Value and Benefits of the Transport Strategy
Over many years each of the three levels of Government in SEQ have cooperatively undertaken the planning, procurement and construction of transport infrastructure projects that seek to benefit the community and provide value-for-money. Recently, the State Government made the commitment to deliver the Cross River Rail project ($5.4bn) by 2024 via the Cross River Rail Delivery Authority (CRRDA). The CRRDA are now managing the procurement process and delivery of this important new rail crossing within the Brisbane CBD. Similarly, the Brisbane City Council, with co-financing from the Federal Government have recently commenced the procurement process for the Brisbane Metro to deliver a high-quality metro network that utilises, complements and replaces the existing busway network. The Federal Government also funded early in 2018 a Business Case investigation into the feasibility of Faster Rail between Brisbane and the Sunshine Coast via the Moreton Bay Region.
It is recognised within relevant SEQ transport infrastructure plans and reports, including for example TMR’s recent draft Regional Transport Plan for SEQ and the Brisbane City Council’s Transport Plan, that appropriate strategic investment in transport infrastructure is critical to realise the State Government’s vision of ‘creating a single integrated transport network accessible to everyone’, and in the case of Brisbane, it will enable Brisbane to achieve its vision of being a New World City that is smart, prosperous, well-designed, accessible and connected. These are consistent aspirations across the Council’s within the SEQ region.
SEQ will be home to another 1.8 million people by 2041, in addition to the existing population of 3.35 million (2016). This population growth will be accompanied by an increase of 950,000 jobs to be added to the current 1.68 million jobs (2016). With the current, and the expected continuation in strong population growth of 55% to 2041, the transport network in SEQ will be under continual pressure to be able to cope with these increasing transport demands that are placed on it. Indeed, the anticipated growth pressures will stretch the road, public transport and active transport networks.
To be able to manage this high level of anticipated growth the Council of Mayors SEQ have developed and proposed a Regional Strategic Transport Plan (‘the Plan’) as an integrated strategy to 2041 with an intervening horizon year of 2031. This strategy includes inputs from the member Councils and also consultation with the State Government.
The plan has been developed to provide additional clarity and a stronger focus on the ongoing planning process with staged investments to spread benefits across SEQ over the 2041 horizon and beyond.
Much of what is proposed in the plan is consistent with Federal, State and Local Government planning and forward investment priorities. One of the major points-of-difference is the proposal for a Faster Rail scheme to connect the major centres within SEQ consistent with the 45-minute region vision. This is intended to leverage off existing infrastructure and planning rather than rely on wholly new corridors. From a road perspective other additional infrastructure includes new road links that will mean Brisbane, for example, will be able to move towards a more mature road network that will provide the city with resilience into the future and be able to adequately respond to both the opportunities and threats arising from transformative technologies such as connected autonomous vehicles.
The plan does not simply focus on the larger metropolitan centres within SEQ. Rather, it has been developed to ensure connectivity across and within the region. Each local government area will receive benefits from the Plan both in the short term and longer term. Faster Rail is one of the projects that can provide stronger regional connectivity and in doing so deliver benefits across SEQ.
As discussed in the previous section, the proposed major project investment (i.e. projects >$100m) for SEQ for the Base and Advanced scenarios over the 2031 and 2041 time horizons shows an increase in capital expenditure. The Base Scenario ‘investment’ of $43.9bn to 2041 includes more than $9bn of committed projects that are underway (i.e. Cross River Rail and Brisbane Metro). Another significant portion of the investment includes a commitment to Faster Rail across SEQ, with $13bn invested for stronger regional connectivity. As shown in Figure 5?2 and Figure 5?3, the planned investment of $2.7bn p.a. is within the recent historical expenditure range of $2-$3bn p.a.
Involvement from the private sector, either through market led proposals or other PPP arrangements, is also an opportunity to manage the investment required and the project risk. Within the investment plan many of the larger scale road projects may be attractive investments for the private sector. Developing appropriate project proposals may deliver potential funding across roads and public transport projects up to $24bn out of the $63.7bn. From an investment scale perspective this investment is similar to delivering five Airport Link and Northern Busway projects (at about $5bn each) across SEQ by 2041.
The Department of Infrastructure, Regional Development and Cities (DIRDC) recognise that “an investment in infrastructure has the capacity to stimulate and enhance the productivity of the economy in both the short and long term. It is an investment that has a multiplier effect throughout the economy, generating lasting economic, social and environmental benefits”.
Conventional economic benefits include value of travel time savings, vehicle operating cost savings, the benefits of transport accident reductions and the benefits of environmental impact mitigation from a reduction in air pollution. Given the scale of each of the Projects it is more than likely that all of the proposed projects that are defined in both the Base and Advanced Scenarios will result in differing levels of each of these benefit types, some projects more than others relative to their size and scale in the transport network.
More recently in Australia it has been recognised that some economic benefits have not been incorporated into the conventional economic benefits assessment framework. These additional benefit types include agglomeration, additional business output in imperfectly competitive markets and tax revenue of the increased labour participation and better job skill matches. These benefit types are referred to as Wider Economic Benefits (WEBs) (or wider economic impacts). The importance of WEBs as a legitimate consideration is recognised by both Federal and State Government agencies as part of assessment frameworks such as the Federal Governments ATAP Guidelines. From an economics perspective conventional economic benefits and WEBs can be added together – there is no “double counting”.
The project types that are most likely to deliver agglomeration benefits (an element of WEBs) are the larger public transport projects such as Faster Rail and the major highway upgrades and improvements as these improve accessibility across the network. However, it is also expected that any additional river crossings implemented as a result of the Brisbane River Crossing and Green Bridge Study will also derive an agglomeration impact as the project has the potential to significantly change accessibility within say a five to ten kilometre radius of the Brisbane CBD, the highest density area and population centre in Queensland.
In addition to conventional economic benefits and WEBs there are also economic impacts. Economic impacts overlap with both conventional economic benefits and WEBs. Economic impacts consider business output, value added / Gross Domestic Product (GDP), job creation and wage income / compensation.
For this strategic level of assessment of the Transport Plan the focus is in relation to the regional economic potential or impact. In this assessment the economic impacts are only considered in terms of business output, the potential GDP impact and job creation (estimated number of jobs) based on an economic multiplier effect.
For this strategic level of assessment it has been assumed that only construction related investment impacts are estimated with the maintenance and operational investment impacts not being assessed. Business output is assumed to be 2.0 times the construction value, value added (GDP) is 0.9 times the construction value and the number of jobs (employment) is each $1m investment can generate 7 full-time equivalent (FTE) jobs (direct and indirect) across all sectors of the economy related to the construction work (for 1 year, or 1 FTE job for 7 years) (Wang: 2015). These parameters are typical for urban transport projects in Australia and are valid for strategic comparison purposes. It is noted that research does indicate that, if compared to a road / highway based project, public transport projects are anticipated to generate higher economic impacts in terms of the economic multiplier effect. However, for the purposes of this strategic assessment road and public transport projects are assumed to achieve the same outcome from an economic perspective. Based on these parameters the total values for the Base and Advanced projects are for 2031 and 2041 as follows in Table 6?1.
The Advanced Scenario investment will add a significant level of economic activity to SEQ to 2041 with an additional $39.5bn in business output, $17.8bn in value added (GDP) and an additional 138,390 FTE jobs. To 2031 alone, there would likely be an additional $21.7bn in business output, $9.8bn in increased GDP (value added) and a large increase in employment opportunity with 76,090 jobs. From 2032-2041 the larger level of investment for the Advanced Scenario will result in a larger economic contribution than the Base Scenario with $17.8bn compared to $16.0bn in business output, $8.0bn versus $7.2bn in value added (GDP) and an additional 62,300 jobs compared to 56,000.

Table 6?1: Estimated Economic Impact of the Base and Advanced Scenarios – Note: These estimates are for comparative purposes only based on an economic multiplier effect. These estimates do not include the impact from operations and maintenance activities.
Private Sector Opportunity
The total potential value for private sector investment for 2019-2031 may consist of $15.3bn over 13 years with another $8.2bn in the following ten years from 2032-2041. Due to the total scale and individual project scale this would present an attractive opportunity for the private sector.

Figure 6.1: Funding Mix for 2019-2031 and 2032-2041
Based on the projects beyond 2031, the primary funding sources may be significantly different by 2041.
Due to the nature of the projects beyond 2031 Government may be investing a lower proportion at 51% with the remainder been contributed by the private sector (49%). This aspiration is based on the attractiveness of the remaining projects for private sector involvement (e.g. Faster Rail services).
The potential funding sources may change over time (see Figure 6 1). It is anticipated that in the period until 2031 the bulk of the investment will come from Government (66%) as a minimum with up to the remaining 34% potentially from the private sector. This private sector involvement may comprise the proposed new road links and the faster rail connections (a premium transport service that may be attractive to the private sector through a PPP arrangement). The development opportunities (primarily around high quality public transport stations and related development), as well as associated innovative funding models (e.g. value-capture, area levies, earn-back) may also spark potential interest from the private sector.
To enable the Transport Roadmap, it is expected that various innovative funding models would need to be considered, e.g. value-capture, earn-back, area levies, amongst others. As potential enablers, these innovative funding models will need to leverage across levels of Government to ensure the party that can best manage the risk assumes the risk.
The Queensland State Government’s position is defined within the Queensland Public Private Partnership supporting guidelines that private sector involvement in public infrastructure or service delivery should be encouraged where it can be shown that the state will achieve better value for money through involving the private sector, compared with delivering the project or service entirely at the public sector’s cost and risk. In Queensland this has included supplementing the National PPP Guidelines (Infrastructure Australia) with the Queensland Public Private Partnership supporting guidelines to suit the Queensland context.
The National PPP Guidelines, administered by Infrastructure Australia (IA), describe a competitive and transparent mechanism to pursue opportunities that bring together the ideas, experience and skills of both sectors to develop innovative solutions to meet the community’s needs, expectations and aspirations. The aim is to deliver improved services and better value for money, primarily through optimal risk transfer, management synergies, encouraging innovation, efficient asset utilisation and integrated whole-of-life asset management.
IA recognise PPPs have shown they can make a valuable contribution to the delivery of infrastructure and services throughout Australia. This is why PPP’s are encouraged, where appropriate, by governments across jurisdictions. As identified in the National Guidelines the challenge for the public and private sectors is to determine the most effective and efficient means of service delivery in an arrangement that is beneficial to both sectors as well as to users and taxpayers.
As identified by IA the principal features of a PPP are:
- provision of a service involving the creation of an asset involving private sector design, construction, financing, maintenance and delivery of ancillary services for a specific period
- a contribution by government through land, capital works, risk sharing, revenue diversion, purchase of the agreed services or other supporting mechanisms
- the private sector receiving payments from government (or users in economic infrastructure) once operation of the infrastructure has commenced and contingent on the private sector’s performance in supplying the services
From IA’s perspective the objective for a PPP is to achieve effective and efficient value for money outcomes. Certainly, for government departments and agencies, contracting the delivery of infrastructure and noncore services to the private sector creates opportunities to deliver improved public services more cost-effectively. IA also recognise that PPPs also provide the construction, service and finance industries with opportunities to generate efficiencies and cost-effectiveness in the delivery of infrastructure and non-core services through innovation and specialist expertise, and to develop their businesses by doing so. It has also been found that the PPP approach has a demonstrated ability to deliver value for money results for the community. Value for money from private sector involvement can be determined by governments through evaluating the project’s costs and benefits.
With consideration of the above principles the eight projects, with a total value of $24.1bn across both road and rail projects, that may be suitable for consideration as part of a Public Private Partnership (PPP) are shown below.
Value, Benefits and Private Sector Opportunity
Faster Rail (Brisbane to the Sunshine Coast)
Project value $4.6bn
A faster rail connection between Brisbane and the Sunshine Coast will provide tourism, productivity, increased land development and economic agglomeration benefits along the corridor. The benefits will be realised through improved connectivity and accessibility across at least four Local Government areas including Brisbane City, Moreton Bay Regional Council, Sunshine Coast Regional Council and Somerset Regional Council. Moreton Bay and Somerset will derive benefit as the faster rail network improves accessibility to the broader region whereas both Brisbane City and the Sunshine Coast Regional Council will become more strongly connected with a faster and more reliable transport backbone between the CBD’s of each region.
Connections between both existing and future knowledge precincts (knowledge economy) are facilitated between the Brisbane CBD (including QUT, UQ), Petrie (the Mill and Sunshine Coast University) and Kawana (Sunshine Coast University Hospital and University).
The opportunity for the private sector will be during the construction phase ($4.6bn capital cost) and also the potential provision of ongoing operational and maintenance services. Also, potential leverage for residential land development and economic benefits will be related to Caboolture West, Petrie (including the Mill and Sunshine Coast University), Narangba / Burpengary / Morayfield, Beerwah East, Aura, Kawana, Nambour and Maroochydore (SunCentral). Commercial development opportunities will also likely exist at, as a minimum, the major activity centres at Petrie, Caboolture and SunCentral.
Faster Rail (Brisbane to the Gold Coast)
Project value $3.4bn
A faster rail connection between Brisbane and the Gold Coast will provide tourism, productivity, increased land development and economic agglomeration benefits along the corridor. The benefits will be realised through improved connectivity and accessibility across at least three Local Government areas including Brisbane City, Logan City and the City of Gold Coast. Logan City will derive benefit as the faster rail network improves accessibility to the broader region whereas both Brisbane City and Gold Coast City will become more strongly connected with a faster and more reliable transport backbone between the CBD of Brisbane and the northern core of the Gold Coast.
Connections between both existing and future knowledge precincts (knowledge economy) are facilitated between the Brisbane CBD (including QUT, UQ) and Southport (Griffith University and the University Hospital).
The opportunity for the private sector will be during the construction phase ($3.4bn capital cost) and also the potential provision of ongoing operational and maintenance services. Also, leverage for residential land development and economic benefits will be related to Beenleigh (higher density, regional activity centre), Jacobs Well, Coomera and Helensvale. Commercial development opportunities would also likely emerge at these activity centres.
Faster Rail (Brisbane to Ipswich and Toowoomba)
Project value $5.1bn
A faster rail connection between Brisbane and Ipswich, and longer term to Toowoomba, will provide tourism, productivity, increased land development and economic agglomeration benefits along the corridor. The benefits will be realised through improved connectivity and accessibility for at least five Local Government areas including Brisbane City, Ipswich City, Lockyer Valley Regional Council, Scenic Rim Regional Council and Toowoomba Regional Council.
The opportunity for the private sector will be during the construction phase ($5.1bn capital cost) and also the potential provision of ongoing operational and maintenance services. Also, leverage for residential land development and economic benefits will be related to Ipswich City (higher density, regional activity centre), Lockyer Valley and Toowoomba as the improved connectivity and accessibility and lower travel time increases the attractiveness of these more distant locations relative to Brisbane. New commercial opportunities may also emerge at these activity centres.
Centenary Motorway Bypass (Sumners Road Interchange to Legacy Way at Toowong)
Project value $3.0bn
This alternative corridor to the existing Centenary Motorway would likely be an attractive tolled route for a consortia either through a market-led or PPP proposal to Government. The corridor would provide the southern section of the Western Bypass of Brisbane thereby providing an attractive link for both private vehicle and freight movements. The inclusion of this route would then present an opportunity to consider downgrading the existing Centenary Motorway to an arterial, rather than a motorway within the road hierarchy, with the released road capacity potentially becoming available for public transport such as a Transitway and/or T2/T3 lanes during peak periods.
The community and industry will likely realise conventional economic benefits due to reduced travel time and improved travel time reliability.
The opportunity for the private sector will be during the construction phase ($3.0bn capital cost) and also the potential provision of ongoing operational and maintenance services by a toll road operator.
East-West Link (Legacy Way to the M3)
Project value $1.8bn
This alternative corridor to the existing predominantly surface street inner city road network in the inner western suburbs of Brisbane and the Riverside Expressway and Pacific Motorway would likely be an attractive tolled route for a consortia either through a Market Led or PPP proposal to Government. The corridor would provide the last piece of the inner ring road (the other two pieces being Legacy Way and Clem7 tunnels) with an east-west functionality. It would provide an attractive link for both private vehicle and freight movements. The inclusion of this route would then provide relief to the existing surface streets, Pacific Motorway and Riverside Expressway with the released road capacity potentially becoming available for public transport such as a Transitway and/or T2/T3 lanes during peak periods.
The community and industry will likely realise conventional economic benefits due to reduced travel time and improved travel time reliability.
The opportunity for the private sector will be during the construction phase ($1.8bn capital cost) and also the potential provision of ongoing operational and maintenance services by a toll road operator.