Jack Colreavy
- Aug 20, 2024
- 4 min read
ABSI - Metro Rail Opening Secures Sydney’s Global City Status
Every Tuesday afternoon we publish a collection of topics and give our expert opinion about the Equity Markets.
Yesterday, to great fanfare, the Sydney Metro officially started operations underneath the Sydney CBD carrying its first passengers to new stations including Victoria Cross (North Sydney), Barangaroo, Martin Place, Gadigal (Town Hall), and Central. While many bask in the monumental milestone, others question why it has taken so long for a global city like Sydney to open a metro railway. ABSI this week will explore the history behind the new chapter in Sydney’s history.
A metro railway system is the cornerstone of any great global city. It is a high-capacity public transportation network designed for urban areas, operating on dedicated tracks that are typically underground, elevated, or isolated from road traffic. It is characterised by frequent, fast, and reliable trains powered by electricity, serving densely populated regions with minimal waiting times.
First Day of the London Tube
Source: History Today
The world’s oldest functioning metro rail line is the London “Tube” which opened its first line, the Metropolitan Railway, on January 10, 1863. The original trains were steam-powered and covered a distance of ~6km between Paddington and Farringdon. Since then, the network has expanded significantly and has inspired other cities to implement similar systems. Today, over 200 cities have a metro rail system including New York, Tokyo, Singapore, and Paris.
So why is Sydney ~162 years behind London in opening a metro?
The answer to that question is multifaceted including Sydney’s existing and complex urban environment, the historical preference for heavy rail, buses, and ferries, and the geological challenges in tunnelling through Sydney’s solid bed of sandstone rock. However, the primary reason has been politics and the challenges of substantial long-term investment across a state government elected every four years.
A rapid transit system was first proposed between Parramatta and the CBD in 1968 by the NSW Planning Authority in response to an increasingly congested suburban rail network shared with long-distance rail and freight services. Unfortunately, the proposal was ignored for decades as governments prioritised short-term upgrades to existing networks. It wasn’t until 2008 that the idea was reimagined and a new “Metro Link” was proposed to connect the CBD with the outer city suburbs. Unfortunately, two years, three premiers, and half a billion dollars spent on property acquisitions and changing plans resulted in its cancellation. However, this plan formed the basis of the Sydney Metro Northwest that was announced in 2011 and opened in May 2019 connecting Rouse Hill to Chatswood at a cost of A$7.3 billion.
Source: SMH
The Sydney Metro City and Southwest line, which opened yesterday, was Stage 2 of the new metro network that began construction in 2017, extending the existing line by 30 km from Chatswood to Sydenham with vital stops in the Sydney CBD. While final costs haven’t been released, they have been estimated at ~A$20 billion. Moreover, there are further two Stages under construction to expand the network costing a further A$35 billion. The Sydney Metro West will connect the CBD with Westmead via Parramatta, while a line will be built at the new Western Sydney Airport.
Cities investing in metro rail lines significantly enhance livability by providing a fast, reliable, and high-capacity service that reduces travel times and alleviates road congestion. By operating on dedicated tracks, metros avoid delays caused by traffic, offering a more punctual and predictable mode of transport. They also contribute to environmental sustainability by reducing the reliance on cars, leading to lower carbon emissions and improved air quality. Now that Sydney has its first lines open, the barrier to further investment by subsequent governments has been lowered and will enable better urbanisation of a city that suffers from shocking housing affordability.
Introducing BPC Wealth Management
BPC Wealth Management is dedicated to shaping resilient investment portfolios, empowering you to achieve and sustain your financial aspirations. While the foundation of your portfolio focuses on long-term investments, through BPC, clients will be offered opportunities in equities trading and equity capital markets. This aspect is highly customised, allowing asset flexibility. Discover how our proactive and client-focused approach can help you achieve your financial aspirations by booking your discovery call with James Whelan.
We offer value-rich content to our BPC community of subscribers. If you're interested in the stock market, you will enjoy our exclusive mailing lists focused on all aspects of the market.
To receive our exclusive E-Newsletter, subscribe to 'As Barclay Sees It' now.
Recent Posts
See All
Share Link