PROJECT EVALUATION REPORT

SYDNEY METRO

Submitted By: Tut03-8

Student Name Student ID Contributed Percentage
Arjun Lamichhane 14367243 100%
Cheng zhang 12717144 100%
Hanlin Shi 13411350 100%
Jaineel Joshi 14076172 100%
Sharon Jane Danielraj 14362180 100%
Snehasis Sahoo 24594424 100%

1|Page
Table of Content

1. Executive summary………………………………………………………………………………….3
2. Introduction …………………………………………………………………………………………3
3. Project evaluation …………………………………………………………………………………...7
4. Recommendations and suggestions for further analysis …………………………………………….14
5. References……………………………………………………………………………………………14
6. Appendices …………………………………………………………………………………………..15

2|Page
 Project Description
Executive Summary

This report provides an economic evaluation of the Sydney Metro Railway project in Sydney, Australia’s fastest
railway line project, from both financial and socio-economic aspects This assessment is primarily based totally
on diverse articles and reviews associated with growing countries' transportation and monetary improvement via
way of means of mission funding possibilities in infrastructure sectors. The creation of the metro line in Sydney
can be a great boost to the financial and economic prosperity of Sydney. This assessment suggests that the Sydney
metro challenge is economically viable however ought to be advanced most effectively primarily based totally on
monetary viability. Through this transportation challenge, useful effects inclusive of a progressed monetary hobby
of Sydney, activity creations and new employment possibilities, value, and time discount withinside the
transportation of human beings and freights, progressed air quality, and improvements of present manufacturing
may be generated. As a result, a broad-primarily based total monetary boom, monetary liberalization, and GDP
boom in keeping with different sectoral traits in energy, agriculture, mining, banking and monetary sectors, and
business offerings are expected. The transition withinside the monetary machine of Sydney can be developed via
way of means of such reforms in infrastructure projects.

Introduction

Sydney Metro is the country's largest public transportation project. By 2030, Sydney will have four metro lines,
46 stations, and 113 kilometres of new metro rail. Sydney Metro is changing the way Australia's largest city
travels by connecting the city's north, west, south, and greater west to fast, dependable turn-up-and-go metro
services with fully accessible stations.

The project aims to provide metro trains to any place across Sydney every two minutes. The project will
provide an enhanced commuting capacity of 40,000 customers per hour from the current level of 24,000
customers per hour. The project provides a 60% increase in train services entering Sydney CBD from 120 to
200 hours per day. Due to the better and enhanced connectivity, there is a projection of an activity boost in
Sydney’s economic centres of up to $5 billion per year.

The objectives of Sydney Metro are:

1. Enhanced customer satisfaction with the use of public transport.
2. The long-term solution for the pressing demand for better and feasible connectivity.
3. Extend public transport support and mode share
4. Assisting the productivity of the Global Economic Corridor
5. Invigorate Urban development
6. Facilitate an efficient and affordable public transport system

Location and Background

3|Page
Sydney Metro mega project is Australia's largest public transport project costing around a whopping $54
billion. Overall, the Sydney Metro project will deliver 31 metro stations and more than 66 kilometers of new
metro rail. First, the Sydney Metro has two parts: Sydney Metro Northwest and Sydney Metro City and
Southwest. And later two additional lines have been announced; Sydney Metro Western Sydney Airport and
Sydney Metro West.
Sydney Metro Northwest
The first leg connects Sydney's northwest suburbs with Chatswood. It consists of 14 miles (23 km) of a new
route between Rouse Hill and Epping, including eight new stations. At Epping, the line connects to the existing
13 km Epping to Chatswood rail link. It will be converted from heavy rail to commuter rail standards and
separated from the existing Sydney train network. Passengers can transfer at both Epping and Chatswood using
existing systems. Construction of Sydney Metro Northwest began in late 2013. It opened on May 26, 2019.
Sydney Metro City & Southwest
The second phase will extend Sydney Metro Northwest from Chatswood on the north coast to Central, south of
the city centre, 30 kilometers (19 miles). The centrepiece of this project is the new twin tunnel crossings under
Sydney Harbour. A new track is being built from Central Station to Sydenham Station. The existing Bankstown
rail line from Sydenham to Bankstown station will be converted from heavy rail to S-Bahn standard.
Construction of Sydney Metro City & Southwest began in mid-2017. The line is scheduled to open in 2024.
Sydney Metro West
Sydney Metro West is a separate line between the Sydney CBD and Westmead. The line was announced as an
official project on 14 November 2016, with up to 12 stations being considered including station locations at
Parramatta, Sydney Olympic Park, Five Dock, the Bays Precinct and the CBD. The estimated cost of this line is
$12 million
Sydney Metro Western Sydney Airport
Formerly known as Sydney Metro Greater West, the West Sydney Airport Line runs from St Mary's via West
Sydney Airport (WSA) on the existing T1 heavy rail line to West Sydney Aerotropolis near Bringelly. It will be
a new subway line. The scope also includes a new stabling and maintenance facility and an operational control
center along the alignment. The estimated total cost of the line is $11 billion.
Micro
In 2020 and 2021, The T2 Inner West and South Lines, and T1 North Shore Line reached near to their
respective full capacities. By 2027, all rail lines into the CBD are expected to have reached capacity, and by
2036, demand is expected to exceed network capacity, causing material impacts on reliability and displacement
of some services. The intricacies of Sydney’s rail network around the CBD further restrict the utilisation of
individual lines and cascade the problem. The transportation department is taking measures such as Timetabling
change and a medium-term plan to further untangle parts of the network to alleviate the operational constraints.
Despite these measures, the rail network remains constrained. By 2026, there is a projection of an increase in
Rail network demand by 41% and with the ever-increasing demand for rail travel into the CBD expected to
increase by 31%. It is forecasted that 775,000 people will travel to Sydney City centre each day by 2031. To
meet these demands Transport For NSW made the Sydney Metro project (Transport For NSW, 2016).
In 2026, CBD is expected to face increased rail demand of 6,733 trips (AM peak), six additional train services a
year to meet the demand, increased train crowding of 3.3 million weighted passenger hours, increased station
4|Page
crowding of 8.4 million weighted passenger hours and reliability of 5.1 million weighted passenger hours.
‘Weighted passenger hours’ refer to the hours lost because passengers are stuck in traffic (Transport For NSW,
2016).
Macro
Sydney’s population is projected to reach 6.2 billion and employment is expected to increase to 3.1 million by
2036. Sydney accounts for one-fifth of Australia’s economic output. It generates over 70% of NSW’s Gross
State Product. Sydney’s Global Economic Corridor (GEC), which stretches from Norwest and Parramatta to
Macquarie Park, through Chatswood, North Sydney, the Sydney CBD and on to Sydney Airport, generates over
57% of the city’s output. Sydney’s CBD alone generates nearly half the output of the GEC (Transport For
NSW, 2016). The Sydney Metro can contribute $8562 million per annum in additional value addition from
increased co-location and productivity of businesses and workers in the corridor (Infrastructure Australia,
2017). Moreover, by 2036, the project can stimulate 44,245 additional jobs in the corridor.
The project is a pioneer in encouraging more urban development rather than green-backed housing
developments, leading to infrastructure savings for taxpayers. Attracting more people to medium- and high-
density housing saves household costs on utilities (electricity, gas, water) and transportation. Health Benefits of
Sustainable Living: This project will enable more customers to walk or cycle on public transport, potentially
reducing public health care costs.

Financial Status

5|Page
 Fig – 1: Sydney Metro Comprehensive Income

6|Page
 Fig – 2: Sydney Metro Financial Position

Project Evaluation
For a successful project, it is imperative to carry out a socio-economic evaluation that includes both quantified
and non-quantified benefits. A socio-economic evaluation can help determine whether infrastructure
development is economically sound.
As a global city, Sydney Metro comes with a wide range of economic benefits that enhance the quality of life of
its citizens. Its public spaces are more accessible because of these benefits.

7|Page
According to the proponent's revised economic evaluation (May 2017), conventional transportation has several
major benefits with a benefit-cost ratio (BCR) of 1.3. In addition to a significant economic benefit as well as a
benefit for city shaping, the BCR rises to 1.7 [1] After considering both these benefits [1]. A broader economic
benefit is defined as those which increase the value of conventional transportation benefits because of changes
in land use. These are the benefits that are categorized under the heading of “broader economic benefits”. These
are benefits resulting from changes in land use that increase productivity because of land use changes, as well as
benefits resulting from more efficient land use [2].
Tangible Benefits:
Consumer Benefits:
It is important to note that the customer experience has been enhanced by levels of comfort, technological
advances, as well as ease of accessibility never experienced in public transport in Australia [3].
• In peak times, there is a train running every four minutes in both directions, so people don't need to
worry about timetables, they just need to be on the lookout for the next metro train, and then they are on
their way.

• The carriages of each metro train contain two wheelchair spaces. In addition, priority seating is reserved
for those with additional mobility needs on the train to accommodate them. Aside from that, there are
also two multipurpose areas on board each train where prams, luggage, and bicycles can be stored.

• Having lifts directly connected to platforms and wide Opal gates for station access will enable everyone
to have an easy journey to and from the station. As well as audio hearing loops, metro stations also
incorporate unique design features such as lighting to assist people in finding their way to the train
stations by pointing them in the right direction.

• As compared with an existing suburban railway line, the new generation of railways will be able to
transmit nearly twice as many people in an hour - more than 40,000 people - than the one currently in
service.

Metro Operators:
As an NSW Government agency, the operators offer several benefits, such as free and discounted travel and
stable employment status with a range of career options. These include the possibility of becoming a bus driver,
a fleet and maintenance manager, a safety officer, or an apprentice. Non-Senior Service employees receive a
minimum of four weeks of paid leave per year with leave loading. They also receive up to 15 days of sick leave
or caregiver's leave. Keeping relevant knowledge, experiences, and transferrable skills is in the employee’s
long-term interest [4].
Annualization Factors:
A proposed change in the NSW Rail Standard for rail projects made by the NSW Government has resulted in a
reduction in the annualization uplift of 288 days, a time frame less than the 300 days prescribed for rail projects
8|Page
under this standard. A revised economic analysis has been prepared by the proponent according to the revised
economic analysis, which is based on the standard annualization factor of the New South Wales economy
Intangible Benefits:
Network Resilience:
Providing an alternative crossing of Sydney's harbour, the project connects the north of Sydney with the CBD to
the Southwest. In the long run, this project will improve the resilience of Sydney's transport network because of
the work being done. The proponent of the project has included the benefits of network resilience in the
business case for the project, but these benefits have not been quantified in the economic analysis of the project,
even though the business case for the project makes use of them.
Appraisal Period:
According to the standard guidance provided by the proponent, the appraisal period for the project should be 30
years. However, there are assets included within the project, such as the tunnel, which may serve the taxpayer
for many decades to come. In accordance with the guidelines of the Australian Transport Assessment and
Planning Authority, it was determined that it was appropriate to adopt a 50-year assessment period for the
project. I think this would make a huge difference to the BCR. [5]
More Employment Opportunities:
It is the employment opportunities that are generated by the Sydney Metro project that provides the greatest
intangible benefit. Approximately 30,000 additional direct jobs are estimated to be generated for Western
Sydney by the year 2020 because of the construction of this project, according to Australia's 2015 report. The
project will enable new job creation which will provide people with a chance to earn and spend more money. As
a result, this would create a multiplier effect that would stimulate the economy in a positive way.
More Business Opportunities
The Sydney metro project offers many benefits, including the creation of new communities and business
opportunities for investors, as well as several other benefits. By utilizing these opportunities, the greater Sydney
regional area is expected to benefit from the opportunities that are being presented, in addition to spurring
economic development in the Greater Sydney region
Better Connectivity
In terms of connecting people and business, the Sydney metro project is an advantage when it comes to
providing ease of transportation facilities [6].
Costs:
Tangible Costs

The two main tangible costs identified in this project are capital expenditure and operating and maintenance
costs. The construction of the Sydney metro requires a whole lot of capital. The amount is calculated to be
around $54 billion ($5.3 billion from the federal government and $40.8 billion from the NSW government).
After the inception of the project, there will be operating and maintenance costs.
These costs are discounted at 7% starting in 2015 (Australian Government Department of Infrastructure and
Regional Development, 2016)

9|Page
Intangible Costs
While the tangible costs can be quantified, as shown above, the projects also incur some intangible costs which
cannot be easily measured. These costs derive from social and environmental factors.
In addition to the many hidden costs, noise pollution and acoustic vibrations are damaging road paths and the
airport environment. This negative externality is inevitable and occurs because the WSA is expected to allow
flights at any time. (Australian Government Department of Infrastructure and Regional Development, 2016).
An additional intangible cost is the loss of local biodiversity as railway construction destroys local flora and
fauna habitats. Noise and air pollution can also cause health problems for nearby residents and affect their
quality of life (Australian Government Department of Infrastructure and Regional Development, 2016).
Hazards and risks are other costs that need to be mentioned. Although operations are subject to strict rules and
standards, there is no guarantee that railway operations and related activities will always be successful.
Businesses and individuals living or operating in this area may be exposed to risks associated with railway
operations. (Australian Government Department of Infrastructure and Regional Development, 2016).

Project Viability Indicators

To check whether the project is financially sound to go forward or not, we use project viability indicators. One
is the net present value (NPV), and another is the benefit-cost ratio (BCR). A positive NPV shows that the
project will be viable. The cost-benefit ratio expresses the value of a project as a ratio of cash inflows (benefits)
to cash outflows (costs). A BCR above 1 suggests the project will be beneficial.

As we know that Sydney metro northwest section is already complete. So, we will not consider this section in
this project viability analysis. We will do the analysis in three sections only.
City and southwest Part:
Total benefit: $11,455M
Total costs: $8,680M
Net Present Value=Benefit-Cost =11,455-8,680=$2775 >0 (Ok)
BCR Ratio=Benefit/Cost=$11,455/8,680=1.13 >=1 (Ok)

West Part:
Total benefit: $17,348M
Total costs: $12888M
Net Present Value=Benefit-Cost =17,348-12,888=$4496 >0 (Ok)
BCR Ratio=Benefit/Cost=$17,348/12,888=1.34 >= 0 (ok)
Western Sydney Part:

Total benefit: $5,545 M

Total costs: $7384M
Net Present Value=Benefit-Cost =$5545M-$7384M=-$1839 <0 (Not Ok)
BCR Ratio=Benefit/Cost= $5545M/$7384M = 0.75 < 0 (Not ok)
If we consider each section as a single, then only the city & southwest parts and west parts are viable, and the
western Sydney part is not viable. However, if we consider all parts as a Singal project which it is then,

Total benefit: $34348 M

10 | P a g e
 Total costs: $22306M
Net Present Value=Benefit-Cost =$34348M-$28952M=$5396 >0 (Ok)
BCR Ratio=Benefit/Cost= $34348M/$28952M = 1.18 > 0 (Ok )

2)Economic evaluation:

Socio-economic evaluation is required to estimate the benefits and costs of the project in national terms and to
include both quantified and non-quantified impacts. The economic soundness of infrastructure development
from a social perspective can be understood by socio-economic evaluation. More socio-economic benefits are
detailed in Appendix II: Social and Economic Benefits

Quantified Benefits of the project:

a. Transport Benefits
1. Increases the capacity of the rail network, allowing for the longer-term growth of the Sydney train
network.
2. Supports the prediction that by 2036, the number of train passengers will increase from 168,400 to
288,000 trips during the one-hour AM peak.
3. Expands the total rail network capacity that is available on the network by 60% (this will be achieved by
adding 60 high-capacity metro train paths every hour making it possible for more passengers to be
carried)
4. With the successful implementation of the project, 40 more train services will be delivered in 2024,
which is an increase of 31%.
5. Reducing traffic by shifting approximately 20,000 trips of private cars to rail in 2036.
6. Offers customers substantial travel time savings, as well as greater comfort and dependability.

b. Key City Building benefits

1. Peak added employment of 6,233 employees over the construction phase.
2. By 2036, the corridor will have added $8,562 million in value annually due to increasing business and
labour co-location and productivity.
3. Stimulates the creation of 44,245 more employment in the corridor by 2036.
4. Households will save between $721 and $1,761 annually in 2036 due to lower living expenses (In
transit-oriented projects, medium- to rising housing has a lower average energy, gas, and water usage
profile).

Some of the Main Benefits categories include: First, catering to the growth in demand which is projected to rise
to 119,600 trips by 2036 in the one-hour AM peak. The development of the project will. The construction of
Sydney Metro City & Southwest will allow the Sydney rail network to efficiently accommodate growth, in
addition, to resulting in a mode shift of 20,000 journeys from road-based to rail during the AM peak by 2036.
Sydney Metro City & Southwest can offer 60 high-capacity services in any one hour when all its capacity is
utilized. This is a significant shift in network capacity that will allow it to accommodate a 60% increase in
passenger demand.
Secondly, expanding the train network's coverage and accommodating different types of trips. The project will
additionally expand the network which will result in the establishment of new stations such as Crow’s Nest,
11 | P a g e
Victoria Cross, Barangaroo, Martin Place, Pitt Street, and Waterloo as well as additional platforms in Central
Station.

The outcome of economic activity and productivity of the project in 2036

Northwest Southwest Global
Details corridor corridor Sydney Total
Value add ($million) 2886 453 5223 8562
Productivity per worker
($) 669 452 381
Additional jobs
(Number) 17435 2442 24368 44245
Income per worker ($) 301 142 322

Regarding the cost of the project, there have been adjustments following the contract renegotiation with the
large companies. As the cost of the building is going up, tender documents show that the government of
Australia has accepted the increase in the scores of contracts for the City and Southwest rail line which includes
those for new stations at Waterloo, North Sydney, and Martin Place. The newly adjusted costs reveal that the
total cost for the rail line to go beyond $17 billion (Swanston, 2022. The government is experiencing budget
overruns on other projects of transportation, notably the first stage of the M6 freeway in Sydney's south, which
will cause the cost of the metro rail line from Chatswood to the inner city to Sydenham in the south and
Bankstown in the west to skyrocket.
The adjustment of the cost includes $1.7 billion in costs attributed to COVD 19 pandemic which made great
disruption to the essential workforce, supply chain, and construction production among other things which were
key to the project. Besides, $ 1 million was budgeted for the financial year 2022-2023 for the linking of beaches
(Swanston, 2022. Approximately, $602.4 million is set apart for stage two of the Parramatta light rail which
made it possible for comprehensive planning and new bridge construction over the river of Parramatta at
Melrose Park which is the proposed route (Swanston, 2022)

Project Risk Assessment

Risk 1: Benefits for User (From Transport and Economic Productivity)

Risk 2: Costs (Expenses, Acquisition of Raw Materials)
Risk 3: Individual Risks
Risk 1
12 | P a g e
With the increasing investments in different projects by the NSW government to boost the water and ferry
commute, If the commuters started preferring these modes of transport instead of Metro trains to commute, then
Transport For NSW (TfNSW) will not be able to generate much revenue to recover the high investments.
Risk 2
In unforeseen circumstances such as COVID-19, the expenses of providing a safe and clean working
environment and scarcity of labour availability increased the spending of the government. Such kind of
pandemics can lengthen the project delivery and increase the leased entities’ cost.

Risk 3
There are chances of Individual risks faced by passengers and workers. TfNSW has rapid transit safety risk
tolerability levels for the Sydney Metro. For passengers, an individual risk of suffering a fatality-weighted
injury (FWI) is provided. This has the least likability of happening.

Quantitative Analysis
Sensitivity Analysis
Benefits = 34348 M
Cost = 28952 M
If the Benefits increase by 10% and keeping Costs constant,
NPV = 8830.8 M
Percentage Change in NPV = 63.65%
If the Costs increase by 10% and keeping Benefits constant,
NPV = 2500.8 M
Percentage Change in NPV = (53.65%)
If the Benefits decrease by 10% and keeping Costs constant,
NPV = 1961.2 M
Percentage Change in NPV = (63.65%)
If the Costs decrease by 10% and keeping Benefits constant,
NPV = 8291.2 M
Percentage Change in NPV = 53.65%
The most sensitive parameter for the project is the Benefits.

13 | P a g e
Recommendation and Further Analysis

As a result of the project evaluation, it is evident that it will bring significant benefits to New South Wales as
well as the wider Australian economy if the Sydney Metro Project is built and operated.
Our report notes that tangible benefits include lower prices for consumers and an increase in connectivity
options provided by metro operators operating in Sydney.
Several intangible benefits are associated with the construction of the Sydney metro project and its many
connections to other areas of Sydney. One such benefit includes increasing employment opportunities for the
common people of Sydney, reducing travel times and congestion for them, as well as the convenience of
switching trains since the metro is connected throughout Sydney constantly, which reduces the amount of noise
and dust in residential neighbourhoods.
Moreover, the financial evaluation carried out indicates that the construction and establishment of the Sydney
metro project are worthwhile station’s positive Net Present Value (NPV) of $5396 million and a Benefit Cost
Ratio of 1.18, which indicates that the project will be beneficial to Australia in the long run.
Among the recommendations made in this report, the last one is that the ongoing construction of the Sydney
metro project should be extended to all other network lines throughout the entire state of New South Wales to
meet the needs of future passengers and the network requirements of the country.

• In addition, the use of second-hand data from previously published reports makes it difficult to verify
the accuracy of the financial evaluation, because the data used are based on information that was once
published.
• It has been found, in my opinion, long-term forecasts of passenger demand are only 80% accurate in
terms of economic benefits.
• In the project evaluation, it was determined that increased trade, tourism, and foreign direct investment
would likely result in broader economic benefits, however, these benefits could not be quantified.
• As a result, we have calculated a Net Present Value for the project over an estimated 60-year period by
applying a 7% discount rate. Based on the economic conditions of the time, the real interest rate will
differ from this estimate and will be based on the conditions of the economy at the time.

References
[1] N. Government, "Project Evaluation Summary," Infrastructure Australia, Sydney, 2017.
[2] J. Lamonte, "Sydney Metro: a game changer for passengers," [Online]. Available:
https://www.intelligenttransport.com/transport-articles/91304/sydney-metro-a-game-changer-for-
passengers/.
[3] C. C. Kite, "TRANSPORT FOR NSW AND SYDNEY METRO SALARIES," Transport for NSW,
Sydney, 2019.

14 | P a g e
[4] Metro, S., 2019. Sydney Metro. NSW.

[5] Infrastructure Australia. (2017). Project Evaluation Summary Sydney Metro City & Southwest.
www.infrastructureaustralia.gov.au. Retrieved from
https://www.infrastructureaustralia.gov.au/sites/default/files/2019-
06/Sydney_Metro_City_Southwest_Summary.pdf.
[6] Transport For NSW. (2016). Sydney Metro City and Southwest Business Case
Summary.www.sydneymetro.info. Retrieved from
https://www.sydneymetro.info/sites/default/files/Sydney%20Metro%20CSW%20Business%20Case%20Summa
ry.pdf.
[7 C. C. Kite, "TRANSPORT FOR NSW AND SYDNEY METRO SALARIES," Transport
for NSW, Sydney, 2019.
[8 S. M. West, "Scoping Report of Sydney Metro".
[9 N. D. a. P. Thornton, "Passenger Benefits of Sydney Metro," Sydney, 2019.
]

[10]Swanston, T. (2022, June 21). Multi-billion-dollar cost blowout in Metro tunnels under Sydney Harbour.
ABC News. https://www.abc.net.au/news/2022-06-21/nsw-budget-reveals-metro-tunnel-cost-
blowout/101171264#:~:text=The%20project%20was%20estimated%20to,and%20south%2Dwest%20to%20Ba
nkstown

Appendices

Appendix: I – Cost-Benefit Analysis

Cost-benefit analysis city and southwest part

15 | P a g e
Cost-benefit analysis west part

Cost-benefit analysis western Sydney airport part

16 | P a g e
Appendix: II – Social and Economic Benefits

Tangible Benefits
Benefit Name Data Figure How it was Data Source
collected
Consumer The 2017 PV Extracted pp 9, WSA Project Brief
Benefit output was 6,300 directly from (Infrastructure Australia Project
million the report itself Business Case Evaluation, 2018)

Metro Operator 1,500 million Directly pp 9,WSA Project Brief

Benefits PV (2017) extracted from (Infrastructure Australia Project
the report Business Case Evaluation, 2018)

17 | P a g e
Intangible Benefits Table
Benefit Description
Job Opportunities As far as financial terms are concerned, this is intangible.
Approximately 20,000 additional jobs will be created in direct employment
by the year 2050.
The growth of businesses creates more indirect jobs than direct jobs.

Better Connectivity An intangible asset in the financial sense.

Provide convenient travel and frequent connectivity services to enhance the
quality of life and the success of the business.

More business Investment opportunities are being brought in as a result of new communities
opportunities being created.

18 | P a g e
Salary Benefits of Metro Operators

Appendix: III

Value of Travel Time

19 | P a g e