Economist Edward Glaeser, ranked as one of the profession's top 50 practitioners, summed-up 40 years of transport economics at Harvard University in four words when he was visiting Wellington last year: "Bus good, train bad." 

Glaeser's argument is centred on the risks of bus versus rail. Rail is capital and land intensive as you need to buy the land at market prices in order to put a track on it. Even in the case of light rail, the capital costs are high, have to be paid up front, budget blowouts are frequent, and if passenger usage projections do not pan out - tough, you are stuck with a fixed network. 

Buses, on the other hand, are relatively light on capital expenditure as you do not need to build a rail network for the trains to run on. Buses can also be leased instead of bought, and if passenger usage changes, you can either move the route or hand the buses back (if they were leased in the first place). 

That's presumably why Wellington officials walked away from a plan to build a light rail network earlier this year. Even Mayor Celia Wade-Brown, who had previously championed the idea, voted against it. 

The wisdom behind this decision was recently underscored by a number of press reports coming out of Australia, detailing just what a nightmare the Australian Capital Territory is going through trying to install a 12-kilometer light rail line in the capital city. 

First, the A$600 million ($660 million) project failed to stack up next other forms of public transport, with buses delivering double the economic return of light rail according to government figures. This was partly because it would only serve two out of Canberra's six town centres. 

Canberra, as noted by Macrobusiness.com.au, is unsuited to a capital intensive project of this nature because the population is too small. The ACT government's own figures show that only 4500 out of a population of 360,000 were likely to use the service, and the density of these commuters was too dispersed for it to ever stack up financially. 

Second, the project is to be funded by a special land levy, charged on those properties that were judged by planners to receive an uplift in value from the installation of light rail. This quickly drew criticism from the Property Council of Australia who labelled it as yet another tax on an already strained sector. 

Adding the final insult to injury, even before the first sod had been turned (due in 2016), the project is already expected to see costs blow out significantly, as engineers will have to reposition underground wires and pipes along the route. This comes as ACT battles to rein in A$100m budget shortfall (without the cost impact of light rail). 
  
All in all, there are numerous warning signs suggesting Canberra's light rail vision is going to end in taxpayer tears. 

Bringing it back to Wellington, it is a well-established fact that in politics, ideas don't die - they simply hibernate until someone revives them. Local government officials in Wellington may be turning their attention to buses for now (creating ample material for a future column), but there is no guarantee we won't be seeing light rail in some Franken-form down the track. 

When it does re-appear we need to keep Canberra's light rail experience front of mind, refuse to compromise on anything but the strictest cost-benefit analysis, and outright reject the notion that 'this time it will be different'. 

After all, smart people learn from their mistakes, smarter people learn from the mistakes of others. 

Source: Light rail off Capital agenda - for now