Chief Minister Katy Gallagher has drawn a line in the sand on the Gungahlin tram project, saying cabinet will not support a cost substantially beyond $614 million, adjusted for today’s dollars.
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It is the strongest statement yet from Ms Gallagher on how far she will go to see light rail become a reality, and will be a challenge to the project team only now finalising the full business case.
Asked whether the team was working on a figure of $800 million to $900 million, Ms Gallagher said she hadn’t seen that estimate, but $614 million was the figure put on the project in 2011, and “cabinet’s tolerance is in that order, updated for 2014 dollars”.
“People are very keen to make sure we can build it within a reasonable cost estimate, no one wants to be pursuing something that is getting to costs that you’re indicating,” she said. “The tolerance is that we want it to be done as efficiently and cheaply as possible for the stage one outlined.”
Converting $614 million to today’s dollars, or even 2015 dollars for when the government wants to sign a contract on the project, still gives a figure well below $700 million.
Ms Gallagher’s limit came with the caveat, though, that it applied to “stage one as it’s understood to be from Gungahlin to Civic”. The Capital Metro agency is considering a new route for stage one, extending the line beyond the city to Russell and perhaps even the Parliamentary Triangle, as part of the full business case, due soon.
Ms Gallagher said the final cost would depend on the staging and the route.
Her public comments on the light rail project are consistently less bullish than those of other ministers, especially Sustainable Development Minister Simon Corbell, who has declared his determination to “stay the course” on a project that “needs to happen”.
''We’re going to be sensible with this project, we’re not going to be silly,'' she said in May.
One of the problems facing the project is Canberra’s spread-out centres. “Passenger intensity” is a key measure of the viability of light rail, and in its rapid business case the Capital Metro agency found only the short, three-kilometre route from the city to Exhibition Park reached the minimum passenger intensity numbers.
As soon as you add in the extra nine kilometres to Gungahlin the passenger intensity number falls off – because it is calculated as the number of kilometres travelled as a proportion of the line length. This is a problem that will follow light rail around Canberra, with long distances between town centres, although the shorter lengths to Russell (3km extra) and Parliament (another 3 km) improve the numbers.
Asked about the problem of passenger intensity, Ms Gallagher said it was one of the issues being “actively examined” by Capital Metro at the moment.
“We know that the peak works really well for the Gungahlin to Civic line. The concern from the agency has always been about the middle of the day … and that’s feeding into some of the considerations that the agency and the board’s having about where it ultimately ends as part of stage one,” she said. “Look, it is challenging, there’s no doubt about it.”
Cabinet’s final decision would take account not only of passenger numbers, but of parking issues, how much it would cost to catch the tram, the financing model and what undermined it, what subsidy was paid to the operator if it was built as a public-private partnership, and how it fitted in with the ACTION bus network. “All of these things feed into the final decision the government needs to take but it’s not easy, that’s for sure,” Ms Gallagher said.
The government will launch a round of consultation on light rail in the week starting June 23, including a mailout to residents of the inner north and Gungahlin.
