A PROPOSED light rail service along Hobart's northern suburbs rail corridor would cost $80 million to set up and require $8.5 million in annual subsidies from the government.
These were the findings of a study that assessed the business case for a light rail passenger system which makes use of the existing rail corridor between Hobart and Brighton, the Northern Suburbs Light Rail System (NSLRS).
The final report, released this week, summarises the findings of the previous three reports into a single document and presents the overall findings of the study.
The study, prepared by ACIL Tasman, Hyder Consulting and SEMF for the Department of Infrastructure, Energy and Resources (DIER), consisted of three stages.
The first stage described the context and setting for the project and set broad parameters for the remainder of the project, recommending that the NSLRS terminate at Claremont.
It was suggested that beyond Claremont, the last three proposed stations on the line (Granton, Bridgewater and Brighton) were unlikely to deliver benefits commensurate with the costs required to upgrade the line to them, based on distance and likely patronage.
The study's second stage developed optimal operating service models (OOSMs) for the light rail system. It found that either diesel or overhead electric traction would be suitable.
The third and final stage calculated the economic costs and benefits associated with the optimal operating service models and determined that the value of the subsidy required for the service would outweigh the value of any community benefits by a considerable margin.
However, the study concluded that "a positive net benefit was a possible outcome, but also a very high risk investment."
Following the release of the report, Minister for Sustainable Transport, Nick McKim, said the Tasmanian Government was not in a position to provide the funds to proceed to the next step.
He said the Business Case estimated that significant subsidies to operate the service would need to be provided.
"The Tasmanian Government would need to provide annual funding of up to $8.5 million for operating support, such as a contribution to offset lower fares for concession passengers," Mr McKim said.
The Minister also said it would cost more than $80 million to set up the light rail service, including track upgrades, station facilities, signaling and safety equipment and the purchase of rolling stock.
Mr McKim said he would now consider approaching the Commonwealth Government, most likely through Infrastructure Australia, for support, but warned that Tasmania will have to present a strong case.
Mr McKim said he had asked DIER to undertake the necessary supporting work to begin building a project proposal that meets Infrastructure Australia's requirements.
"There is more work to be done. It will take some time as a bid must be comprehensive and there are quite a lot of elements required to meet the funding criteria," he said.
However, Mc McKim said he was "satisfied that the business case is robust and defensible and the outcome is the best which can be achieved."
More information about the study is available at <http://www.transport.tas.gov.au/miscellaneous/northern_suburbs_to_hobart_cbd_light_rail_business_case>.