't a part of them.

https://www.infrastructureaustralia.gov.au/map/beerburrum-nambour-rail-upgrade

Problem
Capacity issues on the North Coast Line between Beerburrum and Nambour were identified as a priority in the Queensland Government's Moving Freight strategy, and the 2015 Northern Australia Audit. As Queensland's major north–south rail corridor, the line facilitates freight and passenger movements between Queensland's coastal population centres from Brisbane to Cairns. It will also be a key enabler of future public transport developments within the Sunshine Coast.

The 2015 Northern Australia Audit forecasted  northern Queensland's population would grow by 1.9% on average per year to 2031, driving an expansion of the freight task along the north–south corridor.

Further to the south, the Sunshine Coast's population is expected to grow by two-thirds between 2016 and 2041, according to the South East Queensland Regional Plan 2017. The modelling undertaken for the business case suggests that passenger demand on this route could grow by over 3% per annum until 2036.

The existing rail line does not have enough capacity to meet future levels of passenger and freight demand. The route's configuration as a single track with limited passing loops constrains capacity on the line. Without rail network enhancements, increased commuter movements between the Sunshine Coast and Brisbane are likely to significantly increase traffic on the constrained Bruce Highway.

Why The Direct Sunshine Coast Line Business Case is Poor

Bad news folks, the business case is not good. The BCRs are very low, and by a large margin. Having a good BCR and NPV are crucial for getting IA buy-in.

See, the problem costs around $2.3 billion (Page 9)



But the fix for the problem costs $5.4 billion, $12 billion for the full length (Page 23); and likely $20 billion when you apply a 1.8x Queensland Government historical cost overrun adjustment factor.



In other words, the solution is worse than the problem. A project that costs $2.3 billion could be justified. A project that costs above this, likely not.

There is a lot of reassuring narrative put in this summary business case in what appears to be an attempt to 'explain away' the poor numbers. For example, Page 25:

Quote from: DSCRL Summary Business CaseBenefit Cost Ratios for public transport Public transport BCRs are traditionally challenging to calculate. Some benefits associated with easing congestion, travel time savings and so on can be easily monetised, however improved quality of life, liveability, connectivity, accessibility, social equity and so on are unable to be easily monetised. This means that these benefits are not considered as strongly within the economic assessment.

A major problem with this narrative is that these calculation/quantification challenges also apply in Perth, Western Australia. Yet Perth and the WA PTA have no problem in achieving BCRs > 1.0 for their rail projects, even if the higher and harder 7% rate is used.

Perth Forrestfield-Airport BCR 1.4 using 7% discount rate



Perth Moreley-Ellenbroook BCR 1.1 using a 7% discount rate



Thornlie-Cockburn Link BCR 1.2 using 7% discount rate, excluding WEBS



Perth is achieving this in a low-density, high-car use context. In contrast, the DSCRL does not come even close to clearing the bar, even at the lower 4% rate (Page 25).

Direct Sunshine Coast Line



I am not sure what the answer is here. Rail in Queensland is slow to build, expensive, and on opening infrequent. And it shows up in the numbers. Did they use a 30-minute basic all-day frequency to calculate the time savings? I suspect they might have.

Notes

Infrastructure Australia Project Business Case Evaluation - Perth Forrestfield Airport Line
https://www.infrastructureaustralia.gov.au/sites/default/files/2019-06/WA-Forrestfield-Airport-Link.pdf

Infrastructure Australia Project business case evaluation summary - Moreley-Ellenbrook Line
https://www.infrastructureaustralia.gov.au/sites/default/files/2020-05/morley_ellenbrook_project_evaluation_summary.pdf

But look at my magically massive BCR on this road widening!!! Magic isn't it!

Quote from: Fares_Fair on March 07, 2024, 17:31:13 PM

Quote from: Gazza on March 07, 2024, 17:29:03 PMAlso answers why they stopped the duplication  after Beerburrum. The 2010 report said no Camcos needed for another 20 years, and that was a pretty major reason for doing the duplication.

Gazza, they stopped the rail duplication in April 2009.
It was required for freight up to Cairns - not for the CAMCOS corridor.

Correct. CAMCOS was used as justification for the SEQ area but that had nothing to do with the host of other NCL projects not in the seq area that also had funding withdrawal or were deferred (some coal network projects still went ahead as they were tied to fixed service contracts ie fixed term exclusivity haulage contracts for QR National).

Beerburrum-Caboolture was the big bottleneck in delays especially when freights had to cross with speeds really dropping especially on the climb out of Elimbah heavily impacting running times. Beerburrum-Nambour is manageable.

The original L2N project (quad future proofed 9 car designed 160kph corridor) was established to minimise freight impacts on passenger services along with ramping up both traveltrain, Nambour/CAMCOS services and NCL freight services.

Many still believe it was a precursor with those higher up in management/state government getting out of expensive contracts/infrastructure leading up to privatisation in the hope that the cost would be passed onto the private sector.

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Brisbanetimes --> Sunshine Coast rail link costed at $12 billion $

QuoteThe full cost of the proposed Sunshine Coast rail line to Maroochydore has been estimated at $12 billion, as the Queensland government shut down any hopes it would be completed in time for the 2032 Brisbane Olympics.

Transport Minister Bart Mellish tabled a summary of the business case for the 37.8-kilometre dual-track expansion of south-east Queensland's rail network, to the beachside regions of the Sunshine Coast, in state parliament on Thursday.

Mellish said the full business case, prepared at a cost of $14 million, had been submitted to Infrastructure Australia.

Only the first stage, the 19-kilometre link between Beerwah and Caloundra, was expected to be complete by 2032. According to the business case, that first stage would cost anywhere between $5.5 billion and $7 billion. ...

Couriermail --> Sunshine Coast rail link: $

QuoteA critical rail line into the heart of the Sunshine Coast would cost at least $12bn to build in full, with new documents revealing how the major project will differ from a high-profile vision dreamt up more than two decades ago.

It comes as a summary business case for the direct Sunshine Coast rail line, released by the state government, reveals advice was to take the line to Birtinya by 2032 – but authorities decided this was too risky.

Instead the government has committed to building the first stage of the critical project to Caloundra in time for the 2032 Olympic and Paralympic Games, arguing a staged approached is safer for costs and timing. ...

I have serious doubts about the DSCRL Business Case outcome at IA, and the likelihood of even stage 1 of DSCRL happening. I expect the best we can hope for is the duplication north of Beerburrum and buses into Landsborough.  I am being realistic.

QuoteDuplication of the Sunshine Coast line - Beerburrum to Landsborough

26th February 2024

Good Morning,

We think there is real concern if the DSCRL will be delivered.

We therefore think it is very prudent that the planned upgrade (track duplication) of the Sunshine Coast Line from Beerburrum to Beerwah (cut back from Landsborough) be changed to what was always the original plan.  That is, do the duplication through to Landsborough.  With the new bus station on the eastern side of Landsborough Station, it is highly likely that Landsborough will became a very important bus/rail interchange in the years to come.  To allow increased rail services to meet the demand,  it is essential the duplication go through to Landsborough.  This will also allow better management of freight trains  and long distance passenger services.

This duplication, Beerburrum to Landsborough, was originally going to be completed in 2012.  Here we are in 2024 still waiting.

Best wishes,
Robert

Robert Dow
Administration
admin@backontrack.org
RAIL Back On Track https://backontrack.org

,

https://x.com/7NewsSC/status/1765657768734953858?s=20

Queensland Parliament Hansard

https://documents.parliament.qld.gov.au/events/han/2024/2024_03_07_DAILY.pdf

Ministerial Statements

Sunshine Coast, Rail Infrastructure

Hon. BJ MELLISH(Aspley—ALP) (Minister for Transport and Main Roads and Minister for Digital
Services) (10.07 am): The Sunshine Coast is the largest urban area in Australia without a direct rail
connection. By 2046, the region's population is expected to increase by another 52 per cent, creating
an extra 800,000 local car trips every day. This is why we are building the direct Sunshine Coast rail
line and why it is so important. It is why this government has committed $2.75 billion to make the 30-year
dream a reality. Our government spent $14 million to get the business case done and submitted it to
Infrastructure Australia. I table a summary of the business case now.

Tabled paper: Department of Transport and Main Roads: Direct Sunshine Coast Rail Line-Business Case Summary, March 2024.

At 19 kilometres, stage 1 from Beerwah to Caloundra will be the longest spur line in our
south-east rail network.

Opposition members interjected.

Mr MELLISH: We are happy to add in some more pictures so those opposite can understand. It
is almost as long as the 20 kilometres of Gold Coast line from Helensvale to Varsity Lakes—a line that
took 12 years to build over three stages. We will do it within eight years so it is up and running for the
2032 Olympic and Paralympic Games.

The Sunshine Coast already has the second highest car ownership rate in the country. Building
the direct Sunshine Coast rail line will make a trip from Caloundra to Brisbane at least 45 minutes faster
than a car during peak hour. That is 90 minutes a day in a return trip, 7.5 hours a week, 15 days a year
not sitting in the car battling traffic. That 15 extra days of freedom a year means money well spent.
Building direct Sunshine Coast rail will also fast-track housing development, helping unlock some 3,000
new affordable homes around the rail corridor by 2032 alone. The corridor to Caloundra requires zero
homes to be resumed.

Building a train line does not happen overnight. This government did the proper planning,
including refining the existing corridor, selecting suitable station locations, staging and delivery time
frames. While we await Infrastructure Australia's assessment, we have commenced environmental
investigations along the line. We welcome the Australian government's initial commitment of $1.6 billion
towards this project. I urge the federal government to match our funding and back the direct Sunshine
Coast line.

While I am on my feet, I would also like to address the member for Chatsworth's question from
the February parliament sittings—

Mr Crisafulli interjected.

Mr SPEAKER: Sorry to interrupt, Minister. Leader of the Opposition, I do not need to remind you
to use members' correct titles. I would like to hear the ministerial statement.

Mr MELLISH: While I am on my feet, I would also like to address the member for Chatsworth's
question from the February parliament sittings regarding the cost of building three new train stations on
the Gold Coast. I am happy to advise that the figures in the budget papers are correct. The Queensland
Audit Office have advised TMR they will be updating their major projects report to correct their error.

Queensland Parliament Hansard

https://documents.parliament.qld.gov.au/events/han/2024/2024_03_07_DAILY.pdf

Questions Without Notice

Sunshine Coast, Rail Infrastructure

Mr HUNT: My question is to the Deputy Premier and Treasurer. Can the Deputy Premier update
the House on how the Miles Labor government is delivering better public transport for the Sunshine
Coast, and is the Deputy Premier aware of any alternative approaches?

Mr DICK: I thank the member for Caloundra for his question. As the member for Caloundra
knows, the business case that was tabled by the Minister for Transport shows that the direct Sunshine
Coast Rail Line can finally happen—real infrastructure funded by real money, invested by our Labor
government that gets direct rail to where it is needed, especially for housing. Beerwah East and
Caloundra South have the capacity to house an additional 150,000 Queenslanders.

Let's compare that to the Leader of the Opposition's unfunded promise to extend the rail line
further north. The business case material tabled today makes it clear that the Leader of the Opposition's
plan would cost around, or at the very least, $12.8 billion. That means the Leader of the Opposition
needs an additional $6.6 billion to deliver his rail line. That is money the Leader of the Opposition does
not have. That should send a chill up the spine of every Queenslander, because Queenslanders can
expect another $6.6 billion in cuts from the Leader of the Opposition. That is on top of the $9 billion
budget black hole he has blown in our budget—the state budget—because he wants to cut progressive
coal royalties.

All Queenslanders have been on this train before. The first stop is unfunded LNP promises. We
know where the line ends: with cuts to frontline services, sacking of frontline workers and privatisation
of our energy assets. Members do not have to take my word for it. They need just look at what the
Leader of the Opposition did when he was a senior minister in the Newman LNP government. They
closed the Barrett Adolescent Centre that helped kids in Inala and Ipswich West. That had catastrophic
consequences and young people lost their lives.

Ms Richards interjected.

Mr SPEAKER: Member for Redlands!

Mr DICK: Look at the Leader of the Opposition laughing at young people losing their lives. That
is an absolute disgrace. You should apologise, Leader of the Opposition. They cut funding from
women's services, from death services, from sexual violence services and from taxi subsidies that
helped disabled people. Sick children, grieving women, people with a disability—these were the victims
of the LNP's unfunded promises, not to mention every other Queenslander who suffered worse health
services, worse education and worse crime as a result of LNP cuts. It is time for the Leader of the
Opposition and the leader of the LNP to come clean. How will the LNP leader fund his rail line to
Maroochydore? Will they close Jacaranda Place, which replaced the Barrett Adolescent Centre? Will
they cut the police again? Will they cut 1,800 nurses and midwives? Maybe it will be 2,800 this time.
Until the Leader of the Opposition—
(Time expired)

Sent to all outlets:

Why are the BCRs so abysmal for the DSCRL?

9th March 2024

RAIL Back On Track (http://backontrack.org) has called on the Queensland Government to explain why are the benefit-cost ratios (BCRs) so abysmal for the Direct Sunshine Coast Rail Line (DSCRL) project, and to consider engaging with the Public Transport Authority of WA as a consulting partner for the  DSCRL project.

RAIL Back On Track believes that heavy rail is the best mode for Stage 1 of the project connecting Beerwah to Caloundra, and is essential for plugging the Sunshine Coast into the rest of the SEQ rail network. However, RAIL Back On Track raises serious concerns about Stage 2 and Stage 3 of the DSCRL project. We note that the DSCRL BCR values are all far below 0.5 for all stages of the project. We would like to understand precisely why this is the case? Infrastructure Australia is less likely to recommend federal funding for a project with a BCR  significantly less than 1.



https://railbotforum.org/mbs/index.php?action=dlattach;attach=4425
Page 25 DSCRL Business Case Summary

For comparison, the Public Transport Authority of WA has multiple projects listed on the Infrastructure Australia website which demonstrate that WA rail projects create net benefits for society greater than their costs. For example:

- Perth Forrestfield-Airport BCR 1.4 using 7% discount rate (project mostly in tunnels)
- Perth Moreley-Ellenbrook BCR 1.1 using a 7% discount rate
- Perth Thornlie-Cockburn Link BCR 1.2 using 7% discount rate, excluding WEBS*

While we acknowledge that BCRs for transport projects are traditionally challenging to calculate and that there are benefits that are not easy to assign a dollar value to, these challenges have not prevented rail projects in Perth from demonstrating a positive BCR. The Perth suburban rail system is very similar to the Queensland Rail Citytrain network - its A and B series trains were made in QLD, trains operate on the same gauge of 1067mm (3' 6")  and their network is electrified to the same standard as QLD.

There needs to be an inquiry into why rail in Queensland and on the East Coast generally is so expensive and slow to build compared to our counterparts in Western Australia. The entire Perth network is also 15-minute trains all day including weekends, something that has not been achieved in Brisbane.

We would appreciate it if the Department of Transport and Main Roads, and Transport Minister Bart Mellish could respond to our concerns, particularly why are the BCRs so abysmal for the DSCRL project?

References:

Unit Cost Calculation
The proposed length of the Beerburrum - Caloundra section in km is 19 km from the IA website. This implies a unit cost of $5.5 b / 19 km => $289.5 million/km.

IA Direct Sunshine Coast Line
https://www.infrastructureaustralia.gov.au/projects/direct-sunshine-coast-rail-line

*WEBS - wider economic benefits. Benefits that arise indirectly from the project (e.g. land use changes).

TransPerth A Series Train - Manufactured in Maryborough, QLD.
https://en.wikipedia.org/wiki/Transperth_A-series_train

Why The Direct Sunshine Coast Line Business Case is Poor
https://railbotforum.org/mbs/index.php?msg=281280

Translink SEQ vs Transperth Train Frequency Analysis
https://railbotforum.org/mbs/index.php?msg=278801
(Basic frequency in Perth at all stations is 15 min all day or better, except for Thornlie, which is 30 min service on Sundays)

Infrastructure Australia Project Business Case Evaluation - Perth Forrestfield Airport Line
https://www.infrastructureaustralia.gov.au/sites/default/files/2019-06/WA-Forrestfield-Airport-Link.pdf

Infrastructure Australia Project business case evaluation summary - Moreley-Ellenbrook Line
https://www.infrastructureaustralia.gov.au/sites/default/files/2020-05/morley_ellenbrook_project_evaluation_summary.pdf

Robert Dow
Administration
admin@backontrack.org
RAIL Back On Track https://backontrack.org

Facebook ...

https://x.com/railbotforum/status/1766119472753226141?s=20

https://x.com/Jeffrey_Addison/status/1766063492774416880?s=20

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https://x.com/Jeffrey_Addison/status/1766065208647459088?s=20

^ this the fundamental reason why the BCRs for DSCRL are so low.  The costs are far too high. Possibly benefits underestimated as well. It concerns me greatly that the low BCRs might well be the death knell for the DSCRL, particularly stages 2 and 3.

It would be good to see a breakdown of the various components for the DSCL -- earthworks, sleepers and rail / station buildings and associated infrastructure / station carparks / access roads / bus interchanges / active transport corridors / realigned roads and bridges / viaducts / tunnels etc / road flyovers and underpasses.

As with the Beerburrum to Beerwah RAIL duplication project, much of the project consists of ROAD componentry that would have been the sole funding responsibility of the state government, but which has been intertwined into a RAIL project ... and has been built first.

A 50:50 funding split for the rail only components would see the state government responsible for a much larger percentage of the overall project, all the extra bits rolled in and funded 100 per cent by the Queensland Government. Are we seeing a cost-shifting exercise under way?

I think with Beerburrum to Beerwah the road is enabling works.
Planners wanted a straighter rail corridor, the road was in the way, so its the responsibility of project proponents to move the road out of the way.

It is not like the relocated road was upgraded to 4 lanes and the costs shifted for that....It was a 1:1 replacement.

No difference a light rail project where they have to relocate underground utilities. Its not the responsibility for utilities to pay to move their own pipes and cables.

The state government should not be allowed to get away with having 'Sunshine Coast' as the destination shown on the front of trains running to Caloundra. It should read 'Caloundra'.

It is a very reasonable question to ask FF as to why the costs are so high?

The question has been asked already publicly of the Minister and TMR to explain the low BCRs.

I will also be asking privately today as well.

The business case is being hidden by the cloak of ' commercial in confidence '. 
I note the opposition is demanding the business case be released.

The spur line Beerwah to Caloundra doesn't seem to present any exceptional engineering difficulties above the usual challenges. Most of it is undeveloped land in a protected corridor.

That would suggest a non-engineering issue is the problem, like industry capacity constraints, local content requirements or lack of competition as potential factors. Or it could be something else we have not thought of.

The excellent analysis by Fares_Fare suggests a 3x markup/premium for the full length project over what is efficient (using MBRL project as a basis and assuming that represents 'normal' costs).

That's a huge markup. Raw materials costs should be similar between Perth and SEQ, otherwise any large price difference between the states would cause cheaper materials to flow from WA to Qld or vice versa.

This markup should definitely be probed. WA can do rail cheaply, which means they can do it at scale.

In the DSCRL case, 3x costs probably means 1/3 line will get built and Stage 2 and 3 cancelled (read, indefinitely delayed, because in QLD you never cancel a project).

I have today written directly to the Minister for Transport and DG TMR, asking why the BCRs are so low (essentially why the project is grossly expensive, particularly when compared with other rail projects).

Sunshine Coast News --> Why a heavy rail line can't be built to Maroochydore in time for the Games

QuoteA business case summary for a Sunshine Coast passenger rail line has revealed just how much the entire project could cost and outlines some of the issues associated with it.

The state government this week released a 28-page overview of the Direct Sunshine Coast Rail Line: a proposed 37.8km dual-track line with multiple stations between Beerwah and Maroochydore that would ease congestion in the rapidly growing region.

But there is a funding shortfall and the track won't be completed in time for the 2032 Olympics and Paralympics.

The summary said it would cost $5.4 billion to build the track from Beerwah to Caloundra, $8.4 billion to Birtinya and $12 ...

Some thoughts on BCR:

Fares_Fare's financial analysis shows:

- Based on MBRL costs, we should expect the per-km unit cost of the project to average around ~ $103 million/km (RBA inflation calculator adjusted, $ 2023)*. This seems reasonable.

- Instead it is ~ $289.5 million/km, so about 3x more.

- This is all assuming it runs at 1x rather than 1.8x (recent QLD Gov. transport projects have tended to be delivered at near double their initial costs).

General BCR Objections

It is also worth addressing some criticisms of the BCR approach itself. Some members of the public are using these criticisms as complete defences when they are only partial at best.

Quote from: RBOT Facebook Page CommentHowever, a lot of modelling goes into producing a BCR, and anyone who actually does modelling can very quickly explain to you how easy it is to drive the BCR up and down with small changes to base assumptions.

- Doesn't explain how the WA PTA in Perth manage to do it. Their BCRs are generally > 1.0. There is not an obvious reason to think the WA PTA is better at quantifying the benefits than QLD TMR is. That said, it is documented the PTA learned a lot from the Joondalup and Mandurah line construction, particularly with rail patronage and costings. See the 1988 review they did below.

- Sensitivity testing. If large changes to the inputs still don't get you BCR > 1.0 then you are still in trouble. We know this is a problem for the DSCRL business case, because a 3 pc point change was tested by lowering the bar from 7% rate to 4% rate, it still didn't get BCR > 1.0 or even BCR > 0.5. This refutes the small changes to base assumptions argument.

- 'Unaccounted benefits'. If the problem costs $2.3 billion over the next 50 years (present value) and the solution costs $12 billion over the same period, then all of these 'unaccounted benefits' would have to add to at least:

Cost of Solution minus Cost of Problem => minimum unaccounted benefits to break even

$12 billion - $2.3 billion => $9.7 billion of unaccounted benefits

That's a lot of unaccounted benefits you would need to break even.

Can those using this argument show that it is likely all of these would add up to anywhere close to that? The size of this gap is larger than the cost of delivering Cross River Rail.

All of this indicates:

(a) If there is an issue with the BCRs, it is probably something to do with the project itself.

(b) Stages 2 and 3 are likely to be a similar experience to the last 20 years, with delays etc.

For interest, Perth independently reviewed its Joondalup rail line proposal in 1988. From the Transport Research thread (Page 6):

The Perth Rail Transformation: Some Political Lessons Learned
Peter Newman
Professor of Sustainability, Curtin University
Light Rail 2011 Conference. 6th April. Sydney.
URL: http://www.curtin.edu.au/research/cusp/local/docs/the_perth-rail-transformation.pdf



Notes
* RBA inflation calculator https://www.rba.gov.au/calculator/
Calculator goes up to year 2023 at time of writing.

Because of the large numbers of road projects, TMR does in fact rank the priority of those projects by BCR.

There really is not enough rail projects to do outright ranking in the same way, but the point is the BCR is taken note of, and will most certainly be by IA.

The point you make about BCRs being not so important by some, belies the fact that other jurisdictions do manage to get the BCRs right. I think there is something seriously flawed with TMR's (and probable consultants) approach.  TMR likes to use consultants, and some of them are not worth a pinch of salt IMHO.

The BCR would be improved if the state government had the Sunshine Coast Council pay for the bike paths in the rail corridor, or charged a 'betterment tax' for apartment development in land around the stations, say within 200m ... or incorporated a rentable supermarket space in the design of the Caloundra Station etc -- all money that could defray costs and increase the BCR.

Imagine if you are the IA official charged with the job of recommending to government where it could best spend its money in the interests of the nation and taxpayers. Do you recommend a rail project in WA with a BCR of 1.3 or the DSCL with a BCR of 0.5?

Why does it have to delivered by the project to be included in the BCR. If the project enables it then it should claim the benefit. If should be able to  claim the tax-payer subsidy reduction for each trip not by car now or the social benefit from reducing social isolation.

Forgive my ignorance, but is there an industry-accepted standard economic model duration? Despite the limited amount of information, a couple of face value questions come to mind; but as I work in health economics where the rules are no doubt different... I know there's essentially a futility endpoint where the benefits are more or less worthless, but I do wonder where they've cut this model off.

I struggle at face value to accept, using a BCR of 0.21 as an example (7% DR + WEBs/2RBs), that this project would only generate ~$2.5 billion in (discounted) benefits. It seems unrealistic (at least to me) considering the known car-dependence of the region (and associated impacts) and how it would only otherwise worsen into the future. The impact of the 4% sensitivity analysis suggests, as you might expect, that the benefits are being accrued late into the model, such that the benefits are valued so much less than the costs which are closer to time=0. It would be informative I think to see a sensitivity analysis with a discount rate of 0% and a breakdown of timepoints in the model where costs are expected to be spent and benefits are started to be accrued.

Just to frame my experience, in health economics a 7% discount rate would be considered very high, almost absurdly high. Health technology assessments typically use 5% in Australia (with sensitivity analyses at 3.5% and 0%), and that's essentially the (tied) highest amongst the nations with single-payer healthcare structures. Costs are also discounted in health economic modelling, and I simply don't have the experience to know whether that's standard in infrastructure modelling (if it is, portions of that $12 billion should be discounted already if expended later in the DSCRL model, but such discounts may be offset by inflation etc.)

There is ATAP which tries to standardise things between different states and territories. https://www.atap.gov.au/

Pages 24-25

Direct Sunshine Coast Rail Line, Business Case Summary, March 2024

https://hdp-au-prod-app-qldtmr-yoursay-files.s3.ap-southeast-2.amazonaws.com/9517/0971/7651/Detailed_business_case_summary_March_2024.pdf

QuoteEconomic analysis

Economic appraisal was undertaken to measure the net economic benefits to South East
Queensland associated with the DSC Project, using cost-benefit analysis (CBA). CBA is the
most widely used and accepted economic appraisal and evaluation technique applied in the
assessment of infrastructure projects in Australia.

It provides a framework for identifying, measuring and monetising a range of economic, social and
environmental costs and benefits for an investment decision. The CBA was conducted in line with
the required evaluation frameworks and guidance on economic appraisals.

The economic analysis determined that the project delivers substantial benefits for public
transport users, road users, the community and the broader economy by better connecting the
current and emerging population and activity centres on the Sunshine Coast with an efficient and
sustainable public transport option.

The costs and benefits identified in an economic assessment typically occur over a number of
years. With infrastructure projects, costs are generally very high in the early years as the project
is being built. It is not until after the project is built and people are using it that the benefits
can be gained. 

In order to compare costs and benefits over time, the values attached to costs and benefits
need to be converted and expressed in today's dollar value. This is referred to as 'discounting'
future values.

It is common for projects with long construction timeframes to have a lower benefit cost ratio
(BCR) as the costs are expended from day one but the benefits are gained from project opening
and discounted back over the long period of construction. Therefore, the present value of the
benefits is low but the present value of the costs is high.

The 'discount rate' is the percentage rate at which future values are reduced to bring them into line
with today's values. Determining an appropriate discount rate is important as the discount rate
chosen reflects a judgement about the future value of costs and benefits associated with a project.
Infrastructure Australia advises the use of a discount rate of 7% (real) for public infrastructure
projects (with sensitivity testing at 4% and 10%), largely on the basis that it reflects the
opportunity cost of the investment. The Queensland Government also apply a 7% (real)
discount rate for evaluation of potential investments.

Economic analysis considers value of time, vehicle ownership and operating costs, crowding
(on public transport), crash costs, improved health benefits, environmental externalities,
amenity improvements, avoided road maintenance, capital costs and public transport operating
costs. Wider Economic Benefits (WEBS) have also been included and assessed. These include
growth of employment centres, providing better links between jobs and skilled labour, increase
in production of goods and services that use transport and increased competition (caused by
improvements in affordable transport offerings which help new firms to enter the market and more
effectively compete). These benefits are quantified and monetised (where possible) and then
assessed against project costs to calculate a BCR.

Benefit Cost Ratios for public transport

Public transport BCRs are traditionally challenging to calculate. Some benefits associated with easing
congestion, travel time savings and so on can be easily monetised, however improved quality of life,
liveability, connectivity, accessibility, social equity and so on are unable to be easily monetised. This
means that these benefits are not considered as strongly within the economic assessment.

Rail projects are also generally more expensive than road projects per kilometre.

This results in BCRs which appear lower than other infrastructure projects.

The approach to monetising forecast performance (the number of people using public transport
known as 'patronage') is also limiting for new public transport connections as the current public
transport patronage in the area is usually low due to an inadequate existing public transport network.
Therefore, any percentage increase to monetise patronage benefits is from a low base. For example,
a 100% increase of 10 people is 20 people (10 more), whereas a 100% increase of 100 people is
200 people (100 more).

To better assess the potential performance of the DSC project, case studies were included in the
business case for comparable rail projects. These case studies assessed performance post opening,
comparative to forecast business case performance. These case studies demonstrated that comparable
rail projects which connect regional growth areas to their nearest capital city, generally out-perform
their forecast transport modelling projections, with real patronage significantly higher than forecast
patronage on these lines.

" Rail projects are also generally more expensive than road projects per kilometre.

This results in BCRs which appear lower than other infrastructure projects. "

True, but why is it other rail projects have a BCR > 1 and DSCRL doesn't ??

This is the what needs to be properly explained rather than ' word spin ' in a summary document.

Quote from: ozbob on March 10, 2024, 07:24:21 AMI have today written directly to the Minister for Transport and DG TMR, asking why the BCRs are so low (essentially why the project is grossly expensive, particularly when compared with other rail projects).

This was the correspondence:

10th March 2024

Dear Minister Mellish and Ms Stannard,

We are greatly concerned with the BCRs as reported in the Business Case Summary for the DSCRL.

Can an explanation as to why this is the case be provided please?   IA is less likely to support projects with poor BCRs, particularly of this degree.

The costs of the project seem to be extremely high when compared to other rail projects. 

Thank you.

Best wishes,
Robert

Robert Dow
Administration
admin@backontrack.org
RAIL Back On Track https://backontrack.org

At least we will have flying taxis to take people from the Caloundra rail station to the venues come 2032 🤪😃

^^Maybe that's why the business case is also commerical in confidence as the plans may include a flying taxi landing and take off area at Caloundra.

It will need aerial transport to fly over the traffic jam that will be present all day at the intersection of Caloundra Road and Nicklin Way. The pressure will be on from day one to extend the DSCL to Birtinya.

Thank you Metro for this detailed information and the Perth WA comparisons.
We need their project cost and benefit modellers over here, I'm thinking.

Quote from: #Metro on March 07, 2024, 20:45:56 PMWhy The Direct Sunshine Coast Line Business Case is Poor

Bad news folks, the business case is not good. The BCRs are very low, and by a large margin. Having a good BCR and NPV are crucial for getting IA buy-in.

See, the problem costs around $2.3 billion (Page 9)



But the fix for the problem costs $5.4 billion, $12 billion for the full length (Page 23); and likely $20 billion when you apply a 1.8x Queensland Government historical cost overrun adjustment factor.



In other words, the solution is worse than the problem. A project that costs $2.3 billion could be justified. A project that costs above this, likely not.

There is a lot of reassuring narrative put in this summary business case in what appears to be an attempt to 'explain away' the poor numbers. For example, Page 25:

Quote from: DSCRL Summary Business CaseBenefit Cost Ratios for public transport Public transport BCRs are traditionally challenging to calculate. Some benefits associated with easing congestion, travel time savings and so on can be easily monetised, however improved quality of life, liveability, connectivity, accessibility, social equity and so on are unable to be easily monetised. This means that these benefits are not considered as strongly within the economic assessment.

A major problem with this narrative is that these calculation/quantification challenges also apply in Perth, Western Australia. Yet Perth and the WA PTA have no problem in achieving BCRs > 1.0 for their rail projects, even if the higher and harder 7% rate is used.

Perth Forrestfield-Airport BCR 1.4 using 7% discount rate



Perth Moreley-Ellenbroook BCR 1.1 using a 7% discount rate



Thornlie-Cockburn Link BCR 1.2 using 7% discount rate, excluding WEBS



Perth is achieving this in a low-density, high-car use context. In contrast, the DSCRL does not come even close to clearing the bar, even at the lower 4% rate (Page 25).

Direct Sunshine Coast Line



I am not sure what the answer is here. Rail in Queensland is slow to build, expensive, and on opening infrequent. And it shows up in the numbers. Did they use a 30-minute basic all-day frequency to calculate the time savings? I suspect they might have.

Notes

Infrastructure Australia Project Business Case Evaluation - Perth Forrestfield Airport Line
https://www.infrastructureaustralia.gov.au/sites/default/files/2019-06/WA-Forrestfield-Airport-Link.pdf

Infrastructure Australia Project business case evaluation summary - Moreley-Ellenbrook Line
https://www.infrastructureaustralia.gov.au/sites/default/files/2020-05/morley_ellenbrook_project_evaluation_summary.pdf

Perhaps IA will pick up on the exclusions and under-statements (or over-statements/mis-statements) in the Direct Sunshine Coast rail business summary.

I like their detailed breakdown seen in the Morelly-Ellenbrook IA evaluation summary.
Some benefits were over-stated, and some are still in development for proper assessment, but overall it was positive.