Benefits  

The benefits of the Federation Line include:

• The role of the line in increasing awareness of Canberra as a tourist attraction, with the tramway itself both raising the city's tourism profile and providing another unique attraction.
• A new experience for tourists to Canberra, providing improved linkage to major national tourist attractions. This should increase visitor numbers, and may result in more tourists staying longer in the national capital.
• Increased demand over time for development in the vicinity of the line, as a result of improved accessibility.
• The Federation Line will put some existing attractions and businesses (for example ScreenSound Australia) 'on the map', enhancing their viability.
• Benefits to a number of businesses in the vicinity of the tram line including hotels, restaurants and retailers.
• Land values should be enhanced along the route, which will make currently vacant development sites more saleable for government.
• Reinforcement of Civic as the major retail and commercial centre in Canberra.
• Better city linkages will enhance the functional efficiency of the city and its environs, improving Civic's competitive advantage as Canberra's CBD.  

• The tram service will provide the benefit of removing pressure on parking at the National Museum of Australia, particularly at times of major events.
• It may provide a saving on any alternative service provision (such as ACTION services) or parking infrastructure. The tramway will allow better utilisation of existing car parks.
• Improved utilisation of national facilities (increases patronage, and therefore revenue, of at least the National Museum of Australia, ScreenSound Australia and the Australian War Memorial).
• Environmental benefits
  • Electric trams have no local emissions, and use energy very cost-effectively.
  • Reduced CO2 emissions
  • Reduced car use
  • Reduced road congestion
  • Reduced road accidents
  • Reduced accident costs
  • Reduced pressure on emergency services and police
  • Sympathetic design will mean that the tramway will be a positive addition to the streetscape.
• Increased patronage on public transport (visitors will be able to take a bus from their accommodation to the tram route, rather than use their car).
• Jobs created both directly and in supporting activities; direct and indirect taxation benefits resulting from that employment, during both construction and operation.

Benefit Cost Analysis
A benefit cost analysis of the Federation Line was carried out by MacroPlan Australia. This examined a broad range of benefits and costs associated with the project, with the aim of determining whether it would be profitable for society as a whole.

In an analysis of this type a discount rate is applied to estimated benefits and costs in future years, to reflect the time value of money. A forecast benefit in 10 years time is worth less than if it was available today. The most common discount rate applied in benefit cost analysis is 7%.

Benefits examined in the assessment included induced public transport revenue, tourism expenditure and development; advertising; charter operations; improved pedestrian safety; savings from reduced shuttle bus usage; and increased viability of other attractions. Costs examined in the assessment included the direct costs of establishing the project, environmental impacts and operating costs.

The result of the MacroPlan analysis is that at a discount rate of 7%, the project shows a ratio of benefits to costs of 1.7. In other words, the benefits of the project are 70% higher than its costs. Another measure of the worth of the project is its Economic Net Present Value, which is almost $22 million. These figures show that the Federation Line will provide strong net positive benefits for the community.