IFM's AirRail Melbourne proposal helps other projects to get financed

IFM's AirRail Melbourne proposal helps other projects to get financed
IFM's AirRail Melbourne proposal helps other projects to get financed

It might have appeared to slip under the radar, but the IFM Investors-led consortium's AirRail Melbourne proposal has already had a long life, with work commencing over a year ago.

IFM Investors was set up by industry super funds to manage their investments.  It has stakes in Asia Pacific Airports which owns the lease and operates Melbourne Airport, and IFM also own the 30-year concession for Southern Cross Station.

The consortium behind the AirRail Melbourne proposal unveiled on the weekend, also includes Metro Trains Melbourne who in turn is majority-owned by Hong Kong's MTR corporation with John Holland and UGL Rail rounding out the minority shareholders.

The consortium brings substantial rail and aviation experience in addition to institutional finance to the table, with a spokesperson confirming the proposal had not appeared out of thin air, having undertaken a year's worth of work before the unveiling.

Speaking to Urban.com.au, a spokesperson confirmed that IFM Investors expects to use the Victorian Department of Treasury and Finance's market-led proposal process which should it progress toward the end of Stage 2, we're likely to see far greater detail released into the public domain.

The proposal is rail technology agnostic at this stage and the corridor and references to other government or election initiatives are deliberately open, owing to the many moving parts, chief of which is the state election in a few months time and the Melbourne Airport Rail Link business case which is currently underway.

It was only last week that the state government called for expressions of interest to participate in the Melbourne Airport Rail Link (MARL) and it will be interesting to see if any other well-rounded proposals such as AirRail Melbourne come to light.  

Comment

One can't help but focus on the main organisation which is leading the consortium - they're in the investment and superannuation business. 

Committing a further $5 billion on top of the Federal and State Government's $10 billion is likewise interesting because it's like the Southern Cross, Sunshine and Airport stations, tunnels and tracks and rolling stock will not cost $15 billion. This throws up the opportunity for the joint commitment of $10 billion to be reallocated between the Airport Rail Link and projects like quadruplications in the west.

Remember, as part of the initial Melbourne Airport Rail Link announcement by the State Government in July, part of the business case was to investigate how to get 'high speed rail' to Geelong.  What high-speed actually means is anyone's guess, but the AirRail Melbourne documents published to date hint at it: it's about further separating metro and V/Line services in the west.

The groundwork for Melton electrification is currently underway with track duplication from Deer Park to Melton, and the Regional Rail Link unable to handle both Geelong and outer Melbourne suburban passenger commutes for much longer.

The Regional Rail Link was built for $3.65 billion; quadruplicating Sunshine-Deer Park-West Werribee won't cost as much - but rebuilding Sunshine station along with its rail junction won't be cheap. 

If it costs $15 billion to get the Melbourne Airport Rail Link, with its dedicated tracks between Sunshine and the city boosting rail capacity even further, as well as adding even more track (and services) to the outer west, we're looking at widespread benefits.

We'll have to wait for the outcome of the state election and the release of the business case, but the AirRail Melbourne proposal (or a competing proposal if the market-led process eventually turns into a tender) has appeared at a good time.

Alastair Taylor

Alastair Taylor

Alastair Taylor is a co-founder of Urban.com.au. Now a freelance writer, Alastair focuses on the intersection of public transport, public policy and related impacts on medium and high-density development.

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Melbourne Airport Rail Link

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Peter Hatley
I currently pay Skybus, but Iwoould not describe it as "happily". It is simply cheaper than a cab or uber.

Frankfurt airport has NO surcharge for its train services, both ubahn/sbahn and ICE. Zip. Nada. Nil. Nothing. This is the model we should be using. Airport should be just another station, covered by a standard Myki fare. By maximising patronage, we'll save a fortune in not expanding the freeway. Private investors can recoup their money the old-fashioned way, by increasing their passengers, and by leasing shops, offices and the like in & around the new stations.

Look at the debacle with the Sydney stations, and the Toronto one. People won't pay a surcharge in high enough numbers.
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David  Hardy
People happily pay a premium fare to get to Tullamarine currently by Skybus, and like Sydney will be happy to pay a premium fare to get there in 20 minutes as a high speed one stop service at Sunshine using dedicated Airport trains with adequate seating, extra luggage space etc . Passengers will be able to travel on MYKI with the premium fare being deducted on barrier exit . $ 20 one way to the Airport is a lot cheaper than taxi or Uber and similar premium fares are charged on Airport railways around the World .
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Atomic
I'm not interested in paying $20 for an airport ticket or even $10. London is just a regular fare...
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sir_john_de
In London, it really depends on which airport you're going to, and how you get there.

You can get to Heathrow using public transport, costing £5.10 (about A$9) one way, and it will take you about 45 minutes to an hour depending on where in central London you are at the time. The speed/ease of getting to Heathrow will only improve once Crossrail/the Elizabeth Line opens in 2019.

Gatwick is another matter entirely. For that, one-way tickets start at around £10 (A$17.50) for a circa half hour journey to central London on regional trains. For the premium Gatwick Express train, you'll pay £17.80 (about A$31).
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buffboi
How long ago was that?

I was there earlier this year and a ticket from Baker sf station in London City to Heathrow was $50AUD or 20 pounds each and they had tonnes of inspectors at the airport train station making sure everyone who tried to get in with a normal ticket paid the new amount

I don’t remember that being the case on my prior visit in 2014 however

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