The Strategic Week (no. 16, Friday 8 April 2016) – the week in governance, planning, infrastructure and transport

Top of the Week

Grattan research claims on poor transport infrastructure investment draw support …

report from the Grattan Institute claims that when it comes to government infrastructure expenditure “too much money has been spent on the wrong projects in the wrong places” with spending directed to states and electorates “where federal elections are one and lost”.

The report, authored by Marion Terrill, the Institute’s Transport Program Director, has drawn support from a number of sources. It provides an overview of transport infrastructure expenditure and how it relates to changing demand. In addition it explores the evidence of “poor spending decisions” through a number of case studies.

The report notes that in the case of some major projects the return on investment has been “staggeringly low”, in one case yielding a return as little as eight cents in the dollar for a highway upgrade.

“One difficulty is that there is little to prevent politicians committing to projects on the basis of weak or undisclosed business cases – and particularly during election campaigns,” Ms Terrill said in a media release accompanying the report.

“There isn’t enough publicly available information on potential projects, so the public can’t hold politicians to account or be confident that funds are spent wisely.”

This has occurred despite the creation of Infrastructure Australia (IA), with Terrill noting the failure of such oversight mechanisms.

“Since 2012 over half of Commonwealth infrastructure spending has gone to projects where Infrastructure Australia has not published an evaluation. States have spent billions more with little transparency,” Terrill said.

“A better approach would be for an independent body to assess all infrastructure proposals rigorously on a like-for-like basis. The assessment of the net benefits should then be tabled in the parliament, and only then should governments be able to go ahead and commit public money.”

The report goes one step further, urging that when only projects with clear community benefits are being built the next step should be to “aim to build all such projects”.

In an opinion piece on Fairfax media Ms Terrill noted the effect on Sydney, claiming that while the federal government had “spent up big” in rural NSW the city had “suffered”.

“Although 23 per cent of the nation’s economy activity is based in Sydney, only 5 per cent of Commonwealth transport investment over the past decade was in Australia’s biggest city, while 27 per cent was elsewhere in NSW,” Ms Terrill said.

Responses

In an editorial The Age also provided a local perspective.

“Alarmingly for Victorians and other Australians, the bulk of new money has gone to just two states: NSW and Queensland. The apparent reason? Queensland and NSW have more marginal electorates than elsewhere,” the editorial said.

Engineers Australia welcomed the report with Stephen Durkin the organisation’s CEO claiming that “a longer-term, nationwide, systems-approach to thinking about what the country needs will benefit the community” and that the report “adds to the momentum” for a more coordinated approach to infrastructure investment.

“Smart infrastructure spending takes account of what we already have, rather than solely focusing on new projects. Smarter thinking also draws on the experience of over 60,000 engineers employed in infrastructure delivery in this country, Mr Durkin said.

“Shifting to a longer-term mindset, adopting service standards and channelling smart information about usage will support better directed infrastructure decisions, and spending.”

The Australian Local Government Association (ALGA) also supported the report’s findings and in particular the concerns expressed over the increasing competition for limited space on city transport networks a trend which is exacerbated by the location of most container ports in capital cities.

“The sentiment within the report supports ALGA’s view that more targeted investment is needed to lift the productivity of our freight routes. This includes boosting productivity by addressing first and last mile issues. ALGA’s report 2015 National State of the Assets: Roads and Community Infrastructure Report launched last November highlights the opportunities for local government involvement in an integrated national approach to lift national productivity,” the ALGA response concludes.

… while federal minister seeks “right economic policy objectives” for infrastructure investment

Paul Fletcher, the federal Minister for Major Projects, Territories and Local Government has delivered a speech in which he attempted to answer the question of “what the economic policy objective for infrastructure should be”.

Although the speech did not respond directly to the findings of the Grattan Institute report on infrastructure issues (see previous item), the speech addressed some of the issues raised.

“My argument today is that the economic policy lens through which we think about infrastructure needs to change,” Mr Fletcher said.

“I first want to argue that too often we think about infrastructure primarily as an instrument of macroeconomic, Keynesian demand stimulation policy. In my view it is just as important to think about infrastructure in microeconomic terms – as a tool to stimulate productivity, efficiency and competitiveness.”

Mr Fletcher stressed that he wasn’t suggesting that there was “no macroeconomic rationale for infrastructure investment.”

“Rather, I am arguing that demand stimulation alone is not a sufficient rationale for infrastructure spending; we need a greater focus on the microeconomic rationale”, he said

The minister defended the federal government’s record in supporting infrastructure investment.

“In the past 15 years, the Commonwealth’s road related expenditure has increased by 113 per cent. This compares to an increase of 52 per cent by the states and territories, and a 12 per cent increase by local government,” he said, also reiterating the Prime Minister’s comments that the government wanted to take a more proactive role in infrastructure investment decisions.

“We want to work cooperatively with state and territory governments – but we also intend to take an active policy role rather than simply passively handing over money,” Mr Fletcher said.

The minister also called for greater involvement of the private sector in infrastructure provision, claiming that finding the right balance between the use of markets and government planning processes as the “key to good policy making”.  He was more cautious however on the introduction of value capture particularly in relation to road pricing.

“In our response to the Harper Review last year, the Federal Government indicated that we supported road pricing but as a long-term reform option. This is because we will need to be satisfied that there is a reasonable degree of community acceptance and understanding of any reform in this area. In turn, this will require a demonstration that the benefits from a broader use of direct road user charging would exceed the costs,” he said.

“We have never had better access to data; information technology is becoming increasingly sophisticated and better connected; and we are seeing an appetite for change amongst governments and the private sector in the way our infrastructure projects are managed,” the minister concluded.

Governance

Urban Management 1: Metropolitan governance missing ingredient in Aust cities

Richard Tomlinson, Professor of Urban Planning at the University of Melbourne has argued that metropolitan governance is the “missing link” in Australia’s reform agenda, especially when compared to other Western countries. which have “experimented” with metropolitan governance.

“In contrast, Australia’s state governments are responsible for metropolitan governance. The state responsibility exists in a context of increasing intergovernmental centralisation that favours the federal government, as well as finance and treasury in federal and state governments’, Prof. Tomlinson said.

He notes that while both “Labor and the Coalition, at all levels of government, have embraced public sector reform”, these governments are still ultimately responsible for service delivery because “institutional restructuring has not been accompanied by intergovernmental decentralisation”.

“In effect, while Australia has embraced neoliberal institutional restructuring and state governments pursue global competitiveness as the foundation for urban policies, decentralisation is not on the agenda. While metropolitan governance is discussed, metropolitan government seldom is,” Prof. Tomlinson said.

He also noted comments by urban economist and planner Marcus Spiller that “…state governance of Australia’s urban regions is leading to ineffectual metropolitan planning and infrastructure investment. The result is less productive and more socially divided cities.”

“Transport and planning ministerial silos also compromise effective state leadership in the development of urban regions. Big-budget transport ministries show scant regard for planning ministries,” Prof. Tomlinson said

Prof. Tomlinson also claimed that  this “ineffectual planning and investment and compromised productivity also reflect Australia’s extreme vertical fiscal imbalance,” with the planning agendas of state governments largely influenced by federal priorities.

“Dysfunctional infrastructure planning and funding, ineffectual metropolitan governance and endless blame-shifting poorly serve the creation of competitive and fair cities,” Prof. Tomlinson said.

“Effective metropolitan governance requires intergovernmental decentralisation. Metro-scale planning, infrastructure investment and services, and partnerships with the private sector and civil society are best led by a representative and accountable metropolitan government.”

Urban Management 2: City Deals critiqued but SEQ ready to be a pilot

Another take on metropolitan management (see previous item) is provided in an opinion piece by Paul Burton, Professor of Urban Management and Planning and Director, Urban Research Program, Griffith University. This critiques the UK “City Deals” model which was praised recently by the Assistant Minister for cities and digital transformation, Angus Taylor

“In a nutshell, this model encourages city councils or groupings of councils to work together more effectively in identifying local economic development opportunities. They then strike a deal with the central government to secure the funding necessary to realise these opportunities,” Prof. Burton said.

He also offers an Australian perspective on the UK National Audit Office (NAO) progress review of the first wave of English City Deals. He claims that the policy “look remarkably similar to measures promoted over the last 40 years”.

He notes that we already know that “the problems are inter-related and the all levels of government need to work productively together and with other sectors, departmental silos within government get in the way of strategic planning; and scarce public resources need to be invested wisely.”

“And we know that to overcome these problems we need a much greater degree of policy stability and long-term, bipartisan commitment. What we do not need is to jump on yet another urban policy bandwagon from overseas – one that is already being tinkered with in its country of origin,” Prof. Burton concludes.

These concerns do not appear to be shared by the Council of Mayors South East Queensland whose Chair Cr Graham Quirk released a statement claiming the SEQ region is “the obvious choice of partner for the Federal Government in the nation’s first ‘City Deal'” and is “well placed to lead the nation in successfully demonstrating the benefits” of this approach.

“The Council of Mayors (SEQ) has been investigating the ‘City Deals’ funding model, and its application in Australia, for more than two years. The ‘City Deals’ work that has already been done in SEQ is far more advanced than any other region in the nation,” said Cr Quirk.

Cr Quirk noted that the Federal Government’s commitment to the ‘City Deals’ funding model came days after Queensland Deputy Premier Jackie Trad announced a funded partnership between the Council of Mayors (SEQ), Property Council of Australia and the Queensland Government to investigate how the ‘City Deals’ approach could be applied in SEQ.

NSW council mergers update 1: First NSW merged councillors, now GMs told to reapply for their jobs

General managers of NSW councils identified as merger prospects have joined their mayors and councillors in being asked by the state government to apply for positions on the interim merged councils, according to Government News.

Deputy Secretary of the Department of Premier and Cabinet (DPC) Simon Draper has written to the GMs asking them to indicate by 13 April if they were interested in applying for a 12-month interim role on the new councils.

This is despite the fact that general managers are employed by their council and not the state government. In addition the letter did not contain any detail about the new positions such as salaries or performance criteria.

The letter requested a CV and covering letter from interested GMs and asked them to respond to two questions regarding their approaches in leading “significant organisational change” and the outcomes achieved and about the “key ingredients” to required to deliver “successful service continuity and improvement at a time of change.”

Government News said Local Government NSW President Keith Rhoades was “totally appalled” by the state government’s gambit.

“They (general managers) don’t work for the government. They were not employed by the government, they were not employed by the minister,” Mr Rhoades said. “They have contracts. They are employed by councils.”

Concerns were also raised regarding the costs to councils if some general managers are made redundant.

“Mr Rhoades said: “You can bet your bottom dollar that the tab will be picked up by ratepayers, not the government, even though they’re the ones making the decisions. The government is dictating who will and who won’t work in local government.”

Local Government Professional CEO Annalisa Haskell said the organisation had written to the Department requesting an extension to the 13 days general managers had been given to apply, noting this time was “a lot shorter than [the] councillors received.

NSW council mergers update 2: More councils take legal route to oppose merger proposals amid increased confusion over delegate reports

A number of NSW councils are increasing their opposition to the proposed NSW mergers through a range of legal challenges, following Woollahra Council’s action claiming that the government is using the wrong provision of the legislation (see TSW14).

Ku-ring-gai Council has commenced proceedings in the NSW Supreme Court over the state government’s continued refusal to release the full KPMG report which it used to justify the mergers.

“Along with other councils, Ku-ring-gai Council had sought the release of the full KPMG report. However Ku-ring-gai’s request has been twice refused by the government,” a council statement said.

“The Council is now seeking orders in the Supreme Court to force the government to release the report in full. Proceedings in the court began on 5 April and are continuing.”

Fairfax media also claims that North Sydney, Mosman, Hunters Hill and Strathfield councils have also undertaken or are considering legal action.

Government News reported that Mosman Council is challenging the government’s initial proposal to merge it with Manly Council, arguing that the Local Government Act only allows mergers between councils that share continuous borders.

Unlike the other challenges however, this one is being pursued on a basis that is unlikely to be available to most if not all the other councils opposed to mergers – the two councils do not share a land border. The Spit Bridge lies between the two local government areas and according to the report is considered part of Sydney Harbour. It is also unclear whether this has contributed to the government’s decision to put forward an alternative merger proposal.

In addition there is increasing confusion over when the reports from the delegates appointed to consider each merger proposal will be made public, according to the same Government News report. It claims that Mosman Councillor Tom Sherlock said that council had been given “conflicting advice” from the two delegates writing reports on the two merger proposals it was named in, with one saying his report would be published as soon as it is written while the other stated the report would “only be published after the Minister had made his decision”

NSW council mergers update 3: Other councils contemplate alternative merger options, though with strings attached.

While most affected councils have maintained their strong opposition to the NSW council mergers (see previous items), a small number are formally declaring their support for counter proposals sometimes specifically to avoid the division of councils called for under the state government’s plans.

One example is a proposal put forward by Queanbeyan and Palerang councils to merge in response to the government’s plan to split Palerang in a two-way merger, with one part of the LGA to be merged with Goulburn and Mulwaree and the other section to be joined to Queanbeyan.

The alternative proposal which was forwarded to the NSW council boundary review by Palerang council would avoid this split. Council General Manager Peter Bascomb noted in a letter accompanying the submission that while a stand-alone option was preferred, the merger of the whole council was a “Plan B” which was “far superior to the partitioning proposals currently under review.”

Now Queanbeyan Council has formally resolved to support the alternative proposal. However there are some conditions attached – and if the government doesn’t agree to the terms, in particular the provision of a $30 million grant, council will support the government’s original proposals.

“The resolution we have landed on would provide both the Queanbeyan and Palerang ratepayers with a good result. We have provided conditional support to the full merger proposal, based on the new entity receiving a $30m grant to go towards merger costs and reducing the backlog and investing in new infrastructure”, the Mayor Cr Tim Overall  said, noting that the NSW Government had already offered $15m each in support of its proposed mergers.

Council mergers and reforms: councillor roles – and their perceptions of them – must change to reflect new strategic focus

A recent article by Roberta Ryan, Director of the Institute for Public Policy and Governance (IPPG) and Su Fei Tan also from IPPG (formerly the UTS Centre for Local Government) questions whether councillors fully understand the reshaped role they have as councils are reformed and merged across Australia.

The article notes that over the past three decades the number of councils has decreased from 826 to 565, primarily with a focus on the administrative, financial and technical capacities of councils. As a result of these changes the CEO/General Managers of councils have greater responsibility for management while councillors are responsible for strategy and policy making.

The problem is that many councillors have failed to understand these changes. The authors conducted a national survey of councillors which indicated that they “… felt they should have more influence over administrative policy and procedures. The difficulty is that legislation says this is the responsibility of the CEO or general manager.”

The authors do not offer any views on the virtues or otherwise of council amalgamations or other reforms. However they note that the trend to fewer and larger councils has emphasised the “strategic, long-term decision-making role” of councillors.

“These changes were intended to shift a previously widespread perception of local councils as simply managers of local services and local infrastructure to one where their role, as democratically representative bodies, gained in significance,” the article says.

The problem however is that not all councillors accept or understand these changes.

“The preliminary results of our study show that what councillors think is their role may not be the same as the intent of local government reform. Larger local governments also means councillors must represent more people,” the authors state, warning that unless councillors are helped to focus more on community representation rather than day-to-day administration, “local democracy’s effectiveness could be imperilled”.

Strategic Planning and Policy

Another perspective on Sydney and Melbourne growth…

SGS Economics and Planning has provided another perspective on the recent ABS annual update on Australia’s population statistics (see TSW15 for a summary of the population analysis by .id), analysing and comparing the geographic spread of population in Sydney and Melbourne.

The analysis shows that Greater Sydney has grown by 700,000 residents over the past ten years while Greater Melbourne increased by 830,000.

“The fact Melbourne’s economy has been robust enough to support over 830,000 new residents over the past ten years is a real positive,” Terry Rawnsley, SGS National Leader – Economic and Social Analysis said,.

He expressed concerns however that Melbourne’s reliance on high density growth in the inner city and low density growth at the fringe “doesn’t produce good economic or social outcomes.”

“The challenge facing Melbourne in the future will be housing more people in its middle suburbs,” he said.

He noted that Sydney’s growth was much more evenly spread, with residents attracted to “key areas with existing infrastructure”.

“However, the amount of land in those locations is limited and hence the price of housing has been pushed higher and higher,” Mr Rawnsley warned.

… as another conference looks at Western Sydney development

Hot on the heels of the Western Sydney “Out There” conference held last month (see TSW11), the second annual “Developing Greater Western Sydney” conference to be held in Parramatta in early June will concentrate on the region’s economic development and investment.

According to the conference flyer, the conference “will bring together key figures from federal, state and local government as well as leading representatives from the private sector to explore strategies to attract investments and achieve sustainable economic development across Greater Western Sydney”.

High housing costs cause strains for the hospitaliy sector as well as workers

Research conducted by the City Futures research Centre at the University of NSW indicates that Australian CBD-based tourism and hospitality industries are struggling to find, employ and retain lower-paid staff due to the difficulties these workers face in finding accommodation.

Two of the researchers, Ryan Van den Nouwelant and Laura Crommelin, have described the key findings of the research which also looks at some of the broader issues around housing affordability, CBD economic productivity and lower-income workers. They note that hospitality employs about one in five lower-paid CBD workers and is also heavily dependent on them, with around two-thirds of the hospitality workforce falling into this category.

Van den Nouwelant and Crommelin note that “these lower-paid workers are making a lot more housing compromises to work in the CBD” than those living elsewhere. They are more likely to rent, to live in share houses and smaller properties and also face longer commutes.

“All else being equal, these compromises are going to discourage the lower-paid workers from working in the CBD,” the authors state.

They also note that other CBD industries don’t seem to be as affected as their lower-paid staff are largely limited to entry-level positions. Other industry sectors with large numbers of low-paid positions such as manufacturing tend to be distributed more evenly. The authors did however identify some mitigating factors for the hospitality industry, such as CBDs being the focus for public transport networks and the amenities which the city can offer to these workers.

Van den Nouwelant and Crommelin say the research found that because of the number of agencies involved “governments are not well positioned to respond”.

“It’s important to recognise that high housing costs aren’t just making life difficult for lower-income households, but can have broader economic impacts too. There is also a concern that this represents a thin end of the wedge – as housing affordability around the CBD deteriorates further, there’s every possibility it will leave other CBD industries seeing their lower-income labour market thinning out,” they state.

In response the research paper identifies three key policy requirements, including a “continued focus on facilitating and delivering low-cost and affordable housing options wherever possible”, “an ongoing commitment to public transport policy that fully acknowledges the needs of [low income] workers and “a holistic and integrated policy response at the metropolitan scale, involving collaboration between state and local government entities.”

Development, Transport and Infrastructure Projects/Services

Development Projects and Plans

Parramatta to gain stadium but lose pool…

Fairfax media has revealed that the planned $300 million stadium to be constructed on the site of the current stadium will also result in the demolition of Parramatta city centre’s only swimming pool, with no definite plans for a replacement.

The pool was refurbished less than 10 years ago for a cost of $8 million. In a statement in response Parramatta Council said it “welcomes” the provision of the new stadium to service “not just Parramatta but the entire Western Sydney region”, but is “disappointed” that the pool may be lost.

“The pool is a very popular community asset with an average of 160,000 visitations per year”, the statement notes.

“The closure will also impact 13 permanent staff and 40 casual staff employed at the centre.”

The statement also says that council regards swimming and recreation facilities “as an extremely important part of the services” it provides to the community.

“We will work with the State Government to determine options for the creation of new swimming and recreation facilities to serve this growing city,” the council states.

The situation is complicated council notes, because it does not own the land occupied by the pool which is leased from Parramatta Park Trust. The Fairfax report notes that demolition of the pool was expected to start in November but NSW Sports Minister Stuart Ayres had indicated a “transition plan” would be implemented so that it could remain open for at least one more summer.

According to the report Mr Ayres said that the government was working with the council to identify the “future aquatic needs” of the community but he did not elaborate on plans for an indoor recreation and community facility to be incorporated into the development or on whether compensation would be paid to council.

… while North Parramatta revamp gains royal interest

In one of the moire unusual twists to the long-running saga of proposals to redevelop parts of the North Parramatta heritage precinct, a media report claims that the Prince of Wales has taken a personal interest in the project.

It appears according to the article that NSW Planning Minister Rob Stokes approached the Prince’s Foundation for Building Communities in 2015. Discussions continued when the Prince visited Australia last November.

The project would involve construction of 3,000 apartments in buildings up to 24 storeys high to be built in the historic precinct. The proceeds of property sales would fund the “adaptive re-use” of the heritage buildings.

The Fairfax report claims that the NSW government and the foundation are now “on the cusp of entering into an agreement” that would see the agency provide expert advice on designs and community consultation processes, with a likely focus on North Parramatta. They are also planning to hold a symposium in Sydney to discuss heritage-led renewal in urban areas.

The redevelopment plans have met with strong resistance from concerned local resident and heritage groups.

“Historically communities have resisted growth because they’ve seen, in some cases, it take away from the existing design and character of their neighbourhoods,” Mr Stokes said.

“I know that design can actually make things better and we need to be able to prove that and we’re looking at North Parramatta as a case study.”

Light Rail/Tram/BRT

NSW Government releases Newcastle light rail detail and expansion options

The NSW government has released a range of documents outlining the proposed 2.7km light rail line for Newcastle as well as potential options for the network’s future expansion.

“This is the first look at potential routes for an expanded light rail network to connect major activity centres and suburbs in Newcastle,” NSW Parliamentary Secretary for the Hunter Scot MacDonald said.

Newcastle Light Rail proposed route (source: NSW State Government Revitalising Newcastle website)

Newcastle Light Rail proposed route (source: NSW Government Revitalising Newcastle website)

He also indicated that the Review of Environmental Factors report (REF) for the current project between Wickham and Civic Park is now on display online and at city locations, along with 10 options for the network’s expansion. It also details changes to some road intersections, bus stops and parking to “accommodate light rail operations and ensure the smooth flow of traffic”.

Newcastle Light Rail proposed initial extensions (source: NSW government/Revitalising Newcastle website)

Newcastle Light Rail proposed initial extensions (source: NSW Government Revitalising Newcastle website)

 

Newcastle Light Rail proposed initial and longer term extensions (source: NSW government Revitalising Newcasle website)

Newcastle Light Rail proposed initial and longer term extensions (source: NSW Government Revitalising Newcastle website)

A submissions report will respond to all feedback before a final design is completed. Major construction would start early next year and services would start in 2019.

According to the project overview brochure there will be six stops with services operating every 10 minutes during peak hour. The line will have the capacity to move 1200 passengers per hour and provide a “foundation for future light rail networks in the Hunter Region”.

The Future of Light Rail brochure provides more detail on these options. It notes that:

“The area within five kilometres of the city centre has both a relatively flat terrain and higher population compared with outer suburbs, making it well suited to a longer term light rail transport network if customer needs demonstrate the case for this. Population and employment density is higher closer to the city centre in the established suburbs and day-to-day trips locally oriented, meaning there is a greater likelihood of the take up of public transport and sustainable modes such as walking and cycling.”

The brochure identifies ten corridors, four of which appear to be shorter-term proposals:

  • A – Wickham to Broadmeadow
  • B – Broadmeadow to Stadium
  • C – Broadmeadow to Adamstown
  • D – Wickham to Mayfield

In the longer term, extensions to John Hunter Hospital, the University of Newcastle, Newcastle Airport, Glendale/Cardiff, Merewether/Bathers Way and a loop through Pacific Park and along the Newcastle Mall back to Hunter Street are also proposed.

Hunter Labor MPs have criticised the government’s light rail plans as “short, late land lazy”.

Tim Crakanthorp, MP for Newcastle, said the government was prepared to spend $1 billion on 22 kilometres of light rail for Parramatta and $2.1 billion on 12 kilometres of light rail for the Sydney CBD, yet it was only prepared to build 2.7 kilometres of light rail for Newcastle

“The Hunter needs an integrated transport network which connects employment hubs of Newcastle, Glendale, Wallsend and Maitland to suburbs throughout the Hunter,” MP for Port Stephens Kate Washington said

“The Government has refused to listen to sensible alternatives which will deliver a better system for Newcastle.”

Canberra light rail business case criticised, defended

The Grattan Institute’s report on transport infrastructure expenditure Roads to riches: better transport investment (see earlier item) has singled out the Canberra light rail project as a case study and consequently as an example to demonstrate its argument that “[d]ecisions on particular projects are dubious or made on the basis of weak or undisclosed business cases.”

The report claims that “Canberra’s light rail, now being built, is likely to provide no more benefits than bus rapid transit but cost more than twice as much”.

In exploring the project as one of five case studies, it notes that the ACT government’s submission to Infrastructure Australia in 2012 claimed that the light rail network would deliver similar benefits to bus rapid transit, but at over twice the cost.

After securing the support of the Greens the Labor government decided to proceed with the project, the report notes. A 2014 business case prepared for the project concluded the cost benefit ratio was 1.2. However this incorporated land use benefits and wider economic impacts, which according to the Grattan Institute “… are typically excluded from project evaluations by Infrastructure Australia because the risks of overestimating them are so high, account for almost three fifths of the projected benefits.”

The Grattan Institute report claims that the case study demonstrates the need to use “consistent methodologies” for cost-benefit analysis.

“If these land use benefits and wider economic impacts are excluded, the benefit cost ratio is just 0.5 – well below the level needed to deliver a net benefit to the community,” the report states.

In response the ACT government has released an expert review of the business case demonstrating that the methodology used was “conservative and robust”, according to ACT Minister for Capital Metro Simon Corbell.

The independent review by Professor Roger Vickerman from the University of Kent was one of two undertaken prior to the public release of the business case. The other review, by Professor Derek Scrafton from University of South Australia, was released last year.

“Both reviews confirmed that the methodology used in the business case is sound and that the document overall contains sufficient details and makes realistic conclusions and recommendations,” Mr Corbell said.

“The review also states that the overall benefits of the project could be higher than those presented in the business case.”

“The Capital Metro business case has been thoroughly reviewed by two highly qualified academics with expertise in this field and both have found it to be robust, conservative and reliable,” Mr Corbell said.

“The review released last year produced by Professor Scrafton review also concluded that the business case was fit for the purpose for which it was prepared, used appropriate and realistic methodologies in the analytical sections and followed guidelines which were recommended and approved by national organisations.”

Urban Heavy Rail

Qld government announces authority to deliver Cross River Rail project

The Queensland Government has announced plans for an authority to deliver the revised Cross River Rail project which will provide a second link under the Brisbane River and through the Brisbane CBD.

Described as the “the number one priority infrastructure project for Queensland”, a new 10.2 kilometre alignment for the link between Dutton Park and Bowen Hills was also unveiled by Acting Premier Jackie Trad and Transport Minister Stirling Hinchliffe.

Proposed route for Brisbane Cross River Rail project (source: Queensland Government Cross River Rail website)

Proposed route for Brisbane Cross River Rail project (source: Queensland Government Cross River Rail website)

“Cross River Rail is not only a critical infrastructure project but also a once-in-a-generation opportunity to reshape Brisbane through this major city-making initiative,” Ms Trad said.

“With South East Queensland’s population set to grow to 4.9 million by 2036, Cross River Rail is the state’s number one infrastructure project to boost network capacity in the region and unlock economic opportunity and productivity for our state.

“Almost half the state’s total jobs growth will occur in Brisbane and without an effective transport system to accommodate growth, Infrastructure Australia estimate the cost of congestion in the region could total $9 billion each year,” Ms Trad said.

A new Cross River Rail Delivery Authority will be established “to take the politics out” of delivering the project and the Treasurer said the updated business case based on the new alignment would be completed in mid-2016.

“Over the next 20 years rail demand will increase threefold in South East Queensland and without major investment in the inner-city rail network by 2021, there will be no capacity to increase services during our busiest times and passengers will face overcrowding on platforms and trains,” Mr Hinchcliffe said.

“The Palaszczuk Government has fast-tracked the business case for our number one priority infrastructure project and announced plans to establish a delivery authority to ensure the project is built.”

According to the announcement the new delivery authority will lead the development, procurement and delivery of Cross River Rail and support “wider economic and social outcomes for the transformational project”. It will also seek federal, state and local government co-investment and private sector participation as funding, financing and delivery partners. The government is still investigating the preferred model for the authority.

The announcement received a cautious welcome from the federal Minister for Major Projects, Territories and Local Government, Paul Fletcher in a doorstop interview conducted after the Queensland government announcement.

“… The Turnbull Government stands ready to work with the Queensland Government in relation to the Cross River Rail project. Now what’s been announced today is the establishment of a Cross River Rail authority. What the Federal Government is waiting on from the Queensland Government is a business plan in relation to Cross River Rail, and work is certainly underway, we understand, in relation to the business plan,” Mr Fletcher said.

He also said that the federal government “strongly supported” and wished to “strongly encourage” the principle of private sector involvement in major infrastructure projects, indicating that the federal government “… will be looking to have discussions with the Queensland Government about how the private sector can be involved…”

The response of federal Opposition Leader Bill Shorten was more positive, according to a media report. He said a Labor government would allocate federal funding for the project, as well as funding from a $10 billion “Concrete Bank” of private investment, including superannuation funds.

“My ideal split would be that we’ll try and get the private sector to contribute funds in a way which guarantees good returns for their investors,” Mr Shorten said.

HSR, Freight, other Rail

ACT government prefers airport option for HSR station over Civic

According to a Fairfax Media report the ACT government will call for a major change in the route of any high speed rail (HSR) link, saying it should go to Canberra Airport rather than Civic with a light rail line linking the two.

A link between Sydney and Canberra would be the first stage in an east coast HSR network. Previous plans for the project had suggested a terminal under Civic but a 2013 report recommended Canberra Airport as “the first alternative” if Civic was unable to support the parking requirements for the station.

Alternative route options for ACT terminus for proposed Sydney-Canberra HSR (source: Fairfax media)

Alternative route options for ACT terminus for proposed Sydney-Canberra HSR (source: Fairfax media)

“High speed rail is on the future agenda for our capital city and today I urge the federal government that Canberra would significantly benefit from a potential airport alignment,” ACT Planning and Land Management Minister Mick Gentleman is quoted as saying, noting that the Territory government was developing plans for a light rail network.

“Through this process it may be more cost-effective to have fast rail connect to light rail at the airport,” Mr Gentleman said.

There is increasing support for HSR, the Fairfax report claims. It also noted that while former Prime Minister Tony Abbott decided in 2013 to abolish the High Speed Rail Advisory Group but the Turnbull government is continuing to work with the relevant governments “to protect the identified rail corridors.”

 

This entry was posted in Environment, Governance, Growth, Infrastructure, Local Government, Planning, Public Transport, Statistics, Sydney metro area, The Strategic Week, Transport, Western Sydney and tagged , , , , , , , , , , , . Bookmark the permalink.

One Response to The Strategic Week (no. 16, Friday 8 April 2016) – the week in governance, planning, infrastructure and transport

  1. Pingback: The Strategic Week (no. 17, Friday 15 April 2016) – the week in governance, planning, infrastructure and transport | StrategicMatters – the home of The Strategic Week

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