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High speed rail: benefits that add up

Green infrastructure High-speed rail Rural conditions Sustainability Australia

This report argues that Australian could gain $48 billion of benefits from adopting high speed rail.

High speed rail (“HSR”) now exists on every continent except for Australia and Antarctica. There is a great deal of international experience and analysis available to assess the likely costs and benefits of HSR.

As with all nation-building infrastructure projects, the costs of HSR are more straightforward to assess than the benefits. This is because the costs tend to be monetised and straightforward, whereas the benefits are mostly externalised and spread across the broader economy. Costs are incurred up front, whereas the benefits accrue over decades. This is certainly the case with HSR.

This report has identified some $48 billion of benefits from HSR, including direct user benefits and also externalities to society.

The Phase 1 Report into high speed rail (HSR), published by the Australian Government in 2011, quantified the likely costs to build a HSR on Australia’s east coast, at about $80 billion. The benefits of HSR will be quantified in the Phase 2 Report, due to be completed this year.

The benefits, once quantified, are significant. They include both direct benefits to HSR users and operators (i.e. through time savings and profits, respectively) and indirect benefits to society (called externalities). The main externalities include fewer accidents, lower greenhouse gas emissions, less air and noise pollution, less congestion on roads and at airports and substantial time savings to users. There are significant benefits to regional Australia in towns where the HSR passes through, agglomeration benefits and benefits to cities with a HSR station. Agglomeration and regional rebalancing benefits are not quantified in this report, although they have been in some other recent reports.

This report places indicative values on the externality and user benefits.

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