FROM THE MINISTER FOR TRANSPORT

DATE: Friday, January 18, 2002


MELBOURNE AIRPORT RAIL LINK NOT VIABLE NOW

A comprehensive patronage study has found that a rail link to Melbourne Airport would not be commercially viable for at least ten years, Transport Minister Peter Batchelor said today.

Mr Batchelor said the Government had therefore decided to reserve land for a rail link through the Albion Corridor, but would not proceed with construction of the rail link at this stage.

“A financial analysis undertaken by the Rail Projects Group showed that building an airport rail link now would require government subsidies over a 10 year period of between $350 to $450 million (in today's dollars).” Mr Batchelor said.

“This is a significant cost to Victorian taxpayers that could not be justified.”

The patronage study prepared by Booz Allen Hamilton showed that currently seven percent of passengers travelling to and from Melbourne Airport use public transport (buses and coaches), or approximately 2 million people per year.

Current annual airport patronage is approximately 27 million. This is expected to increase to some 37 million by 2009.

The study predicted that by 2009 a new rail link would increase public transport usage to around nine percent of all passengers travelling to and from the airport at that time, with a rail link attracting only an extra 750,000 passengers public transport users a year.

“This small diversion to public transport is insufficient to justify the high cost of a new rail link,” Mr Batchelor said.

“Given the likely low patronage, a rail link is not commercially viable and it would be financially irresponsible for the Government to proceed with the project at this stage.

“An airport rail link will one day be a valuable addition to Melbourne’s transport system - reserving the route now preserves that option and allows a link to be built when it is commercially viable.”

The study took into account the downturn in air travel following the aftermath of the September 11 attacks and the Ansett collapse.

It studied options for trains terminating at Spencer Street or Flinders Street stations, travelling around the loop or continuing to the eastern suburbs.

The study showed the rail link’s patronage would be comparable to that of the Sydney and Brisbane links, which are reported to be operating at well below forecast passenger numbers,.
The RPG also examined alternative technologies and solutions, including a Maglev, which it found would require a higher Government subsidy than a heavy rail option.

“Subject to a formal indication of support from the Commonwealth, the Government will now reserve the Albion East route in the relevant planning schemes for a future rail link, to be developed when passenger demand makes the project a more viable proposition,” Mr Batchelor said.

Melbourne Airport had been extremely cooperative and had now agreed to reduce the amount of tunnelling required on the Albion East option, making this a more realistic alternative, he said.

Mr Batchelor said following discussions with Maribyrnong City council officers, the removal of Middle Footscray Station would not be pursued for an airport link, and the Government would consider offering to negotiate to purchase the whole of the two affected residential properties near the station once the planning schemes had been finalised.

“The Government will also continue to examine an upgraded bus service using City Link and Tullamarine Freeway and other technologies over the next several months,” he said.

In November, the Government abandoned the Broadmeadows route for the link and committed to further investigate the Albion corridor options, as recommended by an independent planning panel.

Attached is a summary of the patronage study prepared by the Rail Projects Group of the Department of Infrastructure.


MELBOURNE AIRPORT TRANSIT LINK

Summary of results of the patronage study


Background

The Rail Projects Group (RPG) commissioned Booz Allen Hamilton (BAH) to undertake a patronage study for the Melbourne Airport Transit Link (MATL) in May 2001. The purpose of the patronage study was to produce forecasts of the anticipated patronage for the MATL. The study and was completed in late 2001. The patronage study will not be released as it is a cabinet document and is commercial-in-confidence.

Terms of reference

BAH were was requested to produce forecasts which took into consideration:

n the source of demand, ie airport passengers, meeters and greeters, airport employees etc;
n potential diversion rates from competing modes of transport;
n growth factors due to population growth, increased usage of airport facilities, changes in the structure of the transit market etc;
n experience gained from the Brisbane and Sydney airport links; and
n the impact of September 11 and the Ansett collapse.


Approach

The approach taken by BAH was to:

n conduct a head count at the airport to determine the number of people visiting on a daily basis, and the profile of the number of visitors throughout the day;
n conduct over 4,000 surveys of airport passengers to determine their attitudes to the type of service that should be provided. The survey questions included matters such as travel cost, frequency of service, access to the CBD, journey time etc;
n review the performance of international airport transit links to assess the factors that lead to high or low usage and the ramp-up profile (reword) ; and
n review the performance of Sydney and Brisbane airport transit links.

Assumptions

The following key assumptions were made:

n a heavy rail service would be operational on 1 July 2006;
n an enhanced bus options would be operational on 1 July 2003;
n the journey time to Spencer Street station for each mode would be approximately 20 minutes during at off-peak, 25 minutes for bus during at peak;
n new dedicated rolling stock/buses would be used;
n passenger facilities at Spencer Street Station and the airport would be improved; and
n the service would operate every 15 minutes.

Findings

The key findings of BAH’s analysis are as follows:

n approximately 27 million people currently travel to/from Melbourne Airport. This number is expected to increase to 37 million by 2009. The table below indicates the current modale share of each type of travel;
Mode
Share %
Private car
65
Taxi
24
Bus feeder services (Skybus 2.6%)
7
Other
4

n currently 7% of passengers travelling to and from Melbourne Airport use public transport (buses and coaches), or approximately 2 million people a year;
n a MATL service alone will not attract a very high market share of people travelling to the airport. The market share for a MATL service is forecast to be between 3% and 6%;
n for either mode, the introduction of MATL is forecast to increase public transport’s overall share of the "airport to Melbourne" market from 7% to between 8.5% and 9%, . with a rail link attracting only an extra 750,000 public transport users by 2009. This market share is similar to that achieved for the Sydney and Brisbane airports;
n the major source of patronage for the MATL service would be from existing public transport users;
n the forecast patronage for the enhanced bus option is similar to rail; and
n when compared to US and European cities, Melbourne is similar to the US with low public transport modale share due to low traffic congestion and easy road based access and parking at the airport.;

Conclusion

Overall, the patronage study shows that it is very hard to persuade people not to use their cars, given the fast journey times currently available to the airport and expected to be maintained in the near term, the "door to door" service, and the low cost of parking at the airport.
The financial analysis undertaken by the RPG indicates that the rail option would require a Government subsidy over a 10 year period of between $350 and $450 million (in today’s dollars) depending on the specific route and service to be provided.
Rail Projects Group
January 2002