Would it be economically worthwhile to build a high-speed rail between Melbourne/Sydney?

According to this (page 1).

Cost of Sydney to Canberra to Melbourne would cost $38b. Add in Inflation 2012-2020 = ~17%. Add in government project cost multiplier of ~1.75 (i.e. NBN cost 51B, but they said it would be 30B). Total cost is ~$78B.

Let's guess passenger count.

There are 55k flights a year between Melbourne and Sydney. Pretend they are all Boeing 737-800s which carry 150 passengers, so you get a rough number of 8.2m/year. So the assumption is all flights become train rides, and all flights are full.

Let's say the profit above variable costs is ~$20 per passenger (i.e. tickets could cost $50, $30 pays for the train and staff, made up numbers). So a guesstimate profit is $164m/year or a payback period of ~500 years. Which is basically not happening.

I think you will need to see a population in the level of 10-20x higher for to be viable. Even though I would love it if I could travel between Sydney and Melbourne using high speed, and would definitely do it many more times a year than I fly.

/r/AusFinance Thread