Rowville-Rail-Study-Final-Stage-1-Report-FINAL

Final Stage 1 Feasibility Report
Costs, benefits and impacts
of community input before a full capital cost estimate is prepared; and
2) The City of Knox has only recently completed an economic effects study that could
provide information to assist the economic appraisal.
8.4 Wider economic benefits
The main reason for building the Rowville rail line is to realise economic, environmental and
social benefits, most of which are usually accounted for in a transport user economic
appraisal. However these calculations do not fully capture wider effects, which can include:
A move to more productive jobs – the Rowville rail line will make central Melbourne
employment more accessible to Rowville rail line area residents. Jobs in that area are
more productive (i.e. contribute more to Australia’s Gross Domestic Product) than jobs
elsewhere in Melbourne. Added to this, the improved accessibility that the rail line would
provide could encourage more productive businesses to locate in the rail line catchments.
Agglomeration benefits – a shift of employment to areas of denser employment results
in more flow-on effects as businesses benefit from being in closer proximity to each
other. These so-called agglomeration benefits are also typically more significant in major
centres like central Melbourne and the Monash University technology precinct.
There are established methods available to estimate these benefits in economic terms. They
originate in the UK, where wider benefits have been estimated on major projects for at least
the last 5 years. However they depend on detailed information on job productivity that is not
readily available, and we have not calculated them at this stage of the study.
Added to the above is the potential for additional development around the Rowville rail
stations, which could create more public transport patronage. The additional development
could be substantial (and indeed is already anticipated around Monash University, for
example), however the quantum of transport user benefits associated with it is difficult to
estimate with certainty as it depends on where that development might occur if the rail line
was not built. However it too could add significantly to the economic benefits of the project.
The City of Knox’s economic study (undertaken by SGS Economics and Planning and
released in June 2012) has estimated that the Rowville rail line could give rise to:
an additional ~1,350 households and ~1,100 jobs in the area by 2046 (over and above
base projections similar to those in Table 1 herein);
support for about 5,600 jobs in Victoria during its construction; and
additional annual output (direct and value-added) from the Victorian economy of about
$970 million by 2046.
These results suggest that the long-run wider economic effects of building the rail line could
be significant. The economic study report should be considered as a possible input to a
business case for the rail line in Stage 2 of the study.
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