corresponding total load transferred to rail would be 13.6 million net tonnes. The claimed annual removal of freight from the roads is therefore between three to four times the net tonnes carried by rail at present. This result raises serious questions about the availability of sufficient rail capacity. But it has already been established that road freight demand is seven times greater than that of rail and the rate of increase is twice as great. These results suggest that the claimed reduction of heavy vehicle movements is unrealistic and cannot be used to support a case for transfer of road freight to rail. Nevertheless, Deloitte has attempted to use the argument of reduced road crash cost savings (page 48) to justify rail as against road freight. But apart from quoting a crash cost of $0.40 per net tonne kilometre no other result is given which emphasises the difficulty in properly quantifying the real economic gain from such a proposal. In relation to heavy vehicle involvement in fatal accidents, two findings have been mentioned (BTRE, 2006). Across the entire road network, the fatal accident rate is higher for heavy vehicles, but on intercapital corridors the fatal accident rate is well below that of all other vehicles. Detailed numerical examination of the Deloitte business case As previously noted Deloitte has calculated the costs of moving freight only by the upgraded rail system. There was no comparison of the cost savings that would have been obtained by comparison with road usage. Deloitte simply redefined as benefits the costs incurred from using rail only. This redefinition is meaningless but it would have the effect of generating benefits so that the project could be justified. In economic terminology these “benefits” are defined as “consumer surplus”. Deloitte claims to have followed ARTC modelling of the Melbourne-Brisbane inland Rail Alignment Study (2010) in deriving usage costs, but similar data is also available from CRA Pacific National for the more appropriate coastal route Sydney to Brisbane. The Deloitte usage costs are as follows: 3.4 cents per net tonne-kilometre (2011) for rail and 6.2 cents per net (2011) for road.
corresponding total load transferred to rail would be 13.6 million net tonnes. The claimed annual removal of freight from the roads is therefore between three to four times the net tonnes carried by rail at present. This result raises serious questions about the availability of sufficient rail capacity. But it has already been established that road freight demand is seven times greater than that of rail and the rate of increase is twice as great. These results suggest that the claimed reduction of heavy vehicle movements is unrealistic and cannot be used to support a case for transfer of road freight to rail. Nevertheless, Deloitte has attempted to use the argument of reduced road crash cost savings (page 48) to justify rail as against road freight. But apart from quoting a crash cost of $0.40 per net tonne kilometre no other result is given which emphasises the difficulty in properly quantifying the real economic gain from such a proposal. In relation to heavy vehicle involvement in fatal accidents, two findings have been mentioned (BTRE, 2006). Across the entire road network, the fatal accident rate is higher for heavy vehicles, but on intercapital corridors the fatal accident rate is well below that of all other vehicles. Detailed numerical examination of the Deloitte business case As previously noted Deloitte has calculated the costs of moving freight only by the upgraded rail system. There was no comparison of the cost savings that would have been obtained by comparison with road usage. Deloitte simply redefined as benefits the costs incurred from using rail only. This redefinition is meaningless but it would have the effect of generating benefits so that the project could be justified. In economic terminology these “benefits” are defined as “consumer surplus”. Deloitte claims to have followed ARTC modelling of the Melbourne-Brisbane inland Rail Alignment Study (2010) in deriving usage costs, but similar data is also available from CRA Pacific National for the more appropriate coastal route Sydney to Brisbane. The Deloitte usage costs are as follows: 3.4 cents per net tonne-kilometre (2011) for rail and 6.2 cents per net (2011) for road.
sub084-infrastructure.docx