Without the usual fanfare, the ACT Government has released the eight-year-old secretive business case for Light Rail Stage 2B. Planning expert RICHARD JOHNSTON knows why they’ve been hiding it – the economics are disastrous.

Without its customary fanfare, the ACT Government has finally released its business case for Light Rail Stage 2 and the preferred route of the controversial push to Woden. 

Prepared by Transport Canberra and City Services and dated January 29 2018 it has long been “Cabinet in Confidence” and kept away from public view. 

Oddly, the contents pages are listed up to page 191, but the released version shares only up to page 90. 

Nevertheless, it is not hard to see why the government wanted to keep this under wraps, as there is plenty of damning material in this version.

Perhaps the most remarkable outcome was that the all important Benefits/Costs Ratio (BCR) for their recommended Option 2 was only 0.42.

This means that the projected costs of the project were almost two and a half times the expected benefits.

This would be a disastrous result for any sensible, publicly-funded project and should have immediately condemned Light Rail Stage 2 as unaffordable and not worth proceeding any further with. But not to this ACT Government, which shows no sign of being diverted.

An article by the Corporate Finance Institute, available through Wikipedia, explains that for a “BCR<1 [ie, less than 1] The project is destroying value and should not be undertaken”. 

It is likely, of course, that the “costs” for such a project will prove to be understated, and that the “benefits” claimed are optimistic and overstated, as was suggested by the ACT Auditor-General’s report in September 2021 on the Business Case for Light Rail Stage 2A.

The A-G recommended that much more economic assessment should be undertaken. It is not evident that happened and it appears the business case for the whole of Stage 2 has not been revised or updated despite the government having put out a Draft EIS, with revised route options for Stage 2B, last year.

Here are some specific points revealed in the business case for LR2:

• The substantial risks and difficulties involved in taking the light rail routes through the Parliamentary zone are mentioned (getting federal parliament approval etcetera), but not the major environmental impacts on this most important part of the national capital (loss of visual amenity through destruction of many, magnificent 100-year old trees, traffic conflicts etcetera).
• Para. 1.9 refers to: “The risk that the planned strengthening of Commonwealth Avenue Bridge across Lake Burley Griffin is insufficient”. We now know a completely separate bridge is required for LR2 – at what cost?
• Fig. 3-8 on page 48 shows “work trips by bus” to be already 23 per cent to Civic from “Stage 2 Corridor”, compared to only 6-7 per cent into the Parliamentary Triangle and Barton – why is this? Should bus services be improved, or do many more workers in this area insist on private car use, because they can?
• Fig. 3-11 on page 51 purports to show a substantial reduction in “car kms travelled in 2036” with light rail. In fact the diagram is misleadingly drawn and the change is less than one per cent! 
• At the bottom of page 63 is a box containing a short and very superficial comparison of “Light rail or bus rapid transit?”, including the comment “one light rail vehicle providing three times the capacity of a bus”.  As has been previously pointed out, individual buses (which are typically used for feeder routes rather than for “bus rapid transit”) provide a much greater proportion of seats to standing areas than light rail vehicles and bi-articulated vehicles such as those used in the Brisbane Metro have high capacity. “Bus rapid transit” is also, of course, much less costly to install and change as required and inherently much more flexible than light rail on its permanently fixed alignments. 
• On page 68 is the comment: “Option 2 provides better connectivity to employment and cultural centres, and involves lesser costs and construction complexity.  Community feedback in 2017 also indicated a strong community preference for that alignment.” This highlights a key issue with Light Rail Stage 2 – is it actually going to provide a better service for commuters and others wishing to access employment and cultural centres than the existing bus-based services, which of course can and should be augmented and fully electrified as soon as possible?

Richard Johnston is an architect and town planner, and formerly a senior executive in the ACT Planning and Land Authority. He is a life fellow of the Planning Institute of Australia.

Read the report here.