Australia’s push for high-speed rail is ignoring expert advice and parliamentary findings, according to a former MP who chaired the inquiries, warning planners are pursuing expensive station locations where recouping costs will be so difficult it could derail the project.
Former Liberal MP John Alexander, an advocate for east coast high-speed rail, is pleading for the High Speed Rail Authority to heed recommendations from three inquiries he chaired since 2010 before it finalises a business case on the Sydney-Newcastle stretch by the end of the year.
Central to Alexander’s warning are indications as to the likely station locations, and his concerns these locations will dramatically restrict the potential for value capture – a tax on the future sale of land and homes in the vicinity of stations where the value has skyrocketed due to the new infrastructure.
He says parliamentary inquiries and expert advisers have found value capture will be essential to fund the project’s multibillion-dollar price tag.
Alexander’s alarm follows the start of geotechnical drilling by the HRSA into rocks and riverbeds on the New South Wales central coast to determine the optimal route for the tunnelling project needed for a one-hour fast train between Sydney and Newcastle with a stop halfway at Gosford.
Drill rigs have started work on the Hawkesbury River at Brooklyn and at Brisbane Water near Gosford. Rail sources have expressed dismay that this drilling indicates the HSRA is pursuing a Gosford station underneath the existing CBD.
This followed comments from the HSRA chief executive, Tim Parker, that he believed high-speed rail should run into Sydney’s Central station, while tender documents have suggested a Newcastle station in the suburb of Broadmeadow.
In an interview with Guardian Australia, Alexander stressed that high-speed rail could be used as a way to strategically decentralise settlement for a growing population and unburden existing city centres.
To do this, Alexander said it was essential to build high-speed rail stations just outside of the densest population centres – for example, in greenfield areas 15 minutes outside Gosford’s centre, or between Sydney’s eastern CBD and Parramatta – on land that can allow for development of significant new housing.
Alexander said this allowed the potential for value capture to be maximised, meaning the government could recoup the project’s cost.
‘A mechanism to concentrate wealth’
Conversely, by announcing information that indicates stations without implementing a value capture mechanism, Alexander warned the HSRA is on track to incentivise speculation in the property market, similar to what occurred when Roy and Ron Medich sold their Badgerys Creek property adjoining Sydney’s new airport for $499m after buying it for just $3.5m in 1996.
“Without value capture you’re concentrating wealth among speculators and lucky landowners at taxpayers’ expense. It’s a very close cousin to negative gearing. It will become a mechanism to concentrate wealth,” Alexander warned.
“The strongest evidence from the inquiries … was the need to capture the value of the lands that enjoyed phenomenal uplifts in value due to the taxpayer funds used in building the infrastructure in their vicinity.
“My most serious concern is that, from the HSRA’s announcements, it appears to be planning the longest rail tunnel in the world going directly into Gosford, which certainly would not present the best opportunity for uplift in property values over a wide area”, noting it is already built up and surrounded by water.
“Equally flawed is the decision to go into Broadmeadow [in Newcastle].”
Regarding Parker’s comments about high-speed rail into Sydney’s Central station, Alexander said: “Our inquiries agreed the better place was probably Homebush Bay, where there was opportunity to create a new CBD between the east and Parramatta. It would cost less money to tunnel into Sydney at Homebush, and cost less money to go north to Newcastle.”
To prevent speculation, Alexander urged the HSRA to stop making further announcements hinting at the potential alignment until it had a scheme in place or had secured land for the corridor.
“You’ve got to determine the lands on which you will make an uplift charge, before any announcements are made because one minute later it’s too late.
“If you’ve got the value capture mechanism in place it’s fine to have land speculators act, because they will pay a value capture tax on that uplift if they sell after the rise in value, as will the next person who sells that property.”
The Coalition is yet to confirm it will support the high-speed rail line if elected, prompting anxiety from rail experts who fear it will be scrapped.
Earlier this week, the opposition transport spokesperson, Bridget McKenzie, told an infrastructure summit the Coalition would continue with the project if the business case stacked up.
However, Alexander warned that if the HSRA did not seriously pursue value capture in the business case, and treated the project as an operational form of transport funded by ticket costs alone, it would never stack up.
“If we do value capture properly, it takes the political argument that high-speed rail is too expensive, and knocks it out of the cricket ground, it hits it for six,” he said.
Alexander said that “based on the inquiries I chaired, it’s my opinion that if you place stations strategically to capture the uplift, the entire thing can be funded by value capture”.
A 2013 push for a Melbourne-Canberra-Sydney-Brisbane high-speed rail collapsed after studies predicted a $114bn price tag. The NSW government attempt to build its own line between Sydney-Newcastle but abandoned it in 2022 after about $100m spent on studies.
Guardian Australia contacted the federal transport minister, Catherine King, about the concerns. She referred questions to the HSRA, whose spokesperson said no land for the corridor had been secured yet.
Regarding value capture, they said: “Potential station locations will take into consideration a broad range of benefits associated with railway operations, passenger connectivity and precinct and placemaking outcomes, as well as the potential for new development.”
