Stop The Light Rail

Contact has been made by a number of qualified people about this website, regarding the figures being too high or too low….

Even if the total cost scenario is reduced by 50% the project is still not an acceptable infrastructure development, so please contact your local member and ask for a full enquiry into the real costs and let’s find out the truth.

 

Estimated Reality about the Gold Coast Light Rail, Stage 1, 13kms.

A tram only replaces an efficient and economical bus service that uses existing roads. The tram will never carry more passengers just because it’s a tram!

All we are doing is adding huge capital and operating costs for no reason.

It’s effectively owned by us, the taxpayers, not a private company

• It cost at least 2.24 Billion dollars or $172 million per kilometre,
• It loses $45 million per year, which we pay for,
• It costs us more than $256 million in interest per year,
• We pay the operator an interest rate of 9.22% (more than 2 times what the government can borrow money for),
• The daily operating and interest cost (loss) is $701,000,
• Cost per kilometer per year is $19,692,000,
• It carries 25,000 passengers per day, but needs to carry 140,000 passengers per day,
• There are 95,000 residents along the route, so it needs all the residents to catch the tram twice every day,
• Forecast growth rate (calculated from Australian Bureau of statistics) is 30% which gives a population in 10 years of just 126,325,
• It needs a population of 538,000 to provide enough customers,
• Or the average fare has to go up from $5 per trip to $28 per trip to pay its way

The tram service needs a population increase along any of the stages of at least 6 times what it is today.

The population growth in the next 10 years on the whole of the Gold Coast will only be 200,000, that is increasing from 600,000 to 800,000.

The full length will require a population increase, (just along the route within a 10-minute walking distance,) from approximately 227,000 to at least 1.2 million residents.

That’s assuming 26% of the population will use it. If 13% use it, we will need a population of 2.8 million along the coastal strip or about the same size as Brisbane.

That will never happen in a hundred years.

So why are we building light rail?

What is needed right now

• Hold on any further development.
• A full and open review by both the Queensland Auditor General and the Federal Government Department of Infrastructure.
• A review of the existing tram service structure, pay out Goldlinq, reduce the interest rate from 9.22% to about 5% with Government bonds and save at least $80 million in interest payments each year, and have Translink take it over.

Gold Coast Light Rail Cost Calculations Summary by Stages

Stage 1

1. Cost $2,240 million.
2. 13km long ($172 million/km).
3. Interest cost per annum is $171 million.
4. Operational costs are $85 million/year ($6.5 million/km).
5. Customers at 25,000/day (or 26% of the current population) create about a $40 million/year income.
6. Total of operating costs and interest cost is $284 million per annum ($701,000/day).
7. $19,000,000/km/year.
8. Passengers required per day at $5 per ticket is 140,000,
9. Current population 95,000 (Australian Bureau of Statistics, ABS)
10. Population needed: 538,000 (ie: 140,000 times 100 divided by 26)
11. If the trams carry the population needed to break even, and they are half full, we will need 50 trams per hour or 1 every minute. (155,000 divided by 154 passengers per tram divided by 18-hour service)
12. Where will all the buses needed park, and how will they fit on the road, as they need 2.5 buses for each half full tram?

Stage 1 immediately needs 3 times the growth forecast for the whole of the Gold Coast from Yatala to Tweed Heads in the next 10 years, now.

Stage 2

1. Cost $650 million (Contract plus Government costs)
2. 7.3 kms long ($90 million per kilometre) (no road reconstruction)
3. Interest cost per annum is $50 million
4. Operational cost for this section allowance $22 million per annum ($3 million per kilometre)
5. Total of operating costs and interest cost is $82 million per annum ($197,260/day)
6. $9.8 million/km/year
7. Passengers required per day at $5 per ticket is 39,500
8. Current population: 40,000 (ABS)
9. Population needed: 151,000 (using 26% patronage applied to passengers needed)
10. If the trams carry the population needed to break even, and they are half full, we will need 14 trams per hour or 1 every 4.2 minutes.

Stage 1 and 2 combined

1. $2,890 million.
2. 20.3 kms ($142 million per kilometre).
3. Interest cost is $221 million.
4. Operational costs $107 million per annum.
5. Total of operating cost and interest cost $328 million per annum. ($898,000/day)
6. $16,000,000/km/year
7. Passengers required per day at $5 per ticket is 180,000.
8. Current population: 135,000 (ABS)
9. Population needed: 692,000 (using 26% patronage applied to passengers needed)
10. If the trams carry the population needed to break even, and they are half full, we will need 64 trams per hour or less than every minute.

Stage 3

1. $1,050 million.
2. 7 kms ($150 million per km).
3. Interest cost $81 million per annum.
4. Operational costs allowance $21 million per annum.
5. Total of operating costs and interest are $102 million per annum.
6. $14.5 million/km/year
7. Passengers required per day at $5 per ticket is 55,890
8. Current population: 55,000
9. Population needed: 214,000 (using 26% patronage applied to passengers needed)
10. If the trams carry the population needed to break even, and they are half full, we will need 20 trams per hour or 1 every 3 minutes

Stage 4

1. $1,760 million.
2. 11kms ($160 million per kilometre).
3. Interest cost is $136 million per annum.
4. Operational costs allowance $33 million per annum.
5. Total of operating cost and interest cost $169 million per annum.
6. $15.3 million/km/yr
7. Passengers required per day at $5 per ticket is 92,754
8. Current population: 40,000 (27,000 plus 13,000 for airport and John Flynn Hospital)
9. Population needed: 356,700
10. If the trams carry the population needed to break even, and they are half full, we will need 33 trams per hour or 1 every 1.5 minutes

Stage 3 and 4 combined

1. $2,810 million
2. 18kms ($156 million per kilometre)
3. Interest cost is $218 million per annum
4. Operational costs are $54 million per annum
5. Total of operating cost and interest cost $272 million per annum ($745,000/day)
6. $15 million/km/year
7. Passengers required per day at $5 per ticket is 149,000 per day
8. Current population: 110,000
9. Population needed: 573,000
10. If the trams carry the population needed to break even, and they are half full, we will need 62 trams per hour or 1 every 1 minute.

Full project

1. $5,700 million
2. 38kms ($149 million per kilometre)
3. Interest cost is $439 million per annum
4. Operational costs are $161 million per annum
5. Total of operating cost and interest cost $600 million per annum ($1.64 million/day)
6. $15.8 million /km/year
7. Passengers required per day at $5 per ticket is 328,000 per day,
8. Current population: 245,000
9. Population needed: 1,260,000 at 26% patronage or 2.5 million at 13% patronage

What all of Queensland have missed out on for Stage 1 and 2, (and the same again if Stage 3 and 4 go ahead)

Here is an example what all Queenslanders have missed out on due to the spending on the first 2 Stages of the light rail; capital cost - $2.89 billion, the annual cost - $328 million in the brackets:

• $2,554 for every one of the 1.1 million underprivileged children in Australia ($298 each child per year on interest payments)
• 562 kilometres of 2 lane country road for country Queensland at $5 million per kilometre (65.6 kilometres per year on interest payments)
• 18,000 fully trained police at $150,000 per police officers (2,186 police offices per year on interest payments)
• 56,000 aged care persons supported at $50,000 each (6,560 persons per year on interest payments)
• 562,000 emergency hospital beds at $5,000 per night (65,600 beds per year on interest payments)

Here’s additionally what the Gold Coast has missed out on:

• 56 kilometres of 8 lane freeway at $50 million per kilometre – that is Brisbane to Helensvale (or 6.5 kms per year on interest payments),
• an 8 lane freeway from Robina to Tweed Heads, 2.4 times (24kms), (or 1/3 of the distance from Robina to Tweed each year on interest payments).

Opinion

The result of this investigation is that the development of the light rail is a nonsense.

There is no transparency on an enormous financial commitment that is funded and guaranteed by the taxpayers and provides zero benefits.

If anything, it degenerates individuals and businesses during construction and leaves a legacy reflected in the permanent negative effects the development has had on Surfers Paradise and Southport business areas.

Perhaps a few individuals benefit, but the Gold Coast and Queensland as a whole pay unnecessarily for an infrastructure project that is not needed.

Certainly, someone is benefitting from the interest rate.

As an infrastructure project, it cannot be of any advantage to the taxpayer at all, ever, viewed from a cost and operating viewpoint, and as an amenity.

The good points promoted in the media and by Goldlinq and the Gold Coast City council, and the Mayor, and some of the Councillors, and some of the State Parliament members, such as quality infrastructure investment, profitability and patronage, and servicing population growth, when investigated and added up correctly, don’t show such a positive situation, nor justification.

We are spending a fortune to install a light rail system to replace a perfectly good economic and flexible route bus system that uses existing roads.

The NSW Auditor General investigated the Sydney light rail project and essentially (in our words) advised it was a complete waste of taxpayers money, and that is in a city of 5 million people!

This project indicates a gross failure in our Government at all levels.

The funds could be better spent to support our more essential community needs in Queensland.

How could anybody get the numbers so wrong, and still be in business or employed?

Who’s paying

We the taxpayers are paying a private/public partnership entity, ‘Goldlinq’, to build and operate the light rail. They are charging 9.22% interest and borrowing all the money (it’s believed) from an offshore bank.  The Queensland Government is in a private-public partnership with them, and the government does a couple of things:

1. The government guarantee all operating losses and all costs and all variations.
2. The Queensland government is responsible for all the roadworks, services relocations and all the land resumptions, and we assume our interest rate is about 5%.
3. The Government is also contracted to take over the project and costs completely over 15 years, and of course, it then adds, for Stage 1 and 2, 3% to the Queensland State debt, or 6% if you allow for the capital repayment.
4. Then there is the possibility of Stage 3 and four continuing which alone adds another 3% to the Queensland government debt.

So, it is effectively a taxpayers project, and the promoter is completely protected by us, the taxpayer.

We must also query the interest rate of 9.22% when Government bonds can attract money at little more than 4%.

We are already paying the costs now through Department of Transport and Main Roads. See their annual reports for 2015/16, and 2016/17, where the 15-year term and the interest rate and the operating loss subsidy of $45 million per year are recorded on page 229 and 262 of the 2015/16 report.

The subsidy is an additional 50% of the whole of the existing Gold Coast bus Service subsidy, for just 13kms or 7% of the whole of Queensland bus subsidy costs

We have been committed to Stage 1 and 2, which have cost us about 2.89 billion dollars, and an interest and operating (loss) cost to the taxpayer of some $328 million every year, forever.

But we the taxpayers know little about the business plan, or the operational records nor the real costs.

So, it’s us, the Queensland taxpayers who are paying.

History

Stage 1 and 2 were initially promoted with a total cost of between $320 and 360 million.

The price just went up and up, and no one stopped to check what was going on, with a bit of money from the Federal Government, some from the State Government and some from the GCCC.

No one seems to have sat down and added it all up, however, if they had done their homework correctly, the project would never have started.

Stage 1 and 2 costs are calculated here at $2.89 billion, or 9 times more than the original estimate, now with an annual bill to service of $328 million.

The calculations here for Stage 3 and 4 indicate at least another $2.8 billion is required, adding an additional annual bill to service of $272 million every year.

The total annual outgoings for the full project will be at least $600 million per year or $16 million per kilometre without allowance for capital repayments.

What’s wrong with it?

Stage 1 cost, on the figures available from the media and the operators, at least $2.24 billion, (about $172 million per kilometre) and costs $256 million in interest and operating costs every year.

(Sydney and Newcastle light rail are expected to cost more than $220 million per kilometre, so we are happy with our costs here)

It sells about $40 million in tickets. That’s quite a shortfall.

It carries no more passengers than the buses did.

It needs at least 5-6 times the current population along the route that exists now to break even.

It carries approximately 25,000 passengers per day but needs to carry 140,000 per day.

Current population along Stage 1 is 95,000, from the Australian Bureau of statistics, so to get 26% of the population on the light rail, so it breaks even, 95,000 needs to increase to 538,000.

The population increase to 538,000 is 2.5 times the population increase due on the whole of the Gold Coast council area, from Logan River to Coolangatta, over the next 10 years.

The population required for the whole length to the airport is at least 1.2 million or more likely 2.4 million population, just along the route.

For a $5 fare, the cost is $31.

We'll never have anywhere near the population it needs.

At anywhere near its economic operation capacity it creates a logistic traffic nightmare.

We don’t need it.

Costing reality

Based on the figures below, even if we are too high by 50%, the light rail development is still a waste of tax payer’s money.

If we were to use the $220 million per kilometre forecast for the Sydney and Newcastle light rail, the impact on the gold coast and Queensland community would be far worse.

We don’t know the real figures as it’s all hidden behind a private/public partnership, which in our view is just a way to keep the costs off the Queensland Government debt which is running at over 100 billion dollars.

Stage 1 and 2 add nearly 3% to the Queensland debt, and Stage 3 and 4 will make that total 6%.

Infrastructure investment

Government is supposed to invest in infrastructure projects that provide a benefit to the taxpayers.

Given that the original estimates were between $320 and $360 million for both Stage 1 and 2 and its blown out to nearly $3 billion, (some say $4 billion) it seems that there have been some porky pies told or someone has trouble adding up.

There is no benefit for taxpayers if you compare a bus with a tram service. The bus wins hands down by billions of dollars!

The Tax Payer’s choice

Did anybody ask you if you wanted a light rail on the Gold Coast?

If we were given a choice between the alternative spending options above, or do nothing, what would you have decided?

The idea here is to show the combined, real figures and the insanity of building a light rail on the Gold Coast. There are so many negative calculations that it’s hard to show them easily, so some are summarised here, and a full listing is on page 4 of the website.

The cost results here are low and conservative. On the figures, here the rate per kilometre for Stage 1 is $172 million per kilometre, and Stage 2 is about $90 million. The difference is that Stage 2 did not need road and services reconstruction, and little land resumption was required.

The costs are astounding, the concept is faulty, and we have been let down by all levels of government representation.

Income

Patronage reports vary from 17,000 per day on Goldlinq’s website up to 22,000 in the Gold Coast Bulletin, with ‘massive percentage increase’ with the Helensvale section opening.

The Light Rail only carried 28% more passengers than the buses on the same route of 5 years earlier, so the annual growth rate has only been 5% pa.  That includes the major boost since 2012 occasioned by the opening of the University Hospital at the northern end of Stage 1 and extensions to the University. The buses would be carrying the same numbers.

For our calculations, we had to make some assumptions to provide a basis to work from and provide a constant throughout the calculations. We allowed 25,000 passengers per day for Stage1 and assumed an average income of $5 per ticket.

For Stage 1; 25,000 passengers equate to 26% of the current population along the route. We don’t believe patronage will be that high on the remaining 3 sections but have used the 26% patronage to be ultra conservative.

Goldlinq reports provided patronage figures of 21,800 per day; at $5 per fare, that gives $40 million in income, plus the $45 million subsidies from Department of Main roads to work out the annual operating costs of $85 million.

The Stage1 subsidy is equal to an additional 50% of the total subsidy per year for all the Gold Coast bus services.

Stage 2 patronage will not be known for a year, and the Commonwealth Games should provide an unusual increase in numbers.

We don’t have any patronage figures on any bus service from the Gold Coast Hospital to Helensvale.

Demographics

The Australian Bureau of Statistics(ABS) population figures along the light rail for the route show a pretty much static growth, with some years up and some years down in growth rate.

The forecast for the next 10 years is only an additional 200,000 people in the area from Yatala to Coolangatta.

Tourist growth figures are claimed to be part of the reason the light rail is being developed.

We have about 10 million tourists per year.

70% come from Brisbane.

30% elsewhere, including overseas and interstate.

There are about 7 million movements through Coolangatta airport each year. That’s just 19,000 per day.

If the rail goes all the way to the airport from Helensvale, the cost will be about $5.7 billion, with interest and operating cost of approximately $680 million per year.

• At $5 per ticket, that means that the population along the route within 10 minute walking distance of the line will need 119 million passengers per year, or 328,000 passengers per day, or an increase in the Gold Coast light rail route residents (based on 26% patronage) to 1.2 million, from about 227,000.
• Or 2.4 million population if the patronage is only 13%.
• (Or if the tram relied on all and only the passengers at the airport, the airport would have to move 119 million passengers a year).

The population forecasts for the whole of the Gold Coast (Yatala to Coolangatta) to:

• 2030 are suggesting a total just 800,000
• 2050 are suggesting just a population of 1.2 million.

It’s not enough by a long way

That’s never going to happen in our, or our children’s or their children’s lifetimes.

Media reporting

On the 5^th June 2017, the Gold Coast Bulletin reported:

• That the light rail will transform Burleigh. It will, just like it's destroyed Southport and Surfer’s paradise.
• Mayor Tate says, “network it or pull it out.”

This review indicates Mayor Tate’s partially correct; so, let’s pull it out and save ourselves a fortune.

As for being profitable, how come it gets $45 million per year from The Department of Transport and Main roads to cover its operating losses?

That’s 50% on top of the total subsidy for all the Gold Coast bus services just for a 13km length, and that’s the route with the highest patronage on the Coast!All this is reported on pages 261 and 262 of The Department of Transport and Main roads annual Report 2015/2016

The Department of Transport also covers the interest costs. (see Department of Transport and Main Roads annual reports 2015/16 pages 229 and 262, and 2016/17 report pages 195 and 228)

If you use the capital cost of Stage 1 of $2.24 billion and the annual loss of $216 million, (that’s $256 million operating and interest cost less $40 million income) you get a negative return of 9.2%.

We are not too sure about calculating a negative return, but that means to us that it’s not a good project.

Value Capture

Commentary on how the Government thinks they’ll pay for the huge losses:

Within this website, based on summarising the information we can find, we’ve indicated that the tram installation will never work, physically or financially, nor ever work as a useful infrastructure project.

The existing bus service was and is efficient, and in fact, Las Vegas, with 45 million passenger movements through its airport (Coolangatta does 7 million) opted to copy the Brisbane city bus system rather than put in a tram (as a tram system was too expensive and inefficient).

There is a plan by all levels of Government to use ‘Value Capture’ which means that the Government will increase the taxes and rates on land and property that is owned, by us, the taxpayer.

So not only are they wasting our money on a useless project, they are going to tax us, even more, to pay for their mistakes!

Some property owners may get an increase in their property value, as developers will pay more for the land, and the current plan is to allow ‘unlimited height development’ along the tram route.

This may work, but it needs a fast timetable, and enormous construction works.

Most importantly it needs an increase in the population on the Burleigh to Broadbeach strip from the current 55,000 (along the route and within 10 minutes walking distance to a station) to a population of at least 214,000 and more likely 425,000, and for the full route to at least 1.4 million.

This sort of growth is equivalent to building a whole new City of Brisbane, as the population along the full run from Helensvale to Coolangatta has to increase from about 227,000 (just along the tram route) to at least 1.2 million, or more likely 2.4 million people.

Note that the forecast growth for the whole of the Gold Coast population from Yatala to Coolangatta in the next 10 years is only 200,000.

The reality is that this sort of growth rate is not possible, not even in a hundred years.

In just 10 years, if the tram runs the full proposed route we the taxpayers will have had to pay out another 6 billion dollars in operating costs (based on an annual interest and operating cost (loss) of $600 million per year).

The average population density calculated on page 4 of this web site indicates:

 

• that the current population density is 17 persons/hectare.
• That the tram population density required is between 90 and 190 persons/hectare

 

New York city’s population density is 104 persons per hectare.

 

We don’t know how value capture is proposed, but to cover the cost of the losses, over the whole length of 38 kilometres, the cost per person of today’s population of 227,000 is $600 million/227,000 providing $2,643 that every resident would have to pay/year to cover the costs (loses).

 

For a family of 3, that’s $7,900 per family (or rate payer?), on top of what their current rates are.