Canberra light rail to deliver $1b in community benefits, business case shows

A proposed light rail line connecting Gungahlin to Canberra's CBD will deliver almost $1 billion in benefits to the community, according to a business case released by the ACT Government.

The report included $222 million in transport time savings, $140 million in infrastructure efficiency savings, $198 million in wider economic benefits and $240 million in land-use benefits.

It also factored in $5 million in walking, cycling and health benefits and $13 million in environmental and other benefits.

But the Canberra Liberals said the benefit-cost ratio has decreased by half from an earlier estimate, and the figures for the "high risk" project did not stack up.

The business case, which was compiled by professional services firm Ernst and Young, indicated a return of $1.20 for every dollar spent.

It predicted that by 2031, public transport use will increase by over 30 per cent, with over 20,000 journeys made by light rail every day.

The case used information from technical and financial data to predict community and social impacts.

The ACT Government previously estimated it would cost$783 million to deliver the project, including $610 million for capital and $173 million set aside as a contingency.

But there was still a 25 per cent chance the project could go over the $783 million estimate, according to risk analysis outlined in the business case.

The $783 million price tag for capital included design, construction and light rail vehicles.

The business case indicated that, once up and running, an additional $22 million per year on average would be required in operational costs.

1,450 direct jobs and 2,100 indirect jobs

Chief Minister Katy Gallagher said the construction phase alone would create more than3,500 ACT jobs.

The business indicated this would include 1,450 direct jobs and 2,100 indirect jobs.

"This affordable project will deliver huge economic benefits to our city... light rail will revitalise the entire corridor from Gungahlin to the city."

The first stage of network from Gungahlin to the city would be delivered as a public-private partnership, paving the way for a city-wide network.

Along with the release of the report, the ACT Government announced that the expression of interest process for businesses wanting to help build the tram line was now open.

Minister for Capital Metro Simon Corbell said the business case showed that a public private partnership would provide 11 per cent better value than if the Government built and operated the light rail line itself.

"Light rail is an investment we have to make, but it's one we can reasonably afford. Delivering this as a public-private partnership will enable us to spread that cost equitably across future generations," he said.

The results of a survey included in the report showed almost 57 per cent of Canberrans believed they would be more likely to use public transport if it involved a light rail system that was accessible to them.

It follows earlier figures released by the ACT Government showing 55 per cent of Canberrans supported the light rail project, while 34 per cent were against it and 11 per cent were undecided.

Business case contradicts earlier report by Canberra Liberals

Opposition transport spokesman Alistair Coe said Ms Gallagher and Greens MLA Shane Rattenbury had been spruiking the light rail project since their power-sharing deal following the 2012 election, but that today's figures did not stack up.

Mr Coe said in 2012 the ACT Government made a submission to Infrastructure Australia, attributing the project with much higher benefit-cost ratio, but that the submission was turned down.

"Today with more definitive figures, we know that the BCR is not $2.36 as stated in 2012. It is in fact half that," he said.

"If Infrastructure Australia said no to this project in 2012 when it had a benefit cost ratio of 2.36, now that it's half that at 1.32, I find it very hard to believe that this government is onto a winner. It doesn't stack up."

Mr Coe said the Government had based its business case for what he described as a high-risk project on figures shadowed by "considerable doubt".

"They’ve tried to attribute value to all sorts of things, which in only minor adverse circumstances could well all go astray," he said.

The Canberra Liberals commissioned their own report into the economic viability of project earlier this year.

The report by consultant Bob Nairn, released in June, found costs for the light rail link could blow out by $300 million.

Mr Nairn worked on the first stage of light rail in Sydney and had also carried out feasibility studies for light rail projects in Korea.

He estimated it would cost $915 million to build the Gungahlin line, based on the construction costs of recent light rail projects in the United States.

Details eagerly awaited by business community

Details of the report have been eagerly anticipated by the Canberra business community who offered cautious support for the project prior to its release.

The country's peak infrastructure body has also given the project the thumbs up, pointing to the successes of similar proposals in other states.

Infrastructure Partnerships Australia chief executive Brendan Lyon said last month it was a good time to be buying infrastructure as strong competition could drive down the cost.

"This is really setting up for a very good result in terms of price and a very good result in terms of the type of technological advances that Canberra might see," he said.