Light rail a grand vision, but can it stack up?

But does it add up? This is the tricky one, and the question to which the government must find a convincing answer. You can’t simply blow $600 million of ratepayers’ money (and quite possibly a whole lot more; that is an early figure with no convincing evidence to back it to date) without making the financial case – especially when the ink is still wet on the contract you have signed on the eve of an election.

This is the work that is happening apace as we speak – with the draft full-business case due by the end of this month. But judging by the “rapid business case”, a draft of which was leaked to The Canberra Times, it’s not an equation that will come together very easily.

The status of the draft rapid-business case is difficult to assess. Given it was leaked (and an investigation is under way), the government will not confirm the validity of the figures, and you’d have to say they are not easy to make head or tail of. The 90-page document works hard to reach minimum passenger thresholds, starting with a paltry 3340 trips on public transport a day from Gungahlin to the city at the moment, and working variable by variable to a projected 15,400 by 2031.

It uses “passenger intensity” as a measure of viability – with a minimum intensity (passenger kilometres per kilometre of line) of 4000 considered the threshold. As it stands, intensity figures go nowhere near that threshold only finally getting there once you take into account the impact of massive development in the corridor. Without all that development, only the city to Exhibition Park sector of the rail line appears to yap at the heels of the magic threshold number by 2031. As soon as you add in the extra 9km to Gungahlin, or the extension of the lake to the Parliamentary Triangle, the intensity figure drops off (since you’re increasing the distance of the line proportionately more than you’re increasing passenger numbers).

But the passenger numbers and intensity figures in the draft rapid-business case are difficult to understand: the commentary doesn’t always appear to match the tables of numbers; and the tables of numbers don’t always appear to add up. Which means one of three things: someone has fiddled the figures to produce a bogus document in some double-blind, motivationally obscure machiavellian plot; this reporter needs a lesson in using a calculator; or this is a working draft in which the numbers are still being massaged and checked. Even attempting a Nate Silver-style Bayesian assessment of the probability of these options, and keeping in mind a gentle government reminder that these things are put together by top accounting firms like Ernst & Young, which don’t make adding-up mistakes, I still can’t decide which option is more likely. But the slipperiness in the numbers is not comforting whichever way you look at it.

The leaking of this document, and of other damaging information – like the consideration of a levy to fund the project – will be worrying for the government. As will the fact that opposition and agitation is coming from people who are not, on the whole, political opponents. They’re people close to the project who don’t like the way the figures are adding up and the way the government’s budget is heading. They’re people from within Labor and the Greens, who don’t like the massive ongoing expense that light rail entails, and who don’t like one of the leading models to pay for it – a public-private partnership, which removes the project from the public books and from public scrutiny, while committing ratepayers to paying for the tram line with annual contributions from the budget for many years to come. The Labor government and Shane Rattenbury, the Green whose vote keeps the government in power, are upsetting their own constituency on this one.

For Sustainable Development Minister Simon Corbell, there will be no backing down, declaring his determination to stay the course on light rail last week.

Treasurer Andrew Barr is also aglow with the scale of the challenge and the enormity of investment he is charged with drumming up. He’s off to Singapore and Hong Kong in June to get lenders and investors on board for this and other projects, and shares with Corbell a grandness and fearlessness in his vision.

This pair lead the visionary, ambitious charge in the ACT government (in another extraordinarily big-thinking project, Corbell is also setting about a program of wind and solar and bio-energy projects to convert the city almost entirely to green energy), while Chief Minister Katy Gallagher is left sounding less than convincing when she assures us “we’re going to be sensible with this project, we’re not going to be silly”. She did demonstrate her willingness to back down on a plan when she called an 11^th hour halt to Corbell’s fast-track planning laws in May, but as Corbell declares that “work and effort and determination and a willingness to stay the course” are necessary to realise projects on this scale, you can’t help but think the horse might have bolted on light rail, so that even the Chief Minister will struggle to rein it in.

Assuming the draft rapid-business case figures are genuine, albeit in draft, one thing is clear: you don’t get the passenger numbers you need without a transformation of Northbourne Avenue with huge commercial development and a lot more people living there – including turning Exhibition Park into a major hub of apartments and big business. Even then, the magic passenger numbers are in 2031, which is 15 years after the first sod is turned, and 12 years after the tram line takes its first passenger.

The transformation envisaged by the Capital Metro agency is nothing short of extraordinary.

It wants the government to prioritise the corridor, and make decisions "that deliberately favour it over other precincts across the ACT". It wants a special development unit set up to oversee development in the corridor over 30-plus years.

It wants nine development hubs, two of them – Dickson and Exhibition Park – accelerated for a quick decision. Here they are:

The rapid business case also offers insights into the process of making a project stack up. It says the previous business case on this project, in January last year, will be “enhanced” with the release of the full business case in the coming months. The updated business case will add car parking levies to the mix (which persuade more people on to public transport) to “enhance the robustness of the analysis”. It will consider staging and extending the route to improve the numbers (although the government quickly scotched the idea of staging the line to Gungahlin, saying the city to Gungahlin line will be built in one hit).

It will update population and jobs forecasts in the corridor in light of an aggressive (termed “active” by Capital Metro) development program. “Land activation” was likely to result in a higher benefit-cost ratio than in the previous business case, the draft said.

The full business case will also improve “benefit calculations”, “which currently disfavour public transport (and particularly light rail) by failing to capture comfort and convenience benefits”. Public transport invariably takes longer than travelling by car, the report commented, and the previous business case treated the increased journey time as a negative. But if people are attracted out of their cars by better public transport “they must be better off”.

The full business case will update the cost of the project from the early figure of $614 million. And it will take into account new parking charges, the potential for park and ride sites, and the impact of the new Majura highway on the light-rail line.

Plus it will take into account “wider economic benefits”, which the draft document suggests could increase the benefit side of the equation by 10 per cent to 20 per cent.

So you can expect a business case that paints a far rosier picture than we have seen to date about the viability and benefits of a light-rail line. Which will no doubt fuel the cynicism of the doubters, but will at least give the government something to hold up as backing its claims about the transformational power and enormous benefits of the Gungahlin tram line. Assuming it is released.