By Andrea Sharam
MELBOURNE — The Rapid Transit Link is a proposed private rail link to Tullamarine Airport from Spencer Street Station. The Public Transport Corporation (PTC) has released an information circular which outlines the proposal and acts initially as terms of reference for the public consultation (date yet to be announced). This paper was strongly attacked at a recent public meeting held in the inner-city suburb of Brunswick.
The Brunswick meeting unanimously passed a motion demanding that the terms of reference for the public consultation include the public or private ownership of infrastructure. The community denounced private ownership, and a second motion demanded funds from the government to enable a community response.
Other concerns included the proposed routes, the technology and Australian content in the design and manufacturing. Issues of equity, accessibilty and ticketing are dependent on whether the project is publicly or privately owned. Access to the city rail loop is dependent on the technology used.
Existing rail routes could be extended to provide public transport to the underserviced suburbs in the west as well as a link to the airport. If conventional technology was used, the service could easily be incorporated into the city loop network. High-tech options are unnecessary and expensive.
Project manager for the RTL Peter Farrell stated at the meeting that if the RTL was not privately funded and owned, it was likely the project would not go ahead at all. But if there is profit to be made from such a link, why isn't the government providing it?
A private developer will get land and development rights from the government, as well as secondary infrastructure, including electricity. The private developer will also get a whole range of tax concessions, and the government will compensate the consortium if it hands back the daily operations because they turn out to be running at a loss. The government will probably end up spending far more than if it built the RTL itself.
Mayne Nickless and TNT have both expressed interest in the RTL. TNT already has substantial interests at the airport, and ownership of the link could create disadvantages for other operators there.
It is likely that no collateral will be put up by the private sector against the loan for the RTL project, forcing the government to be the guarantor. The company can then default, as happened in the NSW Motorcycle Grand Prix fiasco, leaving the public to pick up the tab.
Western Bypass
The Western Bypass is a proposed private freeway linking the Tullamarine Freeway to Footscray Road and the Westgate Freeway. A private consortium has demanded that the government provide major tax t rights and public land. Further, it wants Prince Henry's Hospital gratis for a casino/luxury hotel and the future proceeds of the 3 cents per litre fuel levy (initially imposed to pay for the Pyramid Building Society collapse)!
The Upfield train line would be closed because the bypass would use the land. A light rail and bus service would replace it — costs, once again, being borne by the government.
Community and environmental groups have objected to state subsidies to private enterprise and pointed out that freeways encourage traffic, creating greater congestion, health and environmental problems, and disruption of suburbs.
An alternative approach, they suggest, would be for the government to make a commitment to public transport for both passengers and freight — a system that attracts passengers by choice.
Public benefit?
State provision of infrastructure in the post-1930s era reduced unemployment to one of the lowest levels ever experienced in Australia. So it is not surprising that many people look to new infrastructure projects for a solution to high unemployment.
But Australia now has one of the lowest levels of government expenditure of all OECD countries. State and federal governments are reluctant to take on new infrastucture investment.
Public investment in infrastructure has fallen from around 9% of gross domestic product during the 1960s to around 5.5% at the end of the 1980s. Over the last 20 years, federal expenditure has fallen by more than 20%.
Federal capital grants and advances to the states have also dropped: from $6791 million in 1975-76 to $2287 million in 1989-90 (1984-85 prices). The states' ability to pay for infrastructure has been further undermined by reduction in Loan Council borrowing limits and by the rise in real interest rates.
State and federal governments argue that involving the private sector is a way of tapping new sources of capital or of doing things more efficiently. Yet the community will be forced to pay considerably more for these services than if they were provided directly by the government. The proposed tax concessions would means further huge and open-ended amounts of government revenue foregone and inevitable cuts in social services.
Running parrallel with these proposals is the proposition that the federal government compensate the states for revenue they will lose when they privatise state-owned enterprises.
The private sector can offer little in the way of finances that would not be available to the government directly. The cost of private sector borrowing is in fact higher than for the public sector.
The public sector is usually liable to pick up any financial disasters, if or when the project becomes unprofitable. Planning processes would be totally distorted by business investment priorities. It would be difficult to find out and control the real costs of such projects. Private ventures would avoid public scrutiny and bypass public planning processes.
Private companies are also not stable enough to manage long-term public responsibilities. Motivated by profit, they are unsuited to providing quality community services, especially for low and moderate income earners.