High Speed Rail Report

High Speed
Rail Study
Phase 2 Report
Key findings and

Executive summary
In accordance with the east coast high speed rail (HSR) The projections, estimation of capital and operational
study terms of reference, AECOM and its sub-consultants costs, assumptions, methodologies and other information
(Grimshaw, KPMG, SKM, ACIL Tasman, Booz & Co and in this Report have been developed by the Study Team
Hyder, hereafter referred to collectively as the Study Team) from its independent research effort, general knowledge
have prepared this report (Report). The Study Team has of the industry and consultations with various third
prepared this Report for the sole use of the Commonwealth parties (Information Providers) to produce the Report
Government: Department of Infrastructure and Transport and arrive at its conclusions. The Study Team has not
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Overview
A strategic study on the implementation of a High Speed Rail
(HSR) network (the study) on the east coast of Australia between
Brisbane, Sydney and Melbourne was announced by the Minister
for Infrastructure and Transport, the Hon Anthony Albanese MP,
in August 2010.
The study has been conducted in two phases. Phase 1, published

in August 2011, identified a short-list of corridors and station
options and estimated preliminary costs and demand for HSR
on the east coast of Australia. Phase 2 built on phase 1, but was
considerably broader and deeper in objectives and scope, and so
refined many of the phase 1 estimates, particularly the demand
and cost estimates. This phase 2 report presents detailed
findings on the 12 advisory objectives established for the study.
Drawings and maps have been prepared for the purpose of

depicting the recommended alignment for the HSR system and
to enable civil construction cost estimates to be made.
High Speed Rail Phase 2 / iii

Key
findings
High Speed Rail Phase 2 / v

Key Findings
Definition of the preferred HSR system

The HSR network would comprise • The HSR would operate frequent services
approximately 1,748 kilometres of dedicated between capital cities and regional centres.
route with four city centre stations, four
city-peripheral stations (one in Brisbane,
• In 2065, it is forecast that peak period demand
two in Sydney and one in Melbourne) and 12 for Sydney-Melbourne would be met by two
regional stations. non-stop inter-capital express services per hour
per direction and three one-stop inter-capital
• HSR would require a dedicated railway express services per hour per direction, calling
network to deliver the necessary level of system at either Sydney South or Melbourne North city
performance, in terms of journey time and peripheral stations.
reliability, to be competitive with other modes of
transport, particularly aviation. The dedicated HSR network would need to
be integrated into the hubs of existing urban
To meet expected demand, the HSR system public transport systems and road networks
would offer a combination of services, to maximise its connectivity with other
including direct express services and limited transport networks.
stop services.
• All city centre stations must be integrated with
• Typical express journey times would be two other public transport networks and the city-
hours and 37 minutes between Brisbane and peripheral stations must have good access to
Sydney, one hour and four minutes between major road networks.
Sydney and Canberra, and two hours and
44 minutes between Sydney and Melbourne. • Most of the stations on the network would
require some local enhancements to public
transport services, parking and interchange
arrangements to ensure good connectivity.
Cost of constructing the HSR system

The estimated cost of constructing the environmental costs. Tunnels make up
preferred HSR alignment in its entirety 144 kilometres (eight per cent) of the preferred
would be about $114 billion (in 2012 terms), alignment and are the most significant
comprising $64 billion between Brisbane construction cost element (29 per cent of
and Sydney and $50 billion between Sydney, total construction costs). Access to and from
Canberra and Melbourne.
Sydney would require the most tunnelling
• The preferred HSR alignment has been designed (67 kilometres) compared to Brisbane
first and foremost to meet market needs (in terms (five kilometres), Melbourne (eight kilometres)
of journey times and reliability), while also being and Canberra (four kilometres).
environmentally and economically sustainable. • The HSR system would adopt internationally
• Tunnelling has been adopted where no proven and available technology for train sets
dedicated surface route could be created without and associated systems (such as train control and
unacceptable dislocation and/or power supply systems), which would cost less
than if a customised design were required.
High Speed Rail Phase 2 / vii
Forecast HSR demand

Between 46 million and 111 million passengers 11 million passenger trips per year, and almost
are forecast to use HSR services for inter- four times as many as the Sydney-Canberra
city1 and regional trips2 , if the preferred HSR market, with about five million passenger trips
network were fully operational in 2065, with a per year.
central forecast of 83.6 million passengers
per year. • Inter-city and long regional travel (>250 km)
are expected to account for 49 per cent and
• By 2065, HSR could attract 40 per cent of inter- approximately 36 per cent of total passenger
city air travel on the east coast and 60 per cent trips and 62 per cent and 35 per cent of total
of regional air travel (primarily long regional). passenger kilometres travelled respectively. Short
On the three main sectors, Sydney-Melbourne, regional travel (<250 km) would represent 14 per
Sydney-Brisbane and Sydney-Canberra, HSR cent of total trips, and only a small per cent of
could attract more than 50 per cent of the air total passenger kilometres travelled. Business
travel market. travellers would account for about 35 per cent
• Actual passenger numbers would depend on of total trips and 42 per cent of total passenger
the rates of population and economic growth, kilometres on the entire HSR system.
the levels of congestion at airports, including • For the purpose of assessing demand, average
travelling to and from airports, and the fares for business and leisure travel were set
fares charged. to be comparable to, and competitive with,
• Sydney-Melbourne is expected to be the air fare rates on the main inter-capital routes
largest market for HSR, with about 19 million on the east coast. In practice, a range of fares
passenger trips per year forecast. This is would be offered, targeted to market segments
considerably more than the next largest market, and influenced by seat utilisation patterns and
Brisbane-Sydney, with nearly competitive pressures, as is currently the case
with the airlines.
Staging the development of HSR

The optimal staging for the HSR program
would involve building the Sydney-
Melbourne line first, starting with the
Sydney-Canberra sector. Subsequent stages
would be Canberra-Melbourne, Newcastle-
Sydney, Brisbane-Gold Coast and Gold
Coast-Newcastle.
• International experience of large infrastructure

developments shows that approximately
ten years could be required for planning,
consultation and environmental approvals,
and five years for preconstruction and
procurement activities.
1 The inter-city market is defined as journeys over 600 kilometres between the six main towns and cities in the corridor based on
population – Brisbane, Gold Coast, Newcastle, Sydney, Canberra and Melbourne.
2 The regional market has been broken into long regional trips greater than 250 kilometres, which includes Sydney-Canberra, and
short regional trips less than 250 kilometres, which includes Brisbane-Gold Coast and Newcastle-Sydney.
Key Findings
Table 1 Commencement and operational milestones for optimal staging
Main construction Operations

Stage
commences commence
Sydney-Melbourne line
Sydney-Canberra 2027 2035
Canberra-Melbourne 2032 2040
Brisbane-Sydney line
Newcastle-Sydney 2037 2045
Brisbane-Gold Coast 2043 2051
Gold Coast-Newcastle 2048 2058
• Some preliminary (‘enabling’) works to enable • Brisbane-Gold Coast would be completed

construction of the HSR at Sydney Central in 2051.
station (e.g. moving platforms and utilities)
• Gold Coast-Newcastle would be the last stage to
would be undertaken before 2027.
be built, with the complete Brisbane-Melbourne
• Construction of the whole HSR system would line operational by 2058.
take around 30 years.
It is possible the program could be
• The Sydney-Melbourne line has stronger forecast accelerated, with the Sydney-Melbourne
demand than the Brisbane-Sydney line, would line operational by 2035. In this case the
be less expensive to build and is predicted to have Sydney-Canberra stage could be operational
higher economic and financial returns. It should by 2030.
therefore be completed first. • Assuming funding, financing and all relevant
• The preferred staging of construction for the approvals were in place and preliminary design
Brisbane-Sydney line (Newcastle-Sydney, had been completed, the earliest that main
Brisbane-Gold Coast and then Gold Coast- construction work could reasonably start would
Newcastle) reflects both market demand and be 2022.
economic characteristics. • Bringing the program forward would reduce the
• For the purpose of evaluation, the study assumed economic benefits, primarily because the market
the initial stage between Sydney and Canberra volumes would be lower when operations began.
would operate from 2035, with the Sydney-
Melbourne line operational from 2040.
Table 2 Commencement and operational milestones for accelerated staging
Main construction Operations

Stage
commences commence
Sydney-Melbourne line
Sydney-Canberra 2022 (earliest possible start) 2030
Brisbane-Sydney line
Newcastle-Sydney 2032 2040
Brisbane-Gold Coast 2038 2046
Gold Coast-Newcastle 2043 2053
High Speed Rail Phase 2 / ix
Financial assessment
The HSR program and the majority of If HSR passenger projections were met
its individual stages are expected to at the fare levels proposed, the HSR
produce only a small positive financial system, once operational, could generate
return on investment. sufficient fare revenue and other revenue
to meet operating costs without ongoing
• The distribution of the economic benefits of public subsidy.
HSR between users of the system and the
operator(s) would depend on the prices charged. • Post construction, the HSR program as a whole,
and each of its sectors (with the exception of
• Based on charging competitive fares, the HSR Sydney-Canberra as a stand-alone sector) are
operations and ancillary services (such as car expected to generate sufficient operating income
parking and lease revenues from related property to cover their ongoing operational and asset
development) would not deliver sufficient renewal costs.
revenue to fund or recover the expected capital
costs of the HSR program. HSR fares adopted for the study have been
assumed to be comparable to air fares on the
Governments would be required to fund the inter-capital routes, and it would appear HSR
majority of the upfront capital costs. could sustain higher fares.
• The potential to attract private finance is limited. • Increasing the cost of fares would increase the
An expected return of at least 15 per cent would financial returns and reduce the funding gap,
be required at this stage of project development although doing so would reduce the number of
to be attractive to commercial providers of debt people using the system. Even so, the economic
and equity to major infrastructure projects. HSR benefits of the program would remain positive.
would fall well short of this. • Given that airfares in Australia are already
• The estimated real financial internal rate of highly competitive on major routes, it is not
return (FIRR) is 1.0 per cent for Sydney- expected that airlines would respond to HSR
Melbourne and 0.8 per cent for the competition by reducing fares on a sustained
whole network. basis. It has been assumed, in line with
international experience, that airlines would
• If potential commercial funding were maximised,
quickly reduce capacity, either by reducing
a funding gap in the order of $98 billion, or
frequencies or aircraft sizes, to locations within
86 per cent of the up-front capital cost of the HSR
the HSR corridor where there is significant
program, would remain.
passenger diversion to HSR. It is likely that any
reduction in capacity would be redeployed to
routes outside the HSR corridor.
• Nevertheless, to the extent that airlines are
able to innovate in ways that have not been
anticipated in this study, there would be an
impact on HSR patronage and capacity to
meet operating costs. The sensitivity tests
included one scenario in which airfares were
reduced by 50 per cent for two years.
Key Findings
Economic assessment
Investment in a future HSR program could calculated using a discount rate of four per cent
deliver positive net economic benefits. a year until the start of construction in 2027
(financial year 2028), and expressed in $2012.
• The Sydney-Melbourne line would deliver a
slightly higher economic internal rate of return • The economic results remain positive under a
(EIRR) on investment than the whole network range of changed assumptions. When calculated
would. The EIRR of Sydney-Melbourne is using a seven per cent discount rate, which
estimated at 7.8 per cent, compared to 7.6 per represents a higher hurdle rate for judging
cent for an investment in the staged HSR economic performance, the EBCR would be 1.1
program as a whole. and the ENPV would be $5 billion.
• The economic benefit cost ratio (EBCR) • Most of the economic benefits (90 per cent)
calculates the ratio of the present value of would accrue to the users of the HSR system.
benefits to the present value of costs. When About two-thirds of the user benefits are
calculated using a discount rate of four per cent, attributable to business users travelling long
the ECBR is 2.5 for Sydney-Melbourne and 2.3 distances, which reflects in part the relatively
for the whole network. higher value of time attributed to business
travellers compared to leisure travellers.
• The economic net present value (ENPV) of
costs and benefits associated with a program • Externalities would be relatively minor,
of investment in the preferred HSR system accounting for only about three per cent of
would be $70 billion for Sydney-Melbourne the benefits.
and $101 billion for the network as a whole,
Environmental and social assessment

The preferred HSR alignment has been
selected to avoid major environmental and
social impacts. The residual impacts on
natural environments and heritage can be
managed by appropriate mitigation and,
where necessary, offsets.
• Potential significant impacts in urban areas, such

as noise and large scale property acquisition, have
largely been avoided by the use of tunnelling on
the approaches to capital cities.
High Speed Rail Phase 2 / xi
Broader impacts of HSR

Aligning public policies, programs and centres to take advantage of the opportunities
capabilities across Australian Government, created by improved accessibility would require
state/territory government and local coordinated and complementary policies to
government agencies as part of a corridor be implemented.
regional development concept would be
necessary to realise the full benefits of HSR. • Emerging international evidence suggests that
wider economic benefits may be generated by
• The implementation of HSR would substantially regional accessibility improvements, but the
improve accessibility for the regional centres that quantitative estimates are neither sufficiently
it serves, providing the opportunity for – but not certain nor robust for inclusion in the main
the automatic realisation of – increased regional economic assessment.
economic development. The ability of these
Implementing a future HSR program

Both the public and private sectors would to the HSR development authority, and for the
play a significant role in the planning and delivery of train services to the public. Control
implementation of a future HSR system. of the movement of trains and maintenance
of infrastructure would also be the role of the
• Governments would need to have a central
private sector, under competitively tendered
role in the planning and development of the
concession arrangements.
HSR system, including securing the necessary
approvals. The primary public sector roles The key risks to the HSR program and
would be executed through a single HSR its successful performance are common
development authority. to all major greenfield infrastructure
projects; most notably, a lack of certainty
• As HSR would be predominantly publicly about future demand and revenues,
funded, the Australian, ACT and relevant and the potential for cost over-runs
state governments would be the owners of during construction.
the system and would assume the key role in • Allowance for risk and uncertainty has been
the specification and procurement of network included in the demand, economic and financial
infrastructure, the allocation of its capacity assessments, but the risks cannot be perfectly
for transport services and the specification of controlled and a program of this nature,
minimum service requirements. particularly extending over a long period of time,
• The private sector would be responsible for contains significant uncertainties.
building the HSR infrastructure under contract
Key Findings
Key public policy issues for a decision to proceed

Whether to proceed with planning for a • The external benefits of HSR - fewer road
future HSR program must necessarily be accidents, reduced road congestion and so on –
a policy decision, taking account of many which might contribute to its rationale, would be
factors that cannot be known with certainty, positive but are estimated to fall far short of the
and in the context of risks which cannot be public funding required.
perfectly controlled.
• By contrast, the opportunities for urban and
• This study estimates that HSR would regional development in the HSR corridor
have positive net economic benefits, using will be considered by many people in Australia
the Australian Transport Council’s cost- to have a high potential value in public
benefit methodology guidelines, which are policy terms, but those benefits do not follow
conventionally applied to major transport automatically or with certainty. There would
infrastructure projects. However, this appraisal need to be confidence that they would be actively
extends to 2085, a necessarily distant time exploited and realised to justify any great weight
horizon for program delivery and market in the decision on whether to proceed. That in
impact compared to most infrastructure turn would require policy commitment at all
feasibility studies. levels of government to pursuing an integrated
• The long-term future is inherently uncertain and corridor development strategy, synchronised
requires caution when making a judgement, but with the delivery of the HSR program.
it is most likely that demographic and economic
trends will support a steadily improving case for A related policy issue is the extent to which
the initial capital costs of an HSR program
HSR on the east coast rather than otherwise.
should be recovered from users.
In that case, policy-makers, whether or not
yet convinced of the merits of committing to • Taxpayers would need to make a substantial
HSR, may also legitimately weigh the possible contribution to the up-front costs of establishing
consequences of not taking actions to preserve an HSR system. The analysis suggests that
that option at some time in the future. charging higher fares than those assumed would
be feasible, and would improve financial returns,
• In this regard, inaction is not benign. In
but would reduce overall economic benefits as
the absence of a protected route, the spread
fewer people would use the system.
of cities and other developments in the
preferred corridor will gradually reduce the • While economic principles suggest that the
constructability and increase the potential capital community’s economic welfare is best pursued
costs of a future HSR program, rendering it by charging users only the marginal cost of
increasingly more difficult to implement, even infrastructure, establishing the balance between
while the fundamental trends may become recovery of public investment in infrastructure
increasingly favourable. and maximising its economic benefits is
ultimately a policy matter.
As in all publicly-funded infrastructure
projects, the balance between public benefit • If an HSR program were adopted, there would
and public cost should be considered. need to be an up-front understanding of what
principles would be applied to infrastructure
• The positive economic performance that is
pricing and cost recovery. Certainly, if passenger
estimated to be achievable from an investment in
numbers were to grow over time, governments
HSR, most of which would directly benefit the
would be in a position to begin to recover some
users of the system, contrasts with low financial
proportion of its capital investment.
returns, which would need to be supported by
public funding. Although this is true of many
transport infrastructure projects, including
national highways, it is an issue that must
be confronted.
High Speed Rail Phase 2 / 1
ES
Executive
summary
The expected growth in Without HSR, aviation would remain the primary
means of transport for long distance interstate
travel demand
(and some inter-regional) trips and road-based
Population and employment growth will continue travel by private vehicle would remain the primary
to challenge the capacity of existing transport mode for connections with, and between, regional
networks and public infrastructure along the centres. Together these would carry over 90 per
east coast of Australia1. Travel on the east coast cent of the trips on the east coast, subject to
of Australia is forecast to grow at around 1.8 per capacity being available.
cent per year over the next 20 years, increasing by
approximately 60 per cent by 2035. By 2065, travel This strategic study investigates how HSR can play
on the east coast will have more than doubled, an effective role in meeting future travel demand
from 152 million trips in 2009 to 355 million trips by providing an alternative mode of transport that
per year2 . would be attractive for people to use.
1 Australian Bureau of Statistics (ABS) mid-range population projections estimate that between 2011 and 2050, the population will
grow by 37 per cent in NSW, 49 per cent in Victoria and 80 per cent in Queensland. ABS, Population Projections Australia 2006 to
2101, catalogue no. 3222.0.
2 See Chapter 2 for detail of how these forecasts were determined.

Executive Summary
What is HSR? City centre stations would be terminal stations

within the CBDs of the capital cities. These
HSR is generally defined as a purpose-built,
locations are the single most important origin
fixed-track mode of transport, capable of moving
and destination in each city and provide ready
people at speeds of at least 250 kilometres per
access to, and integrate with, other metropolitan
hour, usually over long distances. Internationally,
transport services. CBD stations would be located
it typically offers services between major cities,
beneath the Brisbane Transit Centre in Brisbane
competing in the same travel market as aviation,
and on the eastern fringe of Civic in Canberra,
but also provides opportunities for intermediate
and would share existing stations at Central in
stops in regional areas and fast commuter rail
Sydney and Southern Cross in Melbourne. Each
services from outer metropolitan areas. HSR
of the three main capital cities (Sydney, Melbourne
stations are typically located within city centres,
and Brisbane) would also have a peripheral station
close to population and business centres.
(in Sydney’s case it would have two – one to the
Originating in Japan in the 1960s, HSR systems north and one to the south of the urban area), for
now operate in 14 countries3 . Total global passengers who would find it more convenient to
kilometres of track have increased from just over access HSR without having to travel into or out of
1,000 kilometres in 1980, to 15,000 kilometres the CBD.
in 20114 . China is currently constructing an
The minimum corridor width required to
additional 10,000 kilometres of HSR network 5.
accommodate two dedicated HSR tracks is
Most HSR systems operate on dedicated tracks 30 metres. This represents a refinement of
at a maximum speed of between 250 and 300 the phase 1 evaluation, which was based on a
kilometres per hour, with some systems now 200 metre width to ensure that any significant
operating in excess of 300 kilometres per issues were captured when comparing initial
hour6 . Some HSR services also use sections of corridor options. The 30 metre width does
conventional tracks at lower speeds, either on entry not include the additional width required for
to cities or to extend beyond a dedicated line7. All embankments or cuttings necessary to maintain
current HSR systems use conventional steel wheels the smooth vertical alignment required for HSR.
on rails and are powered by electric traction,
In many developed urban areas, surface alignments
although there are several variants in terms of
would not permit competitive access times to
rolling stock and infrastructure.
the city centres for HSR services without major
dislocation of the urban population and, in such
Definition of the preferred cases, the alignment would be placed in tunnel.
HSR system Sections of the regional alignment would also
HSR alignment and station locations be built in tunnel or on viaducts to avoid built-
up or environmentally sensitive areas. Although
The preferred HSR route on the east coast of
tunnels add to the capital cost, they would allow
Australia has been developed first and foremost to
the infrastructure to be delivered in a way that
meet market needs (in terms of journey times and
minimises any potential negative impacts on the
reliability), while also being environmentally and
community and environment during construction
economically sustainable. The route, illustrated in
and operation, and minimises delays and
Figure ES-1, broadly follows a coastal alignment
difficulties during construction.
between Brisbane and Sydney followed by an
inland alignment from Sydney to Melbourne, with
spur lines to the Gold Coast and Canberra.
3 Japan, Italy, France, Germany, Spain, Switzerland, Belgium, Netherlands, Luxembourg, China, United Kingdom, Korea, Taiwan
and Turkey.
4 Derived from The World Bank, High speed rail: the fast track to economic development?, 2010 (updated).
5 Zhang Jianping, Planning and Development of High Speed Rail Network in China, UIC 8th World Congress on High Speed
Rail, 2012.
6 For example, both France and Spain operate services with speeds of over 300 kilometres per hour in commercial service.
7 Particularly in France and Germany and, to a limited extent, in Japan and China.
Regional stations were selected on the basis of avoid disruption to built-up areas, these stations
potential patronage and have been proposed at would be located outside the current urban areas,
the Gold Coast, Casino, Grafton, Coffs Harbour, although they would typically be within ten to
Port Macquarie, Taree, Newcastle, Central Coast, 20 kilometres of the town centre and would
Southern Highlands, Wagga Wagga, Albury- have both car parking facilities and facilities to
Wodonga and Shepparton. To minimise cost and interchange with local public transport services.
Figure ES-1 Preferred HSR alignment and stations for the east coast of Australia
BRISBANE
Gold
QLD Coast
Casino
NSW Grafton
Coffs
Harbour
LINE 2
Port
Macquarie
Taree
Newcastle
Central Coast
SYDNEY
LINE 1 Southern Highlands
Wagga Wagga
CANBERRA
ACT
Albury-
Wodonga
Shepparton
VIC
MELBOURNE
KEY State border Station locations Not to scale

Executive Summary
Types of HSR services HSR service characteristics

The market assessment showed strong demand on Australian market research and international
the east coast, now and into the future, for high experience have indicated that HSR would need
speed travel between the capital cities and to and to offer competitive door-to-door journey times,
from regional centres. The preferred HSR system high standards of comfort and convenience and a
would therefore offer two types of services: competitive fare structure to successfully compete
• Inter-capital express services, mostly operating with other modes of transport, especially air.
non-stop between the capital city central HSR could deliver non-stop journey times under
stations but with some also stopping at the city three hours city centre to city centre, between
peripheral stations. Brisbane and Sydney and Sydney and Melbourne,
as shown in Figure ES-2 and Table ES-1 and
• Inter-capital regional services offering high
Table ES-2.
speed services between the capital cities and
major regional centres. Regional services would
also facilitate travel between regional stations,
although some inter-regional movements with
low demand may require passengers to change
from one service to another at an intermediate
station to complete their journey.
If built, the system would also have the capacity to
accommodate fast commuter rail services between
the capital cities and their nearer regional centres
(such as the Central Coast and Newcastle in
NSW), many of which currently have relatively
slow, if any, services. Commuter services would
probably be operated by third parties. They have
been allowed for in the physical planning but they
would not positively contribute to the financial
performance of HSR, nor would they be the source
of any significant incremental economic benefit
in the cost-benefit analysis of HSR. Commuter
demand was therefore excluded from the economic
and financial appraisals.
Figure ES-2 HSR travel times between major cities
BRISBANE
QLD Gold
Coast
NSW SYDNEY TO BRISBANE
2 hrs 37 mins
NEWCASTLE TO SYDNEY
Newcastle
39 mins
SYDNEY
SYDNEY TO MELBOURNE
SYDNEY TO CANBERRA
2 hrs 44 mins
64 mins
ACT
CANBERRA
VIC
MELBOURNE
KEY State border Roads Not to scale

HSR preferred alignment Station locations
Inter-capital express
Executive Summary
Table ES-1 Typical HSR travel times and distances between selected stations on Brisbane-Sydney line
Destination
Coffs Central
Newcastle Sydney
Harbour Coast
Regional Regional Regional Express Regional

1hr 11min* 2hr 28min 2hr 43min 2hr 37min 3hr 09min
Brisbane
(332km) (662km) (714km) (797km) (797km)
1hr 09min 1hr 30min 1hr 50min
Coffs Harbour -
(330km) (382km) (465km)
Origin
0hr 14min 0hr 39min

Newcastle -
(52km) (134km)
0hr 27min
Central Coast -
(83km)
*With one stop. One hour 23 minutes with three stops.
Note: Distances may not add due to rounding.
Table ES-2 Typical HSR travel times and distances between selected stations on Sydney-Melbourne line
Destination
Southern Albury-
Canberra Melbourne
Highlands Wodonga
Regional Express Regional Regional Express Regional
0hr 29min 1hr 04min 1h 11min 1hr 55min 2hr 44min 3hr 03min
Sydney
(98km) (280km) (280km) (540km) (824km) (824km)
Southern 0hr 39min 1h 31min* 2hr 29min
- -
Highlands (183km) (442km) (727km)
Origin
1hr 16min 2hr 10min 2hr 28min

Canberra
(366km) (651km) (651km)
Albury- 1hr 09min
-
Wodonga (284km)
*Plus interchange time at Wagga Wagga.
Note: Distances may not add due to rounding.
Services would typically operate 18 hours per day Ultimately, train frequencies would be influenced
for 365 days per year. Service frequencies would by future market needs and the preferred train
typically be at least hourly, increasing as demand operating strategy (operating speeds and stopping
grew to reach peak period service frequencies in patterns) but the indicative frequencies established
2065, as shown in Table ES-3. for this study are compatible with the forecast
demand and efficient train utilisation.
Table ES-3 Peak service frequencies in 2065 (per hour in each direction)
Route Inter-capital express Inter-capital regional
Brisbane-Sydney 3-4 2
Gold Coast-Sydney - 4
Sydney-Canberra 1 2
Sydney-Melbourne 5 2
Fares would be structured to be competitive with Forecast HSR demand

alternative modes of transport. For the purposes
An HSR system would significantly increase
of the main demand assessment, average fares
long and medium-distance transport capacity on
for business and leisure travel were designed to
the east coast of Australia and would provide an
be comparable to, and competitive with, air fares
alternative mode of transport that, according to
on the main inter-capital routes on the east coast,
market research and supported by international
taking into account the types of fares typically
evidence, would be attractive to many travellers. If
purchased by the different types of passenger8 .
the complete HSR network was fully operational,
In practice, a range of fares would be offered,
the study predicts that, under the reference case
targeted to market segments and influenced by seat
assumptions9, it could attract approximately
utilisation patterns and competitive pressures, as is
83.6 million passenger trips by 2065, as shown
currently the case with the airlines.
in Table ES-4. Figure ES-3 illustrates the main
inter-city passenger trip flows.
8 For example, the average HSR single fares assumed in the reference case between Sydney and Melbourne were $141 for the average
business passenger and $86 for the average leisure passenger but sensitivity tests also considered fares up to 30 per cent and 50 per
cent greater. The corresponding average fares paid by air passengers were estimated as $137 and $69 respectively.
9 The reference case is part of the central case established for evaluation.
Executive Summary
Figure ES-3 HSR travel demand in 2065 between major cities – passenger trips
BRISBANE
QLD Gold
Coast
NSW SYDNEY TO BRISBANE
10.86 million
SYDNEY TO CENTRAL COAST/

NEWCASTLE
Newcastle
4.75 million
SYDNEY
SYDNEY TO MELBOURNE
SYDNEY TO CANBERRA
18.76 million
5.19 million
ACT
CANBERRA
VIC
MELBOURNE

Table ES-4 HSR travel market for 2065
Total travel market (inter-city and regional)
Trips without HSR (million) 355
Trips with HSR (million)* 389
HSR travel market (inter-city and regional)
HSR trips (million) 83.6
HSR passenger kilometres (billion) 53.1
*Includes new demand induced by the construction of HSR. Assumes the full system is operational.
A set of alternative assumptions produced forecasts

for HSR in 2065, assuming a full system were
to be operational, of between 46 million and
111 million passenger trips. The alternative
assumptions included variations in population and
economic growth, increases in airport capacity at
Sydney (and hence improvements in the aviation
level of service) and variations in HSR fares relative
to the projected air fares and car running costs.
Forecast HSR travel demand by journey type in

the reference case is presented in Figure ES-4 (for
passenger trips) and Figure ES-5 (for passenger
kilometres). Travel for business accounts for 35 per
cent of forecast HSR patronage, with inter-city
business travel being the most important10 . Inter-
city travel would make up about 49 per cent of
total passenger trips and 62 per cent of passenger
kilometres. Regional travel would represent about
50 per cent of total passenger trips and 38 per cent
of passenger kilometres.
10 Inter-city trips are defined as journeys over 600 kilometres between the six main towns and cities in the corridor based on population
(Brisbane, Gold Coast, Newcastle, Sydney, Canberra and Melbourne). Regional trips have been broken into long regional trips of
greater than 250 kilometres, which includes Sydney-Canberra, and short regional trips of less than 250 kilometres, which includes
Brisbane-Gold Coast and Newcastle-Sydney.
Executive Summary
Figure ES-4 HSR travel demand in 2065 by journey type (assuming the full HSR network was operational) – passenger trips
1%
13%
24%
9%
25%
27%
Inter-city non-business Inter-city business Long regional non-business
Long regional business Short regional non-business Short regional business
Note: Total does not add to 100% due to rounding.
Figure ES-5 HSR travel demand in 2065 by journey type (assuming the full HSR network was operational) – passenger kilometres
Figure ES-4
Passenger Trips
2%
<1%
9%
29%
26%
33%
Inter-city non-business Inter-city business Long regional non-business
Long regional business Short regional non-business Short regional business

Table ES-5 shows the forecast travel matrix areas, other than that to and from Wollongong. A
for the reference case in 2065 when the full small proportion of the omitted longer trips could
network would be operational. Intermediate use HSR, and to this extent, the HSR forecasts
stations between capital centres are aggregated are conservative. Trips to and from places external
for presentation purposes. Excluding commuter to the study area were also excluded. The excluded
markets, Sydney-Melbourne is the largest market trips referred to above are shown by an X in
segment for HSR with about 19 million passenger the table.
trips, considerably more than the next largest,
Brisbane-Sydney, with nearly 11 million passenger About half of the HSR demand would be
trips and almost four times Sydney-Canberra, with diverted from forecast air travel as shown in
about five million passenger trips. Figure ES-6. About 19 per cent of total
trips would be new demand generated by the
Some travel was omitted from the matrix because introduction of an HSR service (shown as
it covered only a short distance, or would be best induced demand).
served by car, implying that few such journeys
would be likely to transfer to HSR. This included
all travel wholly within each of the intermediate
Table ES-5 HSR travel market matrix for 2065 (‘000 trips in both directions per year)
Intermediate
Intermediate
Intermediate
Intermediate
Gold Coast
Melbourne
Newcastle
Canberra
Brisbane
Sectors
Sydney
Brisbane X 2,210 1,650 750 600 10,860 1,240 1,130 730 2,490 Total
Gold Coast X 900 520 580 3,830 610 190 440 340
Intermediate X 810 X 5,500 190 330 X 850
Newcastle X 170 1,760 220 250 150 330
Intermediate X 2,990 20 300 X 730
Sydney X 2,690 5,190 2,290 18,760
Intermediate 80 480 100 2,320
Canberra X 640 2,720
Intermediate X 4,660
Melbourne X
Total 83,600*
*Cells may not exactly sum to the total due to rounding.
Executive Summary
Figure ES-6 Source of HSR travel demand in 2065 by journey type (passenger trips)
All
19%
2%
55%
23%
1%
Business
24%
<1%
9% 66%
<1%
Non-business
17%
2%
49%
30%
2%
Air Coach Car Rail Induced
Figure ES-6
How the total HSR and air market would be Melbourne and Sydney-Brisbane), observed HSR
shared between the two modes of transport is a market shares range from around 55 per cent up to
key issue in the demand assessment. Considerable around 70 per cent.
evidence has been assembled in the international
literature on the impacts of HSR on inter-capital This study’s reference case inter-capital forecasts
air travel in Europe and East Asia. In Figure for 2035 have been included in the figure for
ES-7, the international markets are represented by comparison and show a high degree of consistency
the blue dots, which show the proportion of the with the international experience. Sydney-
combined air and HSR travel market captured by Canberra is lower than the expected range for
HSR on selected routes. For HSR journey times journeys less than two hours, but this is largely
of less than two hours, this is typically over 80 per explained by the relatively high proportion of
cent, whereas if HSR journey times exceed four passengers transferring to connecting flights,
and a half hours, the HSR share falls below 30 per which are assumed in the forecasts not to divert
cent. For trips of up to three hours (as for Sydney- to HSR.
Figure ES-7 HSR share of combined HSR/air travel market, comparing the final model forecast for 2035 with international evidence
100%
90%
80%
Sydney–Canberra
70%
Sydney–Melbourne
HSR mode share (%)
Canberra–Melbourne
60%
Brisbane–Sydney
50%
40%
30%
Brisbane–Melbourne
20%
10%
0%
0 50 100 150 200 250 300 350 400 450
HSR in-vehicle time (mins)
International evidence Model forecasts for 2035
Figure ES-7
Executive Summary
Cost of constructing the In addition to the physical components of

capital cost (land, earthworks, structures, track,
HSR network
equipment and facilities), the cost estimates
Internationally, HSR systems are very reliable also include design, program and construction
when they operate as closed systems dedicated management, and asset renewal when it would
to high speed services with purpose-built fall due. Cost components were developed
infrastructure and train sets. Although mixing from Australian unit costs and benchmarked
HSR services with conventional rail services against international HSR systems to ensure the
on shared infrastructure may reduce capital robustness of the estimates. Rolling stock (train
costs, particularly for access into the urban sets) is equivalent to a further nine per cent of the
areas, operational performance can diminish total capital cost, but this would only be expended
dramatically. Such systems are generally not as demand built up over the appraisal period and
capable of delivering the journey times that would service frequencies increased.
be necessary for an HSR system on the east coast
of Australia to achieve the required levels of Tunnelling would be used where the terrain
reliability and competitiveness. requires it, but would also be adopted where no
dedicated surface route could be created without
To achieve the target journey time of under unacceptable community dislocation and/or
three hours for Sydney-Melbourne and environmental costs. This is particularly the case
Brisbane- Sydney, an average journey speed of where the route passes through the middle and
approximately 300 kilometres per hour would need inner suburbs of the capitals, where no suitable
to be achieved. This would require a system capable easements are available. It has also been used in
of a maximum operating speed of 350 kilometres some locations which are highly environmentally
per hour, to allow for some slower sections of sensitive. In total, the preferred alignment
track due to terrain or other operating conditions. includes 144 kilometres of tunnel along the route,
Such average speeds would not be possible on the representing around 29 per cent of the total cost of
existing conventional rail infrastructure on the east construction. Sixty per cent of the tunnel length
coast of Australia, even if it was only used for short is in urban areas, with 67 kilometres in Sydney,
sections for city access and egress, so dedicated eight kilometres in Melbourne, five kilometres in
HSR infrastructure would be required. If the Brisbane and four kilometres in Canberra.
HSR network were used to provide fast commuter
services, it is likely they would not operate at The cost estimates reflect the use of proven HSR
such high speeds; a maximum operating speed of system technology (such as train control and power
200- 250 kilometres per hour would effectively supply systems) and train sets already in service,
serve the commuter market, given the relatively and readily available, and take account of a range
shorter distances and more intensive stopping of manufacturers’ delivered costs for existing
patterns of fast commuter services. HSR systems.
The capital costs have been risk-adjusted to reflect In total, the risk adjustment process increased
uncertainty, principally around the scope of the capital costs by about 10.8 per cent11.
major construction, engineering and operational
elements of a future HSR program. Expected The estimated capital cost for the full HSR system,
construction costs are expressed throughout this excluding the cost of train sets12 , is $114.0 billion
chapter in terms of risk-adjusted value, in $2012. in $2012, as shown in Table ES-6.
Table ES-6 Risk-adjusted HSR program costs ($2012, $billion)
Gold
Canberra Brisbane- Total
Sydney- Newcastle- Coast
Junction- Gold HSR
Canberra Sydney Junction-
Melbourne Coast system
Newcastle
Project
2.2 2.5 1.7 1.0 3.1 10.4
development
Construction 20.8 24.4 17.2 10.0 31.2 103.6
Total capital costs 23.0 26.9 18.9 11.0 34.3 114.0
Notes: Total does not add up exactly due to rounding.
The references to ‘Canberra Junction’ and ‘Gold Coast Junction’ describe the points at which the Gold Coast and Canberra
spurs leave the main alignment.
Figure ES-8 presents the results of the @RISK

analysis for total construction costs including
development costs for the future HSR program13 .
The analysis illustrates that:

• In 50 per cent (P50) of simulations, total
construction costs are expected to be less than
$113.9 billion ($2012).
• In 90 per cent (P90) of simulations, total
$127.0 billion ($2012).
• In ten per cent (P10) of simulations, total
$102.0 billion ($2012).
11 This is the expected risk-adjusted cost and is within one per cent of the median risk-adjusted cost, commonly known as the P50; the
difference between them is due to the risk adjustment applied to the individual cost components being non-symmetrical. Taking into
account the allowances included in developing the non-risk-adjusted costs, the risk allowance is comparable with what would be
allowed as a physical contingency for a project at a similar early stage of development.
12 Train sets are assumed to be leased in the financial assessment.
13 The frequency represents the likelihood of the total construction costs being within a $1 billion band centred on the corresponding
point on the curve. Thus there is a two per cent chance that the cost will lie between $100.5 billion and $101.5 billion and a four per
cent chance they lie between $107 billion and $108 billion.
Executive Summary
Figure ES-8 Total construction costs (including development costs) ($2012, $billion)
P10 P50 P90

102.0 113.9 127.0
0.06
0.05
0.04
Frequency
0.03
0.02
0.01
–
90 95 100 105 110 115 120 125 130 135 140
($2012, $billion)
Figure ES-9 presents estimated average

construction costs per route kilometre on a
Figure
segment ES-8
by segment basis. The extensive tunnelling
required for access into and out of Sydney increases
the cost per route kilometre for these segments by
two to three times compared to the costs for the
remainder of the network.
Parts of the route between Brisbane and Newcastle

also have high costs, reflecting the volume of
earthworks required in these areas.
Figure ES-9 HSR program average construction costs per route-kilometre in staging order ($2012, $million)
185
185
180
160
140 137
($2012 $million per km)
120
100 87
80
56 54 55 57 57
50
60 43
41 40 38
32
40 25
20
–
Central Coast to Sydney
Albury-Wodonga to Shepparton
Shepparton to Melbourne
Grafton to Coffs Harbour

Sydney to Southern Highlands
Southern Highlands to Canberra
Canberra Junction to Wagga Wagga
Wagga Wagga to Albury-Wodonga
Newcastle to Central Coast
Brisbane to Gold Coast
Gold Coast Junction to Casino
Casino to Grafton
Coffs Harbour to Port Macquarie
Port Macquarie to Taree
Taree to Newcastle
Staging the development of HSR Melbourne, and that establishing this link would
Figure ES-9 be the first priority for any HSR network on the
The size and complexity of an HSR system on the
east coast of Australia. At a construction cost of
east coast of Australia would be such that it could
about $50 billion in $2012 (risk-adjusted), the
not be delivered as a single project; instead, it
Sydney-Melbourne line would represent a major
would be delivered in stages linking the principal
undertaking and would itself need to be staged.
centres. Even these stages would be large projects
Canberra, which would be connected by a spur
by Australian standards. Staging would not only
line to the Sydney-Melbourne line, is the next
allow the upfront funding to be reduced and
most important city on this line from a demand
smooth future funding requirements, but would
viewpoint and would be an appropriate terminal
also better match system development to market
for the first stage to ensure revenue would be
growth and would allow revenue to be generated
generated as early as possible.
on sections of the system as they are completed.
The study has concluded that the benefits of

HSR are strongly related to the volume of travel
between the capital cities, in particular Sydney-
Executive Summary
Figure ES-10 Staging of the preferred HSR system – commencement of operations
LINE 2
2051
Gold Coast to Brisbane
BRISBANE
$11.0 BN
QLD Gold
Coast
NSW LINE 2
2058
Newcastle to Gold Coast
$34.3 BN
LINE 2
2045
Sydney to Newcastle
$18.9 BN Newcastle
LINE 1
2040 SYDNEY
Canberra to Melbourne
$26.9 BN LINE 1
2035
ACT Sydney to Canberra
CANBERRA
$23.0 BN
VIC
MELBOURNE

The staging of the preferred HSR system assumed

in the financial and economic evaluations, as
shown in Figure ES-10 and Table ES-7, takes
into account the extent to which individual
sections capture the forecast market, the cost
of construction and the economic and financial
returns of each stage.
Table ES-7 Staging of the preferred HSR system
Built Risk-adjusted Cost per Potential

track cost ($b) km ($m) operational
(km)* date
Line 1 Sydney-Melbourne 894 49.9 56 2040
- Stage 1: Sydney-Canberra 283 23.0 81 2035

- Stage 2: Canberra-Melbourne** 611 26.9 44 2040
Line 2 Brisbane-Sydney 854 64.1 75 2058
- Stage 3: Newcastle-Sydney 134 18.9 141 2045

- Stage 4: Brisbane-Gold Coast 115 11.0 96 2051
- Stage 5: Gold Coast-Newcastle** 606 34.3 56 2058
Total 1,748 114.0 65 2058
* Note that the built track includes spur junctions and other connections. These distances are different from the travel
kilometres in Table ES-1 and Table ES-2.
** Construction of Stages 2 and 5 would start at the Canberra Junction and Gold Coast Junction respectively, the points at
which the Gold Coast and Canberra spurs leave the main alignment.
Note: Totals do not add up exactly due to rounding.
Executive Summary
Figure ES-11 Staging of the preferred HSR system – cumulative capital costs ($2012, $billion)
A B C D E
120
100
80
($2012, $billion)
60
40
20
–
2015 2020 2025 2030 2035 2040 2045 2050 2055 2060
Total capital costs
A Sydney to C Newcastle to E Network operational

Canberra operational Melbourne operational
B Sydney to D Brisbane to Gold

Melbourne operational Coast & Newcastle to
Melbourne operational
Figure ES-11 shows the profile of cumulative Following enabling legislation, a period of more
capital costs over the HSR program. than two years would be required for concept
design, environmental impact assessment and
Line 1 between Sydney and Melbourne would public consultation, before a decision to proceed
be a major undertaking in terms of planning, to implementation would be made in 2021.
construction, testing and commissioning and, There would then be a procurement period of
based on current industry experience, would two to three years to let contracts and to acquire
need to be done in discrete stages. For evaluation land. Enabling works would then be undertaken
purposes, a start date of 2035 was assumed. (critically at Sydney’s Central station). These works
Working back from that date, enabling legislation are anticipated to take four years to divert the
would need to be passed by 2019. Prior to 2019, the current services within the existing operational
final preferred route and station locations would station before the main implementation contracts
be determined, further technical investigations could commence in 2027 (i.e. financial year 2028).
completed and all necessary government approvals
obtained. Steps would also be taken to preserve the
preferred HSR corridor prior to any commitment
to proceed.
The implementation program of a further Financial assessment

84 months reflects the actual program to deliver
The future HSR program and the majority of its
the Taiwan HSR and includes a period of
individual stages are expected to produce only a
34 months for testing and commissioning.
small positive financial return on investment.
Based on this evaluation program, the first
public HSR services would start in April 2035. The estimated real financial internal rate of return
Subsequent stages would be delivered at five to (FIRR) for the program as a whole is 0.8 per cent.
seven year intervals, with planning of each stage For Sydney to Melbourne, the estimated (post-tax)
overlapping with construction of the previous real FIRR is 1.0 per cent. These fall well short
stage. Under these assumptions, the entire network of the financial returns that would be required
could be in operation by 2058. by commercial providers of debt and equity to
major infrastructure providers14 . At a four per
The staging assumed in Table ES-7 could,
cent discount rate, the financial net present value
however, be accelerated by about five years,
(FNPV) of financial costs and revenues associated
although it would likely incur additional cost
with an investment in HSR would be negative
and risk. The time taken to pass the relevant
$47 billion15. Governments would be required
legislation and to make a formal decision to
to meet the majority of construction and
proceed could be accelerated. The enabling works
establishment costs for the HSR network.
could also be started earlier, so as not to delay
the commencement of implementation works at Post construction, the future HSR program
Sydney Central station; this would require funding and its stages (with the exception of Sydney-
in advance of the formal decision to proceed, but Canberra as a stand-alone stage16) are expected
could save 18 months. There is also potential for to generate sufficient operating income to cover
the construction period to be shortened by as much ongoing operational and asset renewal costs. This
as 24 months, but this would require extended forecast holds true for all but one of the scenarios
working hours and could be limited by a lack of and sensitivities tested. As a consequence, HSR
qualified resources. An accelerated program could operations would be financially self-sustaining if
therefore start with the Sydney enabling works traffic and cost assumptions were met.
in 2019, with Sydney-Canberra operational by
2030 and Sydney-Melbourne operational by 2035. Table ES-8 summarises the results of the FNPV
Under this accelerated program, the full network and FIRR analysis on a pre and post-tax basis
could be operational by 2053. for the future HSR program and its stages. These
are presented on a cumulative present value basis,
with the summary costs and revenue obtained by
discounting cashflows by the evaluation discount
rate of four per cent to financial year 2028. Sydney-
Canberra delivers a negative financial return.
Neither the program as a whole, nor any of the
stages, returns a positive FNPV at a four per cent
discount rate.
14 These would typically be around 15 per cent or more.

15 Discounted to 2028 and in $2012.
16 That is, if Sydney-Canberra was operated independently of any other HSR line.
Executive Summary
Assumptions about the timing of the various stages operating costs and the costs of renewing assets
are also shown in Table ES-8. when they wear out. Therefore, provided traffic
forecasts and costs estimates are met, no ongoing
Table ES-9 sets out the summary of risk-adjusted government subsidy would be required to sustain
capital costs, revenues, operating costs and asset HSR operations once the system is constructed
renewals over the evaluation period to 2085. and operational. As traffic builds up, the ability of
The HSR program as a whole delivers a positive transport operations to return some of the capital
net operating surplus. That is, for the preferred costs would increase.
HSR system, revenues would cover ongoing
Table ES-8 Summary of FNPV and FIRR results (present value discounted to 2028, $2012, $billion, 4% discount rate)
Future HSR program
Sydney- Sydney- Newcastle- Brisbane- Network

Canberra Melbourne Melbourne Gold Coast & complete 17
Newcastle-
Melbourne
Year operations
2035 2040 2045 2051 2058
commence
Total costs 20.9 41.1 52.8 58.3 72.0

Net operating result* -0.4 10.5 11.6 11.3 15.5
FIRR (real) n/a 1.0% 0.9% 0.4% 0.8%
FIRR (real, pre-tax) n/a 1.4% 0.9% 0.4% 0.8%
FNPV -21.5 -26.5 -35.2 -41.3 -47.0
FNPV (pre-tax) -21.5 -25.0 -35.2 -41.3 -47.0
Notes: * Revenues less operating costs including payments for rolling stock leases and asset renewal. Due to accumulated
tax losses (primarily from depreciation on the infrastructure asset base), only the Sydney-Melbourne HSR stage pays
corporation tax during the evaluation period. Where tax is not payable, the FIRR and FNPV do not differ on a pre and
post-tax basis.
‘n/a’ denotes an FIRR of less than zero per cent that cannot be mathematically calculated.
17 Network complete represents the entire HSR network between Brisbane and Melbourne.
Table ES-9 Summary risk-adjusted capital costs, revenues, operating costs and asset renewals over the total evaluation period to 2085
(present value discounted to 2028, $2012, $billion, 4% discount rate)

Canberra Melbourne Melbourne Gold complete
Coast &
Newcastle-
Melbourne
Year operations
2035 2040 2045 2051 2058
commence
Total development costs 2.3 4.7 6.1 6.8 8.8

Total construction costs 18.6 36.4 46.7 51.5 63.2
Total capital costs 20.9 41.1 52.8 58.3 72.0
Total revenue 5.0 39.4 43.0 43.5 62.7
Total operating costs 4.4 25.1 27.3 27.9 42.2
Total payments for rolling
0.1 1.3 1.3 1.3 1.8
stock finance leases
Total asset renewals 1.0 2.5 2.8 3.0 3.2
Total operating result -0.4 10.5 11.6 11.3 15.5
Terminal value -0.2 4.0 5.6 5.4 9.1
FNPV -21.5 -26.5 -35.2 -41.3 -47.0
Note: Total may not be exact due to timing and rounding differences.
Risk-adjusted project cashflows for each year of the

evaluation period, reflecting the proposed staging
of the HSR program, are shown in Figure ES-12.
Total annual project capital expenditure ranges
from $2 billion to $8 billion in each of the eight
years prior to the opening of the Sydney-Canberra
section in 2035, and then continues at between
$2 billion and $7 billion per year for the next
23 years until the full network is operational
in 2058.
Executive Summary
Figure ES-12 HSR program risk-adjusted project cashflows per year ($2012, $billion)
A B C D E
15
10
5
($2012, $billion)
-5
-10
-15
2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070 2075 2080
Revenue received Operating costs paid GST (paid)/received
Payments for rolling Tax paid Capital expenditure

stock finance leases


With the exception of the costs associated with (passenger numbers at that point increase by a
accessing Sydney (as shown in Figure ES-9), factor of five). Operating cashflows and returns
capital costs increase broadly in proportion to then also improve, reflecting the growth in
the length of the HSR line being constructed. patronage without a correspondingly material
As indicated in Figure ES-12, extensions to the increase in capital costs. The same benefit would
network lead to step changes in patronage and be observed when the Gold Coast is connected to
therefore are critical to the operating cashflows. Newcastle and the full HSR system is in operation,
For instance, completing Sydney-Canberra or resulting in a considerable uplift in demand
Canberra-Melbourne as stand-alone segments between Brisbane, Sydney and Melbourne. The
would produce only moderate passenger demand financial performance (annual cashflow) of each
and financial returns. When the whole line stage is summarised in Figure ES-13.
connecting Sydney-Melbourne is completed,
significant additional demand would be generated
Figure ES-13 HSR program risk-adjusted cashflows per year by stage ($2012, $billion)
A B C D E
4
–
($2012 $billion)
-2
-4
-6
-8
2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070 2075 2080
Full network Sydney to Canberra Brisbane to Gold Coast and

Newcastle to Melbourne Sydney to Melbourne Newcastle to Melbourne


Due to the future HSR program’s expected low Based on the detailed analysis of program
financial
Figurereturns,
2 significant private sector funding cashflows, the commercial financing gap for the
(debt/equity) would not be available or appropriate entire HSR program would be about $98 billion (or
to finance the program. As such, a considerable 86 per cent of the total risk-adjusted capital cost) as
commercial financing gap would exist between shown in Table ES-10. For the Sydney-Melbourne
the total capital cost of the HSR program and the line, the commercial financing gap would be about
amount of financing that could be raised from the $45 billion, or 92 per cent of the total capital cost.
financial markets on commercial terms, based on
the future HSR program operating cashflows.
Executive Summary
Table ES-10 Summary of the commercial financing gap – reference case ($2012, $billion)
HSR program Sydney-Melbourne
Total capital cost 114.0 49.9

Debt carrying capacity 16.3 4.1
Commercial coverage 14% 8%
Commercial financing gap 97.7 45.7
Value capture has the potential to partially close have on closing the commercial financing gap is
the commercial financing gap through measures therefore difficult to determine at this stage.
such as government land sales and capturing the
incremental impact that the HSR program would Ultimately governments would be required to
have on stamp duty, developments and rates in fund the majority of the future HSR program’s
the HSR affected zones. However, this would be upfront capital costs. A summary of the cashflow
a small contribution at best. It is highly unlikely implications for government for the whole network
that all of these measures would be implemented is presented in Figure ES-14.
and the ultimate benefit that value capture might
Figure ES-14 HSR program government cashflows ($2012, $billion)
A B C D E
—
($2012, $billion)
-2
-4
-6
-8
2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070 2075 2080


Economic assessment The distribution of the net benefits between the

users and the operator(s) of the HSR system is
The study adopted a cost-benefit methodology
determined by the prices charged. Ultimately,
that is conventionally applied to major transport
prices would serve to transfer economic value
infrastructure projects. The cost components
from users of the system to its operators. Revenue
of the analysis, including the necessary capital
is therefore included in the calculations (as a cost
expenditure required to develop, construct and
to users and a benefit to operators) to assess the
renew the HSR system as components wear out,
relative benefits to users and operators.
depend on the proposed HSR engineering and
The net economic benefits internal to the transport
technical specifications adopted for the preferred
system are therefore measured by adding the
HSR system and on the assumed staging of
two components:
network development set out in Table ES-7.
For the purposes of evaluation, construction of • User benefits (or consumer surplus) are
stage 1 of Line 1 (i.e. the Sydney-Canberra stage of calculated based on the difference between a
the Sydney-Melbourne line) is assumed to start in user’s willingness to pay for a service and the
July 2027 (start of financial year 2028). actual price paid.
• Operator benefits (or producer surplus)
Once constructed, the HSR system would generate represent the difference between the price paid
a stream of economic benefits, linked to the or revenue generated by a service and the costs
assessment of future travel demand. In general associated with (or resources consumed by)
terms, the total economic benefit of travel on HSR operating the service. The change in operator
would depend on how much each passenger values benefits is assessed for each mode (i.e. HSR,
their trip, often termed their ‘willingness to pay’. aviation, conventional rail and coach).
This is calculated by measuring the differences
in generalised trip costs when comparing the In addition, there would be costs and benefits that
reference case (with HSR) to the base case (without are external to the transport system that can be
HSR). Aggregating willingness to pay across all measured in monetary terms and included in the
users of HSR and over time provides an assessment cost-benefit analysis. These externalities measure
of the total (gross) economic value created for users the impact of HSR to the broader community,
of the system by the investment in a future including environmental and safety impacts,
HSR program. decongestion benefits and any alternative avoided
or deferred transport network capital expenditure.
Transporting passengers consumes economic A residual value has also been included to capture
resources such as labour and fuel. Because HSR the remaining value of the assets at the end of the
could reduce demand for other modes of transport, evaluation period18 . The present values of costs and
and hence their consumption of resources, the benefits by category, discounted at four per cent,
additional resources required for HSR need to be are shown in Figure ES-1519. The economic net
offset against the resources avoided in other modes. present value (ENPV) is the sum of the present
The net change in resources is deducted from the value of the economic costs and benefits, which for
gross economic value to calculate the stream of the program as a whole is $101 billion.
economic benefits derived from the investment
in HSR.
18 A 50 year evaluation period has been adopted, commencing in 2035.

19 The discount rate converts cashflows of future costs and benefits into present day dollars to allow a comparison of costs and benefits,
expressed in $2012, and using a common base year, in this case financial year 2028, which is the assumed start of construction of the
first stage.
Executive Summary
Figure ES-15 Present value of costs and benefits for the HSR program (present value discounted to 2028, $2012, $billion,
4% discount rate)
($bn)
120
100
14 1 25 101
80
60
141
40
20
-20
-40
-60
79
-80
-100
Capital User Operator Externalities Residual ENPV
expenditure benefits benefits value
Costs Benefits ENPV
The HSR user benefits dominate the economic Business travellers would gain the majority of user
results and account for 90 per cent of the estimated benefits due to their higher value of time, even
benefits (excluding the residual value). A key though they only represent about 35 per cent of the
component is the assessment of time savings for total HSR travel market, as shown in Table ES-11.
travellers across their full journey including travel
time, waiting time, check-in time and access
time, with adjustments for the inconvenience of
having to change modes. Travel time savings are
measured using values of time based on market
research conducted for this study and tested for
reasonableness against conventional values used in
road projects, which vary by trip purpose
(e.g. business versus leisure)20 .
20 Austroads, Guide to Project Evaluation, 2012.

Table ES-11 User benefit estimates by market segment (present value discounted to 2028, $2012, $billion)
Business users Leisure users Total
Short regional 1.7 7.4 9.1

Long regional 31.3 27.1 58.4
Inter-city 60.6 12.6 73.2
Total 93.6 47.1 140.7
The summary results for the reference case predict discount rate21. A seven per cent discount rate has
that an investment in the preferred HSR program also been tested and would reduce the ENPV to
would generate an economic internal rate of return $5 billion and the EBCR to 1.1, as shown in
(EIRR) of 7.6 per cent and an economic cost- Table ES-12; although marginal, the estimated
benefit ratio (EBCR) of 2.3 using a four per cent economic benefits remain positive.
Table ES-12 Summary economic indicators for the HSR program (present value discounted to 2028, $2012, $billion)
4% discount rate 7% discount rate
Total costs 79.3 58.9

Total benefits 180.6 63.8
EIRR 7.6% 7.6%
ENPV 101.3 4.9
EBCR 2.3 1.1
Sydney-Melbourne is the strongest performing line, with an estimated EIRR of 7.8 per cent, as shown in
Table ES-13. It has an estimated positive ENPV of $69 billion and an EBCR of 2.5 when measured on a
stand-alone basis.
Table ES-13 Summary economic indicators for Sydney-Melbourne (present value discounted to 2028, $2012, $billion)
4% discount rate 7% discount rate
Total costs 46.5 38.9

Total benefits 115.7 45.3
EIRR 7.8% 7.8%
ENPV 69.3 6.5
EBCR 2.5 1.2
Note: Totals do not add up exactly due to rounding.
21 The EIRR represents the discount rate that makes the net present value of all economic cashflows equal to zero. The higher the EIRR
the greater the net economic returns achieved by a project relative to its capital resource costs and if EIRR is greater than the
discount rate, then the project would deliver a positive net economic benefit.
Executive Summary
The incremental economic results for each from Newcastle-Melbourne and Brisbane-Gold
additional stage of the preferred HSR program Coast add little incremental economic value on a
are set out in Table ES-14. The results support stand-alone basis (i.e. ENPV does not materially
the preferred staging of the HSR program, with change) and the results suggest they would not be
Sydney-Melbourne delivering an estimated EIRR undertaken unless the intention were to complete
of 7.8 per cent. The subsequent northern stages the line connecting Brisbane and Sydney.
Table ES-14 Incremental economic impacts for each additional stage of the HSR program (present value discounted to 2028, $2012,
$billion)
Future HSR program

Canberra Melbourne Melbourne Gold complete
Coast & (i.e. Brisbane-
Newcastle- Melbourne)
Melbourne
Year operations
2035 2040 2045 2051 2058
commence
Total costs* 22.2 46.5 58.6 64.3 79.3

Total benefits 20.4 115.7 126.7 126.7 180.6
EIRR 3.8% 7.8% 7.3% 7.1% 7.6%
ENPV -1.7 69.3 68.1 63.9 101.3
EBCR 0.9 2.5 2.2 2.0 2.3
* Costs include rolling stock and asset renewal costs.
Overall, the results of the analysis present a • No significant increase in aviation capacity
positive economic case for the introduction of in the Sydney basin. This results in increased
HSR. Forecasts were prepared for the reference delays and the inability of passengers to travel
case (i.e. with HSR) which was part of the central at preferred times, consistent with assumptions
case for evaluation purposes. The reference case in the Joint Study on Aviation Capacity for the
reflects a range of long-term assumptions and Sydney Region 22 . Assumed additional aviation
expectations, including: capacity in Sydney has the effect of reducing
• Strong growth in the base travel market over the estimated EIRR for the HSR program as
the 52 years to 2065 (travel on the east coast a whole from 7.6 per cent to 7.1 per cent and
will more than double from 153 million trips to reducing the ECBR from 2.3 to 2.1. Additional
355 million trips). aviation capacity also reduces the financial
return from 0.8 per cent to 0.3 per cent.
22 Australian Government and NSW Government, Joint Study on Aviation Capacity for the Sydney Region, Canberra, 2012.
• HSR fares would be structured to be –– If HSR fares were increased by 30 per

comparable to and competitive with alternative cent, the EIRR for the program as a whole
modes of transport for both business and would reduce to 7.4 per cent. However, the
leisure purposes. HSR fares have been set financial return would improve from
to be competitive with air fares on the main 0.8 per cent to 2.3 per cent, with operating
inter-capital routes on the east coast, trending cashflows becoming positive three years
downwards over time by 0.5 per cent per year earlier in 2038.
to 2015 and remaining constant thereafter, –– If HSR fares were increased by 50 per cent,
consistent with the forecast reduction in real economic returns would fall further but
air fares. Car operating costs increase over time HSR would still produce substantial net
due to a forecast real increase in the cost of fuel economic gains, with an EIRR of 7.2 per
(13 per cent real increase by 2065 after allowing cent and an EBCR of 2.1 (at a four per cent
for forecast improvements in fuel efficiency). discount rate). The financial return would
improve further to three per cent.
Competitive aviation response

The study predicts that over half the 83.6 million HSR trips forecast in 2065 would be diverted from
air, which would have a significant impact on aviation markets.
Airline services are mobile in the sense that there are few significant sunk capital costs in servicing
particular routes and assets can be quickly redeployed to other routes. Airlines operating along key
regional and inter-capital routes across the east coast of Australia already compete strongly against each
other, and fare levels of many fare classes have declined over time, which suggests that airfare levels are
already highly competitive on major routes.
It is not expected that airlines would respond to HSR competition by reducing their fares on a sustained
basis. Rather, it has been assumed that airlines would quickly reduce capacity, either by reducing
frequencies or aircraft sizes, to locations within the HSR corridor where there is significant passenger
diversion to HSR. This assumption is consistent with overseas experience where, following the
introduction of HSR, the airline response has generally been to reduce services on the
competitive route.
Airlines do not control all of the components of an end to end journey by air that influence the relative
competitiveness of air travel and HSR travel. Most important of these are the cost of accessing the
airport, its location relative to HSR stations and airport capacity. Nevertheless, to the extent that
airlines are able to innovate in ways that have not been anticipated in this study, it could have an impact
on actual HSR patronage.
Executive Summary
A low demand/high cost sensitivity was • The high growth scenario assumes that the
developed that included a range of alternative Australian economy experiences strong growth
assumptions which in combination result in a set into the future (high GDP growth), with high
of circumstances unfavourable to HSR. The low population growth. This scenario results in
demand/high cost scenario includes: higher overall demand for transport and thus
• No aviation capacity constraints in Sydney. higher demand for HSR. Per capita GDP
growth rates are assumed to be 0.3 per cent
• A 30 per cent increase in pre-risk capital costs.
per year higher than in the reference case, and
• Low population growth and low population growth is assumed to be 103 per
economic growth. cent between 2010 and 2065, compared to
• A 50 per cent increase in HSR fares. 72 per cent in the reference case.
While the combination of these assumptions may • Higher (+30 per cent and +50 per cent)
be unlikely, the results of the analysis provide a HSR fares.
useful basis for comparison and an understanding • An aggressive competitive aviation response
of the economic performance of the HSR program. which results in a 50 per cent reduction in fares
The combination of assumptions significantly for two years.
reduces the economic return generated by the • Additional aviation capacity within the Sydney
future HSR program from 7.6 per cent to region, which removes the negative effects of
3.8 per cent. The impact on the financial return is, travel time on flights to/from Sydney from the
however, modest with the higher costs offset by the reference case, and assumes there is no
large fare increase. unmet demand.
The economic and financial results were tested • Additional aviation capacity within the Sydney
against a range of sensitivity tests, with the results region, combined with 30 per cent increase in
summarised in Figure ES-16 and Figure ES-17: HSR fares.
• The low growth scenario assumes lower • Low demand and high costs (described above).
economic and population growth (relative to • Mode choice model sensitivities (including
the reference case) resulting in lower overall alternative specific constants (ASCs), access/
demand for transport and thus lower demand egress weighting and values of time).
for HSR. It assumes per capita GDP growth • Higher (+30 per cent) capital and
rates are assumed to be 0.3 per cent per year operating costs.
lower than the reference case, and population • Lower (−10 per cent) capital and
growth is assumed to be 51 per cent between operating costs.
2010 and 2065, compared to 72 per cent in the
reference case.
0
1
2
3
4
5
6
7
8
9
0
1
2
3
4
-9
-8
-7
-6
-5
-4
-3
-2
-1
10
-10
EIRR (%)
FIRR (%)
Low case
Low case
5.9%
-0.8%
High case High case
9.4%
1.9%
HSR fares HSR fares +30%
7.4%
2.3%
+30%
HSR fares HSR fares +50%
7.2%
3.0%
+50%
Competitive Competitive
7.6%
0.8%
aviation response aviation response
Additional aviation Additional

7.1%
0.3%
capacity aviation capacity
Combined aviation Combined aviation

capacity and HSR
6.9%
capacity and HSR
2.0%
fares +30% fares +30%
HSR ASCs set to zero HSR ASCs set to zero

7.3%
0.6%
Figure ES-16 Impact of alternative assumptions on the economic results (EIRR)
Access/egress Access/egress
7.4%
0.6%
set to 1.0 set to 1.0
Figure ES-17 Impact of alternative assumptions on the financial results (real FIRR post tax)
Fixed value of time Fixed value of time
6.1%
0.6%
Low demand / Low demand /
3.8%
0.5%
high costs high costs
Costs -10% Costs -10%

8.2%
1.8%
=0.8%
=7.6%
Costs +30% Costs +30%

6.0%
-9.8%
Reference case
Reference case
Executive Summary
Environmental and In addition, the assessment of environmental

issues associated with HSR has addressed noise
social assessment
and vibration, energy use and carbon emissions/
A strategic environmental assessment framework, greenhouse gas considerations, the implications of
consistent with Australian Government guidelines, climate change, and the promotion of ecologically
was developed and its key principles incorporated sustainable development (ESD). Additional
into the selection of the preferred alignment detailed investigations would be required across
and station locations to reduce the potential for each of these disciplines, should governments
negative environmental impacts should there be a decide to proceed with HSR, to minimise the
decision to proceed with HSR. environmental impacts and maximise potential
A preliminary strategic assessment of the positive outcomes.
environmental and social aspects of a HSR system The social impacts have been canvassed through
on the east coast was undertaken for three reasons: theme-based case studies into three key
• To ensure that environmental factors were areas identified through research and
integrated into the development of the HSR stakeholder consultation:
system, including decisions about the corridor a. Workforce and community development.
selection, alignment, station locations and
b. Access to health and other public services.
design features.
c. Tourism, recreation and social inclusion.
• To ensure that the overall HSR system is
consistent with principles of ecologically The case studies highlight that HSR could
sustainable development. potentially have a range of both positive and
• To identify important environmental and social negative impacts.
issues to be further investigated and assessed in
the implementation phases, should a decision be Broader impacts of HSR
made to proceed with HSR.
Impacts on regions
The assessment of the environmental impacts International evidence demonstrates that HSR can
of HSR was integrated into the evaluation of contribute to, but is not always a cause of, regional
alignment options and station options, using a development. Implementation of HSR would
Geographic Information System (GIS) toolkit significantly improve accessibility between capital
to identify potential ecological and heritage cities and regional centres and would provide
interactions and land use planning constraints and the potential for significant regional economic
opportunities associated with the various options. development. However, the extent to which
These evaluations were combined with other regional towns and cities served by HSR take
considerations, such as engineering parameters, advantage of that potential would depend on:
constructability, cost and user benefits to determine • Supportive and aligned regional development
the preferred alignment and station locations. policies at the Commonwealth, state and
The preferred HSR alignment and stations were local levels.
selected to avoid, wherever possible, significant • The availability and appropriate application
impacts on communities and ecological and of investment.
heritage resources. Residual impacts would be • Metropolitan and regional planning policies
managed by mitigation strategies developed during that encourage and support new development in
the concept and detailed design phases of HSR regional centres with HSR stations.
development, should a decision be made to proceed • The timing of HSR opening in relation to broad
with HSR. This is a standard practice for large economic trends.
infrastructure projects. Where necessary, offsets for
natural environments could also be used.
Robust and pragmatic planning would be required Impacts on cities

to determine how these initiatives should be HSR could have wider economic impacts on
developed and what outcomes should be pursued. cities through its impact on effective employment
In part, they are associated with the nature and density, that is, by bringing places of residence and
scale of the proposed HSR network and require employment closer together by a reduction in travel
forecasting responses and conditions many years times. Benefits can then arise in a number of ways:
into the future. They are also uncertain, however,
• It is easier to match workers to specific
because they would require responses from outside
vacancies and to find employees with
the transport sector. They would need businesses to
appropriate skills.
change how they operate, investments to switch to
new locations, and tourists to change their • It enables greater specialisation of supply,
travel patterns. leading to more efficient production of goods
and provision of services.
An investment of the magnitude and nature of • It leads to knowledge spill-over (i.e. greater
HSR could also have unintended consequences opportunities for formal and informal contact
and impacts, such as causing small regional cities through increased accessibility).
to lose jobs and residents to nearby regional
• Employees have a greater choice of jobs.
centres with HSR stations. These negative impacts
would need to be managed though effective • There is more competition between companies
regional development policies, early and careful and between individuals.
planning to position local businesses for change, As the HSR system is constructed, accessibility to
and appropriate human and capital investment in major cities from areas such as the Central Coast
complementary assets. (to Sydney) and the Gold Coast (to Brisbane)
To gain positive and sustained benefits from would improve, allowing employers to access a
HSR, regional communities along the corridors larger labour pool and providing employees with
would need to follow deliberate strategies. HSR a wider choice of employers. Internationally,
is not a panacea for regional development but, positive economic benefits have been attributed
when coupled with appropriate strategies and to such impacts, so called agglomeration benefits,
plans, it could have a positive impact on regional and included in the quantitative assessment of the
communities over time. benefits of investments in transport infrastructure.
However, as noted above, because of the
In examining the potential impacts of HSR, the uncertainty of these effects in the current context,
inherent uncertainties need to be acknowledged. no adjustments to the economic returns have been
However, with proactive and positive responses made for them in this study.
from key stakeholders, the implementation of
HSR could result in improvements in regional Impacts on the national economy
productivity, changes to tourist spending patterns Although the majority of benefits of HSR would
and, for regions closer to the capital cities, changes accrue to users of the system, HSR would have
to commuting patterns. Emerging international a positive net impact on the size of the national
evidence suggests that wider economic impacts economy, with GDP estimated to be 0.1 per cent
at the regional level may be generated by regional higher relative to the baseline in 2085.
accessibility improvements, though quantitative
HSR would also raise the overall level of
estimates of these are considered neither
investment in Australia. In 2036, HSR investment
sufficiently certain nor robust for inclusion in the
would represent 0.8 per cent of aggregate
main economic assessment.
investment in the economy, and would average
around 0.4 per cent during the construction period
as a whole. The assumption that HSR would be
financed domestically means that, to accumulate
Executive Summary
the required HSR capital stock, some of Australia’s The expansion in NSW/ACT’s GSP would
pool of investment would be channelled into HSR come at a cost to the other states, which would
instead of elsewhere. This investment substitution share the burden of reduced investment in other
effect produces a negative impact on the economy, sectors. Productivity gains are also expected to be
since it assumes that investment would be diverted concentrated in NSW/ACT, although there would
away from sectors with a higher financial return still be sufficient gains in Victoria and Queensland
than would be achievable for HSR (which is to yield a positive GSP impact.
projected to achieve only a 0.8 per cent financial
rate of return on capital invested), lowering The construction of HSR draws labour into NSW/
Australia’s average return on investment. Other ACT and away from other states. The assumed
things being equal, and in the absence of higher constraint on labour supply means that the bulk
productivity benefits generated by HSR, this of the expansion in construction sector labour
would lower consumption and GDP. However, requirements in NSW/ACT would have to be
business travel time savings generated by HSR are offset by contractions in other sectors, leading to
estimated to increase labour productivity, which varying impacts on employment by state similar to
over the long term drives gains in GDP, offsetting impacts on GSP by state, but with less intensity.
the negative investment impacts. While beyond the scope of the modelling,
The investment impacts of HSR would be different alternative funding arrangements involving a
if it were assumed to be financed by borrowing different sharing of the financing of HSR would
from foreign sources. There would be less crowding clearly alter the pattern of gains and losses in
out of higher return capital, but costs involved with different regions.
servicing the foreign debt would be incurred.
Implementing a future
Real consumption is estimated to decrease during
the construction of HSR (until around 2056).
HSR program
Post 2056, real consumption begins to increase Roles of the public and private sectors
relative to the baseline as benefits start to flow The Australian Government, ACT Government
from the operation of HSR. As investment in and relevant state governments would need to
HSR tails off and productivity gains flow from the have a central role in the development of HSR.
operational phase, resources can be redirected to This would be due both to its strategic nature and
other investment uses and to consumption, and to the fact that the Australian public would have
national income (moving closely with GDP due to to fund most of the infrastructure. Governments
the assumption of domestic financing) begins to would own the infrastructure and would have
increase and move above the baseline. an obligation to ensure that it was efficiently and
effectively provided and used.
Similarly, the investment substitution effect
means that HSR would impact each of the With an initial capital cost in excess of
Australian states in different ways. All else being $100 billion, a future HSR program would be
equal, an increase in investment in one state, for one of the largest infrastructure programs ever
example, would result in a reduction in the level undertaken in Australia. Its size would challenge
of investment across the remaining states. In the the resources of the supplier industry, both
case of HSR, the impact on each state reflects the domestically and globally, with only a limited
strength of investment in and operation of HSR, number of organisations having the financial
and the concentration of industries that compete capacity and depth of skills and resources available
for HSR inputs within each state. to compete for the likely size of works packages. To
achieve value for money, governments would need
Based on these assumptions, NSW/ACT is to carefully package and stage the procurement
expected to be the primary beneficiary state from to ensure competitive bids were achieved for
HSR due to the substantial investment it receives.
each package. Government would need to retain Under the preferred model, HSR train services
some of the risks around the integration of would be contracted to a private sector operator
the component parts, but these risks could be through one or more concession arrangements.
mitigated through rigorous technical oversight. There would be separate concessions for
Line 1 and Line 2, each being a combined
Governments would retain an ongoing role in the exclusive concession for inter-capital express and
stewardship of the HSR sector after construction, regional services on that route, although a single
to ensure the objectives and economic benefits operator would not necessarily be precluded
of the HSR program were achieved. This role from operating both concessions. The concession
would involve providing oversight of the delivery holder(s) would operate the train services, control
of HSR services against agreed price and service the movement of trains through the network and
quality metrics, while being careful to avoid maintain the HSR network.
constraining the market agility and innovation
of those managing the transport services. The preferred model for Australia has common
Governments would also be responsible for safety elements with many of the world’s HSR lines,
and environmental compliance. although overall it is perhaps closest to the
Japanese model for new HSR lines. In Japan, a
The private sector should be closely involved in a single state-owned entity (JRTT) is responsible
broad range of roles: for the development and strategic management of
• Design and construction of components of the the HSR network, but operation of train services,
HSR infrastructure network under contract control of the movement of trains and maintenance
to governments. of lines is carried out by (mainly) private sector
• Development of station precincts in partnership train operating companies serving particular high
with the relevant government. speed routes on an exclusive basis, for which they
• Supply of rolling stock (train sets) and the pay JRTT a fee for use of the line.
signalling and communications systems. Delivering the public sector components
• Control and operation of HSR trains to deliver of a future HSR program
high standard transport services to the public. If adopted, a future HSR program would be
• Maintenance of the HSR system. developed in discrete phases, starting with initial
feasibility studies and investigations, leading
Development of HSR stations, and associated
on to construction and operation of the HSR
commercial opportunities, would offer an
system. Four separate phases can be identified, as
opportunity for private finance. A public-private
illustrated in Figure ES-18.
partnership model is envisaged for greenfield
station developments, with the private sector
partnering with the relevant state or territory
government for CBD station developments.
Executive Summary
Figure ES-18 Four phases of the HSR program
1 2 3 4
Preparation & Detailed planning Construction Operation
corridor protection & procurement
The first phase in a future HSR program would Once there is a mandate to implement a preferred
be a preparation and corridor protection phase, HSR system, a publicly-owned HSR development
which would precede a formal commitment authority (HSRDA) would be created to develop,
to build the HSR system. This phase would procure and integrate the HSR system, including
provide the necessary policy foundation for the procuring and owning the required land. A
procurement, construction and operation of a single coordinating authority, with appropriate
future HSR program. It would require alignment professional management expertise, would be
between the participating governments on the required to effectively and efficiently progress the
program objectives, mechanisms and timeframes detailed planning required to develop and procure
for resolving issues, and the delivery of enabling an HSR system (the HSRDA would later evolve
regulation or legislation. into an HSR development and management
authority in the operational phase, and would
The proposed model for pursuing multi- prepare and manage train operations concessions).
jurisdictional agreements of the type needed to The HSRDA could be owned jointly by the
support the HSR program is to adopt a ‘gated Australian Government, ACT Government and
approach’ using a series of formal agreements. relevant state governments.
Each formal agreement in the process would need
to be in place prior to progressing to the next stage,
ensuring alignment of governments at critical
milestones. The first gate would be a Memorandum
of Understanding (MoU) between the Australian,
ACT and state governments to formalise the
engagement on the HSR program and to set out
the responsibilities of the parties, the process
to be followed and the timelines for resolving
issues. Subsequent gates would involve formal
inter-governmental agreements (IGAs), first to
protect an HSR corridor and later to develop and
implement a stage or stages of HSR.
Next steps
If it were decided that the case for HSR on the east
coast of Australia has sufficient merit for further
government action to be taken, there are a number
of immediate next steps in the process that could
lead to a decision to protect the HSR corridor and
possibly to a decision to implement HSR.
The immediate next step following completion

of the HSR study is to confirm the Australian
government’s interest in continuing the necessary
preparatory works to inform a formal ministerial
decision to proceed.
Following a decision to proceed, an MoU would

be signed to allow planning and development
work, including corridor protection, to commence.
Governments would need to commit resources and
funding to the development and delivery of the
arrangements under the MoU.
The MoU would initiate a number of activities,

including site investigations necessary for corridor
protection and preparation of the IGA to protect
the HSR corridor. The aim of the IGA would be to
formalise the commitment to the protection of the
HSR corridor by rezoning, resuming, purchasing
or holding land within the corridor.

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High Speed

Key findings and

The study has been conducted in two phases. Phase 1, published

Drawings and maps have been prepared for the purpose of

High Speed Rail Phase 2 / iii

High Speed Rail Phase 2 / v

Definition of the preferred HSR system

Cost of constructing the HSR system

Forecast HSR demand

Staging the development of HSR

• International experience of large infrastructure

Table 1 Commencement and operational milestones for optimal staging

Main construction Operations

• Some preliminary (‘enabling’) works to enable • Brisbane-Gold Coast would be completed

Table 2 Commencement and operational milestones for accelerated staging

Main construction Operations

Environmental and social assessment

• Potential significant impacts in urban areas, such

Broader impacts of HSR

Implementing a future HSR program

Key public policy issues for a decision to proceed

High Speed Rail Phase 2 / 3

What is HSR? City centre stations would be terminal stations

LINE 1 Southern Highlands

KEY State border Station locations Not to scale

Types of HSR services HSR service characteristics

Figure ES-2 HSR travel times between major cities

NSW SYDNEY TO BRISBANE

KEY State border Roads Not to scale

Regional Regional Regional Express Regional

0hr 14min 0hr 39min

Regional Express Regional Regional Express Regional

1hr 16min 2hr 10min 2hr 28min

Route Inter-capital express Inter-capital regional

Fares would be structured to be competitive with Forecast HSR demand

NSW SYDNEY TO BRISBANE

SYDNEY TO CENTRAL COAST/

KEY State border Roads Not to scale

Table ES-4 HSR travel market for 2065

Total travel market (inter-city and regional)

Trips without HSR (million) 355

Trips with HSR (million)* 389

HSR travel market (inter-city and regional)

HSR trips (million) 83.6

HSR passenger kilometres (billion) 53.1

A set of alternative assumptions produced forecasts

Forecast HSR travel demand by journey type in

Inter-city non-business Inter-city business Long regional non-business

Long regional business Short regional non-business Short regional business

Note: Total does not add to 100% due to rounding.

Inter-city non-business Inter-city business Long regional non-business

Long regional business Short regional non-business Short regional business

Air Coach Car Rail Induced

International evidence Model forecasts for 2035

Cost of constructing the In addition to the physical components of

Table ES-6 Risk-adjusted HSR program costs ($2012, $billion)

Figure ES-8 presents the results of the @RISK

The analysis illustrates that:

P10 P50 P90

Figure ES-9 presents estimated average