Trams unlikely to be cost-effective – buses generally much cheaper

This morning on 612 ABC Brisbane, Steve Austin interviewed Queensland Tourism Industry Council CEO Daniel Gschwind, who would like to see trams return to the streets of Brisbane (Should trams return to Brisbane?). Mr Gschwind was honest enough to admit it’s a thought bubble and I suspect he’d realise it wouldn’t be sensible if he was shown cost comparisons for trams and buses.

Busways are generally much cheaper to build than tramways/light railways. For example, see the interesting chart below I’ve copied and pasted from a presentation (Merits of light rail versus bus) at a Canberra transport conference by Monash Professor Graham Currie (N.B. BRT stands for Bus Rapid Transit and HOV stands for high occupancy vehicle). 

capitalcostThat’s a large difference in capital costs between light rail and busways. While operating costs per person moved can be lower for trams/light rail compared with buses on busy corridors (see p. 46 of Affordable Mass Transit Guidance), you’d want to be very confident a tram system would be well patronised before committing to it. You’d want to crunch the numbers for a range of demand scenarios – including a low passenger numbers scenario – to check if any savings in operating costs are sufficient to pay for the large up-front capital expenditure that would be needed to build the tram system. My guess is that, for the case of Brisbane, it wouldn’t be.

It’s important to remember that Clem Jones replaced the trams with buses in the late 1960s even though the tramways were already in place – i.e. the expensive capital investment had already been made and was a “sunk cost.” The operating and maintenance costs of the trams were obviously signficantly higher than those associated with buses from the Council’s perspective. Given Brisbane still has a relatively low urban density, I doubt trams would be economically viable for Brisbane, particularly once the capital expenditure to re-establish the tramways is taken into account.

A big hat tip to my friend and colleague Brad Rogers, who first alerted me to what cost comparisons between light rail and buses typically show. Brad blogs at BJREconomics


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