Australian Rail Projects 2000-2012: Costs and Outcomes

COSTING AUSTRALIAN PASSENGER RAIL PROJECTS 2000-2012:
HOW MUCH DID WE PAY AND WHAT DID WE GET?
Scott Martin, CMILT
University of Melbourne

SUMMARY
Between 2000-2012, 28 major urban passenger rail projects were constructed in Australia, at a cost
of approximately A$8.8 billion. The projects represented in this paper includes heavy rail and light
rail projects constructed in Australian capital cities between 2000 and 2012 involving the
construction of new rail lines and extension, amplification and electrification of existing rail lines.
The data collected in the survey has been scaled up to constant 2012 dollars and further analysed to
develop indicative construction cost profiles for certain kinds of rail projects, along with a
discussion of the various risks and circumstances associated with the inception, development and
delivery of these projects.
This is the only known Australian survey examining the finished costs of urban rail infrastructure
projects and represents an important piece of research into the costs of public transport
infrastructure provision in Australia.

INTRODUCTION This study attempts to rank the 28 identified urban
rail projects by total project cost and cost per
In the years between 2000 and 2012, 28 major
kilometre to develop indicative costings for light
urban rail projects were completed in Australia.
and heavy rail projects. This represents the ‘first
These projects covered an array of heavy rail and
level findings’ of research into the cost structure of
light rail (tram) projects, costing approximately
major public transport projects. There is specific
A$8.8 billion (2012 dollars).
focus on per route-kilometre construction costs for
While some of these projects (most notably the heavy rail and light rail projects in an attempt to
Sydney and Brisbane airport rail links) were develop a reliable set of indicative costs for:
constructed as Public-Private Partnerships (PPPs),
• Construction of new lines
the majority of these projects were fully funded by
state governments. As such, these projects • Extensions of existing lines
represent significant expenditure of public monies • Amplification of existing lines
by their respective State treasuries and have had
significant implications on each state’s budgets • Electrification of existing lines
and finances. WHY THIS RESEARCH IS IMPORTANT
During the period of this study, Australia’s Federal
This research is important in ultimately developing
government resumed its involvement in urban
a support tool for decision makers who develop,
public transport. After sporadic involvement in
fund and manage urban rail projects in Australian
urban rail infrastructure funding during the 1970s
state and federal governments to have better
and the 1990s, the Federal Government’s
knowledge about the recent history of urban rail
announcement of $4.62 billion in funding for state
projects and the likely costs of delivering future
urban public transport projects in its FY 2009-2010
projects.
Budget (1). While none of the projects examined in
this paper received Federal Government funding, a By the author’s own calculations there are at least
number of passenger rail projects that are another $16 billion of urban rail projects either
currently underway or commencing construction underway or being planned in Australia at present.
are co-funded by both state and federal In recent years, state governments and their public
governments. transport infrastructure delivery agencies have

Conference On Railway Engineering
Brisbane 10 – 12 September 2012
Conference On Railway Engineering 545

Scott Martin Costing Australian Passenger Rail Projects 2000-2012:
University of Melbourne How much did we pay and what did we get?

been criticised by the media (2), public transport to control costs. Flyvbjerg argues that a key cause
lobby groups (3), Parliamentary Committees (4) of overruns is a lack of realism in initial cost
and Auditors-General in New South Wales and estimates. He argues that:
Victoria (5-7) over the escalating costs of public “the length and cost of delays are underestimated,
transport projects, particularly urban rail projects. contingencies settings are too low, changes in
Better knowledge of public transport infrastructure project specifications and designs are not
project costs may assist governments, transport sufficiently taken into account, changes in
agencies and their contractors to prepare more exchange rates between currencies are
robust business cases with more realistic costings. underestimated or ignored, so is geological risk,
These will give political leaders, state and federal and quantity and price changes are undervalued
treasuries and other key decision makers greater as are expropriation costs and safety and
confidence in the ability of infrastructure delivery environmental demands” (12).
agencies to complete projects on time and on In an Australian context, cost-benefit analysis
budget. (CBA) remains the best model of estimating the
LITERATURE REVIEW costs and benefits of constructing major
infrastructure projects (14) and is an important
There is a growing theoretical literature addressing aspect of state and territory governments
the risks, causes and effects associated with cost developing infrastructure project funding proposals
overruns on major infrastructure projects, as part of Infrastructure Australia’s assessment
particularly transport projects in the 20th Century. processes.(15)
Sir Peter Hall was an early entrant to the field,
featuring a history of the faulty assumptions and Other factors identified in the literature such as
cost overruns in the construction of a landmark ‘scope creep’, procurement practices, poor cost
piece of urban rail infrastructure (San Francisco’s controls, the project complexity of construction in a
BART system) in his landmark study Great ‘live’ rail operating environment and problems in
Planning Disasters (8). managing and mitigating risk management have
all been observed as contributing factors to cost
From the 1990s onward, a range of studies were overruns in Australian passenger rail infrastructure
undertaken on evaluating the real and potential projects. The Victorian Auditor-General’s Office’s
risks associated with large-scale infrastructure reports into the delivery of Regional Fast Rail (5)
projects (called ‘mega-projects) around the world, and five Victorian rail projects (7) identified these
including Kharbanda and Pinto (9), Flyvbjerg, issues as contributing to increased costs in
Bruzelius and Rothengatter (10) and Altshuler and delivering passenger rail projects, as did the NSW
Luberoff (11) have added to the body of literature Legislative Council’s report into the cost of rail
dealing with the management (or non- projects in that state.(4)
management) of risks associated with the
development and delivery of major projects. Also ‘Local’ factors peculiar to Australia’s market for
relevant to this study are works on urban rail transport infrastructure also played a role in
project selection (12) and route-kilometre capital increased costs for rail projects, including labour
costs for metro projects in Europe and America. costs and the small size of the domestic
(13) infrastructure market (16). The NSW Audit Office
reported on shortages of skilled workers as one of
A common thread in these analyses of transport a range of reason for delays and cost escalation
megaprojects are claims that cost estimation on a range of urban rail projects in Sydney (6). The
methods are particularly prone to miscalculation, NSW Legislative Council’s inquiry into the cost of
with overruns from initial estimated costs the rule rail infrastructure projects reported that a range of
rather than the exception (12). Rail projects in factors impacting on the cost of rail projects in the
particular are viewed as highly vulnerable to poor state. These included poorly defined project scope,
cost estimation, with analysis of a range of rail the state’s lack of a long-term rail infrastructure
projects showing average cost overruns of 45 per plan and a pipeline of projects to support it, low-
cent. (10) levels of technical expertise in railway agencies
It is also argued that CBA methods have a along with changing political and other objectives.
weakness as analytical tools being effectively ex- All of these it was claimed contributed to NSW’s
ante valuation methods with methodologies experience of cost overruns on rail projects (4).
focusing on valuing project benefits rather than The range of studies evaluating cost overruns and
ensuring estimates of project costs are well project failure help greatly to fill the gaps in cost-
defined. benefit analysis, providing a method for ex-post
The corollary of cost estimation is the ability of evaluation of rail (and other) infrastructure
project managers to control costs. Kharbanda and projects. These studies also provide a way to
Pinto (9) viewed cost control as the key to analyse problems and failures in previous projects.
management of infrastructure projects; from sound If, as is often stated, past behaviour is a predictor
project scoping to initial cost estimation, managing of future behaviour, knowledge of cost and risk
risk and maintaining detailed expenditure records profiles of previous rail infrastructure construction


projects is useful in helping to estimate future size and cost. These were assembled and ranked
costs and guide transport agencies and decision by total cost and are shown in Figure 1 below.
makers in development and delivery of projects. 2. Refinement of included projects
METHODOLOGY One of the key issues in developing cost profiles
1. Project definition and filtering for major infrastructure projects involves a need to
compare projects consistently on an ‘apples-with-
In developing this study, a review was undertaken apples’ basis. The NSW Legislative Council’s
of the main transport industry trade press and inquiry into that state’s rail project costs heard
academic literature to identify an initial list of urban evidence regarding the importance of comparing
public transport projects from Australia and New projects on this basis for developing accurate
Zealand for consideration. From this initial list of costing benchmarks (4). This has also found to be
over 80 projects, a number of filters were applied true overseas, where attempts to benchmark rail
to remove certain projects types. construction costs requires the use of tightly
Project deemed ‘out of scope’ and rejected for defined project criteria (13).
further analysis in this study included: When and as supporting information was
• Grade separations (essentially road rather available, each project was further examined to
than rail projects) strip out non-infrastructure cost items (such as
operating costs), the costs of ‘movable’
• Projects predominantly benefiting rail infrastructure (new rolling stock) and the costs of
freight traffic ‘enabling’ or ‘network-wide’ infrastructure works
• Projects predominantly benefiting (such as train stabling and depots) if possible to
interurban or ‘country’ passenger rail traffic provide construction costs for just the right-of way
and stations. It was considered going to a further
• Infrastructure projects supporting
level down to screen out the cost of stations to
improved urban rail operations (train
develop a ‘basic’ per route-kilometre cost for
stabling, depots, turnbacks, discrete re-
rights-of-way only. However, this was not pursued
signalling projects)
further due to difficulties in collecting such
• ‘Station’ works (Accessibility programs, information through ‘open source’ methods.
park and ride, modal interchanges) The success or otherwise of this methodology and
• New stations (i.e. Melbourne’s Southern the level to which costs can be isolated depends
Cross) unless it is part of a larger urban on levels of financial transparency and project
passenger rail project governance practiced by infrastructure delivery
The narrowing of scope in this way meant that organisations and governments in annual reports,
some public transport infrastructure projects were budget papers and other material. The quality and
excluded from the scope of this study. Other quantity of this material varies between
exclusions encompassed non-rail infrastructure jurisdictions. Analysing this data is often assisted
projects, most notably the range of bus rapid by the use of other ‘open source’ material found in
transit projects built in New South Wales and the mainstream media and transport trade press
Queensland during this period. Also excluded were (whose data also differs in quantity and quality)
five Victorian regional rail upgrading projects on and increasingly, through the use of social media.
existing rail lines, including Regional Fast Rail Weblogs (‘blogs’) covering transport issues are
(costing $931.2 million in 2012 dollars) and works particularly useful, both as sources of information
upgrading four regional rail lines (Ballarat-Ararat, and informed (sometimes ill-informed) comment on
Ballarat-Maryborough, Bendigo-Echuca and Sale- transport projects.
Bairnsdale) to support the reintroduction of rail An important part of the refinement process
passenger services. One NSW regional rail project involved minimising the possibility of making
(Dapto-Kiama electrification) was also excluded ‘apples-and-oranges errors’ by comparing final
from the scope of this study. out-turn construction costs based on published
As a result of applying these filters, a core list of data of uneven specification and quality (13). The
key infrastructure projects remained within scope author has examined in great detail all publicly
for consideration by this study. The final list available information on the 28 projects featured in
consisted of projects in four categories, namely: this paper and has removed extraneous costs to,
where possible provide an finalised cost of
• Construction of new lines delivering a particular urban rail infrastructure
• Extensions of existing lines project with the full range of railway technology
(permanent way, safeworking, traction power
• Amplification of existing lines
supply and passenger facilities) required for the
• Electrification of existing lines functioning of the project once commissioned.
The 28 remaining rail projects were further Three examples of how basic construction costs
investigated to develop profiles of project scope, were determined are shown at different ends of the



Cost per
State / Cost $M Length
Rank Project Name Project type Completed Cost ($M) km $M
Territory (2012 PPI) (km)
(2012 PPI)
Epping-Chatswood
1 NSW New line 2009 $2,350.0 $2,602.4 12.5 $208.2
Railway line
Perth-Mandurah
2 WA New line 2007 $1,103.0 $1,363.0 72.0 $18.9
Railway line
3 Sydney Airport railway NSW New line 2000 $762.0 $1,251.0 10.0 $125.1

Darra-Richlands
4 QLD New line 2011 $417.7 $423.0 4.5 $94.0
Railway line
5 Airtrain QLD New line 2001 $220.0 $372.1 15.9 $23.4

Robina-Varsity Lakes
6 QLD Extension 2009 $325.0 $354.5 4.1 $86.5
Railway extension
Caboolture-Beerburrum
7 QLD Amplification 2009 $298.0 $330.0 13.7 $24.1
duplication
Salisbury - Kuraby
triplication
South Morang rail New line /
9 Vic 2012 $261.0 $261.0 8.5 $30.7
extension amplification
Quakers Hill -
10 NSW Amplification 2011 $246.0 $246.0 3.6 $68.3
Schofields duplication
Corinda-Darra
quadruplication
12 Cronulla line duplication NSW Amplification 2010 $185.0 $191.3 6.6 $29.0

Craigieburn Rail
13 Vic Electrification 2007 $115.0 $125.9 10.0 $12.6
electrification
Turrella-Kingsgrove
quadruplication
Helensvale - Robina
duplication
16 Thornlie spur WA New line 2005 $57.1 $76.0 3.5 $21.7

Currumbine-Clarkson
17 WA Extension 2004 $58.0 $71.3 4.0 $17.8
rail extension
Sydenham rail
electrification
Port Road Tram
19 SA Extension 2010 $53.0 $53.0 2.8 $18.9
extension
20 Clifton Hill rail project Vic Amplification 2009 $49.9 $52.4 1.0 $52.4
Mitchellton-Keperra
duplication
Marayong - Quakers
Hill duplication
Vermont South tram
23 Vic Extension 2005 $30.5 $36.5 2.8 $13.0
extension
24 Box Hill tram extension Vic Extension 2003 $28.0 $35.2 2.2 $16.0

Adelaide CBD tram
25 SA Extension 2008 $31.0 $33.6 2.1 $16.0
extension
Sydney Light Rail
26 NSW Extension 2000 $20.0 $32.3 3.6 $9.0
Extension
Ormeau-Coomera
duplication
Docklands Drive tram
28 Vic Extension 2005 $7.5 $9.0 1.0 $9.0
extension
TOTAL
$8,815.4
COST $M

Figure 1 – Passenger rail projects 2000-2012 ranked by total project cost (2012 dollars)


Scott Martin Passenger Rail Infrastructure Projects in Australia 2000-2012

cost spectrum. The construction cost of the 2.8 methodology in an Australian context by using the
kilometre tram extension from East Burwood to ABS Producer Price Indices (PPI) indices (23).
Vermont South (Melbourne) is usually quoted as Discussions with a range of stakeholders indicated
costing $42.5 million (2005 dollars). However, this that using PPI over CPI to calculate constant dollar
amount was an aggregated one that included $12 values for projects would give better and more
million of operating costs alongside $30.5 million in accurate results.
capital costs (17). Melbourne’s South Morang Rail
ANALYSIS
Extension was originally announced as costing
$650 million (including initial operating costs) in the The projects shown in Figure 1 above cover a wide
Victorian Transport Plan. When capital costs only variety of public transport infrastructure, ranging
were costed the project price was reduced to from tramway and light rail extensions to the
$562.3 million (2). Subsequent investigation by a amplification, extension and electrification of
public transport lobby group found the project suburban heavy rail lines. The costs for these
scope consisted of several related projects beyond projects ranged from a relatively modest $9 million
the rail extension, collectively increasing capacity for the one kilometre length of Melbourne’s
on the Clifton Hill group of lines to accommodate Docklands Drive tram extension to $2.602 billion
increased services from South Morang (18). The for the mostly tunnelled 12.5 kilometre-long
contract value of the actual rail duplication and Epping-Chatswood railway line.
extension works from Keon Park to South Morang The geographical breakdown of these projects by
was $261 million.(19) Perth’s New Metro Rail state is displayed at Figure 2 below. It was
project (which included construction of the Perth- observed that the majority of these projects were
Mandurah railway line) with its often-quoted cost of clustered in the capital cities of Australia’s eastern
$1.663 billion (20) consisted of a range of different, states, with over 80% of metropolitan rail projects
but related projects under the ‘New Metro Rail’ considered in this study being constructed in the
umbrella (21). Stripping out the parts not directly three states of New South Wales, Queensland and
related to the Perth-Mandurah line (the Thornlie Victoria. The two largest states of New South
Spur and Clarkson Extension), network-wide Wales and Victoria jointly accounted for 52% of the
elements (Nowergup railcar depot, new rolling projects by number. Queensland also featured
stock), the capital spend directly attributable to the strongly accounting for 31% of the listed projects
Perth-Mandurah railway was calculated to be by number.
$1.103 billion in 2007 dollars (21).
3. Costings methodology
As these projects were completed across a 12-
year time period from 2000 to 2012, a method was
sought to approximate each project’s publicly
known cost at the time of completion into constant
(2012) dollars. Data on total costs across the
range of projects was obtained using ‘open source’
(that is, publicly available) data, as found in annual
reports, budget papers, media releases,
newspaper articles and the transport trade press.
Once a basic cost profile for all projects was
developed, there was a need to equalise all
projects across the 12-year time horizon of the
study from dollars of the day into constant dollars.
Two methodologies for doing this were examined.
The first method developed a simple set of
calculations where ‘as built’ project costs in dollars
of the day were escalated into constant (2012) Figure 2 : Percentage of completed Australian
dollars utilising the Australian Bureau of Statistics metropolitan rail projects 2000-2012 by state
(ABS) Consumer Price Index (CPI) figures (22). Western Australia’s very creditable performance
Although this methodology is useful to escalate saw the state’s three metropolitan rail projects (the
costs into constant dollars, it is limited by being Thornlie spur line, the Clarkson extension and the
derived from changes in the prices of the basket of Perth-Mandurah Line) accounting for 10% of the
goods and services that determine CPI. projects by number and 15.5% or $1.51 billion
A comparative, trans-national study of rail project (2012 dollars) of the total value, while the two tram
costs in Europe and the US conducted by extension projects in South Australia made up the
Flyvgberg et al (13) used a second methodology, remainder.
based on movements in the OECD Construction It is worth noting that Tasmania, the Northern
Cost Index. It was decided to approximate this Territory and the Australian Capital Territory did



not construct any public transport infrastructure other Australian and international jurisdictions. In
projects during the last decade that fit the criteria the report of its inquiry into rail infrastructure
for this study. The percentage contribution of each project costings, the NSW Legislative Council
state’s metropolitan rail projects to the total ascribed factors contributing to cost escalation in
national spend is shown below in Figure 3. rail projects as including poorly defined scope of
works, changing user requirements requiring
variation, overdesign or ‘gold plating’ of projects
and a desire by governments to announce big-
budget infrastructure projects before the scope of
works and cost estimates are fully defined (4).
Other factors include previously mentioned
examples of aggregating rail project construction
costs with project ‘enabling works’ such as
resignalling, train stabling or major station
upgrades,(18) the bundling of project capital and
operating costs together, (17) and the extra costs
incurred from client requirements to construct
projects in a ‘live’ railway environment with minimal
disruption to regular services.(24)
While there may be many sound reasons behind
the escalating costs of infrastructure projects,
Figure 3 : Australian metropolitan rail projects there is a perception that governments and their
2000-2012 by state as percentage of total value transport infrastructure agencies have a poor
Analysis of the projects examined in this study has knowledge of indicative per route-kilometre costs
seen patterns emerge that are, in the author’s for building public transport infrastructure
opinion significant and worthy of undertaking (particularly rail) projects in Australia. Better
further in-depth research and refinement in the knowledge of these costs and indicative values of
future. The detailed results of this further research the likely costs to construct, extend, electrify or
could add to efforts to provide more accurate amplify a route-kilometre of light or heavy rail
costing for public transport projects that would be would benefit decision makers and arguably
of great usefulness to Australasian infrastructure provide better value for money in public transport
planning and delivery agencies in developing the infrastructure projects across Australasia. This is
next wave of public transport infrastructure important as in the present decade there is (by the
projects that will be delivered during the second author’s calculations) a $16 billion pipeline of
and third decades of the 21st Century. public transport infrastructure projects in Australian
cities either planned or under construction.
INDICATIVE CONSTRUCTION COSTS FOR
The research undertaken in this paper to identify
AUSTRALIAN RAIL PROJECTS
eligible public transport infrastructure projects has
The preliminary results of this research provided provided some preliminary cost indications for
below outlines general per route-kilometre capital constructing light rail extensions and heavy rail
cost profiles for metropolitan light rail and heavy electrification, amplification, extensions and new
rail projects. Figure 4 shows the 28 projects lines. These preliminary values are the result of
considered in this study ranked in terms of cost per high-level analysis and still require further
route-kilometre from the most expensive to least qualitative and quantitative refinement and testing.
expensive. The findings of this research and the However they are valuable in providing some initial
cost profiles generated suggest that decisions analysis as outlined in the remainder of this paper.
made on route alignments (particularly decisions to The basis of the observations made here is Figure
utilise underground rights-of-way, rights-of-way 4 below. This table ranks the projects listed in
with extensive elevation or entrenchment or rights- Figure 1 in terms of average cost per route-
of-way fully separated from surrounding vehicle or kilometre from most to least expensive.
pedestrian traffic) commit project proponents to 1. Methodology
greatly escalated per route-kilometre construction
costs compared to building in mixed traffic or The chosen methodology to derive the per route-
partially separated surface right-of-way. These kilometre construction costs is straightforward, as
escalated costs are based on the need to mitigate costs for each transport technology type (light rail,
or manage a range of engineering, environmental, heavy rail, new lines, extensions, amplification,
safety and other risks as part of the project scope. electrification) from the sample list of projects in
Figure 1 have been aggregated together and
In recent years, the print media and public
averaged out to provide the mean construction
transport advocates have argued the final outturn
cost for a route-kilometre of light or heavy rail in
construction costs for passenger rail infrastructure
the four main project types (electrification,
projects in Australia (especially heavy rail projects
in Sydney and Melbourne) are much higher than in amplification, extension or new construction).


Cost per
State / Cost $M Length
Rank Project Name Project type Completed Cost ($M) km $M
Territory (2012 PPI) (km)
(2012 PPI)
Epping-Chatswood
1 NSW New line 2009 $2,350.0 $2,602.4 12.5 $208.2
Railway line
2 Sydney Airport railway NSW New line 2000 $762.0 $1,251.0 10.0 $125.1

Darra-Richlands
3 QLD New line 2011 $417.7 $423.0 4.5 $94.0
Railway line
Robina-Varsity Lakes
4 QLD Extension 2009 $325.0 $354.5 4.1 $86.5
Railway extension
Quakers Hill -
Schofields duplication
6 Clifton Hill rail project Vic Amplification 2009 $49.9 $52.4 1.0 $52.4

Corinda-Darra
quadruplication
Salisbury - Kuraby
triplication
South Morang rail New line /
9 Vic 2012 $261.0 $261.0 8.5 $30.7
extension amplification
10 Cronulla line duplication NSW Amplification 2010 $185.0 $191.3 6.6 $29.0

Turrella-Kingsgrove
quadruplication
Caboolture-Beerburrum
duplication
13 Airtrain QLD New line 2001 $220.0 $372.1 15.9 $23.4

14 Thornlie spur WA New line 2005 $57.1 $76.0 3.5 $21.7
Mitchellton-Keperra
duplication
Perth-Mandurah
16 WA New line 2007 $1,103.0 $1,363.0 72.0 $18.9
Railway line
Port Road Tram
17 SA Extension 2010 $53.0 $53.0 2.8 $18.9
extension
Currumbine-Clarkson
18 WA Extension 2004 $58.0 $71.3 4.0 $17.8
rail extension
19 Box Hill tram extension Vic Extension 2003 $28.0 $35.2 2.2 $16.0
Adelaide CBD tram
20 SA Extension 2008 $31.0 $33.6 2.1 $16.0
extension
Vermont South tram
21 Vic Extension 2005 $30.5 $36.5 2.8 $13.0
extension
Marayong - Quakers
Hill duplication
Craigieburn Rail
electrification
Docklands Drive tram
24 Vic Extension 2005 $7.5 $9.0 1.0 $9.0
extension
Sydney Light Rail
25 NSW Extension 2000 $20.0 $32.3 3.6 $9.0
Extension
Sydenham rail
electrification
Helensvale - Robina
duplication
Ormeau-Coomera
duplication
TOTAL
$8,815.4
COST $M

Figure 4 – Passenger rail projects 2000-2012 ranked by cost per route-kilometre (2012 dollars)


Further analysis of the mean cost for each 2. Light rail construction costs
transport technology type shows a level of Since 2000, light rail in Australia has undergone
stratification dependent on each project’s ‘level of something of a renaissance with six projects
difficulty’. For example, railway construction that completed in three cities. Adelaide’s single tram
features extensive underground tunnelling in a route (Glenelg-South Terrace) was upgraded and
‘brownfields’ urban area or grade separated rights- extended through the CBD to North Terrace and
of-way may be more expensive than construction later extended further from North Terrace to the
on ‘greenfields’ sites or ‘upgrading’ (such as track Adelaide Entertainment Centre; Sydney’s sole light
amplification or electrification) to a railway line in rail route was extended from Wentworth Park to
an existing corridor, although the risks of working Lilyfield, while in Melbourne two extensions were
in a ‘live’ railway is likely to add to overall per constructed in the middle suburbs (Mont Albert-
route-kilometre costs. Box Hill and Burwood East-Vermont South) and a
Light rail projects have been considered separately third in Docklands on the CBD fringe.
from heavy rail projects in this study for Figure 5 below shows the per route-kilometre
two reasons. First, they form a largely construction cost profiles developed using the
homogeneous set of projects, mostly constructed sample group of six light rail extension projects.
in on-street environments. Second, unlike most Costs ranged from an upper bound of $18.9 million
heavy rail projects, they are built in rights-of-way (2012 dollars) for Adelaide’s Port Road tram
that are least separated from other road and extension to a lower bound of $9 million (2012
pedestrian traffic. dollars) for the Sydney Light Rail extension to
Using Vuchic’s taxonomy of rights-of-way, (25) Lilyfield. Based on the six projects from 2000 to
Australian light rail projects operate either on 2012, the average per route-kilometre cost for light
surface streets in mixed traffic (Category C), or on rail projects in Australia is $13.65 million.
roads with some physical separation (tram The range of light rail construction costs reflect the
corridors in central medians of arterial roads) but different urban environments they are constructed
also at-grade vehicle and pedestrian crossings in. The four projects costing $13 million per
(Category B). Increasingly, New Australian heavy kilometre or more reflects construction in the
rail projects are moving from rights-of-way largely Adelaide CBD and arterial roads medians in
in Category B rights-of-way (separate corridors Melbourne (Box Hill, Vermont South) and Adelaide
bisected by at-grade vehicle and pedestrian (Port Road). The two projects costing below
crossings) toward Category A rights-of-way that average (at $9 million per kilometre) reflect lower
are fully grade-separated from surrounding construction costs in brownfields areas: inner-
vehicles and pedestrians. This has an impact on urban renewal area (Docklands Drive) and the re-
project costs as requirements for grade separation use of an existing, formerly heavy rail alignment
for new lines and level crossing removals on with a Category A right-of-way (Sydney’s Light Rail
existing lines must be factored into project costs. extension).

Figure 5 – Indicative construction costs per-route kilometre for Australian light rail projects 2000-2012



3. Heavy rail construction costs of how costs were apportioned in projects through
further examination of the data will ultimately
In this sample group, 22 heavy rail projects were
provide better cost profiles across the range of
confirmed as completed between 2000 and 2012.
projects.
These projects encompassed covered the gamut
of rail construction project types including: The sample group of 22 heavy rail projects
considered in this study falls into four key
• electrification, categories. It is now proposed to separate out
• amplification of existing lines, projects in each category from the sample group of
• extensions to existing lines and 22 projects to understand their per route-kilometre
construction costs and also to look at the special
• construction of new lines. case of tunnelled rights-of-way.
Heavy rail projects often prove most contentious of 1. Electrification
all public transport infrastructure projects. The
risks of scope creep and cost escalation rises due Of the 22 heavy rail projects examined in this
to the need to build in mitigation of real or study, only two were electrification projects. Both
perceived risks and disbenefits caused by a rail projects (St Albans - Sydenham and
project. These include environmental (flora/fauna, Broadmeadows-Craigieburn) are located in
watercourses), social (noise barriers, placing lines Victoria. At the time of writing, a third electrification
in cuttings or culverts) or economic (grade project (Sydenham – Sunbury) was nearing
separations to improve road network operation) completion but not commissioned and is therefore
risks and disbenefits. excluded from this study, along with a regional
electrification project in NSW (Dapto-Kiama).
While the costs of mitigation for these disbenefits Based on this small sample of two projects, the
and risks and the consequent scope ‘creep’ are indicative cost for electrifying existing lines is $10.7
more apparent and more likely to occur in the million/km in 2012 dollars.
more heavily populated inner and middle urban
areas of Australian cities, these risks also need to 2. Amplification of existing lines
be managed on the urban fringes, the rural/urban This category consisted of 11 projects, a large
interfaces and regional areas. sample size of projects for examination in this
Increased mitigation costs are often incurred to study. Track amplification (duplication, triplication
mitigate perceived disbenefits to local communities and quadruplicating) of existing lines accounted for
in projects that benefit metropolitan areas as a 11 of the 22 projects, with costs ranging from a
whole. For example, a recent decision by the high of $68.3 million/km for the recently completed
Victorian Government to review noise Quakers Hill- Schofields duplication in NSW to a
management plans for rail projects (26) means low of $4.1 million/km for the Ormeau-Coomera
that state’s Regional Rail Link (RRL) may need to duplication in Queensland. The average cost of
install noise barriers along the rail corridor to track amplification based on the sample size is
mitigate noise impacts on current and future $29.1 million/km in 2012 dollars.
housing developments at an estimated cost of 3. Extensions to existing lines
$20-$50 million. This has also led to ambit claims
by residents along more densely populated RRL The sample size of this category was four projects
corridor for noise barriers to be installed.(27) only, ranging from $86.5 million/km for the Robina-
Varsity Lakes extension in Queensland to Perth’s
The 22 urban heavy rail projects are ranked by Currambine-Clarkson extension, costing $17.8
cost, with the different levels of per route-kilometre million/km. The Varsity Lakes extension cost
costs for these projects shown in Figure 6 below. significantly more than the next most expensive
The per route-kilometre costs (in 2012 dollars) for project (South Morang rail extension,
rail projects in this sample range from an upper costing $30.7 million/km), due to extensive
bound of $208.2 million for the deep-tunnelled earthworks, a 300-metre long cut-and-cover tunnel
underground right of way of the Epping- and extensive additional works such as local road
Chatswood Rail Link to the lower bound of $4.1 reconstruction and essential service relocations.
million for the Ormeau-Coomera duplication. The Based on this sample of four projects, the average
average heavy rail construction cost per route- cost of rail extensions is $39.2 million/kilometre.
kilometre across all 22 projects was $44 million
(2012 dollars). 4. Construction of new lines

FURTHER REFINEMENT OF RAIL PROJECT Five projects represented construction of new
CONSTRUCTION COSTS heavy railway lines. This sample of projects and
their per route-kilometre costs ranged from
However, this average per route-kilometre tunnelled routes such as the Epping-Chatswood
construction cost figure of $44 million per kilometre ($208.2 million/km) and Airport ($125.1 million/km)
masks the differing costs of the variety of project lines in Sydney; to more conventional lines in
profiles and construction types encountered in this Brisbane (Darra-Richlands line [$94 million/km]
sample of 22 rail projects. A better understanding


1 Cost
Per-‐route
k ilometre
$200
Average
Cost
P er-‐route
kilometre

Legend
–
1.
Epping-‐Chatswood
line,
2.
Sydney
Airport
line,
3.
Darra
–
Richlands
line,
4.

Robina
-‐
Varsity
Lakes
extension,
5.
Quakers
Hill
-‐
Schofields
duplication,
6.
Clifton
Hill

$150 duplication,
7.
Corinda
–
Darra
duplication,
8.
Salisbury
–
Kuraby
duplication,
9.
South

Morang
rail
extension,
10.
Cronulla
line
duplication,
11.
Turrella
–
Kingsgrove

quadruplication,
12.
Caboolture
–
Beerburrum
duplication,
13.
Brisbane
Airtrain
line,

14.
Thornlie
spur
extension,
15.
Mitchellton
–
Keperra
duplication,
16.
Perth
–

2 Mandurah
line,
17.
Currambine
–
Clarkson
extension,
18.
Marayong
–
Quakers
Hill

duplication,
19.
Craigieburn
electrification,
20.
Sydenham
electrification,
21.

Helensvale
–
Robina
duplication,
22.
Ormeau
–
Coomera
duplication.

$100
3
4

5

$50 6
7
8

Construction cost per-‐route kilometre (2012 dollars)
9 10 11
12 13 14 15 16 17
18 19
20
21 22
$0 Brisbane 10 – 12 September 2012

554
Figure 6 – Indicative per-route kilometre construction costs for Australian heavy rail projects 2000-2012


Figure 7 – Comparative per-route kilometre costs of urban passenger rail projects 2000-2012
by construction characteristics

Based on this sample of five projects, the average middle and outer suburbs, the most feasible
construction cost for new heavy rail lines in option to improve capacity at the inner-core of
Australia is $93.9 million/km. The first three, being Australian rail networks is with tunnelled rights-of-
the most expensive of these projects represent way. Tunnelling of new routes to increase heavy
efforts to retrofit heavy rail transport into a mature rail capacity will be particularly important to the
urban environment, either in an inner city area continued functioning of the rail networks in the
(Sydney Airport line), middle suburbs (Epping- East Coast capitals of Brisbane, Sydney and
Chatswood) or an urban fringe growth area Melbourne, with major heavy rail projects using
(Darra-Richlands). The latter two represent lines extensive tunnelling being proposed or planned in
built for the majority of their length in low-density all three cities (Cross-City Rail, various Sydney
metropolitan areas or in an existing transport metro proposals, Melbourne Metro 1
corridor. respectively), currently earmarked to commence
Removing the two most expensive projects with construction during the late 2010s-early
tunnelled rights-of-way (Epping-Chatswood line 2020s.Tunnelled alignments are also seen as
and the Sydney Airport Railway), average important in providing access through urban
construction costs for new, non-underground areas to CBD stations in Brisbane, Canberra,
railway lines more than halves to $45.4 million/km Melbourne and Melbourne as part of any future
based on the three remaining new heavy rail East Coast high speed rail project. (28)
construction projects. The small sample size of tunnelled rail projects in
5. Tunnelled rights-of-way – a special Australia is of concern and some attempt has
case study been made in this study to address the
development of indicative costs for tunnelled
The greatest escalation factor in construction rights-of-way in Australian conditions. In
costs for new heavy rail projects is the decision to determining an indicative per-route kilometre
pursue tunnelled rights of way. The technical and construction cost for new lines in tunnelled rights-
geological complexity and risk of tunnelling of-way, the two predominantly underground rail
projects greatly increases this cost. The decision projects, being Epping-Chatswood ($208.2
to choose a tunnelled right-of-way occurs for a million/km) and the Sydney Airport railway$125.1
variety of reasons, most typically the high cost of million/km) in this study were used, in addition to
land acquisition, disruption to a city’s inner core a third project, the section from Perth station to
and CBD and the need to mitigate risk of The Narrows bridge which formed ‘Package F’ of
disruption during construction to essential the Perth-Mandurah line.
services and the built and natural environments.
While the vast majority of the 72-kilometre long
As future opportunities for at-grade railway Perth-Mandurah railway line was constructed
construction in Australian cities moves to the along freeway medians and sandy scrubland



south of Perth, the last few kilometres into Perth’s Index data for civil construction from Statistics NZ
CBD presented complex engineering challenges, with the ABS PPI data to produce comparable per
including the Swan River crossing at the Narrows. route-kilometre cost figures in constant dollars is
The tunnelled approach to Perth station and being sought by the author.
connection to the Joondalup line (‘Package F’) Issues identified in other studies on rail projects
provides another example of the high costs of costs (particularly the NSW Legislative Council
tunnelling in an inner urban environment. The inquiry) of isolating the different elements of
final cost of Package F was $398.1 million (2007 project expenditure to better determine actual
dollars), or approximately 36% of the project’s construction costs would also be a fruitful area for
total construction costs.(21) Package F further research.(16) Further quantitative work is
encompassed 2.2 route kilometres of needed to isolate the costs for different project
underground railway construction costing a total components and develop better cost profiles for
of $299.6 million/km (2012 dollars) or $136.2 constructing a route-kilometre of heavy and light
million per route-kilometre. Package F’s scope rail lines in Australia.
consisted of:
Additional quantitative work needs to be
• 600m of open dive tunnels undertaken to examine the differences in outturn
• 700m of cut and cover tunnels costs across the range of different procurement
• 700m of twin bored tunnels options available in public transport infrastructure
• two underground stations construction. On another level, work remains to
• rail connection to the Joondalup line be done on further identifying costs for railway
• railway track, overhead power, signalling stations and other key infrastructure to develop
and communications unit costs for them also. There is also the
• associated roadworks, drainage and possibility of including rail projects presently ruled
landscaping(29) out scope in this study, such as grade
When this admittedly small sample of three separations, rail upgrades and rail freight works.
projects is analysed, the average per-route Other questions arising from this study are more
kilometre cost of constructing rail projects on an qualitative than quantitative in nature, dealing with
underground right-of-way in Australia was the making of key decisions defining project
determined to be $156.5 million/km. This amount scope and management of risk. Obtaining more
occupies the upper range of construction costs for qualitative information on these projects will
urban tunnelling ($100-$180 million/km) quoted involve interviews with past and current project
by AECOM in their recent Stage 1 High Speed managers involved with these and other projects,
Rail study for the Commonwealth along with other key decision makers at the
Government.(28) political level of transport policy as part of a more
The ratio between the average per route- intrusive data gathering process.
kilometre costs for both underground and ‘at- ACKNOWLEDGEMENTS
grade’ rail construction (approximately 3.5:1) is
also roughly consistent with the cost ratios for The author wishes to acknowledge the assistance
new-build metro system in Europe, the Americas of the two anonymous referees who reviewed this
and Asia as outlined in Flyvbjerg, Bruzelius and paper and their constructive comments on how it
Van Wee, who claim that their study shows could be improved. He also acknowledges the
underground alignments cost between 4-6 times contributions of Associate Professor Philip Laird
more than at-grade alignments (13). of the University of Wollongong, Dr Chris Hale of
the University of Melbourne and Messrs Ray
CONCLUSION Kinnear, Robert Abboud and Justin DiGiulio of the
The information and figures provided above are Network Planning Division of Public Transport
the result of an extensive, medium-term research Victoria, David Rolland of GHD, Evan Granger of
project into the cost of constructing public MGS Architects and Peter Kain of BITRE for their
transport projects in Australia. The preliminary comments on earlier versions of this paper.
results of this study have developed a likely range
of per route-kilometre costs for a range of urban
passenger rail infrastructure projects. However,
there are many areas touched by this study that
require further work and refinement.
Additional qualitative work has been undertaken
to integrate New Zealand rail infrastructure
projects since 2000 to provide a broader and
deeper dataset of projects for analysis. Specialist
advice on integrating the Capital Goods Price



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