Journalist [archival]: But first to Canberra, where the Federal Transport Minister Anthony Albanese has just released the government's detailed study into the feasibility of a high speed rail network for eastern Australia.

Anthony Albanese [archival]: What you have before you today is the most detailed and comprehensive study ever undertaken into high speed rail in this country.

Journalist [archival]: But the biggest stumbling block is undoubtedly the $114 billion price tag. The study finds there would be little interest from private investors so the federal government would have to cover most of the cost.

Keri Phillips: High speed rail in Australia has moved possibly a step closer with the release of the report from the second phase of the federal government's High Speed Rail Study.

I'm Keri Phillips and today on Rear Vision, we'll look at the background to this latest effort to get fast trains moving in Australia.

But first, the longer story of high speed rail itself. Japan opened the world's first high speed rail line between Tokyo and Osaka in time for the 1964 Olympic Games. Japan's Bullet Train was the first to run on a dedicated line, a high speed service for passengers only. I asked Dr Terry Gourvish, director of the Business History Unit at the London School of Economics, if it's easy to see why Japan led the way.

Terry Gourvish: There was a very firm modernising government in power in the 1950s that wanted Japan to grow rapidly, rather like China today. The terrain in much of Japan is quite difficult for motorway building. You know, there was quite a lot of mountainous areas, and also land is at a premium. It's a small island relative to the population, and this is where the capacity that railways offer in terms of moving people around the country really score. So no, it's no surprise at all.

Keri Phillips: How different were the very fast trains, the high speed rail trains, how different were they from the standard suburban or intercity trains that they had before high speed rail?

Terry Gourvish: The first thing that you would notice is that they were streamlined, they had those distinctive noses which have got longer and longer as the technology has developed. So they were streamlined, they were very, very comfortable in comparison with much of the railway network in Japan, and there was an emphasis I think on service to the passenger. So there was good catering et cetera.

Keri Phillips: How about technologically? How different were they from the standard trains that were available the time?

Terry Gourvish: I don't think they were that different in the sense that…I mean, they were using electric traction which had been developed in Japan anyway, they were essentially better versions of what existed.

Keri Phillips: How successful were they? Did they take off immediately or were people slow to take them up?

Terry Gourvish: They were an instant success in Japan. The Tokyo-Osaka corridor, which is rather exceptional because it had such a large population, really found these trains…I mean, it took seven hours to go from Tokyo to Osaka before the high speed train, and they could slash that in half to start with, and then now I think it takes just over two hours, so you can see what a tremendous time difference there was.

Keri Phillips: Was it expensive?

Terry Gourvish: There was a premium but it wasn't as expensive as you might think, and I think if you want demand to actually arrive you have to look at the pricing and I think the Japanese did, and it was a government scheme so they weren't looking to make a large profit as a private sector company might.

Keri Phillips: And in fact did they make any profit?

Terry Gourvish: Oh yes, the returns were considerable. This was the line that made the most money. It's ironic in a sense that the Japanese kept building high speed rail systems in the north of the country particularly and east of Tokyo, but these have not made money, these have been more difficult in terms of financial return.

Keri Phillips: Is it clear why that is?

Terry Gourvish: Partly terrain again, that they cost more to construct, and partly because the population was less dense so you were never going to get the patronage that you were on the densest corridors.

Keri Phillips: Although Italy is credited with Europe's first high speed line, opening between Rome and Florence in 1978, France was developing a system at the same time and launched its first service between Paris and Lyon in 1981.

Terry Gourvish: And again, as in Japan, there was very strong government planning directive behind it. There was a determination by the French to modernise. There was a determination to link Paris, the metropolitan centre, with the other regional centres in France. There was a determination not to be dependent on oil, and so the strategy that the French adopted was to go for nuclear power and that nuclear power would be the energy source for electric trains on their high speed rail network.

Keri Phillips: Was it clear at this stage that there was an economic benefit to a nation that built high speed rail?

Terry Gourvish: It was much talked about. The difficulty I have here are actually is that there's an awful lot of published work on what the expectations are for economic benefits, and very little actually doing back-checks on what actually happened…

Keri Phillips: A bit like the Olympic Games.

Terry Gourvish: A bit like the Olympic Games. Don't hold me to that! But again, it's exactly the same, you know, lots of benefits were put forward, not so easy to find clear elements of economic benefit thereafter. And some of them unexpected, some benefits have been unexpected, some unintended.

Keri Phillips: Can you give us some examples of that?

Terry Gourvish: Yes, I think Paris-Lyon actually is the line where scholars in France have done quite a lot of work and actually looked at what has happened in Lyon, what has happened in Paris. And in Lyon, closer linkage with Paris has had a benefit in some ways, particularly it's enabled certain specialist firms, consulting firms for example, to locate to Lyon and can get to and from Paris in a day to do business in the capital. There has also been some economic benefits in that it's attracted greater tourism in the Lyon area. On the other hand it is possible of course to suck economic benefit out of a regional centre, and this has always been the case where you have a country with one large metropolitan area, for example in the UK with London, and in France with Paris, that if you make the other centres too close to the capital then some of the economic activity can be sucked back into the capital.

Journalist [archival]: In the past year $600,000 has been spent on preliminary studies of the very fast train from this project office in Canberra, a train that could run Sydney-Canberra-Melbourne in just three hours. Their report increased the projected market potential from three to five million passengers a year based on a median fare of $105 one-way. Preliminary estimates said it would need at least 30 trains a day each way, most with only the Canberra stop, others stopping at a whole range of intermediate stations.

Keri Phillips: The CSIRO was responsible for Australia's first high speed rail proposal, made to the Hawke government in 1984. The idea was for a rail network that would link Melbourne, Canberra and Sydney. Dale Budd, who is on the reference group for the current government study, was also involved in what became known as the VFT, very fast train, project.

Dale Budd: The VFT joint-venture consisted of four companies, big names—TNT, Kumagai, the big Japanese company, Elders IXL, and BHP—and that joint-venture spent a lot of money, $15 million, on studies for a Sydney-Melbourne high speed rail project, and that money was spent really between 1986 and 1991.

Well, the joint-venture did a lot of work, engineering and market studies, and it drew on leading consultants not only from Australia but from Japan and France in particular. It did a great deal of work, especially between Sydney and Canberra, a little bit less between Canberra and Melbourne where the emphasis was on the primary route selection, whether to go through Gippsland or inland through Wagga and Albury, and that latter alternative was chosen. And that VFT proposal came to a stop in 1991 when the federal government would not agree to the tax treatment which had been put forward. And there was a broader problem of government indifference at both the federal and state level to the idea of high speed rail at that time.

Journalist [archival]: The very fast train project took another broadside today. Transport Minister Kim Beazley cast doubt on its viability in the new era of deregulated domestic air services.

Kim Beazley [archival]: You could not see the airlines allowing for one minute a VFT to, in pricing arrangements, get terribly competitive with them.

Journalist [archival]: Both he and Treasurer John Kerin say the VFT has been refused tax breaks because it will cost too much.

Keri Phillips: You're listening to Rear Vision on RN with Keri Phillips. Today, the story of high speed rail, and although the VFT was dead, a new proposal, Speedrail, rose from the ashes two years later in 1993.

Journalist [archival]: High speed rail travel is coming, it's coming fast. It's sweeping the world, it will come. There's a fast train headed this way, travelling at up to 350 kilometres per hour, literally a bullet train that some say will shatter the tyranny of distance in Australia.

Keri Phillips: It took four years for the federal, New South Wales and ACT governments to formally invite expressions of interest for the project. In 1998, Prime Minister John Howard announced that Speedrail had been chosen from four proposals. Dale Budd was the managing director of Speedrail.

Dale Budd: The joint-venture partner initially was Alstom Australia, and its parent company in France makes the TGV, the high speed train in France. And interestingly Qantas was a key associate. Its role would have been to operate the trains to do everything from reservations and ticketing through to providing train crew and serving meals and drinks on board.

A few key differences from the earlier project. Firstly the aim was initially to look at Sydney-Canberra as a start-up, a less ambitious start than Sydney-Melbourne. That project had a great deal of work done on it, indeed more money was spent on that than on the previous attempt. It went through a competition because the various governments decided there should be a competitive process. So all of this took years, I might say, from 1993 to 2000, and a lot of detailed work was done on the route and on how the project could be financed. And ultimately it came to a stop for essentially the same reason as VFT, and that is the government of the day, which was the Howard government, did not agree on the financial support that was needed for the project. So after all that money had been spent, work stopped in 2000.

Keri Phillips: How much money was spent on this one?

Dale Budd: $26 million, for which the proponents got not a cent back, so it was a pretty sobering lesson for them.

Keri Phillips: I'm interested in the idea that it was a Canberra-Sydney route only, because one of the things about high speed rail that has been observed where it's operating overseas is that you generally need a fairly substantial population at each end of the network to make it worthwhile essentially. Canberra, despite being the national capital, is a very small town with about 350,000 people.

Dale Budd: Certainly. I mean, Sydney-Canberra was intended to be just the first step, and indeed towards the end of the Speedrail project we…and again, I speak from involvement…we put a lot of effort into pointing out that it was the beginning of a network which would ultimately be Brisbane-Sydney-Canberra-Melbourne.

Journalist [archival]: At the federal Cabinet meeting in Sydney today, they have been considering a plan to dump the proposed $4-billion-plus very fast train from Sydney to Canberra. Ministers have to consider whether the very fast train plan meets the key criteria on cost to the government. The Speedrail consortium, which hopes to build a high speed rail link between Sydney and Canberra, is asking for $1 billion from the federal government. But rather than pay up, Cabinet's expected to call for yet another feasibility study into a high speed train network connecting Brisbane with Melbourne.

Dale Budd: The government of the day decided to do its own study, which they called the VHS - very high speed - East Coast Scoping Study, and this was done between late 2000 and the end of 2001, looking at the Brisbane-Sydney-Melbourne corridor. I think it was a strange piece of work. It looked at a 350 kilometre per hour train but concluded that such a train would take 4.5 hours to get from Sydney to Melbourne, which is I think mistaken, and indeed the current study, which we might come to, is looking at a similar speed and reckons that that will get you a three-hour Sydney-Melbourne trip. And the other thing about that study is that they spent some time on magnetic levitation or maglev, which was fashionable perhaps at the time or was at least being talked about, but it's much more expensive than a wheel-on-rail train, that's why it has not been adopted around the world.

But the headline figure that was published as a result of that study was the maglev figure and the government got cold feet, and so that study didn't go beyond the first phase. And after that, after the end of 2001 there was the best part of a decade of nothing happening on high speed rail in Australia. A long time was lost.

Journalist [archival]: China has inaugurated what it says is the world's fastest rail link, connecting the southern city of Guangzhou and Wuhan in central China. State media says that after a successful final trial earlier this month, the service has now gone into operation. At an average speed of 350 kilometres an hour, the train reduces the time for the 1,000 kilometre journey from more than 10 hours to just under three hours.

Keri Phillips: While high speed rail was becoming possibly the most deeply researched topic in Australian history, high speed rail lines were being built in Germany, Spain, the UK, South Korea, Taiwan and China. In almost every place, government money was involved.

Terry Gourvish: I think the private sector realises that the returns are uncertain and that it's quite high risk. The UK's high speed rail, High Speed 1 from the Channel Tunnel was financed by the private sector, but if you look closely into the history of it you'll see that there was a fair amount of public subsidy. So there have been some joint ventures, but the private sector has not invested in high speed rail at all.

Keri Phillips: And that's because it's not profitable?

Terry Gourvish: Yes, I think so. Obviously many or if not most rail systems are publicly owned or are franchised by the government to a private sector operator. Clearly the private sector does get involved in high speed rail because it manufactures the trains, builds the lines and so on, but the bill is paid for by the government or it's shared between the government and the private sector.

Keri Phillips: Can you tell us where it has been most successful and what are the circumstances or what lessons can we learn from its success in terms of understanding what makes high speed rail work better in some places than in others?

Terry Gourvish: Well, it's successful in a sense where the government wants it to be successful. That is, if it wants to link centres of relatively high population together and to take traffic from the airlines and the roads, for a variety of reasons, including of course global warming, then it has been a success. This requires I think fairly dense populations in the major centres. You need to have, it's thought, between about 10 million and 15 million passengers a year on a high speed rail to really work. And the centres have to be sufficient distance apart, around 400 to 700 kilometres. So when you do your sums and look at rail systems like, for example, Tokyo-Osaka, Paris-Lyon, Madrid to Barcelona, Madrid to Seville, you'll see that these conditions are generally satisfied and these can claim to be a success.

Keri Phillips: What about the actual number of people living in these urban centres? Is there a base number that you need to make journeys of those kinds of lengths pay well?

Terry Gourvish: I would have thought you certainly need population centres of above a million population, of course more than that the better. I don't know what Sydney's population is, perhaps you can tell me…

Keri Phillips: It's just over four million.

Terry Gourvish: Yes, well that would certainly clearly be a candidate. But Canberra is much smaller, isn't it. That's more marginal. Yes, I would have thought linking Sydney and Melbourne would be an extremely good idea, and Sydney and Brisbane.

Keri Phillips: Those cities are obviously up the east coast of Australia. Do you want trains like that to stop as well in other places, like we have much smaller cities that possibly could benefit from the trains stopping there, or do you really just want trains that would, say, link those three major centres?

Terry Gourvish: This is the really critical question actually because you'll find that in the history of high speed rail building, once a line is announced, say from Paris to Bordeaux or whatever, Paris to Nantes, once it is known you'll find lots of local towns wanting a station, wanting to be linked to it because they will benefit. On the other hand, for every intermediate station that you build you lower the returns and benefits from people travelling from one end to the other, and this is of course a great political battle really.

So, for example, if you're contemplating building, as we are, trains between London and Birmingham, the notion that we should stop at Heathrow Airport, which would have benefits on one side, would counteract some other benefits of travelling direct between London and Birmingham without stopping. You lower the time savings that people travelling from one end to the other will get and then that can be measured economically. So every time you put in a stop you're increasing the time taken to get from terminus to terminus. Time savings are one of the things that economists and planners measure as one of the great and measurable benefits that you get from putting in a high speed rail network.

Keri Phillips: When you look at building a network like this, how possible is it to work out the benefits at the other end; how many people will use it, how do you work out what price you'll need to charge for the tickets, all those kinds of things?

Terry Gourvish: We have enough data now to make this relatively easy to predict, but I think the issue that is more troublesome is the infrastructure cost which has varied greatly with projects. Do you want to build the line straight? How many tracks do you want? How much land are you going to consume? Are you going to run the trains into conventional railway stations that we already have or are you going to build entirely new terminal stations? How much environmental protection are you going to add into your network? How much tunnelling so that you preserve the environment in certain beauty spots, for example? All these questions you can see would make a massive difference to the actual infrastructure cost per kilometre.

Keri Phillips: Have people in Europe and other places resisted the idea of high speed rail on environmental grounds?

Terry Gourvish: Yes, they have. In France, for example there was some hostility to it by farmers and others. In Tokyo in the first one the opposition built up I think when it was too late, after it had been built, but it did lead the authorities to put in noise barriers. The biggest I think and most immediately apparent environmental cost of a high speed network is that the trains make a lot of noise, there is noise and vibration, so that if your house is close to the line, you will know it. Some of the enthusiasts for high speed rail building have been countries which have large amounts of land and therefore it's quite possible to relocate people away from the lines. It's countries like Japan, the United Kingdom and densely populated countries like the Netherlands where the environmental factors are quite problematic.

Keri Phillips: Keri Phillips here on RN with Rear Vision. And the possibility of high speed rail for Australia surfaced again with the election of the Gillard government.

Dale Budd: After the re-election of the Labor government in 2010…incidentally, at that election both the major parties committed themselves to a study of high speed rail. Well, the Labor government was re-elected, and as part of its agreement with the Greens, a study, which is what is happening right now, was announced, and I think the big difference between this current study and previous work is that this time there is a very clear recognition from the start that the project is going to need substantial public sector funding, and that's a change from the misconceptions which were the undoing of the previous attempts.

Journalist [archival]: The Federal Infrastructure Minister Anthony Albanese says it will be a long and costly process to make a high speed rail network a reality. The government has released the first stage of a $20 million study into building a network to link eastern Australia's major cities.

Anthony Albanese [archival]: There is no doubt that this is a visionary project for Australia. In the past we've had frankly some ideas floated without the detailed work being done. Unless you do the detailed work then it just remains an idea that everyone thinks is terrific but which doesn't proceed.

Dale Budd: The study looked at primary routes and it in a sense confirmed some work that had been done earlier, that to get from Brisbane to Sydney it's better to come down roughly following the coast through or near the coastal centres such as Coffs Harbour and Grafton and Kempsey, a lot of development up the coast, as opposed to going west and coming down through New England. From Sydney to Melbourne it reconfirmed that very roughly following a Hume Highway route is preferable to going via Gippsland et cetera.

The other key thing that the first stage did was to look at patronage, in particular how high speed rail would compete with air travel, and it found figures consistent with what has been happening with high speed rail in other countries. That is, that for a journey of the Sydney-Melbourne distance or Sydney-Brisbane, a high speed train running at 300 to 350 kilometres an hour will attract about half of the travel from air. For shorter trips like Sydney to Canberra, high speed rail would probably take very close to 100% of the market.

Keri Phillips: Just looking at what you've said about air traffic and taking away from air traffic, how active would airlines be in trying to undermine the idea of high speed rail in Australia? It would take an enormous amount of business away from them.

Dale Budd: We'd have to wait and see, wouldn't we. I think that some airlines might decide that it was better to be in than out. In Britain, Virgin, the British part of Virgin runs trains between London and Glasgow, so a company like Virgin might decide to use their expertise in running trains to do something in Australia. If you look at high speed rail, particularly in Europe and in Japan, airlines have not really succeeded in winning back market share from high speed rail.

If you look at the sort of distance that we're talking about, something between 250 kilometres up to 1,000 kilometres or a bit longer, the train will compete very successfully with air travel. That's important because there is this public scepticism I think about high speed rail in Australia, that Australia doesn't have the population to support high speed rail. In fact the issue is not population, it's travel between key centres, and Sydney-Melbourne is in fact the world's fifth busiest air route, and Sydney-Brisbane is the 12th busiest. So, for whatever reason, we are very intense travellers in Australia, we do a lot of travelling between our major cities, and that provides potentially a viable market for high speed rail.

I do think that finance is the key to seeing high speed rail move ahead. Talking about a network from Melbourne all the way up to Brisbane, we're talking about a project that will take 20 years or more, something between 20 and 30 years, so it's not as if we're looking for very large sums of money in a very short period, and that eases the pressure on financing, whether it's public or private finance.

High speed rail could relieve some other pressure on other government expenditure. For example, a high speed rail network up and down the east coast would delay the need for a second Sydney airport for many years.

Keri Phillips: Dale Budd, from the reference group for the federal government's High Speed Rail Study. We also heard Dr Terry Gourvish, director of the Business History Unit at the London School of Economics.

When the Federal Transport Minister Anthony Albanese released the High Speed Rail Study phase two report earlier this month, he said that the government is serious about giving it further thought and wants a public debate about the idea. If you'd like to find out more, there's a link to the report, including detailed maps, on the Rear Vision web page for this program, abc.net.au/rn/rearvision or just Google 'Rear Vision'. On the government's website there's also a link for public responses, which close on 30 June.

Judy Rapley is the sound engineer for Rear Vision. Thanks for listening, bye now from Keri Phillips.