Melbourne–Brisbane Inland Rail Alignment Study - Australian Rail ...

Table 38 Economic sensitivity analysis ($ million, discounted, 2010 dollars) cont...
12. High oil price – an oil price of US$200/barrel is assumed in comparison to
US$120 in the core appraisal. An increase in fuel prices affects road freight more
than rail freight
13. Change in GDP growth
13a. High GDP – core appraisal assumed low GDP growth in 2010 and 2011,
moving up to 3.1% pa from 2013. This scenario tested GDP growth of 3.6% pa
from 2013 onwards
13b. Low GDP – this scenario tests lower GDP growth forecasts of 2.6% pa
from 2013 onwards
The figure below presents the sensitivity results graphically.
0.82 0.98 1.20
0.93 1.18 1.53
0.52 0.57 0.64
Figure 25 Chart comparing economic sensitivity results for Inland Rail assuming operations commence
in 2030 (BCR)
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2
3
4
5
6
7
Sensitivity test
8
9
10
11a
11b
11c
12
12a
12b
0.00 0.50 1.00 1.50 2.00
Economic BCR
Key findings of this sensitivity analysis were:
The test that affects the economic results most positively is a reduction in the discount rate to 4%
It is also greatly affected and becomes economically viable commencing in 2020 if capital costs are reduced by 30%
Furthermore, it becomes economically viable commencing in 2020 if demand is estimated using more sensitive
ARTC elasticity assumptions
Other scenarios that Inland Rail becomes economically viable if commencing notionally in 2020:
àà
tonnage demanding the inland railway increases by 30%
àà
road pricing undergoes a fundamental shift whereby pricing is based on DORC values.
The test that affects the economic results most negatively is if both rail and road access prices are based on a
regulatory building block approach using DORC valuation.
11. Economic analysis
ARTC • Melbourne–Brisbane Inland Rail Alignment Study – Final Report
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