Like most degenerative diseases, the malaises that have affected Australian rail over our lifetimes, were present long before they become evident, and long before they ended up nearly killing the host.

I’ve been down this track before so I was going to look at specific trends in rail, and open discussion on these topics.

In previous posts here and elsewhere I’ve suggested that the legacy rail network, particularly in SE Australia, had its last serious bout of investment in the 1920s.

However we would be foolish to regard even this round as a proactive investment in Australia’s development. On the contrary, I would suggest it was reactive, in other words, the “body” of Australian rail politics had already had the ‘disease’ at the point when the first radical cures were being tested.

Economic advantage over the competition

Even the lightest laid, most insubstantial railways in Australia, be they the cane tramways or the pioneer branchlines of the larger gauges, had a capacity and transit time advantage over the nearest competition, namely horse-drawn wagons.

Along the coast, however, the advantage was less clear, as shipping could at least manage to hold its own in terms of carrying capacity, and was not far behind on transit times (an analogy for the situation today vis a vis road and rail?).

Hence the coastal rail networks were the last to be developed, with 3 conspicuous examples: A connection from the eastern states to Perth, contiguous rail to Cairns, and the coastal line from Melbourne to Sydney (never finished) and Sydney to Brisbane (only completed in 1930).

I should also mention the Murray River riverboat network, if only to mention it played a valuable role in establishing the idea of rural development and the development of agricultural commodities as opposed to merely agriculture for home consumption. However, the network was not extensive, was indirect and not very reliable.

For all the talk of nation building and the importance of a national rail network, I suspect economics drove this.

Back to the horse-drawn vehicles: A manifold improvement in productivity from rail haulage was evident from the first railway being built, and for established or viable settlements it made sense to pay for rail haulage or passage, no matter how high the fixed costs of the rail system. Rail systems were incredibly capital intensive and somewhat labour intensive as well, however, to run the same system, even if it were possible, using horses would have been much more intensive in both (if you regard horses as capital).

In this first phase, rail as a development option was really against the opportunity cost of not developing country at all. While a grazier might be able to graze extensively, or a quite specific mining project, say gold or copper, might be able to smelt on site and lift small amounts of finished product out by horse, the options for development and settlement of distant inland settlements were few without rail.

Given the opportunity cost of rail was undeveloped country, this could easily skew arguments towards rail development. And away from developing the rail well, given that even a poor quality line would make a significant difference to the economic prospects of fertile country.

However, by the 1920s, even a rudimentary motor vehicle-based alternative would be a real threat. Here, the economic advantage came not from capacity or transit time (roads were still poor), but from the blind-spots of rail: inflexibility of rail, and high fixed costs.

If anything, arguably, motor vehicles profited from the opposite characteristics of those that made rail great. Rail could carry a few hundred tonnes at a time, even on the lowest quality routes; rarely was that capacity needed in Australia except during harvests, and even then. Yet customers and later taxpayers were paying for that fixed, very high capacity the routes had. Transit time might be better, but gate-to-gate or gate-to-ship times might be better, simply for the lack of waiting and handling.

If you stand in the souvenir shop at Puffing Billy’s Belgrave Station, you will see something that gives much of the game away. A comment on a photograph from the heydey of narrow gauge shows the old goods shed at Belgrave. It notes that little freight was in fact shipped through Belgrave, even at the start. It just wasn’t worth unloading it from horse or truck onto a narrow gauge train for a few km, then transhipping to the broad gauge. Much easier to get the horse or truck down the hill to Fern Tree Gully, even if this had a longer transit time.

This would be the tale of much of Australian rail even by the 1920s.

I recall reading in the passenger market it was similar. The Newcastle Express was introduced in the 1920s to combat the same problem, with some effort put into reducing the journey time which had not been a priority before. The road journey was still 4 hours versus 2.5 on the train. However was this the real journey time? The train might be reliable and fast but how frequent compared with a car you drive yourself, and could leave anytime; or a bus that might need only 20 passengers to be a viable run?

It follows as well that as the road journey time decreased, you would expect efforts made to improve the rail time as well. This did not occur, and the time is approximately the same today, despite vast sums spent on electrification, concrete sleepering and heavier rail.

Despite Australia having a somewhat impressive growth rate since the start of Australian rail, in practice it was nowhere near enough to soak up all the excess capacity of the rail system where it ran. And the question of spending recurrent resources maintaining this capacity, rather than a simultaneous rationalising and improvement, has dogged Australian rail since that time.

Technology

This flowed through into the technological choices. Assuming abundant capital and a viable market, one would assume Australia would at least be in the middle of the pack of technological innovation. And where the returns from innovation were high, in cases where Australia’s situation was special, you would expect to see Australia at the front. Situations like remoteness, like high temperatures, or low water availability, long distances to depots, and so on.

So it is a surprise to see it took an American to come in to shake up the South Australian Railways out of their Britishness, and that the neighbouring systems paid scant attention to what he was doing, though the lessons were much the same for them.

Physical token-based safeworking would be the first bizarre import from the UK that should not have persisted past the development of an alternative. Of course there were doubts about telegraphic and virtual systems such as train orders; why these weren’t traded off against the clear savings from significantly less staff and capital, and more flexibility, is not clear. Too many ‘purists’ with a UK history of safeworking I suspect.

Electrification on the DC system was also a technology just starting to come into its own when two Australian cities grasped it. It wasn’t actually a brand new technology, given trams and interurbans had been using a lighter version of the technology for some time. In fact, when Doncaster had Australia’s first electric tramway, it preceded Melbourne heavy rail efforts by decades.

This was a truly expensive technology, though it also realised significant benefits in crewing and servicing costs of locomotives. Especially in the busier or steeper parts of the system where steam costs were high. It is puzzling why, given these advantages, it wasn’t more widely used, especially before the advent of heavier haul diesel locomotives. I would guess the recurrent costs of the less profitable and more sparsely used parts of the system were diverting capital from what could have been a good system on the major routes.

Referring to the Newcastle Express above, one could imagine a lighter, faster and more sprightly electric service that could have been built in the 1920s, using similar car bodies as the suburban system but fitted out to a higher standard. Such cars could have put on the power on the grades the locomotives found tough, such as Cowan Bank, Hawkmount, and the Hornsby climb, and might have been cleared for faster running around curves. That alone would have cut some time from the timetable of the day, before any consideration was given to rerouting the corridor.

While internal combustion locomotion was still in its early days, railmotors had started appearing around the country on passenger traffic, most conspicuously through the Brills, CPH and PERM (later DERM).

Again, this should have been seen as a canary dozing off in the coalmine, as steam-hauled passenger trains were obviously quite unviable by the 1920s on all but the major routes. If a complete train of passenger cars could be replaced by a single self-propelled carriage, this was clearly pointing to the unviability of passenger traffic in rural areas on the whole. Now I don’t mean could they fill a train, as there will still large numbers of well patronised mail and day express trains on the major routes. I mean could they fill a train at an adequate rate of return, and to every nook and cranny of the system.

Oddly enough, some of these railmotors also started appearing on outer suburban routes, such was their lower cost, their convenience, and the actual traffic on offer. It is a wonder such vehicles weren’t considered for the marginal outer suburban lines of the day, like Lilydale, Hurstbridge, or the North Shore. As I understand it, they did actually see service to East Hills, Carlingford and the Sefton route.

If the 1850s revealled the promise of opening up the country with conveying heavy loads in reasonable times, the 1920s heralded the need for economy, the productivity curve tapering off massively.

Industrial Relations

The Australian Settlement, taken from the point of the Harvester Judgement, was a bit over a decade old at this point. In return for paying a fair wage, businesses exposed to import competition would be protected by tariffs. As this would hurt the domestic and export sectors, agriculture would be supported through marketing boards and export facilitation. Large numbers of monopolies were under government control, from water and electricity to the railways.

In the Anglosphere this was not yet the norm. The heydey of the private railway groups in the UK was coming upon them, while major railroad groups were forming in the US. Those nations too, apart from some cherry picking in specific industries like ship building, tended to less government intervention.

Given the explicit development objectives of Australian governments, it is not surprising that Australian rail operations had fallen so completely under government by this point. While the objective of maintaining the rail enterprise as a whole as a profitable or at least cost-neutral endeavour remained, differentials of profitability within the enterprise remained.

Fare and freight rates books tended to be fairly even by distance, even when the costs of delivery changed markedly according to what was actually involved. Hence a distant branchline that was costly to serve might not cost much more to the customer than a more easily served mainline destination closer to capital or port. And certain traffics might be advantaged to customer; never to the railway.

Little pressure was brought to bear on the enterprise therefore to actually become more efficient. And with road transport bearing upon them, orders of magnitude of efficiency would be required. Technology, as explained above, could help. But at the end of the day, leadership and management were lacking when they were needed most.

A railway of steam locomotive-hauled passenger trains using staff and tickets, substantial staffed stations and could have been quickly transformed into a system of EMUs and railmotors, using simplified signalling and unstaffed halts with onboard or agency ticketing. The 1920s would have been the right time to have done it.

Conclusion
I’ve long been a believer the rot started long ago, and so long ago that we can scarcely recognise the cause; few around today would have seen the world where it was not the case.

Whether your fond memories were 1960s steam, 1970s branchlines, 1980s mainline express trains or even 1990s vestigal suburban trains that have now passed from use, what you were seeing was the dregs, the tail end of a system that started dying before most of us were born.

It would be hard to make meaningful second guessing of decisions taken in the 1850s or 1880s, the world was still a very different place then. By the 1920s, however, enough of the modern world was visible for informed descendents to judge how effective contemporary decision making was.

With the advent of road transport, rail would no longer be unchallenged on most passenger and freight tasks. Technology was moving to improve rail incrementally; but the capital was not able to be raised; and the will not summoned to divert funds from those parts of the network that could not be saved, to those that could.

What had confronted the 1850s and 1880s decision maker as a clear advantage to rail; the same day journey or the same week goods haul, would soon not be enough. Days would turn to hours and rail would lose massively.

What survives from the 1920s? Suburban electrification in Melbourne and Sydney provided an asset that could be drawn down for the next several decades; only now are realising its limitations. Train order working and a big locomotive and rolling stock policy did not really leave South Australia until the 1950s and 60s, so I’m not sure it was a success. Branchline railmotors did at least point the way to the least cost way of carrying country and interurban passengers, with Vline’s Velocities the descendents of generations of rail motors, arguably the way it should always have been.

The 2010 Australasian Transport Research Forum has put out a call for papers that closes at the end of January 2010. It will be held in Canberra, so it’s a good opportunity to go to a local conference on transport that’s not too expensive.

If you’ve got a piece of research that you’ve done on a transport topic, why not share it with the rest of the transport world? Just finished an honours/masters/PhD? – time to publicise your research. Alternatively, if you’ve just completed a transport project, it’s time to share successes and failures with your peers.

I know there’s a few contributors who already work in the industry who could easily do a paper and there are others who have lots of good ideas, but no ’serious’ forum (beyond TT of course) at which to be heard. Then its time to ‘put the money where the mouth is’ so to speak. A 200-word abstract is not a big investment of one’s time. The hard part will be putting the paper together if it gets accepted.

If anyone is interested in taking the first step into a wider world of transport research and policy, email me and I’d be pleased to lend a hand and give advice. For examples of what an ATRF paper looks like, there’s a great archive of papers from the first conference in 1975 through to 2009 on the PATREC website. There are so many good ideas floating around on TT that it would be a shame if they went no further out into the world of transport.

Source: Signalboxes.com

Recent issues of UK rail magazines have discussed the merits of extending conventional (medium speed up to 200km/h) rail services along the remaining non-electrified main lines in that country. Some of these have recently been announced, including in Scotland, while other iconic possibilities include the Great Western Railway territory, a famous home of fast but conventional trains and deemed for many years, too low density for electrification.

The UK is one of the rail systems in Europe at the low end of mainline electrification reach. While some of the important lengths of the country have been spanned since the 1970s and 1980s, such as both mainlines to Scotland, and the shorter network towards the south east on the third rail system since the 1930s, the UK has manifested some of the anti-electrification habits that we see in this country. While the 1970s gave everyone a shock on energy security and price issues, the UK felt somewhat insulated, for a time, by its oil deposits in the North Sea.

An immediate focus on the developing a medium to high speed option in the Intercity 125 (now class 43), the precursor to the Australian XPT, responded to the demand for a faster intercity service that forestalled, at least for a few years, the possibility of electrification on major routes to the North and West. With a passenger:freight traffic ratio favouring passenger, the UK had no major drive to reduce fuel costs for rail freight hauls, also tending not to push for electrification.

Notwithstanding this, the mainlines to Glasgow, Liverpool and Manchester were electrified in the 1970s, while the north eastern mainlines to Leeds and Edinburgh with some local Scottish routes were electrified in the 1980s. With electrification came some limited attempts to increase mainline maximum speeds above what the class 43 had been rated at, with the north eastern mainline rerated at 225km, grazing the lower limit of what some would call high speed rail. However, this was not feasible on the west coast route which led to attempts to reduce transit time using tilting trains. The first such attempt in the 1970s was a failure, however, tilting trains have since found a home in the UK.

The only challenge to date from high speed rail has been in the SE, linking to France and the extensive continental high speed network. The technology and operating practices for this service have been unapologetically and explicitly Continental. It was not felt wise to be developing a home-grown template for high speed services, such as occurred in Mainland Europe, with separate seeds for high speed in France, Germany, Italy and Spain. Conventional rail electrification in the UK is probably at its technological limits, but not its limits of extent, hence the recent debate and announcements.

In Australia there have been roughly three phases (but not three-phase, as such) to mainline electrification. The first was largely abortive, with planned developments to Newcastle not proceeding in the 1920s. Suburban railways in Sydney and Melbourne were electrified. The principal driver was to reduce the heavy loco operational and maintenance costs associated with steam operation, and increase speeds at the margin, and traffic density, within the suburban passenger area.

The Melbourne network was more extensive and took electrification a long way into the rural hinterland but generally not on the mainline network.

Electric locomotives were built, but only used on local shunting trips. St Albans was the extent on the Bendigo line however no attempt was made to use electric locomotives to haul goods or passengers to the limit and steam beyond, as occurred in Wellington. The same applied to Dandenong.

Broadmeadows, which might also have benefitted from electric haulage (at the top of a long grade) was probably also too close to Melbourne to warrant such a change – and a bypass freight line was built that reduced the consequences of the adverse grade.

Electric motive power was swapped at the boundaries of the electrified network at Lilydale and Frankston. These services were very low density and rural, and offered little practical benefit in swapping motive power. Services to the ends of the low density rural network at Hurstbridge and Upper Ferntree Gully were delivered, in all likelihood to remove the requirement for steam locomotives based at the extremities.

Sydney had a much more limited electric network. Hornsby and Sutherland, like Broadmeadows, sat at the top of a heavy grade and might have benefitted from electric haulage, however, no serious attempt was made to do so.

The other extremities were purely suburban and on easier grades. None was far enough from Sydney to provide any benefit from mainline haulage, as the swap would occur to close to the city centre.

The principal benefit in Sydney’s case of electrification was to enable an earlier start on a city underground than had been delivered elsewhere. As the 1920s came to a close, and economic decline set in, the Sydney and Melbourne networks stood as they would for another 30 years.

The 1950s and 60s saw the second push towards mainline electrification. In both the Victorian and NSW examples, this time the key driver was heavy mainline freights, and the cost of locomotive exchanging was factored into this case. In the NSW case, the extreme mainline grades on the Central Coast and Blue Mountains routes provided the main differential benefit over steam, while in Victoria’s case the expected high traffic densities meritted the work over a dense steam operation.

In both cases passengers also benefitted, although only in NSW was a dedicated set of electric rollingstock provided for the service. This reflected much higher passenger traffic densities on the Sydney lines, while in Melbourne using electric locomotives to haul conventional long distance passenger services sufficed.

The NSW electrifications also provided the opportunity to extend suburban passenger services, in the western case, to Penrith, and in the northern case to the somewhat artificial terminus of Cowan. This pattern continued in the late 1960s as electric coal haulage to Glenlee provided the first electric suburban trains to Campbelltown.

In Melbourne this should also have been possible – except that apart from a few workers trains a short distance past the Dandenong limit, it was not taken up until the mid 1970s.

In some ways the 1950s electrification movement was a false dawn – not waiting to see the benefits of dieselisation, which reduced operating costs by a similar amount without the heavy capital requirement, and in many cases saddling the railways with 30 years of locomotive exchange and slower journey times. Transit times over the electrified section were only incidentally increased.

Only passenger services have endured to this day, driven as they have by urban growth rather than a preference for rail transport. Services beyond Pakenham have been de-electrified. The traffic for which it was electrified has not only reduced, it has completely disappeared. Not only was the electrification technology the wrong tech – but even the traffic was disappearing at the time they thought it was appearing, as people no longer needed brown coal briquettes for domestic and industrial use. Ironically, electricity itself was one of the causes for this displacement of briquette technology, as was natural gas which the government was promoting in parallel.

The 1980s saw the third burst of electrification – sadly, a rehash of the 1950s. This cements for me, how Australian rail planners not only make mistakes, but make the same mistakes again and again. Driven by the same resource boom mentality of the 1950s, the same responses were selected – electrify over conventional rail tracks, swap locomotives at the boundary, which was often a political or operational boundary rather than a natural limit to traffic. Mineral haulage estimates and fuel prices were again exaggerated and not achieved- and the benefits of improved diesel technology pre-empted.

In Queensland at least there was a singular advance, through the use of high voltage AC electrification. This was potentially available in the 1950s however was not quite mature enough in its use in Europe to be available here with few risks. For passenger services especially there was concern about reducing the scale of transforming equipment to fit onto a conventional multiple unit carriage in the early days – issues well resolved by the 1970s.

Queensland also made some attempt to reduce transit times by realignment but this exposed the issue somewhat – that the considerable cost of electrification might have been spent on more realignment, both in Queensland and NSW, and delivered measurable benefits in energy costs (through shorter, quicker, flatter journeys) and other benefits of transit time and reduced loco crewing, without the capital costs of wire and a dedicated fleet of electric rollingstock.

The criticism is particularly damning in NSW. Here, the case for improved passenger services was stronger due to urbanisation. However, lessons from Europe or Japan were not heeded – the availability of dual voltage rollingstock for example, the desirability of major realignments or new routes if real market share in passenger transport were to be achieved. Or the potential to build fast, comfortable and even tilting rollingstock to serve diesel lines (which in one sense already existed with the XPT, misused as it was on long distance slow journeys). A whole generation of 160km/h DMUs such as now exist with the Velocity in Victoria, was a technology available in Europe in the 1980s. Route improvements, such as deviations near Newcastle around the Awaba-Fassifern-Teralba area, or a reinstatement of older routes on the Illawarra, might have been more realistic. In Queensland, no new DMUs have been built since the 2000 class in the 1960s. A belated program of realignments, commenced again in the 2000s, has seen route improvements in Queensland that could have been facilitated 20 years earlier.

Like the 1950s, much of the 1980s has been unwound. Electric traction has disappeared from Emerald (another political and operational outpost, rather than a traffic-mandated one) and the Gladstone Gympie section and the Rocklands to Rockhampton section are down to one electric passenger train a day. The Illawarra network is down to the bare-bones passenger service to Kiama and Port Kembla, and the Newcastle one restricted to the Sydney to Newcastle passenger line.

It would be my contention that if route and transit improvements drive market share and density, and density then drives electrification, we might have had a more virtuous circle of dieselisation leading to route improvement leading to more traffic leading to electrification, rather than the path that was actually followed, which I would call “premature electrification”.

But with the pendulum in the UK, a lag-adopter by European standards, now swinging back to electrification, let’s look at the drivers and challenges for such an approach on conventional Australian mainlines (which I define as routes with general freight and a mix of long distance and local passenger traffic).

Traffic densities are not predicated around distance from capital (nor distance hauled) in Australia. Heavy hauls are seen on the lines north west from Newcastle as far as Narrabri but only one freight a day goes to Bomaderry. You will see a much lower amount of traffic at Virginia, within the suburban area of Adelaide, than you will see at Blackwater in rural Queensland. Even passenger densities are arbitrary, as explains a good service frequency to Lithgow ahead of a poor service frequency to Stony Point, albeit the opportunities to realise density gains are greater on the latter route.

Even the percentage of a traffic’s distance hauled indicates little. For example, using Stony Point as the example, the broad gauge haul from Dynon to Long Island is electrified most of the distance, from the Dynon area to Frankston. As a discrete haul (the load is transhipped) this line could be easily electrified, providing an electric passenger service to Hastings (most of the traffic) and a potentially faster, quieter and less polluting option within the suburbs. Of course, no such service is provided. Even traffics entirely ‘under the wire’ are no longer provided with electric haulage, for example, the Owanyilla woodchips were provided with electric traction to start with, but no longer.

Comparing the UK with Australia we need to examine the following benefits and challenges:
-capital cost
–sovereign debt financing
–construction cost
-operational cost
–fuel or energy
–incidental costs of swapping rollingstock and maintenance
-flexibility of rollingstock deployment
-traffic density
-higher speed of rollingstock
-incidental transit time improvements to route
-improved ‘image’ of electric rail

First, the capital cost is a ‘dead weight’ on any comparison of electric versus non-electric, and puts every other possible improvement ‘behind’ which we saw especially in Queensland. This is made up of two costs – public finance costs and construction costs.

Public finance is subject to a multitude of paradoxes – such as how the UK with a sovereign debt around 100% of GDP is able to offer low interest rates than Australia with only 16% (and with Malcolm Turnbull screaming blue murder about it!). One of the paradoxes is explained by the home country bias: people will lend to their own sovereign at cheaper rates than others, irrespective of the actual risks. That is how Japan has managed to stay in business at all – with Japanese people lending money for free to their governments.

Of course that in turn is answered by two realistic explanations – that people are in fact paying for all the economic stimulation their governments do, to protect their jobs and develop their countries – by subsidising their national borrowings. Secondly, they have some influence, through the political system of their own country on how it is spent and paid back. Equity, rather than debt. No Japanese voter can influence how another country’s government spends or repays.

Unlike Japan, Australia is a debtor nation. It is not the government debt causing interest rates to be above world levels, but private debt. Australia’s private economy is seen as too much of a risk, too dependent on low-value-adding industry and not much depth. And for Australian governments two risks: having to effectively underwrite private debt, but also having limited ability, though the income and consumption tax system, to pay off loans quickly, because our income and consumption tax bases are low by developed world standards. Hence worthwhile government expenditure is deferred, while unsustainable investments in housing construction and company acquisition (reducing the pool of economic talent further) are the preference.

This would explain Australian government’s fetish with being the ‘model debtor’ to the world – to make up for the private sector’s failure to generate sufficient wealth within our borders. A perverse sort of “crowding out” where private sector demand crowds out the public sector.

The long and the short of it is, a total project cost over 30 years at 6% is going to cost Australia far more to finance than the UK, dollar for dollar (pound for pound).

Looking at construction costs, this is a hobbyhorse of great age. The expertise and some of the equipment for electrification is highly traded and mobile. However, at the risk of overlapping with the sovereign debt argument, the real consideration is not traded prices but purchasing power parity (PPP) – what does it cost in terms of local opportunities foregone to pay for these projects, not the actual price.

While currencies move dramatically around conditions and whims (for example, the AUD:GBP rate has gone from 3:1 to 2:1 in a very short time). For actual traded goods, this can provide windfall gains and losses very quickly. For example, a UK electrification contractor might find a move to the Australian market very lucrative when reported in their own currency at present. It might change if we return to earlier levels. However, PPP rates do not change markedly over time because the economic fundamentals and the scarcity costs of all the different goods and services WITHIN the domestic economy do not change quickly. So the general labour cost of electrification workers in Australia is lower than the UK and will remain that way for some time. However, specialist workers are in high demand and Australia does not produce enough for itself – we pay over the odds for these people.

The real cost drivers are the lack of constant work (boosting the fixed costs of design and project establishment, equipment acquisition and recruitment), variable costs not able to be spread over large projects (long km lengths), and our sovereign debt rates.

Looking at fuel/energy costs it may actually favour diesel in the UK, as the electricity costs are higher than here, while diesel is actively traded around the world. I’m unclear on UK taxation of fuels as a business input, so won’t say anything more about it.

From our point of view, any differentials in prices in Australia must be artificial, we are a net energy exporter albeit an importer of petroleum products. I do not see energy price or security issues affecting the equation either way – it would come down to a simple fuel efficiency equation – does the generation of electricity and its transmission to the point of use, being cheaper than supplying that energy as liquid fuel, overcome the cost difference between a locomotive generating its own electricity, and the locomotive which doesn’t and therefore relies on lineside transmission and delivery equipment.

Both energy sources have extensive and established supply chains – liquid fuels via private supply and delivery, electricity via transmission networks. The main difference is the railways have to supply a ‘to the railhead’ electricity supply system, whereas a tank or 2 of distillate at a few depots is all that it takes to keep a diesel locomotive fuelled – the supplier does the rest.

Incidental costs including loco exchange and extra maintenance can be a killer. To minimise the amount of loco swapping – the electrification scheme needs to reach the limits of the traffic, not the limits of a political region or former rail operational base.

NSW readers will recall what happened with Lithgow. The scheme was supposed to reach Wallerawang and the mines in that area, so that end to end haulage (mine to power station or export loader) could take place with a single set of locomotives. However when the cost of the entire scheme got excessive they terminated it at Lithgow, a rail depot that had been located not because of its coal deposits or traffic, but because it marked the end of a difficult section of rail. As well it had become a large town in its own right – making reaching there a political imperative as much as an operational one – but ignoring the actual traffic to be hauled.

For the saving of maybe 5% of the total project cost by truncating the service at Lithgow/Bowenfels (which obviated a tunnel enlargement) the line was condemned to 30 years of needless locomotive exchange to reach destinations only 5% extra distance beyond from the end of the wire.

Too many other examples abounded in Australian electrification – traffics out of unwired sidings or branches which undermined the whole rationale for the electrification. Metropolitan Colliery, Sulphide works, Newstan/Eraring/Vales Point, Maryvale paper, Holmview cattle siding and the Ebenezer Colliery would all be a good place to start. They were unable to even wire to the gates of Goninan in Broadmeadow.

And its never clear just how many sidings are required to be wired. Most yards have a siding or crossover that’s hardly used, but is kept just in case. But unwired, it becomes unusable without a shunting loco kept on site, another cost.

And keeping diesels ‘around’ increases the likelihood they will be used, and the electrification scheme becomes steadily redundant. In Victoria, for example, they turned off the Latrobe Valley electrification every Sunday. With low service levels and a more efficient freight service actually provided on Sunday than during the week (for example, a Sunday Bairnsdale train could run right through without loco change) – the incentive to keep the wired service was reduced.

This also points to flexibility, another opportunity cost of electrification. This is fairly self-evident, but has become all the more so with generic body designs for passenger rollingstock, where the power unit is the only difference between diesel and electric. Think of the Rockhampton and Cairns Tilt Trains, for example.

Freight haulage today will depend on how well electrification maximises the heavy hauls, and the extent to which overhead wiring limits payload space, for example, trailer on flat car or double stacked containers. It is possible to install traction wires at heights that allow for double stacking – it has not been seen as important in Australia to date to do this – and many of the clearance adjustments undertaken in electrification schemes have been ‘barely enough’ to squeeze a pantograph down above the roofline of a conventional locomotive or wagon/carriage body.

Heavy haulage should be the domain of the electric locomotive. It was troubling that the 86 class running on low voltage DC electrification, though notionally rated a more powerful locomotive than the 81 class diesel of the same generation of purchases, was in practice limited to the capacity of the supply system installed. When 2-locomotive coal trains of 30 odd wagons was the norm, the difference was not evident. When trains double that length started to appear, the 4×86 combination was trumped by a 3×81 combination – a 33% improvement in locomotive productivity. As I understand it, high voltage AC locomotives tend to avoid this power drop.

Traffic density is now the key determinant from the need side of the equation. Tractive effort, which used to give electric locomotives a clear lead over steam, is no longer such an advantage against diesel locomotives. Higher speed (facilitated by lighter weight and track impact at speed) only favours electric at the top of the speed range (typically above 220km/h). Underground operation favours electric but with the cost of underground rail many times greater than above ground, any savings from the use electric traction will be marginal to the overall decision.

It is no surprise density is a key factor in a renaissance of mainline electrification in the UK. We are not talking population density, though that is part of it. We are talking traffic density, especially what I would call general intercity traffic – journeys from settlements of all sizes to others for business, for visiting friends and relatives and so on, not merely for the daily work journey or for welfare.

Because this traffic can be very non-specific (not focussed on a handful of large centres like in Australia) it is not easily amenable to replacement by grand high speed rail schemes, as in France. It is closer to the German example.

Any move to a renaissance of long distance passenger rail in Australia would more closely mirror the French example – justified by a few large cities, and the needs of smaller settlements en route or elsewhere would be irrelevant. It is hard to imagine for example, a journey from Wagga to Bathurst being of any great import to a decision to improve passenger rail in Australia. In Germany, however, two cities of 50,000 would be just the market for the sorts of journeys that network does well.

Mainline electrification has seen what I would call incidental improvements in transit speed. This is distinguished from design improvements, which might involve faster locomotives, rollingstock, track or signalling. Some of this can be regarded as consequent on catching up on deferred maintenance.’

It was noticeable that apart from the presence of overhead masts and wire, the 1950s and 1980s electrification schemes showed precious little evidence of the whole rail line being upgraded to meet modern requirements. The track and signalling often was unchanged from before electrification, except in some cases were track recircuiting required the signalling to be modernised.

Incidental improvements in transit time also came from the greater power on the hills, and quicker recovery from stops. OS Nock, in his seminal Railways of Australia, gave the example of the U-Sets in the Blue Mountains running the same timetable up the hill and down. This was not the case with the steam-hauled local trains they replaced!

Higher speeds should be possible from rolling stock, given two advantages of electrification. Opportunities to distribute power throughout the train, reducing axle loads from locomotives. Electrification allows EMU designs to be developed where high power to weight is achieved, compared with diesel equivalents. Higher torque allows power to be picked up quickly and applied to moving the train to cruising speed. Electric locomotives can also provide peak bursts of power, in excess of the continuous power rating, that can be used to start a train rolling to high speed, with lower power required to keep it at high speeds. This mechanism allows TGVs to develop 5 digit kw output for a short time to reach 300km/h, but not have to sustain it as the train has considerable momentum.

The case for electrification is often made by pointing the elusive preference people have for it. I would distill this into a few discrete factors: Electrification is often accompanied by new rollingstock and station upgrades, hence an association in the public mind with it being more desirable.

Because electrification requires higher traffic densities, a plan to increase traffic densities may occur concurrently with electrification, and the two become conflated. For example, post electrification, Nambour, Newcastle, Wollongong, Kiama and countless other places have better services. However, Ballarat and Bendigo also have considerably better services, as does Traralgon, which has more services now than it did when wired. Maitland and Nowra manage with excellent (for their size) diesel passenger services than are unlikely to see electrification.

And electrification may not presage the way to better service. Sunbury is not on the line to Geelong, but Sunbury definitely points the way to Geelong. One is currently unhappy and the other definitely would be. Because electrification has become conflated, in Victorian minds, with an inferior quality of service, with uncomfortable rollingstock, delays, strikes, lack of staff presence and social undesirables. Of course overhead wires and substations have nothing to do with this; but just as a good image can become conflated, so can a bad one. Some rail enthusiasts, who passionately advocate for electric services to places like Geelong, fail to see this.

Finally the environmental argument should win it for electrification, but often doesn’t. Coal fired, especially brown coal fired electricity might only move the pollution from city to powerstation. Renewable sources will clean up the emissions, however an empty train is still wasteful, taking renewable power in the grid from other industries who might have had a better use for it.

The most environmentally friendly thing a train can do is be full. A full train represents car or truck journeys not made, and improves at the margin, ie the marginal wagon or carriage will represent less of an impost on the environment than the ones before it, but draw cars and trucks away that had a constant rate of damage. But an empty train is wasteful. Socially, environmentally and economically.

So how and in what circumstances can Australia benefit from mainline rail electrification?

Given the limitations I’ve mentioned above, some key points are:

-the scope of the electrification must fit around a traffic, not a set of political or operational end points. Ending schemes at the modern equivalents of Lithgow or Rockhampton is doomed. The synergies of Glenlee for freight, and Campbelltown for passengers are the right way to go – the Ebenezer/Rosewood scheme the wrong way to go.

-if the traffic is high value, high volume passenger traffic, then possible mainline electrification is not the way to go, but to build a whole new line, which in probability will also be electrified. Mandurah and Bunbury are pointing the way. If Bunbury is worth having a passenger service, it will be worth having a high speed one, with new fast corridor, dedicated stock and electrification. Not a tacked-on arrangement on the existing route, dodging the slower freights. If it is not worth a new route, it is probably not worth doing.

-traffic density rather than haulage capability or speed are the most realistic options in Australia. If speed becomes make or break, as in high speed intercity rail, then electrification will be favoured. If it isn’t make or break, for example, in the case of Geelong or Sunbury, where rail is already faster than road on point to point (but not door to door) then electrification will make no difference. If however a 220km/h diesel train from Sydney to Canberra was simply not able to beat an aircraft end-to-end, but a 300km/h electric train could – then the case would be clear.

And to justify electrification would require the sorts of suburban densities we see now – out on the mainlines. We may yet see them in some places, for example, between Sydney and Brisbane, or between Sydney and Narrabri/Ulan. If Narrabri/Ulan electrification fortuitously provided a suburban service to Maitland that only required the short section to Telarah wired, then great. However, I can’t see that benefit without coal haulage driving it.

A proper carbon price might skew some of the decisions in favour of electrification, as with peak oil. However, to build the case for rail being a good environmental citizen, it needs to focus on core efficiencies – relieving congestion in the cities, including going underground if need be; hauling the big hauls on the rural mainlines; and possibly providing an alternative to air travel between the closer large cities on the coast. That way, it will kick the big goals against the other modes and develop a market share large enough to justify the electrification that will make a virtuous circle complete.

I’ve blogged a few times on what I see as the paradox of a dying government with a history of poor decision-making and inappropriate relationships – actually getting it right.

How is it I can say it is right when:

-the route is incomplete and somewhat hard to justify

-the cost seems exhorbitant for the short length involved

-the outcry from those areas that missed out, such as the NW suburbs, is deafening

-and the federal Infrastructure Department found it so wanting, it missed out on funding?

My answer to this paradox is: because they have got the service model and technology right – and everything else is something that can wait for another day.

Why is this important? Because Australia has had, for a very long time, perhaps since the beginning, a misconceived and misapplied approach to rail planning and investment, and a poor operating culture, which incremental investment approaches have only perpetuated.

A dying government, in its last days and with little financial or planning credibility left, has actually thrown the right spanner in the works, called a halt to the Australian rail paradigm once and for all. A commendable step. We’ll have to see if this line survives the transition to a Liberal Government.

Planning:

First of all, the Sydney Metro gives primacy, above all, to addressing congestion issues: the primary motivator for sensible passenger rail investment in Australia. Where the people are in abundance, that’s where rail needs to be. Not where they vote (still not many voters in the CBD itself to fill with pork). Not in areas of ‘deprivation’ or those areas deemed worthy by social workers or whatever.

The system is aimed specifically at two types of congestion – rail congestion on the Cityrail system, especially at the existing stations of Town Hall and Wynyard. I will confess I would like to see more work on how these two stations could be modified to improve capacity, but I accept the basic premise, and wonder at the danger of having 6 platforms, loaded with full double deck trains, and a fire breaking out. How would you clear that many people?

The other form of congestion is of course road congestion. Victoria Road, especially from Gladesville inwards, is one of Sydney’s busiest road corridors that is not freeway, nor has a parallel rail alternative. Again, I can foresee alternatives to a metro on this route – but support the fundamental view that it is congestion visibly driving the investment. A turn-up-and-go 100% reliable and quick rail service to the CBD will be very competitive with driving on the route, and steal much  market share.

Secondly, the Sydney metro is planned as an expandable system. You might say “aren’t they all” but it is clear to me that some rail enhancements in Australia are anything but. Look at Melbourne’s City Loop for example.

Expandable doesn’t just mean route length – it means that you can ramp up services perhaps 5 fold over the original brief. An off the shelf metro, as planned for Sydney, has a starting spec of 5 minute headways, but can likely take 1 minute headways if and when it gets busy enough to do so. This is amazing. Can Melbourne’s City Loop accommodate a 5-fold increase in traffic? Granted, it was set up to accommodate 3 minute headways, but seems to struggle as it closes on that mark. The rest of the Sydney system cannot cope with service expansions.

The easy wins, such as going from single to double deck, started in the 60s and were complete in the 80s. There is still more need for track amplification but some key locales, for example Strathfield to the City, will not cope.

Sourcing

The realisation that Australia is not the place for custom manufacture of rail track and rollingstock has only taken 150 odd years to percolate into the transport bureaucracies. Rail innovators need some core characteristics – considerable existing support for rail, a risk taking culture, and environments that actually require innovation (such as the need for speed). Australia has none of those three things, and any rail innovation in urban areas is doomed as a result.

It becomes an ugly ducking (Melbourne’s 4D), a political target (the Tangaras in Sydney) or destined to never reach its potential (XPT). I’ll grant the Sydney double deck interurban (Comeng V-set) program has been a raging success over the years, possibly due to the ‘actually requiring innovation’ criterion being met, due to the large pool of Central Coast and Blue Mountains commuters.

Sydney’s metro, by being promoted blatantly as off-the-shelf, turns that 150 years of culture on its head and gives the planners the confidence that outcomes will be met, and the public the confidence that it will be just like the ones they’ve ridden overseas.

Operation

The planned operation of the system is just out of the Transport Textbook, with most of my training track concepts adopted (not that I invented any of them!) I sometimes wondered if I was going crazy, pointing these things out in hostile places like Railpage only to have seasoned posters in that place suggest that these things don’t matter. Clearly they do, and when the chequebook is open wide enough for someone to implement them, they are.

These concepts include:

-a published service standard (which happens to be TUAG, but that is not the point, the point is that it is published, unlike say the service standard to Penrith, which is what?

-a service standard of TUAG

-realisation that dedicated rollingstock are needed for the line (fitting the rollingstock to the line)

-single deck stock (high density and high speed loading and unloading)

-cross platform interchange and no single seat journeys

-dedicated operator, not part of Cityrail. I maintain that it is the passenger’s job to change vehicle and the coordinating authority’s job to plan interchanges and timetabling, but it does not matter who operates the vehicle as long as they achieve the service standard applying to the service.

Of course the other key operational characteristic is driverless operation. I won’t turn this into a union-bashing thread, but it is clear that the union parasite has killed its Cityrail host. Unless is can be removed, there is no way the sorts of operational improvements Cityrail needs can be implemented, especially with a dying Labor government at the helm. These people will be thinking about their lives after political office, and won’t be making enemies in the union movement between now and then. But it will be hard for the union to argue for drivers in a system that can run without them.

Funding

While it is regrettable the money is not available to extend the system further, it appears to me that a ‘line in the sand’ has been drawn against Treasury whiteanting, and the money, though exhorbitant, is somehow quarantined for the project. Contracts and so on are clearly being drawn up so that the Libs can’t overturn them without considerable expense (although there are plenty of precedents in Sydney including Maldon-Dombarton, several iterations of the Eastern Suburbs line and so on).

In marketing terms, I’ve noticed the Government ’sticking to its guns’. Clearly someone in charge believes what they are doing – a pleasant change for a Melbournian used to plastic smiles and thinly veneered spin.

Conclusion

The project has a lot to be critical of, but I believe I have pointed out that, at its heart, it is the right project. The right technology, the right operational setup, the right planning approach and acceptance of core transport truisms about what make urban transport tick. I’ll hold judgement on whether the right funding model and right terminus have been adopted. I do have every confidence the outcome is somewhere between ‘no regrets’ and ’should have done it decades ago’.

I fear more for Melbourne which, if current plans are accurate, has not learnt the lessons of 150 years of pain and grief. If we see Siemens electrics running through to Sunbury on tracks shared with Vline and freight, but then pretending to deliver a ‘metro’ service under the city, then they have learnt nothing – from the City Loop debacle, or from the Dandenong line dramas, or even from the period of decline and marginalisation in the 1970s and 80s, when commuter rail so demonstrably failed to meet the needs of a changing city, yet was so admirably clung to by bureaucrats and unions alike.

Some of our recent posts been instructive in this regard – particularly the way federal-state financial relations impact the amount of funds available to subsidise transport.

Background

It is my contention that government subsidies should not be used for subsidising operations but should be for capacity building – be that heavy capital works, light capital upgrades such pedestrian access or station access, or for improvements in signage, flow and even staff training that will make the system work better.

But I accept that ongoing subsidies will be required in many contexts, even on the pathway towards cost recovery. Some operations will have internal cross-subsidies, or will merit explicit subsidies under textbook-economic-market-failure conditions, such as congestion amelioration, pollution reduction or other promotion of national identity etc.

However, the question then arises who pays? The simple answer is taxpayers because that is what government is for. To redistribute money from one set of activities, and one set of people, to another, to meet some externally decided objective. It amuses me when some rightwingers completely lose the plot, and start saying that the rich shouldn’t be paying tax or whatever. As in, if not them, then who? That’s what the government is for. The rich get rich through market relations, through the market economy. Hence another agent is placed in the market to alter the outcome. Our social contract. But I digress.

But the more interesting question is: which taxpayers? Pure market failure theory might suggest that those taxpayers who are the beneficiaries (or at least the bystanders) rather than the victims of market failure are those that pay. Congestion, for example, could be paid for by those causing it, or those who benefit from its removal, or the community immediately surrounding the congestion, or any combination of the above.

But is it realistic for a new level of government to be created, with its own political and geographic boundaries, merely to shadow the extent of a market failure problem? There precedents for this in Australia – the Murray Darling Commission or the Great Barrier Reef Authority spring to mind. There is something to be said for example, for defining the problems of the Murray Darling to be directly impacting those who live within its watershed, and not everyone else. Hence they should, as a group, pay for its correction. But even here, life is not so neat. If the rice grown in the basin is predominantly sold outside it, does that mean the community wider than the population of the basin have a role in fixing it? Probably.

And what of the expense of creating a new authority for every problem? Imagine a Melbourne Inner City Transport Routes Congestion Authority. Such a body, with limited budget and mandate, would be able to readily define its interest and the extent of the problem, but would run into permanent turf warfare with permanent, entrenched authorities such as the local councils and the state government instrumentalities, and from a weaker position than these other bodies.

Melbourne had the Melbourne Underground Rail Loop Authority (MURLA) which while it was a short lived specific issue authority at least had the following going for it: it could be carved out of existing rail expertise in the Victorian Railways, and it was charged by the State Government with a very specific, defineable and high profile objective, to construct and deliver the loop. No doubt the turf issues were there as much as ever, but it was never the objective of its turf warfare opponents to drive it out of existence, as that would have been very much a ‘career limiting move’ for those that tried!

Whereas NSW experience in recent times has been less positive. Various authorities have been set up in the transport and planning portfolios to deal with specific issues, and you can see from the results that existing interests did their best to destroy them. The Rail Infrastructure Authority, Rail Services Authority and the numerous local planning authorities testify to the way NSW has failed to get a proper handle on this issue.

So you are left with the feeling that rather than create new mandates and bureaucracies around every problem, you are stuck with the existing institutions of government. Federal and State Governments and their departments and agencies, and the local councils.

Subsidiarity

A key theoretical principle in the formation of the European Union has been the idea of subsidiarity, meaning the administration of government is delegated to the lowest level of government that can capably deal with it. This principle is derived from the basis that Europe would be impossible to govern centrally because of diverse cultural and linguistic issues, there are jealous national governments in the middle between the EU and the people, and finally, that the national governments themselves are often weak and recognition of local issues and identities is the best way to get a form of governance most people are happy with.

Quoting wikipedia, the basic principles are:

The action must be necessary because actions of individuals or member-state governments alone will not achieve the objectives of the action (the sufficiency criterion)

The action must bring added value over and above what could be achieved by individual or member-state government action alone (the benefit criterion).

Decisions should be taken as closely as possible to the citizen (the close to the citizen criterion)

The action should secure greater freedoms for the individual (the autonomy criterion).

Of course cynics will point to the convenience of subsidiarity – that by encouraging regionalism the EU can break the power of the national governance. And will also note that as a theory it is not matched in practice, with numerous trivial regulations being handled centrally and a ‘democracy deficit’ between the powerless European parliament and the laws and regulations that come from the EU bureaucracy.

However, subsidiarity does have its attractions as an organising principle when starting ‘from scratch’. Rather than organising a new authority for each problem, it is more straightforward to identify the extent of the issue then simply ‘match’ it to the tier of government of the right size. Is it an issue for the Borough of Camden, the devolved government of London, the national region of England, the government of the United Kingdom, or the European Union?

If it is the number of taxi pickup locations, hopefully it doesn’t end up in Brussels or Whitehall. If it whether a high speed rail service can pass through the area, though, hopefully the Borough does not have a right of veto either. This could be a UK issue (on the grounds of the collective transport interests of UK residents) or even an EU issue (promoting high speed rail against aviation as an EU wide policy). Where the middle tier (London) sits is hard to establish.

However, issues are never that straightforward. If we mesh the two issues together what do we get – a High Speed Rail Station built within the Borough, but no taxi stops permitted. Who would decide then?. A simple example, and a more realistic one is the interface between transport and planning. If we devolve too far, we will end up with a set of beautiful street level aesthetics that make no contribution to regional or national objectives, simply because the locals organised it to suit themselves. If we centralise too much, we will end up with bulk, ugly buildings to suit the market and national objectives, but which alienate the locals.

Subsidiarity, taxation and subsidisation

It is not just the planning that subsidiarity can address but also the payment. Which tier of government should have its taxpayers/ratepayers stung for the issue at hand? There are plenty of practical problems such as the volume and method of tax payment.

In Australia, local issues can be dealt with through the municipal rate system, usually levied on land. This can, however, distort land use decisions for reasons quite unrelated to land use. Development levies are a classic example. It has not been hard to convince rate payers that some types of development levy such as local road improvement are suitable items to recover through rates. The benefits are fairly defineable and capturable. Even preschools make some sense, as these urban subdivisions are being created for young families and it is expected that they will need preschools. But libraries? Civic Centres? Council bureaucrats? It is a slippery slope from reasonable use of development levies to unreasonable uses.

And what about the adequacy of the revenue. All local governments get subvention from state and federal governments, simply because the rate base is not enough to meet the costs.

Henry George once imagined all government spending could be financed from land taxes. But he imagined this before the size of general government ballooned beyond what could be imagined in the 19th century. And it made sense when economic activity was directly tied to land use. But what would you do with businesses like Amazon.com? There land footprint would be small compared to their economic activity. George justified land taxes on the grounds that land was finite and land use was zero sum (I win at your expense or v.v.) unlike most other production decisions which can be made win:win. It was therefore ‘fair’ to tax land to the exclusion of everything else.

Suffice it to say, land taxes, whether local or central, are not going to raise those sorts of sums of money. And what is there to limit spending? One criticism of local government, always crying poor and with the hand outstretched, is that subvention by the higher tiers places no limit on the councils to only deliver what they can afford. Which elected council will say to its electors “You can’t have a new swimming pool because our rate base doesn’t allow it”. It is much easier to both blame and demand from the higher tiers, then claim the electoral credit for it. No wonder we have mickey mouse local governments in most states.

The next level up in the Australian system is the state government. These are more a legacy of history than something you would go to any trouble to create today. Some would even say the state governments have ‘crowded out’ the field, preventing the emergence of viable local government, except perhaps in Queensland where the state government has always been held in check by regionalism and the capital has been weak.

But in the south east, the organising principles of state and local has always harnessed the apparatus of state government to the needs of the capital, while simulataneously preventing the emergence of a ‘metropolitan’ government to give voice to those exclusive needs of the capital. And this is where transport has suffered most. A metropolitan government could clearly see the urban transport needs, and devote itself to these.

Whereas a state government, incorporating metropolitan and rural needs, and with a tier above it as well, has always had the let-out. To tell rural voters that the metropolis needs the money, but to tell the metropolis the opposite. And then to tell both that the tier above is unfairly victimising it.

So we end up with country passenger rail services, not because they are needed, but to provide ‘balance’ to a subsidised transport system that is only really requiring subsidies to deal with issues that affect the urbanised areas only – congestion, pollution, and planning failures.

Yet these market failures, whether rail or road, are also inadequately dealt with, with the excuse that rural areas need their share of transport subsidies, when they probably don’t. I would go so far as to say that besides a basic level of 2 lane sealed road and a post-bus style ‘milkrun’ bus service to help people on low incomes, the state has no other responsibilities to provide transport in rural areas. Businesses can pay for air transport for their passenger journeys, farms and mines should be able to pay for their road or rail needs, and busier roads like the F3 should be tolled to pay for their maintenance and extension. Whereas the govenment should be intervening in the cities, because of their unique needs.

States also have had problems with raising revenue, since they vacated the income taxation field to the Commonwealth in the 1950s (following a ‘temporary’ absence due to the wars). Such remaining state taxes are highly distorting and inefficient, and often quite unrelated to the problems at hand. I won’t go into this at length except to say that it leaves them also crying poor and unable to meet the expectations of their voters (though doing little to not raise these expectations!) Recent infrastructure bids have not been edifying, with states drawing up elaborate plans and selling these, knowing full well they could not afford to build them without substantial or complete federal contribution.

The Feds of course are the funders of last resort. Again, this is not just a legalistic/constitutional argument but a political one. The Feds have done little to discourage this view over the years. For example, S.23 of the constitution was modified to enable Federal funding of healthcare, especially nursing homes and hospitals, not just because of ALP policy but also through the influence of the churches, especially the Roman Catholic Church. It knew the best chance of getting their policy of state subvention up was through the Feds, not the state…because that’s where the money was.

Business has also promoted the view that the tier of government that matters is the Feds, probably for the same reason. Talk to the man with the money, not the man with nameplate on the desk or door.

Which leaves transport in limbo. The sums of money required for transport subsidies in practice today can only be found at the Federal level, yet constitutionally and politically the Feds struggle to get involved. As discussed in the earlier posts – Federal involvement is not bipartisan, and the conservatives have been happy to keep out of the expensive end, and limit their involvement to ribbon-cutting ‘blackspots’ that generate local paper copy.

Against subsidiarity

Transport generates network effects, multiplying the benefits of good transport links beyond the immediate area. A well built junction rail station or interchange might be entirely the cost of the locals, but benefit people from far beyond the area, or people who are only passing through. This is true of all modes – road, rail, air, sea.

The transport/planning interface is another that rapidly escalates its consequences beyond the immediate beneficiaries or financiers. Decisions to concentrate or disperse economic activity within an area or region will impact transport use massively, beyond the immediately visible parties to the planning decision.

Finally, the collection of revenue, to quote Peter Costello quoting a ancien regime finance minister, was to pluck the goose with a minimum of hissing. Socking the largest body of people for tax revenue, the income taxpayers of Australia, for the extra required to fund transport, spreads the burden most thinly. And company tax or GST revenue can also become quite invisible to the average voter. So there is something to be said for centralised urban transport decision making, simply because that is where the funds can be most easily raised, irrespective of how good and how representative those decision makers become.

I like to quote the American examples, a much larger jurisdiction, for insights on how we could do it differently.

A federal executive, who set policy based on electoral mandate, in this case, a stronger urban transport policy without necessarily much detail provided at election.

A federal legislature with geographic consituencies, to haggle over the details of how programmatic funding is divided up on a state and regional basis.

State governments, who fund cities and plan multiregional transport authorities, with a similar executive and legislature pattern. It is up to them to furnish the federal government with urban transport options to fund, which meet the federal objectives.

Metropolitan or regional governments (with celebrated cases large than Australian states) who operate services, as well as developing local transport plans for state attention. State government intervention often results in urban transport authorities that cross these boundaries, but still have a strong local stake. Consider the city of Dallas, which has built a light rail network, and where the participation of other local governments has the potential to affect the overall functioning of the network, but not enough to sink it.

The granularity of the metropolitan governments is low enough to reach to the lowest parking meter or taxi stand, but not so low that transport decisions become trivial, as in Australia.

So how might the US analogy work in Australia? Probably not a whole lot differently, except that a metropolitan tier of government would emerge. Not a ‘taxi stand’ level like Newcastle, who despite their size, seem unable to pull integrated transport and urban planning out of the state government’s grasp. Probably more like Brisbane, but with responsibility for urban rail as well. I have always regarded QR as an oddity, with stakeholders in Quilpie and Coppabella fighting those in Beenleigh or Ipswich for attention. They actually do a good job under the circumstances. But if Brisbane electors could choose whether a new bus route or train met their needs, and were forced to make the operational funding decision themselves rather than kicking it upstairs, a lot more rational policy could be achieved.

Brisbane or similar governments would also need a revenue stream to match, probably a sales tax stream, freed up by reducing the GST or income tax. And would need to come to joint venture arrangements with its neighbours: Ipswich, Gold Coast, Sunshine Coast and so on, which would provide long distance commuter or intercity services. And it would be interesting to see if genuine intercity services emerged from such an arrangement. The Gold Coast for example might not be happy to see its services ‘tacked on’ to Brisbane’s urban ones, but might look for a more genuine partnership in services that benefitted both. And GCCC in turn would be required to consider better integration of bus/light rail to the rail service in return.

Most commentators seems to be still pessimistic regarding the potential of HSR outside of certain politically favourable areas. Much of this, from transport lobbyists particularly, comes from understanding the HSR does not just succeed by getting people from A to B fast; it requires a whole supporting network of transport infrastructure, hard and soft, working with the ‘headline act’ namely the single HSR route between the major cities. This infrastructure is generally available in Europe and Japan, and consists of urban public transport (fixed rail) of frequency and quality that doesn’t leave the passenger stranded when they get to the downtown terminal. It also consists of supportive pricing, passenger information and other policies that assist the service to be seamless door-to-door, as its main competitor, a combination of road and air, tends to be.

This article in the San Francisco Examiner outlines some of the issues – how to connect cities to their urban rail networks.

I have posted elsewhere that I don’t think the situation is as chronic as some would think. Some of the major routes under consideration eg the North East corridor, the major cities all have urban rail systems and I suspect the key issue will be quality of service and information, not absence of infrastructure. I could be the most savvy New Yorker and know all my lines, yet not know the same depth of detail about Washington DC, and end up getting a taxi (in which case, the airport might be just as convenient as the downtown rail station). And getting this quality of service is a more cultural thing than a case of hard dollars.

We can look beyond the NE and see similar situations elsewhere. California has a mature rail system in San Francisco and an expanding one in LA. The quality of service is good but reach is ordinary. Sacramento, San Jose and San Diego have light rail systems – expanding the reach somewhat although I question how supportive a light rail system can be of a passenger on a time-sensitive journey, beyond a few blocks from the downtown terminal.

I had a think about a conceptual framework for looking at how HSR might be competitive in the USA without having serious hard data to support the proposition. The US aviation market is mature and extensive and I have had some experience with quantitative modelling of it in the past. The road system is also mature and extensive. The rail system is primarily structured around historic metro systems in the oldest cities, light rail (generally reserved track with some street running) in some cities, long distance commuter rail (read Mees A very public solution for a critique of this type of operation) and conventional Amtrak services between the major cities, which outside the NE corridor tend to be tourist-type services unsuited to non-tourist journeys due to slow transit time and lack of frequency.

So without any data that I can be bothered bringing to this discussion I thought of a matrix-type analysis and would welcome people’s comments on how well the different market segments I define below actually fit into the model.

First, I’ve developed a fictitious city-triplet with A-town (pop 2 million) B-borough (pop 1.5 million) and C-ville (pop 250,000) with A and B roughly 600km apart in a relatively dense part of the country, and C about 200km from B.

In common with the Australian experience, a mature air service runs between A and B at high frequency and operated by flag carriers at the prevailing business fare, from the large international airports in both cities. In addition, a turboprop service flies 4 times a day from B to C. The purpose of this service is to provide a good connecting service for A to B passengers, but also for the many other aviation origin-pairs that arrive in B and need an onward connection. This service tends to be otherwise very expensive and is only used by time-poor politicians and poseurs for the B-C journey by itself.

In addition, both A and B have former air force bases that are used by a low cost carrier 5 times a day. The fares are considerably cheaper but all the disadvantages of this model apply in this case.

Further, the flag carrier has started flying a direct service from C to A, each way in the morning and the afternoon. Because this route is a bit less demanded, they sometimes offer specials on this route, only on the direct service, and it can even attract people from outlying parts of B flying to A who don’t mind the drive.

The road network, being mature, has no remarkable characteristics other than noting it would be crazy to drive from C to A through B, even though the cut off freeway from C to A is not direct it is better in peak times than going through B.

The rail network consists of an urban rail service in A and a light rail service in B with a commuter rail service from B to C in peak times, as well as an Amtrak service that runs twice daily stopping at C on its way to elsewhere. A to B is served by a once daily Amtrak service that takes 8 hours for the journey.

From where we sit today we can see that aviation is the only feasible option for business travellers, and low cost air, driving, bus or train are options for tourists or VFR travellers.

I’ve defined some traveller archetypes – and I’ll try to match them according to their travel needs to the modes present and future. All live in A-town.

a

Business traveller at day meeting in B-Borough; downtown origin and destination; taxi to major airports; full fare on flag carrier; all costs paid by employer

b

Business traveller in B-borough for Monday to Friday; suburban location; needs car; self employed

c

Business traveller from A-town visiting C-ville for 2 day seminar; employer pays but watching costs closely; could leave own car at airport;

d

VFR traveller staying in enviros of B-town and C-ville for a few days; prefer central location in B-town

e

VFR traveller visiting friend for weekend on whim, paying for self; suburban location

f

Uni student starting term in C-ville; needing lowest cost option; flexible about start time and mode; suburban location; can get dropped off some of the distance at A and might have minibus connection provided by Uni at B

The matrix of my assessment of how likely the archetype is to use each mode, for that purpose, is shown below:

It is impossible to be definitive in an exercise like this – having generalised this much I’m not giving much concrete to argue about.

Some discussion points:

-HSR and premium aviation are, all things being equal, competitively matched for downtown-downtown travel using taxis at both ends. What aviation gains at higher cruising speed, it loses for check in and the longer taxi journey. Rail is probably ahead on comfort and convenience. Rail’s fares are rarely any better than flying though, at the premium end (check Eurostar if you don’t believe me!). Questions about ’supporting infrastructure’ don’t matter in this market. Hence I’ve marked “a” as definitely travelling on both modes.

-as the business market’s needs diversify, eg to suburban locations or to C-ville, HSR+urban rail could still hold its own, if the supporting infrastructure (urban rail) holds up. Driving self becomes viable after the length of stay increases; the driver has no confidence in the urban transport of B-borough.

-”c” is a very common business traveller type these days, an employee going to a conference which is marginal to the employer, who might say “go, but I can’t bill your travel to anyone so keep it cheap” and as conference venues are often in non-downtown locations, the premium air option is looking unnecessarily expensive. Again the success of HSR+urban rail will depend on how well urban rail holds up its end of the bargain. “c” might find himself being dropped off by his/her spouse at a suburban rail station, prior to boarding a HSR train at the downtown terminal. No taxi to bill to the firm from home.

-the VFR and tourist market is much more price sensitive and the HSR+taxi, like the premium air option, is looking undesirable, especially for those more discretionary options like ‘whim’. However, HSR might have some seats to offload at quiet times, like the low cost air option, and could make a reasonable play for those passengers if the supporting infrastructure eg urban rail is there.

-the uni student living in C-ville will probably need the car and drive themselves. If that is not an option, then probably the cheapest intercity transport either to C-ville, or to B-Borough which is close enough to get some local transport like a Uni-owned minibus. If HSR happens to have cheap seats or student discounts that are targeted at niche low cost markets (for example, positioning runs late on a Sunday night), might be in the running.

My conclusion: HSR is a suitable mode at both the premium and low cost ends of the spectrum, provided the supporting infrastructure is there. If not, then it will have to survive only on the premium end of travel – downtown to downtown, supported by taxis.

Options including C-ville will not be viable from B-Borough, as the taxi cost will be prohibitive even for the “a” customer, and driving oneself from B-Borough to C-ville is not an option in a hire car as that customer will find the premium flights into C-ville airport, either direct or via connecting turboprop, a better option.

It is therefore crucial that at least at the skeletal level that we can see some evidence of a supporting infrastructure for HSR below the ‘headline act’ of the single high speed main line.

Network effects and granularity.

My fictitious city-triplet is in a relatively dense part of the USA and it can be assumed that all modes have more traffic than the city pair line hauls. The airports, bus terminals and even the rail terminal are hubs for intercity services, and also support a local network of transport as well (taxis, buses and limited urban rail).

In Europe and Japan, where the population is the most dense there is also a thick network of connections between rail (and other modes) linehauls. Network effects multiply the possible journeys into a much better ’soaking up’ of potential transport demand and give the public modes a much better shot against private motoring (which has a dense network of routes in all markets).

HSR, too, depends not just on the ‘headline act’ downtown to downtown journey, nor even just to the suburbs of the respective A-town and B-borough, but also to other combinations of cities, changing at B-borough for C-ville, D, E and other cities in the area. The more of these combinations in the network, the more each linehaul trunk will enjoy in the way of patronage; the more sustainable and effective in the long term.

But Europe and Japan also enjoy better ‘granularity’, not only is the number of intercity destinations vast, but also within each city effective public transport (fixed rail) is able to zoom you in to exactly where you want to go, whether by suburban mainline stations, above ground suburban rail, underground rail or light rail.

The USA will clearly lack this – even in some of the better examples like New York or San Francisco. The BART for example, might well get you to SF HSR terminal from Oakland but will it get you from a specific city block in Oakland, or will you still need a taxi? And if you need a taxi – should you just stay in the taxi to the SF HSR terminal? Or to the airport and be rid of the rail option? If you lose someone from rail for part of the journey, they might discount it for the whole journey.

So the question is – how much ‘granularity’ constitutes the effective support that HSR needs at the urban level.

This is where I do tend to part company with some other commentators – I would suggest down to the 5-10km level would be plenty, at which case a good urban rail system in each of these cities is doing its job. Even in Europe and Japan, the lineup of taxis outside the major TGV or Shinkansen stations is still impressive.

In most of the archetype examples given above, luggage is a factor. This implies any of the following: lack of preference for light rail or urban bus, possibility of being dropped off, parking one’s own car, getting a taxi. So long as HSR holds it own against aviation, it is still in the running in these cases.

Second, there is a price versus time trade-off, but only up to a point. A cheap flight is not cheap if the airport takes all the saving away, or the taxi does. Effective HSR+urban rail is going to have price points and timing points that it must achieve reliably. Urban congestion is not normally a problem for people to get to their nearest railstation, but to get to downtown or the airport could be.

Finally, I’m very sceptical of light rail in the equation. For more than a few blocks it is too slow. It provides the necessary granularity around the downtown areas but unless the service approximates the speed of suburban rail, will end up too slow for the time-constrained passenger.

One comment about the prospects of HSR in Australia. You will notice from my analysis above that it is hard for HSR to deliver more than the ‘headline act” and there is a lack of intercity network effect. It is fine to say that even Sydney to Canberra or Melbourne to Canberra are ideal distances for HSR – it is hard for these cities to act as hubs for other journeys as there are no other in consideration.

And hubbing to conventional options such as Sydney to Newcastle or Moss Vale to Wollongong are not possible while the existing transport on those routes remains so poor. As for local journeys, high profile unreliability of suburban services, and slow journey times, make this undesirable.

It is to imagine a commuter coming home from Canberra to Melbourne on the HST only to crawl their way to Traralgon on the Velo or fight their way onto the all stations to Frankston and bus to Mornington.

So I would rate the urban fixed rail system as at least as much of a disadvantage to Australian HSR as to the American candidate areas, if not more so. It is not the much touted ‘population’ or ‘density’ issue; rather the defects in the existing system.

Some basic assumptions

The idea that Melburnians are wedded to their cars implies that public transport use is not a function of public transport quality – if it were then it would be a good indication that people were making transport decisions based on the merits of their options. To test this, we can compare public transport modal share and average cars per household in parts of the city with good and bad public transport quality. To assess what constitutes a good public transport service, I’m going to take a very simple approach – namely that trams and trains are good, and that buses are bad. It’s certainly a simplistic assumption, but a largely necessary one if I’m to use the map data. In any case, I think it’s fair to say that, on average, the quality of service on Melbourne trains and trams is much higher than on buses.

The data

The data I’ve used is from the ABS’ Melbourne… A Social Atlas and DPCD’s Melbourne Atlas, both from 2006.

The map below is from pages 50-51 of the ABS report, and details public transport modal share for trips to work. Using trips to work (which are primarily undertaken at peak hours) works well because it is when the trains are at their most efficient and the cars their least efficient.

What’s striking about the map is how clearly the areas of higher public transport use in the middle and outer suburbs are clustered around the rail lines. The inner suburbs are largely saturated with tram lines and also have a high public transport modal share.

The next map is more interesting. Taken the DPCD’s Melbourne Atlas Living in Melbourne section, it shows the relative proportions of 0, 1, 2 and 3 car households in Melbourne.

There’s a clear pattern of cars with fewer cars clustering around the rail lines, and I’d say that in general, fewer cars equates to more public transport use. These figures are going to be influenced by average occupancies per dwelling and overall density. Pages 64-65 of the ABS report shows the percentage of the population living alone, which is clustered around rail lines in some areas, but the connection does not appear to be incredibly strong. Population density (pages 12-13 of the ABS report) does not seem to be correlated with the rail corridors at all.

Conclusion and caveats

To my mind, the data shown above suggests that Melburnians do make their transport decisions on the basis of the available options. The obvious issue with my assessment is the selection bias problem. It could well be argued those that want to use PT will choose to live close to rail and tram lines, and that those who prefer to drive won’t care if they live near PT. I don’t find that argument very convincing, but in all fairness I have to admit that the data above can’t rule it out. I’d be interested to hear your thoughts on this issue.

cheers

Phin

I’ve often suspected that the Adelaide to Belair rail service beyond Eden Hills or at best, Blackwood, is a triumph of politics and pretty scenery over good sense. In my other posts on this topic I compared the service with walking; an extreme case to be sure. Reality would suggest commuters would be looking at car or bus as alternatives, and many buses do in fact run into the Adelaide Hills. The rail service seems to be only an ‘optional extra’, a ‘nice to have’.

This service used to run all the way to Bridgewater, deep in the hills and home of the mill and winery that is famous Australia wide. When OS Nock, the famous British rail writer toured this part of the world in 1969, he said that Bridgewater was a bustling suburban terminus. Even in 1987 when this photo posted in the earlier blog, credited to David Phillips, was taken, you can see what an important location it was. Not today. But nothing is forever, so we should not say that anything is immutable, even Belair.

I didn’t want to debate the simple “Should the line beyond say Eden Hills be discontinued?” proposition as such, but to look at some of the deeper transport planning and operational issues. Sure, the line is uneconomic but so are most of the lines we are talking about.

Some of the principles I think this raises include:

• the trade off of marginal time spent remaining on board the rail vehicle, versus interchange with a bus that will get there much quicker. (The same issue I saw beyond Waitekere in Auckland, where the beautiful line beyond slows a train down to 1.5 hours for a 50km transit)
• What to do where the disadvantage the train suffers is in the vertical plane rather than the horizontal
• Appropriate models of bus transit that connect with rail to cover the short distances involved.
• How to determine the appropriate time comparator.
• Network design.

The second point makes an interesting one and should be easily answered – a cable car, ropeway, escalator or similar can address this issue well. And we are not talking ‘freak tech’ either. It could be like Wellington or HK – a funicular, or series of escalators might well do the trick. I wouldn’t know where to start even in costing the alternative – but I suppose the stream of income to pay for it would be the session of at least one railcar run beyond Eden Hills and attendent track maintenance (assuming ARTC didn’t want the track for freight).

Which gets me quickly to the fourth point. The reason ARTC don’t really need to consider a hills bypass is fairly plain. The time comparator is only the road freight competition on their main competitive traffic – intermodal freight, bound to/from Melbourne. A 12 hour plus journey, and if time savings were to be made, they could be found more cheaply elsewhere on the route. Even, dare we think, holding freight cruising speeds above 130km/h on the flat straight middle of the journey, across scubby plains, for hours on end, would save more time than finding a quicker way over from Murray Bridge to Adelaide. And the other traffics, sand from Loxton and wheat from the silos, are also not  time sensitive.

So, unless local politics intervenes, no reason to remove freights from the hills.

But the passenger market IS time sensitive, and while some are blase about the patience of Hills commuters (and have a rail bias in saying so) the reality is that they don’t. They didn’t in 1987, when the Bridgewater service ended, and are no better for it today.

Which gets me to the first point.

What is the convenience factor of staying aboard a slow rail vehicle versus changing onto a bus that will get to the destination quicker.

Let’s assume, for convenience sake, the train has got to Torrens Park from Adelaide much quicker than any road vehicle could have, especially in peak times. The time penalty for the change is the turn-up-and-go frequency, split down the middle. The train is doing 15 minutes at best but a bus service taking seven minutes each way and not really stopping at each end (assume the driver takes a leak at a cubicle at each end, but immediately drives off when he’s ready) would equalise the train and bus frequency pretty well. SO the result is not really turn-up-and-go; it is pulsed. But is only limited by the train’s frequency.

Assuming we got a magic increase in train frequency to 7 minutes. Two buses could also maintain the turn-up-and-go arrangement by operating in a continuous circuit.

Let’s look at the economics. Few simple things:

-bus driver with rigid licence is not going to require the driver to be paid as well as a train driver

-bus on public road is not going to cost as much as servicing a railcar and a long length of broad gauge track with no other current use

My final comment re the Belair service is the network shape, not the line speeds as such. While line speeds are ordinary, and reflect the curvature of the lines, they are not unremarkable by Adelaide standards. If we were worried about trains maintaining 50km per hour then most of the network would be considered problematic. It is the topology; the shape of the network at this point. The key competitive benefit of rail in Adelaide is the ability to get a clear run in a straight alignment from the city out to the suburbs without congestion.

From Goodwood down to Eden Hill, it has a straight southerly run. This is the part of the line with the upgrade potential. Potentially Blackwood could be regarded as an incremental “does no harm” extension and a major interchange with the area.

But the line beyond only returns to the same general area it came from, albeit a little higher above sea level. The limitation of conventional rail is visible at this point, no other consideration. Skitube gains in equivalent terrain at 1:8 and the funiculars gain even quicker.

So how do we judge the Eden Hills to Belair corridor? Unfortunately, it must be judged on its own merits. As an isolated section. We already know a bus connecting at Torrens Park would truncate the run substantially with, at most, a 3 minute interchange penalty.

Would you build a new railway to Belair? No, is the short answer, not with the traffic offering. Would you convert to Light Rail? As far as Eden Hills and Blackwood, I see no reason why not – it should be time competitive with road and attact ridership commensurate with current loadings plus additional loading for better service quality attracted by turn-up-and-go services and new vehicles.

Beyond Blackwood, I would only consider Light Rail a charity case. Maybe you could get the speed down somewhat by high acceleration LRVs and reduce the curvature by lower profile bodies. But these same highm performance trams might have just as much luck getting to Belair from Torrens Park by leaving the rail easement and heading up Old Belair road.

The road gains 200 metres in about 3 kilometes. Something near 1:12 gradient. This is not unheard of for trams, and the extra effort required by the vehicle to maintain a reasonable pace is more than offset by the much lower distance travelled.

Paradoxically, a trip to Glenalta could even be quicker by taking the rail service the WRONG WAY. In other words, the rail corridor, at least from Belair to Glenalta, might be a reasonable journey approached from the north rather than the south. We could end up with the Toodyay situation, the WA towns of Toodyay and Northam swapping positions on the journey from Perth after the late 1960s Avon Valley deviation was put in.

I suspect though, this flight of fancy is too lofty for us to give much further thought to. Suffice it to say, Belair at 3km from the Torrens Park Station is well within the range of a high frequency bus shuttle service, and would best serve commuters by being operated in this way.

For grieving rail fans, make your case to ARTC for a series of steam shuttles along the main on weekends – you’ll end up with the same scenery, plenty of good photos and at the end of the day, the fun rail day out you really want, not a diesel powered Comeng railcar running all stations, which is all you get now.

Hong Kong MTR station, wikicommons. Responding to the value proposition of modern life in the big city.

When I wrote earlier about the value proposition and value adding in public transport the first point that was picked up was that for many people, particularly in a fast paced urban environment, the service standard called “turn up and go” was a perfect solution to their simple value proposition – get me from A to B, now.

But marketers have always understood that the value chain was circular and infinite, and even consumers are part of the continuous chain, called the supply chain when we are looking at production.

How does the simple value propostion evolve? People at “A” usually an origin (a place of residence, mostly) want to be at “B” a destination (a trip generator, a place of such importance that it generates the demand for a trip, such as work, school, public event). Because they are not current at “B”, but at “A” demand for a trip has formed. Now it could be ‘later’ a planned trip, but if the experiences of Generation Y in a period of extended prosperity are anything to go by, the event horizon is shrunk to close to zero, and the need for the trip is now. I’ll come back to the double-simple value proposition “the return trip” in a later post.

The demand for turn-up-and-go transport has always been there, hence the success of the motor vehicle, it responds directly to it. For public transport it has always been more problematic. It is a supply problem. The lumpiness of vehicle investments and the inflexibility of labour in this market. The rapid economies of scale which accrue to the operator, but can’t be easily priced to the customer, unlike in other markets.

It is analogous to building an office tower in ever deepening quicksand; will the extra height you add today overcome the depth you sank down to today? As public transport operators try to add capacity to benefit from economies of scale and reduce prices to the customer, they are “sunk” by the increasing costs of those investments, not getting the same returns to scale. Third tracks, such as Melbourne’s, are a good example.

This biases supplier courses of action away from the normal supply behaviours we see in other markets. A laptop maker might develop a new laptop type, at considerable expense. Then license it to a manufacturer, who can produce more and more of them, setting up a virtuous cycle of production economies, reducing prices and satisfying more consumer demand. This does not happen in public transport, except in very big lumps, often insurmountable hurdles.

Returning to the value proposition, not all public transport users have the “get me from A to B, now” value proposition. And I’m not talking about the “get me from A to B, eventually, but don’t hurry, I’m a pensioner etc and low stress is more valued than speed” value proposition either!

Remember, the consumer is part of the circular infinite value chain, by virtue of being also an employee (most) and investor (a few) and therefore a part of the production process.

So the value proposition is actually defined in two terms: The consumer value proposition (life and leisure for its own sake) PLUS the producer value proposition, which will vary from person to person but will tend to reflect their individual roles in the production process.

People in management or sales jobs will tend to reflect the value proposition that they need to sell. They must be both presentable and punctual and with a mind focused on their sales or strategy role. Chaotic public transport, as specialised in by Sydney and Melbourne particularly, is not able to respond to that value proposition at all, and hence will drive no matter the opportunity cost to themselves or the business they work for. The business will carry that cost; it is understood to be a part of the cost of doing business in Australia, as opposed to Japan, Germany or Iceland, for that matter. In the great soup called “National Productivity” (which I will come back to in a future post). I’ll concede this also has something to do with taxation; a useful topic for a later post.

Others have some opportunity to regain their composure after a stressful, chaotic public transport experience, and work in companies that are not prepared to pay them the extra cost of private transport. Their producer value propostions may not be that different from the ones in the previous paragraph, but with a freer labour supply, they will set the proposition as applying from the door of their premises; how you get to that door is up to you.

Note these businesses may fret over how their customers arrive at the business and may set special parking spots up for them; they recognise the potential damage chaotic public transport could do to their sales. But are less concerned about how their staff arrive, as time may be made for those staff to regain their composure. But it is up to the staff to determine their own circumstances. If their personal value propostions are not satisfied by public transport, they too may drive at their own expense, or move to a suburb where the public transport is more capable or reliable.

Having looked at the producer value proposition, we’ll look at the extended value proposition of consumers.

Not all consumers will opt for “A to B, now”. Some have methodical habits, and will specify the times for the A to B journey. Despite the obvious benefits of supplier responding to the “unmethodical” users by running turn-up-and-go services (the incremental consequences of delay being smaller), it would in fact be easier and cheaper if consumers stuck to defined travel patterns.

For example, if all the 8:00am train catchers always caught the 8:00am and the 8:10 riders always caught that train, it would not take long for the system to fall into some sort of harmony.  So much so, that it would be worth it to the operators to offer some sort of discount to make it so. Train lengths would be harmonised, the revenue collection task would be straightforward, crowding not a problem, and so on.

So arguably “A to B, now” is a more demanding value propostion than “A to B, at the agreed time”. Ask any taxi driver, who would much rather take the same booking every day than a series of ad hoc bookings, or worse, cruising the streets or waiting at the rank. The certainty is worth money.

The airlines too, who price turn-up-and-go at a vast premium over planned, scheduled services. The heirarchy goes something like this from cheap to expensive: advance purchase (we nominate the time) advance purchase (you choose the time) , turn-up-and-go, charter, own the plane yourself.

As we go along the heirarchy, we see the passenger ‘freedom’ increasing, the operator cost increasing and therefore the realised price increasing, and realised quantity falling.

So why do we regard turn-up-and-go (or rather, frequent services to a turn up and go service standard) as the basic response to the urban transport market, given that it is a premium response compared with the scheduled service?

First, because of the competition from road. Road is already able to provide this premium service, albeit an ability limited by congestion, giving public transport an opening.

Second, because operator economies, we spoke of earlier, are not easily divisible. Some reward for low marginal (variable) cost could be passed through to the customer, others not. When I come back to post on the double-simple value proposition (the return trip) I’ll talk about the paradox of returning the vehicle and the passenger to the origin. Suffice to say, it is not always possible to pass the economies through, so attibuting specific revenues to specific operations is not possible. Given that, the operator should therefore maximise as much of the operation at minimal variable cost, by running

Third, the gradient effect, which leads to one of those investment quicksand traps I spoke of above, can be mitigated to a certain extent. Offering the same service standard all day reduces the tendency of customers to see a better service in peak times (hence rewarding use at those times). Instead, they see congestion and crowding and the incentive is pointing in the right direction, towards off-peak.

Of course many would say they have no choice in their working hours, but even this misses the point. Apart from the socio-economic reality that we are talking about people in the full-time paid workforce, who are already in the better  off part of society by virtue of that alone, we are not letting the self-correcting forces in the market do their job.

If attracting good paid staff was difficult for employers because of transport congestion, they would face tough choices too, not just their staff. Should they be in congested “destinations”? Should they set working hours the same as everyone else? Should they just pay more? At the moment, producers are immune from these decisions. They pay their senior staff enough to drive, their middle and junior staff bear the costs (financial and emotional) themselves, and the employers never contribute to the solution.

Of course, this is changing in recent times, as cities like Sydney and Melbourne experience almost continuous congestion. Support for metros, offering not just extra capacity but also a turn-up-and-go service standard, is found among the Property Councils and Chambers of Commerce. They are starting to see citywide congestion impacting on national productivity, and are valuing the reduction in it. The producer value propostion is starting to be impacted by it. This, plus the opportunity to speculate on land values and development, is too good to resist.

To sum up, the turn-up-and-go response is the best response to the value proposition “Get me from A to B, now” even though it is a more costly response than scheduled services. Extra operator cost (at off-peak times) is mitigated by less chance of failing to met the value proposition through unreliability, as delay is not transmitted. Producers are beginning to see congestion impacting on their value propositions too, and are beginning to value a transport response that addresses it. Finally, current and future generations of young people are coming to expect immediate responses to demand, and turn-up-and-go will be increasingly valued. A price response may be possible.

A big theme of my posts on my own blog and in other notorious places has been the role of genuine intercity rail services, such as we’ve seen in other countries.

I have always found it bizarre, especially from railfans, the argument that personal motor transport (your own car or motorbike) is somehow desirable as a form of mass transport between cities.

The advantage of the motor vehicle is to fill in the gaps between public transport routes, and this is obviously why car traffic has built in the outer suburbs, or those areas of cities without mass transport.

Yet a journey from Sydney to Canberra, from Maroochydore to Brisbane or from Bunbury to Perth are not ‘filling in the gaps’ – anything but. These are classic corridors, both in a settlement and transport sense. Relatively straightforward to provide line haul transport solutions on those routes, as the route consists of at least 2 fairly dense settlements at each end, demand generators through their roles as employment or production centres, and a straight land route between them.

It therefore does not make intuitive sense why the largest modal share on these routes, even fairly tightly defined, ends up being personal motor transport.

Leaving aside other factors, the three things that strike me as undesirable about using the car is parking, unfamiliarity with the area at the other end, and finally, the tedium of driving (I will leave price and quality variables as endogenous to the model). Yet the motor vehicle does have the largest share of transport undertaken in these sorts of corridors.

You can take it as read that I see many of the shortcomings of the ferrovial-political system (the interaction between rail and politics) to blame for this but this post is to present a deeper analysis, and to suggest what might be possible.

Case Study – Albury to Melbourne

Many overseas examples I can name have very complex transport possibilities. Going from London to Edinburgh could take you via a couple of airlines, or several rail routes, or several roads, and in the case of road, your choice of your own vehicle or a couple of buses.

Albury-Wodonga, on the Murray River, has close to 100,000 people yet really only 4 options on three modes to reach Melbourne, the nearest large city.

Air, via Rex (Regional Express Airlines)

Rail, via a mess of Vline or Countrylink services

Road, basically drive yourself on only one feasible road, the Hume Highway or

Road, using a couple of bus companies.

This very small number of options makes the analysis comparatively easy, and the recommendations straightforward, compared with the London to Edinburgh example.

Using air is the quickest way point to point, using a taxi from the Melbourne CBD to Tullamarine airport, checking in using the minimum check in time, not having luggage you leave the plane at Albury and catch a waiting taxi to a point in South Albury 5 minutes walk from the rail station.

The air time is 55 minutes; minimum check in is 30 minutes. Taxi takes 25 minutes to Tullamarine and 5 minutes at Albury end.

Rex’s current best special from Albury to Melbourne one way is $106 plus you would need to factor $40 for a taxi in Melbourne, and $10 in Albury, all up $156 for the journey. The fully flexible fare equivalent is $375 all up. There are 2 flights a day, timetabled to get a business traveller to Melbourne before 9am and after 5pm.

Rail is a disaster, and can’t really be compared using current timetables even before the standardisation of the broad gauge line. Working on the assumption that the old timetables which allowed the XPT to get from Melbourne to Albury in 3 hours, and allowing for a stop at Benalla and Wangaratta only, this timetable applied to all services. My assumption is the service is properly managed, and not fragmented.

If we then assumed the services ran 5 times a day, they could be spaced as follows:

Albury-Mel 6am arrive 9am

Albury 8am arrive 11am

12pm arrive 3pm

3pm arrive 6pm

6pm arrive 9pm

With a spread like that they would certainly be attractive to the business traveller. For example, a meeting that finished at 2pm in the afternoon you would need to wait in Albury till nearly 6pm for the flight, but board a train that left at 3pm and got back to Melbourne just as the flight was getting airborne.

Driving at the ATO rate of 60 cents a kilometre results in a marginal cost of 300km times .6 or $180 each way. Of course people try to write down the cost into their actual marginal cost by claiming much of the kilometrage as ‘fixed’ or ’sunk’ costs (tyres, servicing, registration etc). Business people don’t do this of course and the rest are fooling themselves.The journey takes realistically 3.5 hours or up to 4 hours by road.

You could also hire a car, say from Hertz at $60 approximately for a day return, allowing $60 for petrol return and therefore paying approximately $120 direct costs for the car. Factor in another $20 for parking in Melbourne if going in that direction.

Now what of the prices?

Again for the business traveller, the comparator is the cost of the flight minus some. Certainly, using the yield management approach the airlines use, I would suggest a full fare of about $200 with $80 super discounts available. I would not offer any welfare tickets except those paid in full by welfare agencies, who could access the super discounts just as anyone could.

Putting these together in a table:

Mode                                                Air                  Rail (optimistic)            Drive                 Bus (Greyhound)
Transit time                                   2 hours            3.1 hours                        3.5 hours            4 (3.4-5) hours
Average Wait time                6 (0-12/2) hours       1.5 hours (0-3)             0                        ? 6 hours
Coincidence with business peaks       Good            Good                          Excellent                   Ordinary

Price lowest                $156 (all inclusive)              $80 (incl City Loop)   $190($380)* (incl park)       $40-50
Price business            $375 (all inclusive)             $200 (incl City Loop)  $190($380)* (incl park)       $50

*a return trip is mandatory for driving your own car, other modes have one way prices.

Now of course you might say this is not a fair comparison, as rail is shown as if properly managed, while the others are shown as currently managed. You could not, of course, consider rail as currently delivered, so without optimising the rail situation, might as well not bother with a comparison!

What does this analysis tell us?

Rail is certainly well placed to compete with air for those genuine business travellers (who are unlikely to exceed more than 60 in number each way per day if the Rex SAAB 340 flights (30 seats) are a guide. They could certainly comfortably fill a first class car on an XPT with 2+1 seating and a buffet/dining area. (on only one train).

So even if the rail service completely killed the air service by running nearly as fast, but being more flexible and comfortable, it would still need to pull custom out of motor vehicles. It is unlikely to succeed in pulling people off buses, as it appears that with a low fare, and an inflexible timetable, the bus companies are still able to sell seats on this route.

The other key marketing change would be the loss of the ‘welfare’ market, who one would expect to see almost universely head for the buses. However, the train could still sell, using yield management, second class seats that might compete with buses, and depending on the rollingstock used, might be able to add extra cars at little marginal cost that could expand the supply of seats at peak times.

The key challenge, though, would be getting people out of their cars. The shortcoming for rail (and air) in this market is the lack of connectivity between the terminal and passengers’ ultimate destinations. I have assumed CBD-CBD but I suspect a large number of drivers drive direct from non-CBD destinations.

While the car appears flexible, it has one very major inflexibility, which is you have to drive the car back. There is no ’single journey’. The other modes can be mixed and matched. For more than one person, the car is cheaper on all comparisons.

The key quality challenge for rail would be to maintain on-board service and reliability that business travellers would expect. Within the $200 fare range, that should not be hard. Quality furnishings, staff training equivalent to airline standards, and catering options should be affordable within that fare zone. Reliability should be improved with the line being double tracked almost the whole way post-standardisation.

Rolling stock would be assumed to be an XPT or Velocity doing their design-spec 160km/h almost all of the way. That is currently not possible on the standard gauge track, but given track geometry, sleeper make and weight, and ballast height, I suspect this is a political issue rather than a practical one. The track looks at least as good as many of the RFR routes or the former 160km/h Countrylink routes.

In fact, most of the issues would be political: deleting stops, reducing the welfare load, providing competition to the air route, and interacting with the freight railway, which is genuinely profitable.

Finally, would this rail operation get off the ground? I think I have demonstrated that with current rollingstock, technology and operational assumptions, a service competitive with the time and comfort of air, and the true price of motoring, and even on the margin with the welfare offering of the buses, could be delivered. Rail would be hampered in journey time by the poor quality of Connex services in Melbourne, but if taxi travel to Melbourne or perhaps Broadmeadows was included, the overall competitiveness of the service might be there, at the expense of

I fear for the demand though. If Rex can only muster about 60 seats a day, and some of these will be non-contestable, basically connecting to other flights, I’m not sure the demand is there. This relates fundamentally to Albury-Wodonga’s role, rather than any other thing. It is not endogenous to the market, but exogenous to it. We have covered all the endogenous factors.

Using a European comparator, generally a place on a peninsula like say Bergen in Norway (371km from Oslo) you would find a healthier market.The European comparator needs to not be benefiting from the network effect, and needs an air alternative (so much of central Europe, rail has beaten air).

Bergen is larger than Albury-Wodonga but Melbourne is bigger than Oslo. Using the gravity analogy for transport demand, the effect should be similar. However Bergen would do more ‘business’ than Albury-Wodonga would. More reason to travel for business to Bergen than you would have from Albury. The road from Bergen is worse than the Hume, I gather, not having been there. However the business market, here as there, should be air versus rail, not rail versus road.

According to Norge Staatsbanen website, a business fare from Oslo to Bergen will cost you NOK 761 approx $166 in AUD (fairly similar in PPP terms). Sounds reasonable for service that is not aimed at welfare recepients.

So my conclusion, in this case, is that the supply can be delivered, whether the demand is there is another thing. It would depend on getting people out of their cars.

In part 2, I’ll look at some more optimistic cases.