Inland rail options for Australia

The construction of an inland railway from Brisbane to Melbourne has moved closer to reality with the release of a DOTARS-commissioned report in mid 2006. 

The report by Ernst and Young looked at four route options. It concluded that the Far-Western corridor option, via Albury, would cost $3.1 billion – much less than the nearest competitor, a $6.3 billion hybrid model. The two other options – a central inland route and coastal route – cost considerably more.

The project was given impetus when Deputy PM Vaile affirmed that a second railway between Melbourne and Brisbane will be needed by 2019 to meet the growing transport task. He added that the issue has the potential to affect every business that dispatches freight up and down the east coast.The Far Western corridor involves Junee, Parkes, Narromine, Coonamble, Burren Junction, Moree, North Star, Goondiwindi and Toowoomba. The Hybrid corridor option runs up to Goulburn and cuts across to Muswellbrook and Maitland, and then the coastal route to Brisbane. Either route could be linked to Melbourne via Albury or Shepparton. The betting is that this rail project will actually happen.

There is a national interest argument in favour of the Far Western corridor. To explain, the cost-benefit analysis would have been rosier if Australia had a regional population strategy, supported by decentralisation incentives and a network of inland city hubs. Such a network would also relieve environmental pressure on Sydney and the coastal belt. At a time of drought, the doomsayers are especially vocal about inland regions having reached their environmentally sustainable limit.

The opposing argument is that if towns and cities such as those in the above corridors collectively had twice the industry and population, they would improve the economics of rail transport systems and a national water pipeline grid. All a bit revolutionary perhaps? Additionally, the viability of all four inland rail options would be enhanced if road freight users met their true costs to the community (road damage, environmental pollution, loss of social amenity, deaths etc.) through user-pays principles – this is sadly lacking in the debate at present.

The Howard Government will give further in-principle support to the project in the run up to the election to titillate voter interest. Decision day of course is 2-3 years away. The Government is now seeking your comments.

The report can be accessed at www.auslink.gov.au/publications/reports/index.aspx

OECD lends support to linking of clusters

An interesting compilation of research has recently surfaced – ‘Europe – Reflections on Social Capital, Innovation and Regional Development (the Ostuni Consensus)’.

The editors are Mikel Landabaso, Antoni Kuklinski and Carlos Roman. You might find it on the web – if not, we have it on our system.  

The report includes ‘OECD Policy recommendations on clusters and social capital’ by Sergio Arzeni and Dina Ionescu of the LEED Group (OECD). It highlights, inter alia, the latest OECD studies that have dealt with fostering social capital within clusters. A key recommendation is that framework conditions conducive to enterprise development in general, and cluster development in particular (regulation, infrastructure, real estate, barriers to associative activity), should be created by local governments.  

The OECD also suggests that a major asset for an enterprise is to be part of an international cluster learning network – it fosters a more competitive environment and positively affects the market.