Costing of Australian urban passenger rail project 2000-2012
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Costing of Australian urban passenger rail project 2000-2012

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A paper I presented at CORE 2012 in Brisbane on developing a costing model for urban passenger rail projects. This research is to my knowledge unique in Australia

A paper I presented at CORE 2012 in Brisbane on developing a costing model for urban passenger rail projects. This research is to my knowledge unique in Australia

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  • 1. COSTING AUSTRALIAN PASSENGER RAIL PROJECTS 2000-2012: HOW MUCH DID WE PAY AND WHAT DID WE GET? Scott Martin, CMILT University of MelbourneSUMMARYBetween 2000-2012, 28 major urban passenger rail projects were constructed in Australia, at a costof approximately A$8.8 billion. The projects represented in this paper includes heavy rail and lightrail projects constructed in Australian capital cities between 2000 and 2012 involving theconstruction of new rail lines and extension, amplification and electrification of existing rail lines.The data collected in the survey has been scaled up to constant 2012 dollars and further analysed todevelop indicative construction cost profiles for certain kinds of rail projects, along with adiscussion of the various risks and circumstances associated with the inception, development anddelivery of these projects.This is the only known Australian survey examining the finished costs of urban rail infrastructureprojects and represents an important piece of research into the costs of public transportinfrastructure provision in Australia.INTRODUCTION This study attempts to rank the 28 identified urban rail projects by total project cost and cost perIn the years between 2000 and 2012, 28 major kilometre to develop indicative costings for lighturban rail projects were completed in Australia. and heavy rail projects. This represents the ‘firstThese projects covered an array of heavy rail and level findings’ of research into the cost structure oflight rail (tram) projects, costing approximately major public transport projects. There is specificA$8.8 billion (2012 dollars). focus on per route-kilometre construction costs forWhile some of these projects (most notably the heavy rail and light rail projects in an attempt toSydney and Brisbane airport rail links) were develop a reliable set of indicative costs for:constructed as Public-Private Partnerships (PPPs), • Construction of new linesthe majority of these projects were fully funded bystate governments. As such, these projects • Extensions of existing linesrepresent significant expenditure of public monies • Amplification of existing linesby their respective State treasuries and have hadsignificant implications on each state’s budgets • Electrification of existing linesand finances. WHY THIS RESEARCH IS IMPORTANTDuring the period of this study, Australia’s Federal This research is important in ultimately developinggovernment resumed its involvement in urban a support tool for decision makers who develop,public transport. After sporadic involvement in fund and manage urban rail projects in Australianurban rail infrastructure funding during the 1970s state and federal governments to have betterand the 1990s, the Federal Government’s knowledge about the recent history of urban railannouncement of $4.62 billion in funding for state projects and the likely costs of delivering futureurban public transport projects in its FY 2009-2010 projects.Budget (1). While none of the projects examined inthis paper received Federal Government funding, a By the author’s own calculations there are at leastnumber of passenger rail projects that are another $16 billion of urban rail projects eithercurrently underway or commencing construction underway or being planned in Australia at present.are co-funded by both state and federal In recent years, state governments and their publicgovernments. transport infrastructure delivery agencies have Conference On Railway Engineering Brisbane 10 – 12 September 2012 Conference On Railway Engineering 545 Brisbane 10 – 12 September 2012
  • 2. Scott Martin Costing Australian Passenger Rail Projects 2000-2012:University of Melbourne How much did we pay and what did we get?been criticised by the media (2), public transport to control costs. Flyvbjerg argues that a key causelobby groups (3), Parliamentary Committees (4) of overruns is a lack of realism in initial costand Auditors-General in New South Wales and estimates. He argues that:Victoria (5-7) over the escalating costs of public “the length and cost of delays are underestimated,transport projects, particularly urban rail projects. contingencies settings are too low, changes inBetter knowledge of public transport infrastructure project specifications and designs are notproject costs may assist governments, transport sufficiently taken into account, changes inagencies and their contractors to prepare more exchange rates between currencies arerobust business cases with more realistic costings. underestimated or ignored, so is geological risk,These will give political leaders, state and federal and quantity and price changes are undervaluedtreasuries and other key decision makers greater as are expropriation costs and safety andconfidence in the ability of infrastructure delivery environmental demands” (12).agencies to complete projects on time and on In an Australian context, cost-benefit analysisbudget. (CBA) remains the best model of estimating theLITERATURE REVIEW costs and benefits of constructing major infrastructure projects (14) and is an importantThere is a growing theoretical literature addressing aspect of state and territory governmentsthe risks, causes and effects associated with cost developing infrastructure project funding proposalsoverruns on major infrastructure projects, as part of Infrastructure Australia’s assessmentparticularly transport projects in the 20th Century. processes.(15)Sir Peter Hall was an early entrant to the field,featuring a history of the faulty assumptions and Other factors identified in the literature such ascost overruns in the construction of a landmark ‘scope creep’, procurement practices, poor costpiece of urban rail infrastructure (San Francisco’s controls, the project complexity of construction in aBART system) in his landmark study Great ‘live’ rail operating environment and problems inPlanning Disasters (8). managing and mitigating risk management have all been observed as contributing factors to costFrom the 1990s onward, a range of studies were overruns in Australian passenger rail infrastructureundertaken on evaluating the real and potential projects. The Victorian Auditor-General’s Office’srisks associated with large-scale infrastructure reports into the delivery of Regional Fast Rail (5)projects (called ‘mega-projects) around the world, and five Victorian rail projects (7) identified theseincluding Kharbanda and Pinto (9), Flyvbjerg, issues as contributing to increased costs inBruzelius and Rothengatter (10) and Altshuler and delivering passenger rail projects, as did the NSWLuberoff (11) have added to the body of literature Legislative Council’s report into the cost of raildealing with the management (or non- projects in that state.(4)management) of risks associated with thedevelopment and delivery of major projects. Also ‘Local’ factors peculiar to Australia’s market forrelevant to this study are works on urban rail transport infrastructure also played a role inproject selection (12) and route-kilometre capital increased costs for rail projects, including labourcosts for metro projects in Europe and America. costs and the small size of the domestic(13) infrastructure market (16). The NSW Audit Office reported on shortages of skilled workers as one ofA common thread in these analyses of transport a range of reason for delays and cost escalationmegaprojects are claims that cost estimation on a range of urban rail projects in Sydney (6). Themethods are particularly prone to miscalculation, NSW Legislative Council’s inquiry into the cost ofwith overruns from initial estimated costs the rule rail infrastructure projects reported that a range ofrather than the exception (12). Rail projects in factors impacting on the cost of rail projects in theparticular are viewed as highly vulnerable to poor state. These included poorly defined project scope,cost estimation, with analysis of a range of rail the state’s lack of a long-term rail infrastructureprojects showing average cost overruns of 45 per plan and a pipeline of projects to support it, low-cent. (10) levels of technical expertise in railway agenciesIt is also argued that CBA methods have a along with changing political and other objectives.weakness as analytical tools being effectively ex- All of these it was claimed contributed to NSW’sante valuation methods with methodologies experience of cost overruns on rail projects (4).focusing on valuing project benefits rather than The range of studies evaluating cost overruns andensuring estimates of project costs are well project failure help greatly to fill the gaps in cost-defined. benefit analysis, providing a method for ex-postThe corollary of cost estimation is the ability of evaluation of rail (and other) infrastructureproject managers to control costs. Kharbanda and projects. These studies also provide a way toPinto (9) viewed cost control as the key to analyse problems and failures in previous projects.management of infrastructure projects; from sound If, as is often stated, past behaviour is a predictorproject scoping to initial cost estimation, managing of future behaviour, knowledge of cost and riskrisk and maintaining detailed expenditure records profiles of previous rail infrastructure construction Conference On Railway Engineering Brisbane 10 – 12 September 2012 Conference On Railway Engineering 546 Brisbane 10 – 12 September 2012
  • 3. Scott Martin Costing Australian Passenger Rail Projects 2000-2012:University of Melbourne How much did we pay and what did we get?projects is useful in helping to estimate future size and cost. These were assembled and rankedcosts and guide transport agencies and decision by total cost and are shown in Figure 1 below.makers in development and delivery of projects. 2. Refinement of included projectsMETHODOLOGY One of the key issues in developing cost profiles1. Project definition and filtering for major infrastructure projects involves a need to compare projects consistently on an ‘apples-with-In developing this study, a review was undertaken apples’ basis. The NSW Legislative Council’sof the main transport industry trade press and inquiry into that state’s rail project costs heardacademic literature to identify an initial list of urban evidence regarding the importance of comparingpublic transport projects from Australia and New projects on this basis for developing accurateZealand for consideration. From this initial list of costing benchmarks (4). This has also found to beover 80 projects, a number of filters were applied true overseas, where attempts to benchmark railto remove certain projects types. construction costs requires the use of tightlyProject deemed ‘out of scope’ and rejected for defined project criteria (13).further analysis in this study included: When and as supporting information was • Grade separations (essentially road rather available, each project was further examined to than rail projects) strip out non-infrastructure cost items (such as operating costs), the costs of ‘movable’ • Projects predominantly benefiting rail infrastructure (new rolling stock) and the costs of freight traffic ‘enabling’ or ‘network-wide’ infrastructure works • Projects predominantly benefiting (such as train stabling and depots) if possible to interurban or ‘country’ passenger rail traffic provide construction costs for just the right-of way and stations. It was considered going to a further • Infrastructure projects supporting level down to screen out the cost of stations to improved urban rail operations (train develop a ‘basic’ per route-kilometre cost for stabling, depots, turnbacks, discrete re- rights-of-way only. However, this was not pursued signalling projects) further due to difficulties in collecting such • ‘Station’ works (Accessibility programs, information through ‘open source’ methods. park and ride, modal interchanges) The success or otherwise of this methodology and • New stations (i.e. Melbourne’s Southern the level to which costs can be isolated depends Cross) unless it is part of a larger urban on levels of financial transparency and project passenger rail project governance practiced by infrastructure deliveryThe narrowing of scope in this way meant that organisations and governments in annual reports,some public transport infrastructure projects were budget papers and other material. The quality andexcluded from the scope of this study. Other quantity of this material varies betweenexclusions encompassed non-rail infrastructure jurisdictions. Analysing this data is often assistedprojects, most notably the range of bus rapid by the use of other ‘open source’ material found intransit projects built in New South Wales and the mainstream media and transport trade pressQueensland during this period. Also excluded were (whose data also differs in quantity and quality)five Victorian regional rail upgrading projects on and increasingly, through the use of social media.existing rail lines, including Regional Fast Rail Weblogs (‘blogs’) covering transport issues are(costing $931.2 million in 2012 dollars) and works particularly useful, both as sources of informationupgrading four regional rail lines (Ballarat-Ararat, and informed (sometimes ill-informed) comment onBallarat-Maryborough, Bendigo-Echuca and Sale- transport projects.Bairnsdale) to support the reintroduction of rail An important part of the refinement processpassenger services. One NSW regional rail project involved minimising the possibility of making(Dapto-Kiama electrification) was also excluded ‘apples-and-oranges errors’ by comparing finalfrom the scope of this study. out-turn construction costs based on publishedAs a result of applying these filters, a core list of data of uneven specification and quality (13). Thekey infrastructure projects remained within scope author has examined in great detail all publiclyfor consideration by this study. The final list available information on the 28 projects featured inconsisted of projects in four categories, namely: this paper and has removed extraneous costs to, where possible provide an finalised cost of • Construction of new lines delivering a particular urban rail infrastructure • Extensions of existing lines project with the full range of railway technology (permanent way, safeworking, traction power • Amplification of existing lines supply and passenger facilities) required for the • Electrification of existing lines functioning of the project once commissioned.The 28 remaining rail projects were further Three examples of how basic construction costsinvestigated to develop profiles of project scope, were determined are shown at different ends of the Conference On Railway Engineering Brisbane 10 – 12 September 2012 Conference On Railway Engineering 547 Brisbane 10 – 12 September 2012
  • 4. Scott Martin Costing Australian Passenger Rail Projects 2000-2012:University of Melbourne How much did we pay and what did we get? Cost per State / Cost $M Length Rank Project Name Project type Completed Cost ($M) km $M Territory (2012 PPI) (km) (2012 PPI) Epping-Chatswood 1 NSW New line 2009 $2,350.0 $2,602.4 12.5 $208.2 Railway line Perth-Mandurah 2 WA New line 2007 $1,103.0 $1,363.0 72.0 $18.9 Railway line 3 Sydney Airport railway NSW New line 2000 $762.0 $1,251.0 10.0 $125.1 Darra-Richlands 4 QLD New line 2011 $417.7 $423.0 4.5 $94.0 Railway line 5 Airtrain QLD New line 2001 $220.0 $372.1 15.9 $23.4 Robina-Varsity Lakes 6 QLD Extension 2009 $325.0 $354.5 4.1 $86.5 Railway extension Caboolture-Beerburrum 7 QLD Amplification 2009 $298.0 $330.0 13.7 $24.1 duplication Salisbury - Kuraby 8 QLD Amplification 2008 $256.0 $298.4 9.5 $31.4 triplication South Morang rail New line / 9 Vic 2012 $261.0 $261.0 8.5 $30.7 extension amplification Quakers Hill - 10 NSW Amplification 2011 $246.0 $246.0 3.6 $68.3 Schofields duplication Corinda-Darra 11 QLD Amplification 2011 $218.2 $232.0 5.2 $44.6 quadruplication 12 Cronulla line duplication NSW Amplification 2010 $185.0 $191.3 6.6 $29.0 Craigieburn Rail 13 Vic Electrification 2007 $115.0 $125.9 10.0 $12.6 electrification Turrella-Kingsgrove 14 NSW Amplification 2001 $85.0 $113.2 4.0 $28.3 quadruplication Helensvale - Robina 15 QLD Amplification 2008 $72.0 $79.5 16.6 $4.8 duplication 16 Thornlie spur WA New line 2005 $57.1 $76.0 3.5 $21.7 Currumbine-Clarkson 17 WA Extension 2004 $58.0 $71.3 4.0 $17.8 rail extension Sydenham rail 18 Vic Electrification 2002 $44.0 $56.9 6.5 $8.8 electrification Port Road Tram 19 SA Extension 2010 $53.0 $53.0 2.8 $18.9 extension 20 Clifton Hill rail project Vic Amplification 2009 $49.9 $52.4 1.0 $52.4 Mitchellton-Keperra 21 QLD Amplification 2008 $46.0 $49.8 2.5 $19.9 duplication Marayong - Quakers 22 NSW Amplification 2002 $30.0 $38.8 3.0 $12.9 Hill duplication Vermont South tram 23 Vic Extension 2005 $30.5 $36.5 2.8 $13.0 extension 24 Box Hill tram extension Vic Extension 2003 $28.0 $35.2 2.2 $16.0 Adelaide CBD tram 25 SA Extension 2008 $31.0 $33.6 2.1 $16.0 extension Sydney Light Rail 26 NSW Extension 2000 $20.0 $32.3 3.6 $9.0 Extension Ormeau-Coomera 27 QLD Amplification 2006 $22.0 $27.5 6.7 $4.1 duplication Docklands Drive tram 28 Vic Extension 2005 $7.5 $9.0 1.0 $9.0 extension TOTAL $8,815.4 COST $M Figure 1 – Passenger rail projects 2000-2012 ranked by total project cost (2012 dollars) Conference On Railway Engineering Brisbane 10 – 12 September 2012 Conference On Railway Engineering 548 Brisbane 10 – 12 September 2012
  • 5. Scott Martin Passenger Rail Infrastructure Projects in Australia 2000-2012University of Melbourne How much did we pay and what did we get?cost spectrum. The construction cost of the 2.8 methodology in an Australian context by using thekilometre tram extension from East Burwood to ABS Producer Price Indices (PPI) indices (23).Vermont South (Melbourne) is usually quoted as Discussions with a range of stakeholders indicatedcosting $42.5 million (2005 dollars). However, this that using PPI over CPI to calculate constant dollaramount was an aggregated one that included $12 values for projects would give better and moremillion of operating costs alongside $30.5 million in accurate results.capital costs (17). Melbourne’s South Morang Rail ANALYSISExtension was originally announced as costing$650 million (including initial operating costs) in the The projects shown in Figure 1 above cover a wideVictorian Transport Plan. When capital costs only variety of public transport infrastructure, rangingwere costed the project price was reduced to from tramway and light rail extensions to the$562.3 million (2). Subsequent investigation by a amplification, extension and electrification ofpublic transport lobby group found the project suburban heavy rail lines. The costs for thesescope consisted of several related projects beyond projects ranged from a relatively modest $9 millionthe rail extension, collectively increasing capacity for the one kilometre length of Melbourne’son the Clifton Hill group of lines to accommodate Docklands Drive tram extension to $2.602 billionincreased services from South Morang (18). The for the mostly tunnelled 12.5 kilometre-longcontract value of the actual rail duplication and Epping-Chatswood railway line.extension works from Keon Park to South Morang The geographical breakdown of these projects bywas $261 million.(19) Perth’s New Metro Rail state is displayed at Figure 2 below. It wasproject (which included construction of the Perth- observed that the majority of these projects wereMandurah railway line) with its often-quoted cost of clustered in the capital cities of Australia’s eastern$1.663 billion (20) consisted of a range of different, states, with over 80% of metropolitan rail projectsbut related projects under the ‘New Metro Rail’ considered in this study being constructed in theumbrella (21). Stripping out the parts not directly three states of New South Wales, Queensland andrelated to the Perth-Mandurah line (the Thornlie Victoria. The two largest states of New SouthSpur and Clarkson Extension), network-wide Wales and Victoria jointly accounted for 52% of theelements (Nowergup railcar depot, new rolling projects by number. Queensland also featuredstock), the capital spend directly attributable to the strongly accounting for 31% of the listed projectsPerth-Mandurah railway was calculated to be by number.$1.103 billion in 2007 dollars (21).3. Costings methodologyAs these projects were completed across a 12-year time period from 2000 to 2012, a method wassought to approximate each project’s publiclyknown cost at the time of completion into constant(2012) dollars. Data on total costs across therange of projects was obtained using ‘open source’(that is, publicly available) data, as found in annualreports, budget papers, media releases,newspaper articles and the transport trade press.Once a basic cost profile for all projects wasdeveloped, there was a need to equalise allprojects across the 12-year time horizon of thestudy from dollars of the day into constant dollars.Two methodologies for doing this were examined.The first method developed a simple set ofcalculations where ‘as built’ project costs in dollarsof the day were escalated into constant (2012) Figure 2 : Percentage of completed Australiandollars utilising the Australian Bureau of Statistics metropolitan rail projects 2000-2012 by state(ABS) Consumer Price Index (CPI) figures (22). Western Australia’s very creditable performanceAlthough this methodology is useful to escalate saw the state’s three metropolitan rail projects (thecosts into constant dollars, it is limited by being Thornlie spur line, the Clarkson extension and thederived from changes in the prices of the basket of Perth-Mandurah Line) accounting for 10% of thegoods and services that determine CPI. projects by number and 15.5% or $1.51 billionA comparative, trans-national study of rail project (2012 dollars) of the total value, while the two tramcosts in Europe and the US conducted by extension projects in South Australia made up theFlyvgberg et al (13) used a second methodology, remainder.based on movements in the OECD Construction It is worth noting that Tasmania, the NorthernCost Index. It was decided to approximate this Territory and the Australian Capital Territory did Conference On Railway Engineering Brisbane 10 – 12 September 2012 Conference On Railway Engineering 549 Brisbane 10 – 12 September 2012
  • 6. Scott Martin Costing Australian Passenger Rail Projects 2000-2012:University of Melbourne How much did we pay and what did we get?not construct any public transport infrastructure other Australian and international jurisdictions. Inprojects during the last decade that fit the criteria the report of its inquiry into rail infrastructurefor this study. The percentage contribution of each project costings, the NSW Legislative Councilstate’s metropolitan rail projects to the total ascribed factors contributing to cost escalation innational spend is shown below in Figure 3. rail projects as including poorly defined scope of works, changing user requirements requiring variation, overdesign or ‘gold plating’ of projects and a desire by governments to announce big- budget infrastructure projects before the scope of works and cost estimates are fully defined (4). Other factors include previously mentioned examples of aggregating rail project construction costs with project ‘enabling works’ such as resignalling, train stabling or major station upgrades,(18) the bundling of project capital and operating costs together, (17) and the extra costs incurred from client requirements to construct projects in a ‘live’ railway environment with minimal disruption to regular services.(24) While there may be many sound reasons behind the escalating costs of infrastructure projects,Figure 3 : Australian metropolitan rail projects there is a perception that governments and their2000-2012 by state as percentage of total value transport infrastructure agencies have a poorAnalysis of the projects examined in this study has knowledge of indicative per route-kilometre costsseen patterns emerge that are, in the author’s for building public transport infrastructureopinion significant and worthy of undertaking (particularly rail) projects in Australia. Betterfurther in-depth research and refinement in the knowledge of these costs and indicative values offuture. The detailed results of this further research the likely costs to construct, extend, electrify orcould add to efforts to provide more accurate amplify a route-kilometre of light or heavy railcosting for public transport projects that would be would benefit decision makers and arguablyof great usefulness to Australasian infrastructure provide better value for money in public transportplanning and delivery agencies in developing the infrastructure projects across Australasia. This isnext wave of public transport infrastructure important as in the present decade there is (by theprojects that will be delivered during the second author’s calculations) a $16 billion pipeline ofand third decades of the 21st Century. public transport infrastructure projects in Australian cities either planned or under construction.INDICATIVE CONSTRUCTION COSTS FOR The research undertaken in this paper to identifyAUSTRALIAN RAIL PROJECTS eligible public transport infrastructure projects hasThe preliminary results of this research provided provided some preliminary cost indications forbelow outlines general per route-kilometre capital constructing light rail extensions and heavy railcost profiles for metropolitan light rail and heavy electrification, amplification, extensions and newrail projects. Figure 4 shows the 28 projects lines. These preliminary values are the result ofconsidered in this study ranked in terms of cost per high-level analysis and still require furtherroute-kilometre from the most expensive to least qualitative and quantitative refinement and testing.expensive. The findings of this research and the However they are valuable in providing some initialcost profiles generated suggest that decisions analysis as outlined in the remainder of this paper.made on route alignments (particularly decisions to The basis of the observations made here is Figureutilise underground rights-of-way, rights-of-way 4 below. This table ranks the projects listed inwith extensive elevation or entrenchment or rights- Figure 1 in terms of average cost per route-of-way fully separated from surrounding vehicle or kilometre from most to least expensive.pedestrian traffic) commit project proponents to 1. Methodologygreatly escalated per route-kilometre constructioncosts compared to building in mixed traffic or The chosen methodology to derive the per route-partially separated surface right-of-way. These kilometre construction costs is straightforward, asescalated costs are based on the need to mitigate costs for each transport technology type (light rail,or manage a range of engineering, environmental, heavy rail, new lines, extensions, amplification,safety and other risks as part of the project scope. electrification) from the sample list of projects in Figure 1 have been aggregated together andIn recent years, the print media and public averaged out to provide the mean constructiontransport advocates have argued the final outturn cost for a route-kilometre of light or heavy rail inconstruction costs for passenger rail infrastructure the four main project types (electrification,projects in Australia (especially heavy rail projectsin Sydney and Melbourne) are much higher than in amplification, extension or new construction). Conference On Railway Engineering Brisbane 10 – 12 September 2012 Conference On Railway Engineering 550 Brisbane 10 – 12 September 2012
  • 7. Scott Martin Costing Australian Passenger Rail Projects 2000-2012:University of Melbourne How much did we pay and what did we get? Cost per State / Cost $M Length Rank Project Name Project type Completed Cost ($M) km $M Territory (2012 PPI) (km) (2012 PPI) Epping-Chatswood 1 NSW New line 2009 $2,350.0 $2,602.4 12.5 $208.2 Railway line 2 Sydney Airport railway NSW New line 2000 $762.0 $1,251.0 10.0 $125.1 Darra-Richlands 3 QLD New line 2011 $417.7 $423.0 4.5 $94.0 Railway line Robina-Varsity Lakes 4 QLD Extension 2009 $325.0 $354.5 4.1 $86.5 Railway extension Quakers Hill - 5 NSW Amplification 2011 $246.0 $246.0 3.6 $68.3 Schofields duplication 6 Clifton Hill rail project Vic Amplification 2009 $49.9 $52.4 1.0 $52.4 Corinda-Darra 7 QLD Amplification 2011 $218.2 $232.0 5.2 $44.6 quadruplication Salisbury - Kuraby 8 QLD Amplification 2008 $256.0 $298.4 9.5 $31.4 triplication South Morang rail New line / 9 Vic 2012 $261.0 $261.0 8.5 $30.7 extension amplification 10 Cronulla line duplication NSW Amplification 2010 $185.0 $191.3 6.6 $29.0 Turrella-Kingsgrove 11 NSW Amplification 2001 $85.0 $113.2 4.0 $28.3 quadruplication Caboolture-Beerburrum 12 QLD Amplification 2009 $298.0 $330.0 13.7 $24.1 duplication 13 Airtrain QLD New line 2001 $220.0 $372.1 15.9 $23.4 14 Thornlie spur WA New line 2005 $57.1 $76.0 3.5 $21.7 Mitchellton-Keperra 15 QLD Amplification 2008 $46.0 $49.8 2.5 $19.9 duplication Perth-Mandurah 16 WA New line 2007 $1,103.0 $1,363.0 72.0 $18.9 Railway line Port Road Tram 17 SA Extension 2010 $53.0 $53.0 2.8 $18.9 extension Currumbine-Clarkson 18 WA Extension 2004 $58.0 $71.3 4.0 $17.8 rail extension 19 Box Hill tram extension Vic Extension 2003 $28.0 $35.2 2.2 $16.0 Adelaide CBD tram 20 SA Extension 2008 $31.0 $33.6 2.1 $16.0 extension Vermont South tram 21 Vic Extension 2005 $30.5 $36.5 2.8 $13.0 extension Marayong - Quakers 22 NSW Amplification 2002 $30.0 $38.8 3.0 $12.9 Hill duplication Craigieburn Rail 23 Vic Electrification 2007 $115.0 $125.9 10.0 $12.6 electrification Docklands Drive tram 24 Vic Extension 2005 $7.5 $9.0 1.0 $9.0 extension Sydney Light Rail 25 NSW Extension 2000 $20.0 $32.3 3.6 $9.0 Extension Sydenham rail 26 Vic Electrification 2002 $44.0 $56.9 6.5 $8.8 electrification Helensvale - Robina 27 QLD Amplification 2008 $72.0 $79.5 16.6 $4.8 duplication Ormeau-Coomera 28 QLD Amplification 2006 $22.0 $27.5 6.7 $4.1 duplication TOTAL $8,815.4 COST $M Figure 4 – Passenger rail projects 2000-2012 ranked by cost per route-kilometre (2012 dollars) Conference On Railway Engineering Brisbane 10 – 12 September 2012 Conference On Railway Engineering 551 Brisbane 10 – 12 September 2012
  • 8. Scott Martin Costing Australian Passenger Rail Projects 2000-2012: University of Melbourne How much did we pay and what did we get? Further analysis of the mean cost for each 2. Light rail construction costs transport technology type shows a level of Since 2000, light rail in Australia has undergone stratification dependent on each project’s ‘level of something of a renaissance with six projects difficulty’. For example, railway construction that completed in three cities. Adelaide’s single tram features extensive underground tunnelling in a route (Glenelg-South Terrace) was upgraded and ‘brownfields’ urban area or grade separated rights- extended through the CBD to North Terrace and of-way may be more expensive than construction later extended further from North Terrace to the on ‘greenfields’ sites or ‘upgrading’ (such as track Adelaide Entertainment Centre; Sydney’s sole light amplification or electrification) to a railway line in rail route was extended from Wentworth Park to an existing corridor, although the risks of working Lilyfield, while in Melbourne two extensions were in a ‘live’ railway is likely to add to overall per constructed in the middle suburbs (Mont Albert- route-kilometre costs. Box Hill and Burwood East-Vermont South) and a Light rail projects have been considered separately third in Docklands on the CBD fringe. from heavy rail projects in this study for Figure 5 below shows the per route-kilometre two reasons. First, they form a largely construction cost profiles developed using the homogeneous set of projects, mostly constructed sample group of six light rail extension projects. in on-street environments. Second, unlike most Costs ranged from an upper bound of $18.9 million heavy rail projects, they are built in rights-of-way (2012 dollars) for Adelaide’s Port Road tram that are least separated from other road and extension to a lower bound of $9 million (2012 pedestrian traffic. dollars) for the Sydney Light Rail extension to Using Vuchic’s taxonomy of rights-of-way, (25) Lilyfield. Based on the six projects from 2000 to Australian light rail projects operate either on 2012, the average per route-kilometre cost for light surface streets in mixed traffic (Category C), or on rail projects in Australia is $13.65 million. roads with some physical separation (tram The range of light rail construction costs reflect the corridors in central medians of arterial roads) but different urban environments they are constructed also at-grade vehicle and pedestrian crossings in. The four projects costing $13 million per (Category B). Increasingly, New Australian heavy kilometre or more reflects construction in the rail projects are moving from rights-of-way largely Adelaide CBD and arterial roads medians in in Category B rights-of-way (separate corridors Melbourne (Box Hill, Vermont South) and Adelaide bisected by at-grade vehicle and pedestrian (Port Road). The two projects costing below crossings) toward Category A rights-of-way that average (at $9 million per kilometre) reflect lower are fully grade-separated from surrounding construction costs in brownfields areas: inner- vehicles and pedestrians. This has an impact on urban renewal area (Docklands Drive) and the re- project costs as requirements for grade separation use of an existing, formerly heavy rail alignment for new lines and level crossing removals on with a Category A right-of-way (Sydney’s Light Rail existing lines must be factored into project costs. extension).Figure 5 – Indicative construction costs per-route kilometre for Australian light rail projects 2000-2012 Conference On Railway Engineering Brisbane 10 – 12 September 2012 Conference On Railway Engineering 552 Brisbane 10 – 12 September 2012
  • 9. Scott Martin Costing Australian Passenger Rail Projects 2000-2012:University of Melbourne How much did we pay and what did we get?3. Heavy rail construction costs of how costs were apportioned in projects through further examination of the data will ultimatelyIn this sample group, 22 heavy rail projects were provide better cost profiles across the range ofconfirmed as completed between 2000 and 2012. projects.These projects encompassed covered the gamutof rail construction project types including: The sample group of 22 heavy rail projects considered in this study falls into four key • electrification, categories. It is now proposed to separate out • amplification of existing lines, projects in each category from the sample group of • extensions to existing lines and 22 projects to understand their per route-kilometre construction costs and also to look at the special • construction of new lines. case of tunnelled rights-of-way.Heavy rail projects often prove most contentious of 1. Electrificationall public transport infrastructure projects. Therisks of scope creep and cost escalation rises due Of the 22 heavy rail projects examined in thisto the need to build in mitigation of real or study, only two were electrification projects. Bothperceived risks and disbenefits caused by a rail projects (St Albans - Sydenham andproject. These include environmental (flora/fauna, Broadmeadows-Craigieburn) are located inwatercourses), social (noise barriers, placing lines Victoria. At the time of writing, a third electrificationin cuttings or culverts) or economic (grade project (Sydenham – Sunbury) was nearingseparations to improve road network operation) completion but not commissioned and is thereforerisks and disbenefits. excluded from this study, along with a regional electrification project in NSW (Dapto-Kiama).While the costs of mitigation for these disbenefits Based on this small sample of two projects, theand risks and the consequent scope ‘creep’ are indicative cost for electrifying existing lines is $10.7more apparent and more likely to occur in the million/km in 2012 dollars.more heavily populated inner and middle urbanareas of Australian cities, these risks also need to 2. Amplification of existing linesbe managed on the urban fringes, the rural/urban This category consisted of 11 projects, a largeinterfaces and regional areas. sample size of projects for examination in thisIncreased mitigation costs are often incurred to study. Track amplification (duplication, triplicationmitigate perceived disbenefits to local communities and quadruplicating) of existing lines accounted forin projects that benefit metropolitan areas as a 11 of the 22 projects, with costs ranging from awhole. For example, a recent decision by the high of $68.3 million/km for the recently completedVictorian Government to review noise Quakers Hill- Schofields duplication in NSW to amanagement plans for rail projects (26) means low of $4.1 million/km for the Ormeau-Coomerathat state’s Regional Rail Link (RRL) may need to duplication in Queensland. The average cost ofinstall noise barriers along the rail corridor to track amplification based on the sample size ismitigate noise impacts on current and future $29.1 million/km in 2012 dollars.housing developments at an estimated cost of 3. Extensions to existing lines$20-$50 million. This has also led to ambit claimsby residents along more densely populated RRL The sample size of this category was four projectscorridor for noise barriers to be installed.(27) only, ranging from $86.5 million/km for the Robina- Varsity Lakes extension in Queensland to Perth’sThe 22 urban heavy rail projects are ranked by Currambine-Clarkson extension, costing $17.8cost, with the different levels of per route-kilometre million/km. The Varsity Lakes extension costcosts for these projects shown in Figure 6 below. significantly more than the next most expensiveThe per route-kilometre costs (in 2012 dollars) for project (South Morang rail extension,rail projects in this sample range from an upper costing $30.7 million/km), due to extensivebound of $208.2 million for the deep-tunnelled earthworks, a 300-metre long cut-and-cover tunnelunderground right of way of the Epping- and extensive additional works such as local roadChatswood Rail Link to the lower bound of $4.1 reconstruction and essential service relocations.million for the Ormeau-Coomera duplication. The Based on this sample of four projects, the averageaverage heavy rail construction cost per route- cost of rail extensions is $39.2 million/kilometre.kilometre across all 22 projects was $44 million(2012 dollars). 4. Construction of new linesFURTHER REFINEMENT OF RAIL PROJECT Five projects represented construction of newCONSTRUCTION COSTS heavy railway lines. This sample of projects and their per route-kilometre costs ranged fromHowever, this average per route-kilometre tunnelled routes such as the Epping-Chatswoodconstruction cost figure of $44 million per kilometre ($208.2 million/km) and Airport ($125.1 million/km)masks the differing costs of the variety of project lines in Sydney; to more conventional lines inprofiles and construction types encountered in this Brisbane (Darra-Richlands line [$94 million/km]sample of 22 rail projects. A better understanding Conference On Railway Engineering Brisbane 10 – 12 September 2012 Conference On Railway Engineering 553 Brisbane 10 – 12 September 2012
  • 10. Scott Martin Passenger Rail Infrastructure Projects in Australia 2000-2012 University of Melbourne How much did we pay and what did we get? 1 Cost  Per-­‐route  k ilometre $200 Average  Cost  P er-­‐route kilometre Legend  –   1.   Epping-­‐Chatswood   line,   2.   Sydney   Airport   line,   3.   Darra  –   Richlands   line,   4.   Robina  -­‐   Varsity  Lakes  extension,  5.  Quakers  Hill  -­‐  Schofields   duplication,   6.  Clifton  Hill   $150 duplication,  7.  Corinda  –  Darra  duplication,  8.  Salisbury  –  Kuraby  duplication,  9.  South   Morang   rail   extension,   10.   Cronulla   line   duplication,   11.   Turrella   –   Kingsgrove   quadruplication,   12.   Caboolture   –   Beerburrum   duplication,   13.   Brisbane   Airtrain   line,   14.   Thornlie   spur   extension,   15.   Mitchellton   –   Keperra   duplication,   16.   Perth   –   2 Mandurah   line,   17.   Currambine   –   Clarkson   extension,   18.   Marayong   –   Quakers   Hill   duplication,   19.   Craigieburn   electrification,   20.   Sydenham   electrification,   21.   Helensvale  –  Robina  duplication,  22.  Ormeau  –  Coomera  duplication.   $100 3 4 5Brisbane 10 – 12 September 2012Conference On Railway Engineering $50 6 7 8 Construction  cost  per-­‐route  kilometre  (2012  dollars) 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Conference On Railway Engineering $0 Brisbane 10 – 12 September 2012 554 Figure 6 – Indicative per-route kilometre construction costs for Australian heavy rail projects 2000-2012
  • 11. Scott Martin Passenger Rail Infrastructure Projects in Australia 2000-2012University of Melbourne How much did we pay and what did we get? Figure 7 – Comparative per-route kilometre costs of urban passenger rail projects 2000-2012 by construction characteristicsBased on this sample of five projects, the average middle and outer suburbs, the most feasibleconstruction cost for new heavy rail lines in option to improve capacity at the inner-core ofAustralia is $93.9 million/km. The first three, being Australian rail networks is with tunnelled rights-of-the most expensive of these projects represent way. Tunnelling of new routes to increase heavyefforts to retrofit heavy rail transport into a mature rail capacity will be particularly important to theurban environment, either in an inner city area continued functioning of the rail networks in the(Sydney Airport line), middle suburbs (Epping- East Coast capitals of Brisbane, Sydney andChatswood) or an urban fringe growth area Melbourne, with major heavy rail projects using(Darra-Richlands). The latter two represent lines extensive tunnelling being proposed or planned inbuilt for the majority of their length in low-density all three cities (Cross-City Rail, various Sydneymetropolitan areas or in an existing transport metro proposals, Melbourne Metro 1corridor. respectively), currently earmarked to commenceRemoving the two most expensive projects with construction during the late 2010s-earlytunnelled rights-of-way (Epping-Chatswood line 2020s.Tunnelled alignments are also seen asand the Sydney Airport Railway), average important in providing access through urbanconstruction costs for new, non-underground areas to CBD stations in Brisbane, Canberra,railway lines more than halves to $45.4 million/km Melbourne and Melbourne as part of any futurebased on the three remaining new heavy rail East Coast high speed rail project. (28)construction projects. The small sample size of tunnelled rail projects in5. Tunnelled rights-of-way – a special Australia is of concern and some attempt hascase study been made in this study to address the development of indicative costs for tunnelledThe greatest escalation factor in construction rights-of-way in Australian conditions. Incosts for new heavy rail projects is the decision to determining an indicative per-route kilometrepursue tunnelled rights of way. The technical and construction cost for new lines in tunnelled rights-geological complexity and risk of tunnelling of-way, the two predominantly underground railprojects greatly increases this cost. The decision projects, being Epping-Chatswood ($208.2to choose a tunnelled right-of-way occurs for a million/km) and the Sydney Airport railway$125.1variety of reasons, most typically the high cost of million/km) in this study were used, in addition toland acquisition, disruption to a city’s inner core a third project, the section from Perth station toand CBD and the need to mitigate risk of The Narrows bridge which formed ‘Package F’ ofdisruption during construction to essential the Perth-Mandurah line.services and the built and natural environments. While the vast majority of the 72-kilometre longAs future opportunities for at-grade railway Perth-Mandurah railway line was constructedconstruction in Australian cities moves to the along freeway medians and sandy scrubland Conference On Railway Engineering Brisbane 10 – 12 September 2012 Conference On Railway Engineering 555 Brisbane 10 – 12 September 2012
  • 12. Scott Martin Passenger Rail Infrastructure Projects in Australia 2000-2012University of Melbourne How much did we pay and what did we get?south of Perth, the last few kilometres into Perth’s Index data for civil construction from Statistics NZCBD presented complex engineering challenges, with the ABS PPI data to produce comparable perincluding the Swan River crossing at the Narrows. route-kilometre cost figures in constant dollars isThe tunnelled approach to Perth station and being sought by the author.connection to the Joondalup line (‘Package F’) Issues identified in other studies on rail projectsprovides another example of the high costs of costs (particularly the NSW Legislative Counciltunnelling in an inner urban environment. The inquiry) of isolating the different elements offinal cost of Package F was $398.1 million (2007 project expenditure to better determine actualdollars), or approximately 36% of the project’s construction costs would also be a fruitful area fortotal construction costs.(21) Package F further research.(16) Further quantitative work isencompassed 2.2 route kilometres of needed to isolate the costs for different projectunderground railway construction costing a total components and develop better cost profiles forof $299.6 million/km (2012 dollars) or $136.2 constructing a route-kilometre of heavy and lightmillion per route-kilometre. Package F’s scope rail lines in Australia.consisted of: Additional quantitative work needs to be • 600m of open dive tunnels undertaken to examine the differences in outturn • 700m of cut and cover tunnels costs across the range of different procurement • 700m of twin bored tunnels options available in public transport infrastructure • two underground stations construction. On another level, work remains to • rail connection to the Joondalup line be done on further identifying costs for railway • railway track, overhead power, signalling stations and other key infrastructure to develop and communications unit costs for them also. There is also the • associated roadworks, drainage and possibility of including rail projects presently ruled landscaping(29) out scope in this study, such as gradeWhen this admittedly small sample of three separations, rail upgrades and rail freight works.projects is analysed, the average per-route Other questions arising from this study are morekilometre cost of constructing rail projects on an qualitative than quantitative in nature, dealing withunderground right-of-way in Australia was the making of key decisions defining projectdetermined to be $156.5 million/km. This amount scope and management of risk. Obtaining moreoccupies the upper range of construction costs for qualitative information on these projects willurban tunnelling ($100-$180 million/km) quoted involve interviews with past and current projectby AECOM in their recent Stage 1 High Speed managers involved with these and other projects,Rail study for the Commonwealth along with other key decision makers at theGovernment.(28) political level of transport policy as part of a moreThe ratio between the average per route- intrusive data gathering process.kilometre costs for both underground and ‘at- ACKNOWLEDGEMENTSgrade’ rail construction (approximately 3.5:1) isalso roughly consistent with the cost ratios for The author wishes to acknowledge the assistancenew-build metro system in Europe, the Americas of the two anonymous referees who reviewed thisand Asia as outlined in Flyvbjerg, Bruzelius and paper and their constructive comments on how itVan Wee, who claim that their study shows could be improved. He also acknowledges theunderground alignments cost between 4-6 times contributions of Associate Professor Philip Lairdmore than at-grade alignments (13). of the University of Wollongong, Dr Chris Hale of the University of Melbourne and Messrs RayCONCLUSION Kinnear, Robert Abboud and Justin DiGiulio of theThe information and figures provided above are Network Planning Division of Public Transportthe result of an extensive, medium-term research Victoria, David Rolland of GHD, Evan Granger ofproject into the cost of constructing public MGS Architects and Peter Kain of BITRE for theirtransport projects in Australia. The preliminary comments on earlier versions of this paper.results of this study have developed a likely rangeof per route-kilometre costs for a range of urbanpassenger rail infrastructure projects. However,there are many areas touched by this study thatrequire further work and refinement.Additional qualitative work has been undertakento integrate New Zealand rail infrastructureprojects since 2000 to provide a broader anddeeper dataset of projects for analysis. Specialistadvice on integrating the Capital Goods Price Conference On Railway Engineering Brisbane 10 – 12 September 2012 Conference On Railway Engineering 556 Brisbane 10 – 12 September 2012
  • 13. Scott Martin Passenger Rail Infrastructure Projects in Australia 2000-2012University of Melbourne How much did we pay and what did we get?REFERENCES in Urban Rail. European Journal of Transport and Infrastructure Research. 2008;8(1).1. Australian Government. Budget 2009-10:Infrastructure Overview - Nation Building for the 14. Dobes L. A century of Australian cost-Future. 2009 [2 August 2011]; Available from: benefit analysis. Working Papers in cost-benefithttp://www.budget.gov.au/2009- analysis. Canberra: Department of Finance and10/content/glossy/infrastructure/html/infrastructure Deregulation; 2008._overview_01.htm. 15. Infrastructure Australia. Infrastructure2. Toy M-A. Tracking the cost. Available Australia’s reform and investment framework:from: http://www.theage.com.au/national/tracking- guidelines for making submissions tothe-cost-20090612-c67m.html?page=-1. Infrastructure Australia’s priority list using the reform and investment framework. Canberra:3. Gatenby G. Why rail projects in NSW cost Infrastructure Australia; 2012.three times as much as they should. Availablefrom: http://www.crikey.com.au/2009/03/26/why- 16. Evans and Peck. Rail infrastructurerail-projects-in-nsw-cost-three-times-as-much-as- project costing in New South Wales. New Souththey-should/. Wales Parliament: Legislative Council General Purpose Standing Committee Number 3; 2011.4. General Purpose Standing CommitteeNumber 3. Rail infrastructure project costing in 17. The Minister for Transport and MajorNew South Wales. Sydney: Legislative Council., Projects. $500M Transport Package for Scoresby2012. Corridor. Melbourne: Victorian Government.5. Victorian Auditor-General’s Office. Result 18. Bowen D. The truth behind Southof special audits and other investigations. Morang. Transport Textbook 2009.Melbourne: 2006. 19. Leighton Holdings. South Morang Rail6. New South Wales Audit Office. The Extension. 2011 [28 July 2012]; Available from:Auditor-General’s Report to Parliament - http://www.leighton.com.au/our-Transport Infrastructure Development business/projects/south-morang-rail-extension.Corporation. Sydney: 2010. 20. Muhammad I; Low N & Glover L. Mega7. Victorian Auditor-General’s Office. Projects in transport and development:Management of Major Rail Projects. Melbourne: Background in Australian case studies - Perth2010. Urban Railway. Melbourne: GAMUT Centre, 2007.8. Hall P. Great Planning Disasters. London:Wiedenfield and Nicholson; 1980. 21. Waldock R; Martinovich P; Cartledge A & Hamilton R. New Metro Rail Project - Lessons9. Kharbanda OP & Pinto GK. What made Learned 2008 22 April 2011. Available from:Gertie gallop?: lessons from project failures. New http://www.ceiid.wa.gov.au/Docs/KNF_200805/MYork: Van Nostrand Reinhold; 1996. AY08-NewMetroRailProject.pdf.10. Flyvbjerg B; Bruzelius N & Rothengatter 22. Australian Bureau of Statistics. 6401.0 -W. Megaprojects and Risk: an anatomy of Consumer Price Indexes, Australia, March 2012.ambition. New York: Cambridge University Press; 2012 [5 June 2012]; Available from:2003. http://www.abs.gov.au/AUSSTATS/abs@.nsf/Loo kup/6401.0Main+Features1Mar%202012?OpenD11. Altshuler A & Luberoff D. Mega-projects: ocument.The changing politics of urban public investment.Washington DC: Brookings Institution Press; 23. Australian Bureau of Statistics. 6427.0 -2003. Producer Price Indexes, Australia, March 2012. 2012 [6 June 2012]; Available from:12. Flyvbjerg B. Survival of the unfittest: why http://www.abs.gov.au/ausstats/abs@.nsf/mf/642the worst infrastructure gets built - and what we 7.0.can do about it. Oxford Review of EconomicPolicy 2009;25(3). 24. Saulwick J. Rail costs blow out because of add-ons 2011. Available from:13. Flyvbjerg B; Bruzelius N & van Wee B. http://www.smh.com.au/nsw/rail-costs-blow-out-Comparison of Capital Costs per Route-Kilometre because-of-addons-20111121- 1nr1j.html#ixzz1eOgyCgIb. Conference On Railway Engineering Brisbane 10 – 12 September 2012 Conference On Railway Engineering 557 Brisbane 10 – 12 September 2012
  • 14. Scott Martin Passenger Rail Infrastructure Projects in Australia 2000-2012University of Melbourne How much did we pay and what did we get?25. Vuchic V. Urban Transit Systems andTechnology. Hoboken: John Wiley & Sons,; 2007.26. Victorian Government. Draft PassengerRail Infrastructure Noise Policy. Melbourne2012.27. Reynolds G & Millar B. Regional RailLink: Reduce rail racket, commands Guy 2012.Available from:http://www.brimbankweekly.com.au/news/local/news/general/regional-rail-link-reduce-rail-racket-commands-guy/2523989.aspx?storypage=0.28. AECOM. High Speed Rail Study - Phase1.; July 2011. Sydney: 2011.29. Australian Tunnelling Society. New MetroRail city project, Perth. n.d. [20 June 2012];Available from:http://www.ats.org.au/index.php?option=com_content&task=view&id=66&Itemid=4. Conference On Railway Engineering Brisbane 10 – 12 September 2012 Conference On Railway Engineering 558 Brisbane 10 – 12 September 2012