Very Fast Train Joint Venture

In October 1988, the Victorian Minister for Transport proposed a "Fast Freight Train". It was partly a response to the VFT proposal, which would not have been suitable for the carriage of freight due to the steeper grades proposed. The FFT proposed a major upgrade of the existing alignment between Sydney and Melbourne, comprising several bridge replacements and minor deviations between Albury and Melbourne, and much more extensive works between Moss Vale and Junee. The proposed alignment would allow freight trains to travel at a top speed of 115 km/h for most of the route, with no speed restrictions for curves or hills.[8]

In response, the joint venture expanded the scope of the Project Evaluation to encompass an investigation into using the VFT alignment for dedicated freight trains.

In January 1990 it was reported that the NSW Government was considering upgrading the existing state railway lines to use tilting train technology under development by UK engineering giant ASEA Brown Boveri. Although at 200 km/h they would be somewhat slower than the VFT, the tilt trains would avoid the need for a completely new rail corridor. There was concern that two fast railways could end up being built, which would then both be financially unviable. The VFT joint venture argued that the proposed upgrades would cost the state $1.45 billion and provide 1,700 seats daily between Sydney and Melbourne, while the VFT would cost the state nothing (the estimated $4.5 billion cost was to be privately funded) while providing 16,000 seats.[9]

The VFT joint venture considered the potential of tilting trains in its own study but dismissed them, suggesting that the achievable speed increases are often overstated. Without major works to ease curve radii and increase cant on the existing rail alignment, the joint venture concluded that tilting trains could offer, at best, an 8-hour service between Sydney and Melbourne, which they deemed would not be competitive with air travel.[10]

Although the joint venture considered magnetic levitation technology, they decided to proceed with conventional "steel wheel steel rail" technology due to the fact that there were no operational or near-term commercial systems, and projections that the capital cost could be up to four times as much as conventional high speed rail.

Numerous different alignments were studied, including variations of both the coastal route and the inland route.

Variations of the coastal route focused on three different alignments between Cooma and Bairnsdale through the Brodribb Cann and Snowy River Valleys.

Options considered for the inland route included several variations of the eastern Riverina route through Albury and Benalla (similar to that identified in the original pre-feasibility study), a route through Deniliquin and Bendigo, a diversion to Shepparton, two options that would allow a station at Tumut, and one option that passed directly under the Snowy Mountains with 72 km of tunneling from Bredbo. Most of these routes were abandoned in early stages of investigation due to excessive construction costs or low projected passenger demand.

The final decision to adopt an inland route substantially similar to the pre-feasibility route was influenced by the much higher engineering costs associated with the coastal route. Although the coastal route would have had higher passenger demand due to both density of development and tourism potential, these benefits were found to be not nearly sufficient to compensate for the higher capital costs.

The VFT was proposed to start from a new terminus alongside Sydney Central station proceeding to Sydney Airport via a tunnel emerging alongside the East Hills line at Turrella from where new tracks would be built on either side of the existing line to Glenfield.

From Glenfield through to a point 15 kilometres north of Mittagong, it would cross the Hume Highway several times before following it to south of Goulburn from where it would pass to the west of Lake George.

Particular attention was given to the proposed housing developments in the Glenfield/Campbelltown area, with the report urging the government to ensure any land releases reserved a corridor for future development of the high-speed alignment.

The Canberra station was to be built in the northern suburb of Gungahlin. Although this is some 10 km distant from Canberra's CBD, it would have good road access to all parts of the city, as well as Canberra Airport. It would have left Canberra via a new corridor parallel to the Barton Highway to Yass and Wagga Wagga.

It then would have headed west of the Bulloc Bulloc Range close to Henty, Culcairn and Walla Walla then crossing the Murray River near Howlong before passing through Chiltern, Rutherglen and Wangaratta. It would then run parallel to the existing North East line through Benalla to Mangalore passing west of Kilmore before rejoining the existing line at Seymour.

The route passed close to Melbourne Airport, and possibilities for a link were "being investigated". It would then proceed through the northern suburbs of Melbourne on a new alignment via Somerton, Broadmeadows, Oak Park, Strathmore, Moonee Ponds and Ascot Vale before joining the existing the Broadmeadows line to terminate at Spencer Street station.

The Project Evaluation also foreshadowed the possibility of links to Badgerys Creek, Brisbane and Adelaide. The Badgerys Creek spur was planned to divert from the main line at Glenfield, and serve the proposed Second Sydney Airport.

A brief analysis of a link to Brisbane, initially proposed in a 1989 paper prepared at the request of the Queensland Government and designated "VFT-N," was included in the 1990 Project Evaluation. It would include stations at Newcastle, Taree, Coffs Harbour and the Gold Coast. Preliminary investigations identified a route 797 km long, with a non-stop travel time of 2.5hours. Capital costs were slightly lower than the Sydney link due to the shorter length and mostly easier terrain. A new commuter rail station tentatively named "Warringah" was proposed to be located near Frenchs Forest and integrated with the suburban rail network. Southbound VFT-N services would terminate at Sydney Airport, and northbound VFT services would terminate at Warringah, thus avoiding the need to redevelop the congested sidings at Central for turnaround and stabling facilities; it would also increase convenience for passengers by providing several destinations within Sydney.

Although substantive studies were never undertaken, the joint venture also considered a link from Melbourne to Adelaide ("VFT-S"), branching from the mainline at Seymour. By sharing the same access corridor through Melbourne's suburbs, its capital cost would be far lower than the other links; the consortium reported the VFT-S was both "possible and viable".[10][11]

In October 1989, following the release of a major progress report entitled VFT: Focus for the future,[13] it was noted that the joint venture appeared to be admitting that the VFT project would not in fact be financially attractive as a passenger service alone.[14] According to economist Peter Swan of the University of New South Wales, the Progress Report seemed to indicate that the project's financial viability hinged on a massive land-development program in the vicinity of new stations along the route, in turn made possible by large-scale governmental compulsory-acquisition orders and development approvals.

In a document entitled Sharing value added to property on the VFT corridor, the consortium suggested that part of the cost of the VFT could be offset by the government levying a capital gains style tax on property within the development corridor; the resulting backlash from farmers and other landowners caused the consortium to quickly back away from the suggestion.[15] Similarly, some opponents of the VFT seized on a remark by Abeles that "land value capture" could be used to fund the project through its difficult early years, and began to publicly suggest that the VFT was in fact a "disguised real-estate project" rather than a genuine desire to provide a transport service.[16]

One of the main concerns centred around the noise levels expected from the new trains, which environmentalists said would be "equivalent to a continuous stream of jets taking off", and would be heard five kilometres away.[17] This is likely an exaggeration (see Examples of sound pressure), although the 1989 progress report indicated that NSW planning limitations for peak noise of 80dBA would only be met at a distance of 150m from the line. The joint venture's solution to this was to plan for the line to pass no closer than 200m to existing dwellings without noise abatement measures. Some raised concerns that this would severely restrict future development along the noise corridor. Public opposition also led the joint venture to promise that the VFT would be restricted to 80 km/h on the part of the alignment passing through the Wolli Creek Valley residential area; if additional speed restrictions were demanded in other residential areas, travel times would begin to be severely affected, damaging the project's profitability.[18]

In the early years of the proposal, a coastal corridor was favoured which would have necessitated a new rail alignment through the relatively pristine eucalyptus forests of East Gippsland. Aside from the direct impact of clearing, earthworks and construction for the new line, concerns were raised by environmentalists about the potential for the VFT to disrupt natural fauna migration corridors. The Australian Greens warned that the VFT had the potential to become the greatest environmental conflict in the history of Victoria and New South Wales, while the Australian Conservation Foundation suggested the selection of a Gippsland corridor could lead to the extinction of the long-footed potoroo.[19][20]

Eventually, detailed corridor analysis determined that although the coastal corridor had higher projected earnings, the inland corridor had a higher net present value due to substantially lower construction costs. As a result, the joint venture changed their preferred corridor from the coastal to the inland option in 1990. Nevertheless, a perception that the VFT would damage sensitive environmental areas remained.

In August 1990, it was reported that the joint venture was seeking tax concessions from the government, on the grounds that other privately owned transport providers (e.g., airlines and buses) are not expected to pay directly for necessary infrastructure such as airports and freeways. The consortium had always argued that they would never request financial assistance from the taxpayer, and continued to argue that the changes they sought did not constitute this; rather, it was "levelling the playing field" – allowing the VFT, and other similar projects, to have access to the same tax-deduction benefits that other business ventures with shorter lead times already enjoyed.

Treasury was vehemently opposed to the idea of tax concessions, which they estimated would cost the government $1.4 billion in reduced tax receipts (the joint venture estimated the concessions at closer to $550 million). Treasurer Paul Keating, supported by Minister for Land Transport Bob Brown, argued forcefully for the rejection of the proposed tax breaks, but were overruled by the rest of Cabinet, led by the Prime Minister, who wished to at least consider the joint venture's proposal.[21] Keating and Brown were tasked to a subcommittee to examine the proposal in more depth, along with ministers John Button, John Dawkins and Ralph Willis, in March 1991.

In May 1991, the subcommittee reported that delayed-income projects were not disadvantaged by current tax law, under which interest expenses could be claimed ahead of the operational phase. The magnitude of the concessions sought was also revised downward to between $900–$1,200 million.[22]

The joint venture's tax proposal was released in July 1991,[23] and called for companies involved in delayed-income projects to be allowed to distribute tax-losses to shareholders – in effect, allowing the shareholders of the VFT to claim a tax-deduction of 39 cents in the dollar on VFT expenditure, whether the VFT eventually earned taxable income or not. In the report prepared by Clayton Utz, they argued that the existing tax arrangements create a strong bias against start-up ventures, as start-ups have no existing income against which to offset tax losses incurred in the construction phase of a large infrastructure project. The proposed treatment was essentially to treat deductions in the early years of a project "as if they were those of a fully-owned subsidiary of another company".[24]

The south-east corner of Australia now has less transportation infrastructure than when the VFT was proposed. The Gippsland line was closed east of Bairnsdale in 1987 and the Cooma line south of Queanbeyan in 1988, following closure of the Bombala line in 1986.[36] Services on the Gippsland line improved in 2006 after a substantial line upgrade and VLocity railcars capable of running at 160 kilometres per hour (99 mph) were introduced.[37] Nevertheless, the journey epitomised the fundamental difference between running conventional trains faster on existing lines and running trains on dedicated high-speed tracks. The Pakenham–Traralgon express journey time of 1 hour 18 minutes for a distance of 103 kilometres (64 mi) equates to only 79 kilometres per hour (49 mph), and from Melbourne to Traralgon the 2 hours 21 minutes to cover 160 kilometres (99 mi) equates to 68 kilometres per hour (42 mph)[38] – slightly slower than the scheduled speed from Canberra to Sydney that had failed to impress Dr Wild in 1984. The VFT scheduled time for Melbourne to Traralgon was to be 30 minutes: 1 hour and 51 minutes quicker than today's journey time.[39]

Budd and Abeles were both involved with later high-speed rail proposals between Sydney and Canberra, with Budd spearheading the Speedrail Consortium proposing a shorter version of the VFT, and Abeles advocating a maglev link via Wollongong. Speedrail came close to getting the green light but was also cancelled in 2000 when the government refused to subsidise the project.[40] There were also several proposals to upgrade the existing tracks to accommodate faster tilting trains.

The proposed underground railway to Sydney Airport was completed in 2000 as a CityRail suburban railway.[41]

Following the cancellation of the Speedrail proposal in 2000, the Howard Government commissioned a study into a very high speed railway linking the east-coast capitals. The $2.3 million report, released in November 2001, proposed a route broadly similar to the VFT proposal, and estimated construction costs at $41 billion if 250 km/h technology was selected, $47 billion for 350 km/h, and as high as $59 billion for 500 km/h mag-lev technology ($58, $67 and $84 billion in 2014, respectively). The high cost estimates, which would have to be 80% government funded, led the government to abandon the second phase of the report, and so a detailed alignment was not proposed.[42]

In December 2008, the Rudd government announced that an east-coast very high speed railway was its highest infrastructure priority. A $20 million study was undertaken in two phases, with Phase 1 released in August 2011 and identifying a preferred route, and Phase 2 finalising a detailed corridor selection as well as costings and demand forecasts. It estimated the 1748 km railway between Melbourne, Sydney and Brisbane with a spur line to Canberra would cost $114 billion (100% publicly funded) and not be fully operational until 2065. It was heavily criticised for its extremely high cost estimates and absurdly long construction timeframe, with the suggestion that this meant the government had never intended the project to go ahead.[43]

The Very Fast Train Joint Venture's series of studies remain the most expensive investigation of high speed rail performed in Australia with a cost of over $37 million in 2013 dollars, and no proposal has come closer to becoming a reality. It remains the only high-speed rail proposal to have maintained a promise of no net cost to the taxpayer.