Page 1205 - Week 04 - Wednesday, 7 May 2014
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Part (b) of the motion is about other routes in a potential ACT-wide network. Yesterday I asked a question of Minister Corbell about the staging of the future rollout of the network. He said that the master plan will provide advice to the government about the rollout, about the staging. That is important, and I am glad it will. But why was that information not provided prior to committing to Gungahlin to the city? It may well be that this government is doing a tremendous disservice to light rail in the ACT by putting forward a route that may not be viable. And, of course, we on this side of the chamber believe it is not viable.
The staging of a light rail network is vital. It is vital so that the maximum economic return and patronage levels can be returned. In any system, there will be some routes which are more economic than others. This is especially the case when the routes are stand-alone, such as Gungahlin to the city. By getting the staging right, less economic routes can feed off the more economic routes and therefore collectively be more economic than they would be as stand-alone routes. Therefore it is absolutely vital to get the staging right.
Unfortunately, the ACT has not considered which leg is the most important one to start the light rail network. They have simply committed to Gungahlin to the city without proper analysis of the other routes. The ACT has simply gone ahead without economic analysis and said that it is in Canberra’s best interests to start a light rail network with Gungahlin to the city. Where is the economic analysis to back the $614 million of capital expenditure?
We are concerned that the time frame and cost could blow out considerably from the $614 million and the four or five years for construction. As we have seen with so many of the government’s projects, they simply do not get it right. Whether we are talking about the secure mental health facility, the Canberra Hospital car park, the ESA headquarters, Tharwa bridge, the GDE or the Cotter Dam—all have blown out considerably. The Cotter Dam is a classic one; it went from $120 million to $410 million for the main dam wall. The GDE went from $53 million to $200 million. With ESA headquarters, it was 13 to 76. With the Canberra Hospital car park, it was $23 million to $43 million. With the secure mental health facility, which we are still waiting for, it has been $11 million to $25 million—and who knows what it will actually finish up at?
We know that $614 million is already a conservative cost compared to that of the Gold Coast. Let us also remember that the Northbourne Avenue corridor will have to be dug up. Who knows what water pipes there are, whether it be sewerage or town water pipes? What about electricity cables? What about gas? What about communications—defence communications et cetera? Many of those will be insulated with asbestos. We have some tremendous challenges with this project, all of which I think could contribute to the cost blowout and to a time blowout.
The cost of financing the project is likely to be significant. If the government borrows between $500 million and $600 million, even at a conservative interest rate, we are looking at $20 million per year. That is a huge amount of money to recoup off the cost of running light rail. To think that you are going to get $20 million in fair revenue for
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