Canberra Businesses Struggle as Light Rail Construction Enters Second Year
One year into the disruptive light rail construction works in Canberra's city centre, local businesses along London Circuit are reporting severe financial strain. The ongoing infrastructure project, which began in early 2025, has led to significant drops in customer traffic, forcing many establishments to cut staff and reconsider their future viability.
Substantial Revenue Declines Reported
Business managers and owners have detailed alarming reductions in trade since construction commenced. Danny Moreno, manager of The Cupping Room, estimates a 30 per cent drop in overall trade, with weekend business particularly affected. "We did drop off pretty quickly," Moreno explained. "We find that Canberrans are just avoiding the city, weekends in particular have dropped low, almost half."
Other businesses report even more dramatic declines. Fav Cup cafe manager Nat Se noted weekend sales have fallen by 50 per cent, forcing staffing reductions. "Some people from the courts come, but I think they don't know if this way is going to be closed or not, so they didn't come," she said.
Parking Challenges Deter Customers
Accessibility issues have emerged as a primary concern for businesses struggling to maintain customer numbers. David Hue, owner of Little Steamer, reported his business is down 30 to 40 per cent compared to pre-construction trading levels. "Since they blocked Northbourne Avenue, the customers have cancelled," Hue said. "At least five tables said, 'Oh, we can't find parking.'"
Even when alternative parking options are suggested, customers remain reluctant. "We talked to them, the customers, we said use the Hobart Place or Marcus Clarke Street, and they said, 'Oh, it's not worth it, we prefer to go to Woden or Gungahlin,'" Hue added.
Business Survival in Question
The financial pressure has raised serious questions about business sustainability. Charcoal Restaurant owner Anna Gray previously expressed uncertainty about whether her venue would survive another year of construction works, declining to sign a year-long lease as a result.
Nick, owner of Roy Jr., initially optimistic about the light rail's potential benefits, now describes the situation as "pretty ruthless". Despite anticipating a future light rail stop at his front door, he has seen a substantial drop in customers and is urging Canberrans to support local businesses during this challenging period.
Government Support Measures Under Scrutiny
The ACT government has implemented several initiatives to assist affected businesses, including a marketing campaign, business advice, free parking, and the "fare free evenings" program providing free public transport on Friday and Saturday evenings from 6pm. However, business owners question the effectiveness of these measures.
Danny Moreno described a government-funded event at The Cupping Room as not "greatly successful", noting they "probably broke even with the money that we were given". Moreno explained their proactive approach: "We were pretty proactive at the start, we made some changes to our style of service and just tried to be as adaptable as we could just to try and stay afloat, but it just feels so much harder than it should be."
Potential Legal Action Considered
Some businesses along the circuit are exploring legal options, including a possible class action against the ACT government for lost revenue. This consideration follows a December 2025 High Court decision that overturned a ruling denying compensation to businesses affected by Sydney's light rail project, potentially setting a legal precedent for similar cases in Canberra.
Business owners have suggested additional support measures, including reduced liquor licence fees or land rates charges. An ACT government spokesperson stated that Infrastructure Canberra regularly engages with affected businesses and that "feedback from businesses is an important input to how construction is planned and, where appropriate, how business support measures are considered."
The spokesperson confirmed that "the government is evaluating and reviewing support measures and will continue working with affected businesses." Stage 2A of the light rail network to Commonwealth Park is expected to open to passengers in 2028, with construction on London Circuit estimated to continue for approximately two years from its February 2025 commencement.
