Re: Very Fast Train appears all but dead

["Bill McNiven" <wmcniven@gunzel.ozemail.com.au>]

Thanks to all the long-term aus.rail'ers for etiquette advice.
I revisited
http://www.news.com.au/oznews.htm?/news_content/national_content/4360478.htm
and found a story titled "Kennett out but fights to bitter end".  I fished
around www.news.com.au and found the original story "$4bn rail project runs
out of steam" also alleging to be at
http://www.news.com.au/oznews.htm?/news_content/national_content/4360478.htm
.  Concerned as I am at copyright issues, I can only suggest that you go to
one of the
http://www.news.com.au/oznews.htm?/news_content/national_content/4360478.htm
(s) and read the ads after you read the following 10% or so of the story.

In the future, I will provide the URL so the aus.rail internet police don't
have to post back the URL of my source.

Rgds,

Bill :{)

$4bn rail project runs out of steam
By JOHN MACLEAY
20oct99

THE $4 billion Sydney-to-Canberra Very Fast Train appears all but dead after
the Federal Government scrapped the accelerated depreciation allowance, the
head of the company short-listed to build the project warned yesterday.

Leighton Holdings chief executive Wal King said although the project still
had a "sporting chance" the rail link would only eventuate with government
assistance.

"It's certainly going to be harder to do. It will certainly need government
support and if the Prime Minister and the Government are committed to it,
they're the ones that are going to make it happen," he said.

But Mr King acknowledged financial support from Canberra ran contrary to Mr
Howard's edict that the project – a 50-50 venture between Leighton and
French train builder GEC-Alsthom – be built at no net cost to the
Government.

Mr King's comments, made after a Securities Institute briefing in Sydney,
are the most negative to date about the project from one of the
participants. They contrast strongly to the upbeat assessments made by both
Leighton and the Government earlier this year when a "proving up agreement"
was signed to assess the viability of the high-speed link.

Minister for Finance John Fahey, whose electorate takes in the link, told an
audience of mainly engineers in April that the Very Fast Train was a
"distinct possibility" that could be extended along the eastern seaboard.

But Mr King said yesterday that economic circumstances, including higher
interest rates and the goods and services tax, had moved against the train
project.

"Since we were nominated as preferred tenderer 18 months ago, GST has come
in and that's an impact, in terms of needing to attract people. Car costs
under a GST are more or less neutral, rail tickets get rammed with a 10 per
cent," he said.

A spokeswoman for federal Treasurer Peter Costello said guidelines covering
the accelerated depreciation allowance would be released soon but could not
comment specifically about the Very Fast Train.

After the release of the Ralph tax reform package, Mr Costello said the tax
break for depreciation would be kept on projects of "national significance"
but they had to be capital intensive and have a long economic life.

The Very Fast Train had been expected to take 4 million passengers a year
between Sydney and Canberra with journey times of about 80 minutes compared
with three hours by car.

Construction was to have begun next year, employing as many as 15,000
people, with the first trains running by September 2003.

Mr King yesterday also cast doubt over the long-term benefit to Sydney's
road network of the soon-to-open $700 million Eastern Distributor tollway
even though it would initially carry an estimated 45,000 cars a day.

He forecast the road would become "a parking lot" within a few years because
of traffic congestion generated by an additional 50,000 vehicles joining the
toll road from the extension of the M5 East freeway, which linked Sydney to
Canberra.

"You will have a couple of years that will be a holiday period. When the M5
East is built it will put a substantial number of cars on to it. That is the
way infrastructure is, you've got to keep developing, you can't stop," he
said.


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