Tuesday, May 17, 2016

How much will Capital Metro Stage One cost?

One of the major benefits of the contract signing is the announcement of the actual cost of the light rail project. No one ever expected it to be cheap, but in the context of other infrastructure projects, better public transport is an investment in our future that will provide direct and indirect benefits for decades to come. The total cost announced on 17 May 2016 of $710 million is far below some predictions.

How much will light rail cost? 

The light rail contract’s capital cost will be approximately $710 million, much less than the cost originally estimated in the business case for the project.

Where is the money coming from? 

The ACT Government will be making a capital contribution of $375m towards the project in 2018-19. The first payment to the Canberra Metro consortium will be made only when operations commence.
This $375m is funded from the sale of assets – such as ACTTAB, ageing public housing and ACT Government office accommodation – and includes a 15% bonus from the Commonwealth as part of the Asset Recycling Initiative.
The federal Liberal government has also demonstrated its support for Capital Metro Stage One by increasing its contribution to the project to $67 million.
The money for the rest of the project will come from the ACT Budget. The ACT Government receives funding from a number of sources, the largest by far being Commonwealth grants (from GST revenue and payment to the ACT Government for delivery of services) that in 2015-16 totalled 5.6 billion dollars.

What about the long term payments?

Over its 20 year operations period the first stage of Canberra’s light rail will account for less than 1 per cent of ACT Government expenditure. Over the same period, the ACT Government will spend $33 on health and $24 on education for every $1 we spend on light rail.
Over the 20 years of the contract the annual availability payment, which includes operational costs such as electricity, drivers and maintenance as well as construction costs, would be approximately $48m in the first 12 months of operations and finish at approximately $75m for the last 12 months of the contract term in 2038, with an average annual availability payment of approximately $64m.

What about the rest of the light rail network?

The ACT Government have only committed to Stage One of a light rail network at this stage. They have indicated they may go to the electorate with a second stage at the October 2016 ACT Assembly elections. In the Light Rail Master Plan, it states that all future stages must have their own business cases.

As well as this website, the facebook group 'Light Rail for Canberra' carries frequent updates on Capital Metro and light rail related news. 

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