Re: Inland MeIbourne-Brisbane railway would save money - study

[dbromage@fang.omni.com.au (David Bromage)]

Taliesin Walker (taliesin@chariot.net.au) wrote:
> "The life of the asset". How long do they expect a railway line to last?

That usually means for the life of provate ownership before it is
transferred to government, i.e. about 30 years. 

The weighted average economic life of a railway is about 40 years. That
means the actual economic life of each component weighted by the
proportion of the railway being made of that component. For example, a
concrete culvert might last 150 years, but culverts are a very small
proportion of the asset. A rail might have a life of 15 years before it
has to be replaced.

Unfortunately this method of accounting (for depreciation) assumes that
the railway has zero asset value after 40 years, which we know is not the
case. It does not allow for component replacement. Even when component
replacement is taken into account, it is considered to be an expense
rather than capital works. This is the costing mechanism by which RAC
calculated than electric traction is more expensive (i.e. depreciates
assets more quickly) than diesel. RAC got a smack on the wrist from IPARC
for doing this.

Cheers
David