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A High Speed Rail Network will unlock economic opportunities

Updated: Mar 21

By Phil Potterton, Director of transport economics and policy consultancy, Economic Connections Pty Ltd

Speaking in Newcastle recently about the Federal Government’s plan to connect Sydney and Newcastle by high speed rail, Catherine King, Minister for Infrastructure, Transport, Regional Development and Local Government remarked:

“… it’s not just about the rail: it’s actually about the economic opportunities it brings to Newcastle and the Hunter once we’ve got it here.”

Are economic opportunities as important for the proposed full network from Brisbane to Melbourne, including for Canberra? It helps to view the transport problems that high speed rail can solve and the resulting economic opportunities through a lens of differing route geographies: routes to regional centres near major capitals, routes to more distant regional centres and routes between the major capitals.

Amongst the regional centres between 100 and 350 kilometres distance from an Australian capital city, just two – Ballarat and Bendigo in Victoria – have passenger rail services offering journey times to the capital that are even slightly faster than the private vehicle. So high speed rail with top speeds above 300 kilometres per hour – or even ‘fast rail’, with speeds up to 250 kilometres per hour – could dramatically improve service. In the case of Newcastle, where currently even express rail services exceed two and a half hours duration, travel could take less than an hour.

For Newcastle, Australia’s second largest regional centre, international evidence suggests businesses could experience opportunities to reorganise, specialise and grow, leveraging newly convenient travel combined with a lower, non-capital city cost base. Given coordinated planning, employment opportunities from faster regional economic growth could shift a share of future population growth from Sydney. In turn, this could help relieve capital city infrastructure-related pressures – transport congestion, housing unaffordability, restricted housing choice and flood risk vulnerability among them.

Faster travel for commuters to Sydney also offers an opportunity for increased ‘satellite’ housing development, especially closer to Sydney on the Central Coast – with liveability benefits.

Beyond about 350 kilometres, all Australian regional centres have air access to the nearest major capital. However, daily frequencies seldom exceed five or six, tourism centres such as Gold Coast or Cairns aside. In addition, with airlines operating small non-jet aircraft, the cost of airfares is high, often upward of $50 per hundred kilometres.

High speed rail – not fast rail, at these distances – could provide service times within two hours for Port Macquarie to Sydney and Coffs Harbour to Brisbane. With travel via centrally located stations, and without the need for security checks and other boarding procedures, ‘end-to-end’ journey times would be shorter than by air. In addition, frequencies should be higher and fares lower, the latter reflecting economies of scale in train operation and costs for airlines in using small non-jet aircraft.

These service features should markedly increase travel demand. Over time, high speed rail could extend business growth and population shift impacts throughout the corridor.

In the intercapital air market between Sydney and Brisbane and similarly between Sydney and Melbourne, the key transport challenge is not speed, frequency or fares. Rather, it centres on the limited peak weekday capacity of conveniently located, but site-constrained Sydney Kingsford Smith Airport, the hub of the nation’s air transport system and home to two thirds of the air routes in the high speed rail footprint. Today, Sydney’s convenient, close to city centre airport location helps keep intercapital business end-to-end day trips within about three and a half hours each way – the outer limit of a convenient day trip.

High speed rail, offering air-competitive end-to-end journeys, would prevent business day trips from becoming lengthier – as they inevitably would with more and more journeys routed through the future Western Sydney International Airport –46 kilometres and 40 minutes further by road from central Sydney than Kingsford Smith.

With Adelaide added to the network, high speed rail could compete with, on my estimates, 30 per cent of total future domestic air passenger kilometres. Given zero or low emission electric traction, and in the absence of a timely decarbonisation solution for large passenger jet aircraft, there is an economic and environmental opportunity for high speed rail to contribute to the transport sector’s transition to net zero emissions.

Intercapital high speed rail, coupled with modern terminals like that in Moorebank, Sydney, could also enable fast freight services, as Fastrack Australia’s Dr Garry Glazebrook proposes (see Freight and High-Speed Rail. Fastrack Australia, June 2023).

A nine hour night-time service, using the high speed infrastructure when passenger trains would not be operating, could compete with road freight in the intercapital overnight market, adding both capacity and choice.

Finally, Canberra  is a Newcastle-sized centre that can gain from the better business and research sector synergies that high speed rail could enable with a service time to Sydney under 90 minutes and lower fares than on existing air services. The Sydney-Canberra air route is Sydney Airport's fourth largest by number of flights, so demand shift to high speed rail would offer valuable major capital city airport capacity relief. And over three quarters of the high speed rail route to Canberra is shared with the Sydney-Melbourne route, the nation’s busiest air route.

The Sydney to Newcastle business case, due by the end of 2024, should indeed draw out that route’s economic opportunities. There are economic opportunities also for each section of a much larger network.

Phil Potterton is a Director of Canberra region-based transport economics and policy consultancy, Economic Connections. For further information, see his 2023 paper on policy rationales for upgraded long distance passenger rail.

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