Australian rail projects missing out on value capture funding

Australia could be missing out on the potential of value capture when it comes to funding new metro lines.

In a parliamentary hearing held on June 23, the House of Representatives Standing Committee on Infrastructure, Transport and Cities heard from experts on financing faster rail.

Chaired by MP John Alexander, the committee heard that property owners sold houses near the North West Metro Line in Sydney for 40 times their value, but without that windfall contributing to the cost of infrastructure.

“I raise concerns now because we have evidence regarding more extraordinary windfalls for speculators, investors and property owners in the region of Western Sydney, by virtue of the investment in infrastructure and the Badgerys Creek airport,” said Alexander.

“I’m wondering what has happened in regard to value capture in that precinct. Have we missed the boat again?”

Responding to Alexander, Chris Allen, managing director of Infrastructure and Project Financing Agency (IPFA) said that Australia has not been successful in capturing the value of increases in land value due to infrastructure investment.

“Historically in Australia, the ability to capture uplift in value and the ability to structure a mechanism that has been accepted has not been overly successful.”

Mike Harris, UNSW Sydney lecturer, said that globally other cities were using value capture to finance projects, and in the case of New York, a $2.4bn metro extension recouped funding beyond the cost of the extension through the Hudson Yards redevelopment.

Harris also pointed to Copenhagen, which has generated finance from developing government owned land near the rail corridor and noted that development in Sydney could also be used to finance Metro West.

“There is a great deal of urban renewal underway or planned through that corridor, particularly at Sydney Olympic Park, The Bays Precinct, Camellia, and Parramatta/Westmead.”

According to Leilani Frew, chief executive of IPFA, stamp duty is one way that an increase in value in land is captured through tax, but there is a lack of transparency of value capture from property and that stamp duty is an indirect tax arrangement.

“We’re very supportive of the Commonwealth government, when committing its funding to states, seeking that states pursue more-direct or more-transparent value-capture mechanisms in developing infrastructure projects,” said Frew, speaking at the financing faster rail inquiry.

Transport for NSW introducing $50 weekly travel cap for Opal

The New South Wales Government will start placing a weekly cost cap of $50 on Opal cards from Monday June 24.

The new cap is about 20 per cent lower than the current cap of $63.20 a week, and is expected to save public transport users up to $686 a year. These savings will also extend to users of the recently launched North West Metro, saving $563 a year for an adult customer travelling to and from Tallawong station and Central five days a week.

Examples of regular weekly commuters who could save $686 a year under the new plans include those travelling from Meadowban to Barangaroo via ferry, Tuggerah to Central and Kiama to Sutherland routes.

State premier Gladys Berejiklian said that the new cap would help to ease cost pressures for around 55,000 customers across NSW public transport services (including ferries).

Caps for concession holders will also be reduced as part of the plans. Opal card benefits such as weekly travel rewards and transfer discounts will also survive the new cap.

“We want to make public transport more affordable and that is why we are lowering the cap,” Ms Berejiklian said. “From Monday adults will pay no more than $50 a week and the concession cap will also be reduced from $31.60 to $25 a week.”

State transport minister Andrew Constance added that from Monday fares would rise in line with inflation at 1.9 per cent as opposed to the Independent Pricing and Regulatory Tribunal (IPART) recommendation  of 4.2 per cent.

“This means catching the train, bus, ferry, metro or light rail is still a much cheaper option than driving,” he said.

Sydney Metro hits ‘one-millionth journey’ mark

Over one million commuters have travelled using the North West Metro within two weeks of the service’s launch, according to figures from the New South Wales Government.

The automated North West Metro opened on Sunday May 26 and runs for 13 stations between Tallawong and Chatswood. It transported an average of 72,000 patrons on weekdays, a statistic referred to by NSW Premier Gladys Berejikian as a “huge result for a brand new mode of transport”.

“The success shows just how much commuters appreciate the delivery of this game-changing project, which connects the area by rail like never before,” Berejiklian continued.

Line data gleaned from Opal found that May 29 had the busiest morning peak (23,330 trips) while May 28 had the biggest afternoon peak (27,542 trips) across over 3,400 metro train services. May 30 was the busiest day overall since the Metro’s launch, recording 75,876 trips.

The service launched on time at a cost of around $7.4 billion ($1 billion under budget). The service has suffered from a few initial technical issues, including a breakdown between Cherrybrook and Epping and a train that failed to stop properly at Chatswood station.

“As with any comparable railway of this scale around the world there have been some minor teething issues and we thank customers for their patience as we continue to fine tune the system,” said NSW Minister for Transport Andrew Constance.

Sydney Metro Northwest opening confirmed for end of May

The New South Wales Government has confirmed that the long-awaited Sydney Metro’s North West line will open to the public on Sunday May 26.

The 36-kilometre line, which stretches from Tallawong to Chatswood across 13 stations, started construction in 2011 and was delivered on time and $1 billion under budget, according to NSW Premier Gladys Berejiklian.

“This is an exciting time for the future of public transport. Thousands of commuters will have access to world class metro rail,” Berejiklian said.

The trains on the North West line are driverless and have no timetables, with a train promised every four minutes in each direction during peak times (to be increased to every two minutes in future). This automated system has undergone over 180,000km of testing prior to the public launch of the service.

The line also incorporates 4000 car parking spaces for commuters, and mover 1,500 weekly services have been added to bus timetables to support links to the Metro’s stations.

The state government has referred to the project as Australia’s first “fully accessible railway”, that being a a railway with lifts at every station and no gaps between the platform and the train.

“The true mark of a progressive global city is a reliable and world-class public transport system and the North West Metro is a key component that will advance the quality of public transport in Sydney,” said NSW Business Chamber Director of Policy, Advocacy and Influence Chris Lamont.

“This is the beginning of a revolutionary way to move large numbers of people around the city and conveniently link them to employment and educational hubs.”

Early works are continuing on the Sydney Metro project’s other component, Sydney Metro City & Southwest, which comprises a southerly line from Chatswood to Sydenham.

The full Sydney Metro project comprising 31 stations across 66km is expected to be completed in 2024.

“The new generation of driverless trains have now completed more than 180,000 kilometres of testing and final commissioning is underway,” said NSW Minister for Transport Andrew Constance.

“Sydney Metro is Australia’s first fully accessible railway which will deliver fast, safe and reliable travel.”