Tram Construction and Operating Costs
Construction Costs
I’ve been posting a few ideas for tram extensions, so I thought it might be an idea to lay the groundwork by looking at how much the fixed infrastructure is likely to cost. An easy way of doing this is to look at how much recent Melbourne tram extensions have cost.
Box Hill
The Box Hill extension, opened in 2003, is 2.2 kilometres long and cost $28 million.
Vermont South
The Vermont South extension, opened in 2005, is 3 kilometres long. The exact capital cost is tricky to work out, given that the works included upgrading the 732 bus and funding the operation of these services for 4 years (god knows why). Of the $42.5 million total cost, $12 million was allocated to future service operation, leaving us with a construction cost of $30.5 million. This probably overestimates the cost somewhat, given that it includes capital works on the 732 bus.
Docklands Drive
The Docklands Drive extension, also opened in 2005, is just under a kilometre long (my Melway says 940 metres) and cost $7.5 million.
Indexation and calculating an average per-kilometre cost
Using the RBA’s inflation calculator to work out these prices in 2006 dollars* (2007 dollars not yet available), we find that Box Hill would cost $30.46 million; Vermont South $31.58 million and Docklands Drive $7.77 million. This yields an average per-kilometre cost of $10.87 million in 2006 dollars.
*These price increases are based on the Consumer Price Index, not an index of infrastructure costs, so it is conceivable that they may be a little bit out. However given how close we are to the base year, the difference is probably negligible.
Note about economies of scale
I’d say that the provision of tram infrastructure faces an l-shaped long run average cost curve (LRAC) on the scale that occurs in Melbourne, indicating there are economies of scale. Now of course if every city in Australia decided to each build 200 kilometres of tram lines, then we’re going to see some diseconomies of scale due to insufficient skilled engineers and workers – pointing to a u-shaped LRAC. As stated, however, for this to occur, the scale of production would have be implausibly high; so on a city wide scale we can assume that infrastructure investment LRACs are probably only downward sloping. This suggests that a 10 kilometre tram extension ought to cost less per-kilometre than a 500 metre tram extension.
Operating Costs
Shown below are the estimated operating costs over 2004-08 for Melbourne’s train and tram systems – taken directly from page 29 of the Auditor General’s 2005 report on public transport franchising.
Over these five years, the operating costs for trams total $1204 million, or $240.8 million per year assuming no inflation. These costs include lease payments for new rollingstock, which aren’t an operating cost, but rather a (not particularly efficient) way of spreading the costs of capital stock (the trams) over the life of the investment. These costs should be dealt with elsewhere, and will be excluded from operating costs for the purposes of the exercise. This yields $210.4 million in operating costs per annum.
Melbourne has 249 kilometres of tram track. Dividing total operating costs by by the size of the system in kilometres, yields a per kilometre operating cost of approximately $0.84 million per year. As mentioned previously in my infrastructure costs post, these calculations assume constant returns to scale. However, I would suggest that there are significant economies of scale in the industry, so the marginal cost will be lower for a for a city with a large tram system (like Melbourne) than it will be for a city starting up a tram system from scratch. Consequently, the $0.84 million marginal per kilometre cost figure for Melbourne is probably slightly higher than it should be when looking at calculating operating costs for tram extensions.
However, any significant extension to the tram network would likely require more trams, and the hitherto ignored new rollingstock lease repayment figures offer an easy way to estimate these costs. The Auditor General’s report estimates these costs to be around $30.4 million per year. But only about 1/5th of the trams in Melbourne are “new” and purchased under these arrangements. Again assuming constant returns to scale, if all the trams were new, the lease repayments would total around $152 million per year. Divide this by the number of kilometres of track on the system, and we find that the marginal cost (per kilometre) for providing new trams is $0.61 million per year for the life of the asset. I don’t like leaseback arrangements, but they do make it easy to get an annual figure.
Riccardo,
I’m not up to date with all of your postings but where would you suggest building tram extensions in Melbourne?
Regards
Geoffrey
Thanks Geoffrey Hansen
Not sure what I have posted before but no.1 would be Wattle Park to either Box Hill or Deakin Uni, and no.2 would be East Malvern terminus to Chadstone.
Most of the obvious tram extensions involve getting scrappy little terminus runs extended to the nearest big trip generator, in many cases not that far away.
Extending no.48 to Doncaster Shopping town is a bit of a stretch but doable (and was promised by the Libs at the last election).
Finding a home for No.67 Carnegie could also be a challenge, it could logically go to Carnegie Stn but this would require the Truganini curve to be abandoned and other complex work in the very tight Koornang Rd area.
Sorting out the West Preston tram so that it goes direct up St Georges Rd to Bell St and round the corner to Bell Station would also be a possibility.
Finally the job of getting the cross town tram routes all to logical termini is not easy, for example, moving 72 Camberwell to Caulfield and Heidelberg or Ivanhoe. This last one is also a natural given Monash Caulfield would be a prime attractor for Burke Rd traffic, but is also a considerable distance along conventional roads.
As a rule I don’t support blindly extending trams into the suburbs without a local trip generator. I think the Bundoora and Vermont South trams have probably gone far enough without infill generators, and while I can see the logic of extending the Airport West tram to the Airport, a heavy rail link would be better.
Phin,
Don’t forget that there’s another recent case study from Adelaide where it cost approximately $21 million (2005 dollars) to build 1.2km of double track to Adelaide station (approximately $17.5 million per km) and an additonal $10 million to construct another 600 metres to UniSA’s City West campus, pushing the total project cost to $31 million for 1.8km of mostly double line tramway (or $17.2 million per km).
LS
It makes you realise just how pricy tram track works are.
“I think the Bundoora and Vermont South trams have probably gone far enough without infill generators”
What do you think of the proposals to extend the 75 Vermont South to Knox City, which has for now been bridged with a ‘Tramlink’ bus? I’m a bit skeptical of that idea myself.
Route 5 could logically be extended to Darling Station, although that is not a major station or centre – benefit would be a connection from the Glen Waverley Line to the Wattletree Rd etc area (probably a low priority).
Riccardo, When you look at the first link in the last post, you see how much project $$$ gets swallowed up before the first track was laid north of Victoria Square. Basically 43% of the project costs (or around $9 million) was spent in project design and management costs and pre-construction works.
Ls
Route 59 is odd in that it terminates near a fairly large shopping centre (Westfield Airport West) but patronage on the last section is very low, not helped by poor access from residential areas to the Matthews Ave tram stops.
I doubt an extension of it to the airport would be well received, a few workers may use it, in addition to dribblers who would catch it all the way from the CBD to the Airport (with all their luggage) and want Skybus replaced by it “because people rather a tram”. Keep in mind that the current bus ’service’ to that area has a gap of 2 or 3 hours in the middle of the day – fix that first.
^^^ Agreed – moreover, given that Mandurah heavy rail only costs around $13m or so per km, it shows that trams aren’t always much cheaper. Of course the per km cost will be higher for a 600m project than a 70km one!
It certainly teaches you ‘horses for courses’
Mandurah was a good example with a mixture of city tunnelling, freeway and greenfields engineering.
When we talk tunnelling we need to be very careful that we are talking in the tens of thousands of people per hour, and only then. Otherwise a light rail solution might be better, assuming it is suitably competitive in terms of time. Surface heavy rail is cheaper, but without freeway or other corridors the NIMBY risk might be overwhelming these days, hence the desire to tunnel from Epping to Rouse Hill almost the whole way.
I have suggested on my blog that the City Loop could have handled a similar number of people with only two tracks, but with the right design.
For example, a dedicated fleet of trains that had no intermediate driving cabs, full ‘concertina’ the way through, no ‘margin’ at either end of the train in terms of platform length, 2 minute signalling or better. Basically a ‘metro’ specification.
And of course, no ‘dead spots’ caused by having the train actually loop when it doesn’t need to. And ensuring that the only people actually on the train are those who need Parliament, MC or Flagstaff stations, not those actually travelling to/from SXS or FSS who have another route available to access those stations.
How much of the overloading in the evening peak is due to SXS and FSS passengers being on the train when they don’t need to be?
Back to trams, I would suggest that much of the cost is ’site’ cost and could be spread over more length of track.
Agree re Darling, I don’t know if the tram/train interchange would be used enough or reliable enough to justify the extension. I would like to think it was but have some skepticism about it
Following up on my Bendigo blog post, here’s a fascinating article from the Bendigo advertiser and it speaks volumes.
http://www.bendigoadvertiser.com.au/news/local/news/news-features/forget-the-jam-on-a-parkandride-tram/1276620.aspx
Assuming the Bendigo Tram Trust is a volunteer run operation with the aim of at least making a small operating profit each year (net of maintenance of the network and fleet) – then the Trust’s preparedness to offer an effective yearly ticket at $20 tells you that if every tram they ran was full of ticket holders holding this ticket, based on their schedule, then the cost of doing so is less than the $20 per passenger per year.
The lessons are:
-salaries are a large part of operating costs, including drivers and conductors, workshop staff (I assume all their maintenance is done by volunteers)
-if volunteers are prepared to lay the track for free with limited assistance from government, then this model could be expanded throughout Bendigo at low cost, potentially with second hand branchline rail, concrete sleeper rejects and used wire (I assume YT has this).
Phin & Riccardo,
You’ll be pleased to know that as far as I can tell, I’ve just given TT its first citation in an ‘academic’ work. My interdisciplinary studio essay on Transit Oriented Development used the above per km tramline costings as a yardstick for costing a major LRT project in Melbourne as part of a TOD. Great resource to have around!
LS
I had a beautiful site like this once, but it got spammed so bad I had to close it