Sydney and The Rail Fallacy MK II

The Rail Fallacy Strikes (Sydney) Back


In June last year I posted about Sydney and The Rail Fallacy – mind you it was in concern to passenger trains as I was drawing a warning in regards to the City Rail Link.

From last year:

Sydney and its Rail Fallacy

It seems Sydney has not quite learned from Auckland’s botched public transport system with multiple operators, seemingly a heterogeneous train fleet, disjointed fares and very disjointed timetables between the three p/t modes. Although Auckland is on the path in fixing the last three bits of that previous sentence, we will have some way to go yet before achieving a homogenous public transport operating system. But as I said at least we are going towards homogenous, because upon reading the Sydney transport article; they seem to be going in full reverse and heading to a heterogeneous system like we have. If you are wondering how Sydney has a rail fallacy; well it has not got a fallacy right now like other places, but heck it is heading to one and one it can avoid quite easy.

The Rail Fallacy will apply to the when the North West Rail Link (which is to be run as a PPP) is complete and opened in 2019, and most likely to the second Sydney Harbour is the New South Wales state governmentmanages to screw that up.


And for the definition of Rail Fallacy it is this:



The Rail Fallacy was a formula given to  me by a mentor on how to roughly calculate the “actual” cost and time to completion of a heavy rail or light rail project. The Fallacy was based on previous experience from projects in the USA and Scandinavia where rail projects were given a cost and time to completion by the Public Authorities. However  by the end of the said project (if it was not scrapped) the final cost was higher and time to completion “delayed” compared to the original numbers given, with public confidence often not that high. Thus the Fallacy formula was derived on an average of 1.5x (one point five times) and can be applied to (usually) to any passenger rail project due to be constructed in the Western World.


Well yesterday its mentioned in the Sydney Morning Herald that Sydney and wider New South Wales suffered a rather large Rail Fallacy – although it was from a freight line rather than a passenger line.

From the SMH:

‘We wanted to make sure we got it right’: new rail line opens … three years late”


The first train line in Sydney to be paid for and built under the Rudd and Gillard governments opened on Monday, $700 million over budget and three years after it was promised to be finished.

The 36km Southern Sydney Freight Line will allow extra freight trains to run between Macarthur and Chullora in the city’s south west and will increase rail freight capacity along the entire Australian east coast.

This is an investment that’s been got right. This isn’t a loss to taxpayers. This is an investment that produces a return on that investment by getting it right.

But the project ended up being vastly more expensive to build than when it was first promised by the federal Transport Minister, Anthony Albanese, in 2009.

Read more:–three-years-late-20130121-2d279.html#ixzz2IjrDydNo


Getting it Right? That should of been done in the (proper) Planning Process which would of indicated rather clearly the upcoming complexity of the entire project

As for costs and time that is reflected below, but from my understanding the freight line came in at 3.5x over budget and three years (so 3x over the one year completion date) late from what was “promised” by the Federal Government.


More from the SMH:

At a press conference in Birrong to mark the start of operations on the line, Mr Albanese and the chief executive of the Australian Rail Track Corporation, which built the line, defended the blow-out.


The final cost was about $1 billion. When Mr Albanese announced the start of construction in February 2009, he put a figure of $309 million on the project and a completion date of early 2010.

“This is a pretty complex piece of work,” Mr Albanese said on Monday.

He attributed the delays and cost blow-outs to the necessity of moving utilities such as water and energy lines during construction.

Mr Albanese also said that the difficulty of operating on a live rail line – both freight trains and passenger trains on the adjoining East Hills line stayed running while the new line was being built – added to the challenge of the project.

“We wanted to make sure we got it right,” the Transport Minister said. “No corners have been cut. This has been got right.”

The Australian Rail Track Corporation is owned by the federal government. As with the NBN Co. it receives money from the federal government in the form of investments which do not come off the government’s budget bottom line.

Mr Albanese declined to criticise the ARTC for the more than three-fold increase in the cost of the project. According to figures provided to Senate Estimates, the ARTC spent almost $12 million in planning the line before construction even started in 2009.

“This is an investment,” he said. “This is an investment that’s been got right. This isn’t a loss to taxpayers. This is an investment that produces a return on that investment by getting it right.”

Mr Fullerton said the new train line, which will allow capacity for up to 48 freight trains a day to pass through the area and potentially to Port Botany, was the largest project the ARTC had undertaken.

“The original budget made some assumptions on how we could build a line over 36 kilometres adjacent to a metropolitan line but when we got into the project we realised that lot of the services covering off Sydney Water, a lot of the RailCorp services to do with signalling, electricity lines, all those sorts of things had to be relocated and that comes at a significant cost over 36 kilometres,” Mr Fullerton said.

The ARTC stopped work on the freight line in late 2009 and 2010. The benefit of the line is in allowing passenger trains and freight trains to run separately from each other.

This means that an existing eight-hour curfew on freight trains running during the morning and afternoon peak periods can now be lifted.

Mr Albanese defended the record of the federal Labor government in relation to transport in Sydney.

As transport minister, he has promised to build the Epping to Parramatta train line, though that pledge has been scuppered by the O’Farrell government which ranks it a lower priority. He has also agreed to fund a new freight terminal at Moorebank and another freight train line through Sydney’s northern suburbs, though both are still at the planning stage.

Read more:–three-years-late-20130121-2d279.html#ixzz2Ijs0hJ9l


By the looks of it (and always seems to be the case) it that the project is a worthwhile one (this dedicated segregated freight line being an example) but the planning was just an utter disgrace and not done properly. And from the Sydney Freight Rail Line example some rather dodgy planning was done indeed. Costs underestimated (as always the case), time of completion underestimated (as always the case), scope of work underestimated (was with Sydney), complexity of the work at hand underestimated (usually the case), benefits delivered from project overestimated (although with Sydney and back here with the CRL this would be a case of benefits most likely being underestimated due to pitch of the benefits being wrong).


So a message to our resident Prude – The Mayor and Auckland Council, take heed of Sydney AND Canberra doing a ballsy and allowing a Rail Fallacy (and a large one at that with the multiple over 3.0) happen with a FREIGHT rail line (let alone passenger rail line projects like the Sydney North-Western Line proposals). Because while some call it scaremongering in what I write, I call it the utter truth from examples overseas gathered and an absolute warning on how to avoid The Rail Fallacy. And I give these warning so that mistakes from overseas  are not repeated in regards to the City Rail Link mega-project. Because if the The Rail Fallacy does happen (and it has with Manukau – knocking confidence right out of Councillors and rail supporters) then support and confidence in further investment in rail (the other four lines to be built) goes right out the door.

Just of note The CRL already faces a tough pitch in giving ratepayers confidence in its multi-billion dollar project support; Whale Oils Rail Patronage post would be a testament to that (after by the looks it someone got a proverbial spanking over there) and The Rail Fallacy coming true with the CRL will do no one any favours. However if we get a Britomart situation where the project was in high doubt but is now a beacon (well all things considered too) of confidence restoration with rail investment and the CRL pulls off the same thing – then – well you figure out with further investment with rail.


So the stakes are high folks they really are…