Sydney’s transport and land use blunders

When Malcolm Turnbull took the Federal Government's helm, he said that he would restore the integrity of Infrastructure Australia, that there is no place for ideology in modal choices (cars or trams or buses or trams or double-deckers or metros or cycling ...), and that he wanted to see innovation (as well as Jobs & Growth).

The background included the Abbott Government's dislike of non-freeway options; and NSW's history of kneejerk "decisions". The best statements on the latter were from the Council of Australian Governments, the Planning Institute and the Property Council, and two now-former Premiers Barry O'Farrell (NSW, top 2 below) and Jeff Kennett (Victoria):

• Labor had produced a "fiasco" and that "No boardroom, or CEO in the private sector would be permitted to get away with such incompetence".
• We will put an end to the stench that has surrounded [decision-making] for more than a decade during which [ideas] were drawn up on the back on envelopes before media conferences ...not ... the actual needs of the taxpayers, citizens and our economy.
• Jeff Kennettin 2010, "A new government must be elected to end - once and for all – the poisonous culture of self-interest that exists among the majority of personnel that make up the currentNSW government".

The Liberal/Nationals Coalition was elected in 2011 and for a while that "stench" receded. Then in 2012 it came back with a vengeance. The second cycle saw the professional and lobby groups, iA and all mainstream media and political parties falling in line with an alternative vision which eschewed accepted assessment approaches including rejecting "options". They have defied so many respected views that a regional plan is needed before projects are considered – a point made regularly in 2009 and by Nick Greiner in 2013.

Economics has tools for comparing and contrasting options, especially benefit/cost analyses which bring all future costs and revenues to (say) 2017 dollars by applying an inverse interest rate (the discount rate, often 7% p.a.).

As in life, bad inputs and missing data mean "garbage in/garbage out". The worst of the bad inputs are ideological obsessions which lead to waste, distortions, untruths and contempt for community opinions. Examples of the lack of option-testing include:

• The demolition of 50 or so tall buildings and the "straightening" of suburban platforms (with herding of passengers – in quiet areas, changing our culture without electoral mandate!) where a different vehicle would have made both unnecessary. It took almost 3 years for the Metromeisters to realise they couldn't run on the long-promised link to the Illawarra and that their trains needed straight platforms – a most unimpressive performance
• People in the NorthWest have been waiting for the all-bells-and-whistles Metro when tram/trains could have been running years ago
• The Bankstown line (lowest priority in all assessments) was chosen over the East Hills line (highest priority) for Metro extension without any justification except a clever carton in 2009 which implied a boozy Labor lunch
• Labor's Metromaniacs cancelled the Anzac Metro without known justification which would have been running by now – and are talking about bringing it back!

iA rightly says in its national plans that commonsense should prevail:

Prior to investment decisions, governments should define the problem that needs to be addressed. Problems are identified through long-term integrated infrastructure planning and the analysis of strategic data sources .... early project development studies should then proceed. These include:

• Strategic options assessments: demonstrate the nature and scale of the problem(s) and identify solutions ...;
• Feasibility studies: undertake engineering, environmental and economic assessments to develop solutions into fully-scoped projects; and
• Project business cases: provide more detailed economic assessments, including cost-benefit analysis.

These studies help ensure the right infrastructure solution is selected and that benefits to the community are maximised.

Dr Kerry Schott's NSW Commission of Audit emphasised the practical necessity:

It is important that agencies fully comply with the business criteria and ensure that all these aspects are addressed in a well-articulated and unambiguous manner. Agencies also need to be held accountable against the appropriate key performance indicators if the proposed asset investments are undertaken.

iA has found continuing breaches across various administrations while the Grattan Institute published Roads to Riches in 2016 and concluded that Ministers should be taken out of decision-making streams right up to Parliamentary debate (removing the stench). (iA also made its own mistakes: the post-Eddington iA is a very different beast to Sir Rod's impeccable professionalism.)

Those commonsense thoughts are the opposite of Sydney's sometimes mistaken and sometimes clever experience with Labor's Metros, the gap-filling freeway program WestConnex, the NW heavy rail-then-Metro in 2012, second Harbour Crossing (metro trains), the Bankstown Metro, the Eastern Suburbs and Olympic Park tramways, the long Spit tunnel in the Northern Beaches, and the mythical West Metro. The Chief Commissioner of the Greater Sydney Commission was reported to be shocked that heritage homes in the model "planned estate" of Haberfield were to be demolished. Some 200 community groups have formed.

The total expenditure is well over $50 billion so this is not chicken feed. Moreover, a careful look at old and new ideas produced the conclusion that some $30 billion can be discussed as the current level of wasted money – with the precious once-off proceeds of electricity privatisation going into substandard system options (routes, vehicles, timing, integration and so on).

The Government is refusing to reveal the "hidden costs" of cannibalising the Bradfield rail system, sections of which can be expected to close and the whole deprived of adequate Budget allocations. If the move is designed to rid the State of the rail union, as has been long-rumoured, taxpayers have had no chance to judge the policy nor the expensive method at elections – maybe the Coalition should be required to pay for the political intent.

The most obvious indicator that something is wrong is cost overruns. The Chairman of iA Mark Birrell said this in June 2016:

Cost blowouts on big projects such as Sydney's new WestConnex motorway have led to calls for fuller analysis of projects before they get under way.

In August 2009 it was revealed that Labor's CBD Metro had blown out to $7 billion, to which then Leader of the Coalition, Barry O'Farrell, said, "the estimated blowout was more reason to have the project scrapped". Fast forward to iA's analysis of WestConnex and the lack of pre-panning had unnecessary cost and community impacts. (The agency has ignored sensible and other route improvements including from Rockdale and Sydney City councils.)

Then, on 12 May '16, The Australian's Mark Coultan wrote that:

The cost of Australia's largest public transport project - the Sydney Metro rail line - has blown out to $12.5 billion, raising questions about how it will be funded. It has refused to reveal how much it hopes to recoup from property sales, with speculation it will approve massive high-rise buildings above the stations in an attempt to maximise returns.

The government has already announced it wants to redevelop a public housing estate in Waterloo to accommodate 10,000 new homes near the proposed station.

Transport Minister Andrew Constance said the full details would be revealed when the business case was released.

NB: Constance was wrong, the "summary" business case had 110 redactions and many important gaps, and was near useless in this context.

Finally on 27 June'17 Premier Berejiklian's team wandered down their well-worn imaginative path:

The cost of a new metro rail line running mostly through tunnels between Sydney's CBD and Parramatta is set to exceed the $12.5 billion price of the railway soon to be built under Sydney harbour. While insisting it was too early to put a figure on the cost of the proposed CBD-Parramatta line, Transport Minister Andrew Constance said it would be a "much bigger project" than the second stage of the government's current metro rail project.

There are strong indications that the Government's wish-list is unsustainable, under- if not –un-funded, and certainly not legitimised through iA's and Eddington's/Schott's Treasury-based precautions.

Metros cannot carry more passengers than the Bradfield system – the lobbies and iA had forgotten that their patron Nick Greiner's State Infrastructure Strategy measured the existing lines' potential to carry 40,000 people per hour in each direction – this being the "elephant in the room" option.

This author's Eddington Bedrock: from Christie to Greiner to Gibbons has even better options that have been thoroughly peer-reviewed but the governments are ignoring it – especially Baird and Berejiklian. As a start, if Berejiklian's abandonment of the Epping to Parramatta line (without analysis) was reversed, enough paths might be released to allow fast services at higher capacity on the existing system including to the new Airport – much more quickly and cheaply.

It was just about enough when the AFR reported on 30 June '17 that:

NSW Treasurer Dominic Perrottet has pledged to work closely with the federal government on a planned $12.5 billion (stet, should be "more than") line from Sydney to Parramatta in a sign he is hoping to grab some of the $10 billion of federal funds on offer .... Infrastructure lobby groups have urged the NSW Government to fund the West Metro project urgently .... Property developers argue the line will services (stet) suburbs like Homebush where the state government has encouraged them to build huge housing developments.

There is no scoping, no feasibility of options, no "first plan before transport projects are dreamt up", no benefit/cost analyses, no community engagement – no legitimacy. Once again unelected interests are covering governments' eyes and leading them to the developers' trough. The Federal Minister for Infrastructure at least said iA would be consulted first. Coming generations will face a depleted treasury, an inefficient transport/land use context, and an inability to correct mistakes for at least one generation.

The saddest thing of all is that so little has been learnt from a decade of disarray. The Telegraph had reported in August 2009 that $8 billion would produce travel times savings of 2 minutes per passenger. Then Premier Nathan Rees had said in 2008 that "the CBD Metro has to be pushed through at all costs"; and then, as had his hapless predecessor Morris Iemma done about the West Metro in 2008, he said he'd expect the Federal Government to pay for the same. Nick Greiner's iNSW overturned a few shibboleths but was defeated by Berejiklian's Big Projects – and iNSW has never recovered its mojo.

There is not one independent body which can guide NSW forward. The legendary Milton Morris created one which Wran continued and which Bruce Baird thought in 1995 should be reinstituted. This author was its secretary and knows it was efficient, reliable and clean.

The Greater Sydney Commission should be allowed to shine but it is chained to pre-approved projects (even if not legitimised) and the Commissioners can be dismissed without cause if they offend the meisters. This author's Creative Reconstruction of NSW Local Governance would have set up regional leadership, strong community engagement along a "willingness to pay" path and speedy justice where mischief recrudesces but the Coalition had commissioned it then ignored it.

Perrottet found that same well-worn track and failed his first test – as custodian of Treasury's economics and finance Guidelines, does he know what they mean? Economics might be the Dismal Science but it throws more light on Sydney than does a whole Parliament and State apparatus.