Doing a few calculations and assuming the project cost $1.2b which has been reported on this site and confirmed in media reports, that $1.2b would be amortised over the 25 years of the network.
That is an annualised repayment of capital of $48m per annum based on 25 years and assumes no borrowing costs nor opportunity cost.
We need to get back at least $8m per annum in benefits to just break even. Now looking at operating cost I have assumed 5% of capital over the life of the project (25 years) which is $60m or $2.4m per annum to operate the network.
Based on 657,000 trips per annum at a price of $2.20 per adult (discounting for children would make the numbers even worse) we are looking at revenue of $1,445,400 per annum.
Yes, you guessed it, this is roughly a PER TRIP subsidy of $75!!!!!!! Yes $75.00 per trip.
Looking at it another way, if the length of the service is 2400 metres that is a subsidy of $3.20 PER METRE.
These guys have rocks in their head if they are calling this a worthwhile project.
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