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Response to Liberals’ Light Rail Report

By Canfan - 13 June 2014 66

The paper on light rail commissioned by the Canberra Liberals chooses the most expensive construction method for the project and its use discredits the entire report, according to the Minister for the Environment and Sustainable Development, Simon Corbell.

The report is inaccurate, based on incorrect assumptions and does not stack up to rigorous assessment. It does not include important economic benefits from the project and uses unsound cost and construction assumptions. The paper’s author acknowledged the report assumes a construction alignment which is more expensive than constructing in the median corridor, and makes cost assumptions based only on a very few hand-selected foreign examples.

“Cost benefit analyses for transport projects are complex. The Liberals’ paper is based upon simplistic assumptions, including very limited foreign benchmarking that is not specific to Canberra and it cannot be relied upon,” Mr Corbell said.

“In contrast, Capital Metro’s analysis is robust and will stand up to industry standards for a project of this complexity. Our experienced economic advisers draw upon detailed and well considered inputs prepared by specialists with extensive experience on previous similar projects.

“The Liberals’ paper is based on the most expensive alignment option, a two-tracks system, one on either side of Northbourne Avenue, where the footpaths currently are. The government’s assumptions are based on the use of the median corridor because it is a more cost effective option and one which produces a better transportation outcome.

“The figures cited in the paper on benefit cost ratio and capital expenditure are completely out of the ball park. The BCR in the Liberals’ paper is less than 1.0. In contrast, work undertaken by Capital Metro and its economic advisors confirms the BCR for Capital Metro is positive and therefore delivers a positive economic return to the ACT.”

The analysis fails to include a number of key benefits, including:

– Benefits from urban densification spurred by the project, including increased patronage and the more efficient delivery of utility, health, education, waste collection and other services.
– The residual value of benefits at the end of the review period. It is wrong to say that in 35 years the line will have no value. Rail systems have long lives.
– The analysis does not include health or amenity benefits. In the press conference the Liberals’ own consultant acknowledged studies have proven people prefer light rail over buses.
– No wider economic benefits have been included in the Liberals’ analysis.

The Liberals’ report states that “few projects are funded unless the benefit to cost ratio is greater than 2.0 and usually about 2.5 is expected”. This is incorrect as there are numerous examples of transportation projects having been progressed in Australia with a publicly stated BCR of less than 2, including recent rail and road projects in Queensland and New South Wales. A project with a BCR of greater than 1.0 provides a net social and economic return sufficient to justify a project’s costs. The BCR for Capital Metro will meet this threshold.

(Simon Corbell media release)

What’s Your opinion?


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66 Responses to
Response to Liberals’ Light Rail Report
1
HiddenDragon 7:18 pm
13 Jun 14
#

“The analysis fails to include a number of key benefits, including….” …….wishful thinking and unmeasurable intangibles – “amenity…….people prefer light rail over buses” – and the hard economic value of that is……?

Consultants’ reports at 20 paces. Why bother, when it’s ultimately about “vision” and ideologically-based policies?

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2
rommeldog56 7:22 pm
13 Jun 14
#

So “The BCR for Capital Metro will met this threshold” (ie. >1%) will it ? I assume the final costs are known then ??? How else could that be asserted ???

“work undertaken by Capital Metro and its economic advisors confirms the BCR for Capital Metro is positive and therefore delivers a positive economic return to the ACT”. Really, so again, final costs are know are they ?? Over how many years/generations will it take to realise that alleged positive economic return to the ACT ?

If “social costs” are factored into the BCR, is thats whats acceptable ? I would have thought it a BCR should focus on just economic costs. If a “social return” and health considerations are input into a BCR….. – oh, whats the point really.

Neither side can be believed – though my uneducated guess is that the Lib’s costings will be closer to the mark.

I dunno if the ACT Lib’s will be any better, but personally, I can not wait to get the chance to vote this current ACT Government out of office. And that will be the 2nd time in my life I have not voted Labor – the 1st was at the last ACT election because of the Light Rail and potential tripling of Annual Rates.

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3
rosscoact 8:51 pm
13 Jun 14
#

He who pays the piper calls the tune. What a good little consultant.

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4
gooterz 11:33 pm
13 Jun 14
#

Lightrail on northborne will be complex therefore expensive.

Lightrail will raise the prices on the blocks it passes. However the government doesn’t own them so can only benefit from increased rates.

Build the tram to undeveloped housing and wollia you get you money back from the developers paying more.

This current government seems to whinge more than manage

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5
gooterz 11:35 pm
13 Jun 14
#

You also have to wonder how much extra putting in a cross city tunnel would be. If you have to move utility just dig under it.

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6
miz 7:31 am
14 Jun 14
#

Light Rail report consultant Bob Nairn flatly refutes Simon’s accusations of bias and miscalculations – see today’s CT letters here (scroll down to ‘Light rail costings’:

http://www.canberratimes.com.au/comment/ct-letters/if-welfares-too-much-who-started-the-cash-splash-20140613-3a2wr.html

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7
rommeldog56 8:40 am
14 Jun 14
#

miz said :

Light Rail report consultant Bob Nairn flatly refutes Simon’s accusations of bias and miscalculations – see today’s CT letters here (scroll down to ‘Light rail costings’:

http://www.canberratimes.com.au/comment/ct-letters/if-welfares-too-much-who-started-the-cash-splash-20140613-3a2wr.html

But what I still don’t get is how, before all the ACT Governments consultants reports and studies have been finalised and costed, how Simon Corbell can say that the BCR WILL be >1 ? Does anyone, smarter than I, know please ?

Even if there are shortcomings in the Nairn report, is it possible for the ACT opposition to fund a duplicate study to the same depth/complexity as the ACT Government has (by necessity), done ? I think not because the ACT Government has sunk 10’s of millions of taxpayer $ into that. Plus, as well as all the resources of Government and taxpayers $ at its disposal, the ACT Government now also has it’s Capital Metro Authority (or what ever its called) to further add to and co-ordinate the spin and push its agenda.

If it is true that who ever pays the consultant calls the tune (directly, or by implication), where does that leave the poor mug ACT Ratepayers/Taxpayers/residents if no one has deep enough pockets to argue against the ACT Gov’t with the same detailed counter arguments/studies/co-ordinated spin ?

By Corbell’s statement, it seems to me to indicate that the decision has been made and its going ahead come hell or high water ?

It may be that they only way this will be stopped is by people power – and keeping the pressure on the ACT Government ! What else can be done ?

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8
bigfeet 10:39 am
14 Jun 14
#

The original post says this Benefits from urban densification spurred by the project, including increased patronage.

I don’t know about increased patronage on the line, but there is certainly a huge increase in patronising opinions by the proponents of light rail.

The current argument seems to be:

“Light rail is good and anyone who disagrees is a dumb-dumb head” I assume this is followed by poking out ones tongue.

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9
dungfungus 11:25 am
14 Jun 14
#

rommeldog56 said :

miz said :

Light Rail report consultant Bob Nairn flatly refutes Simon’s accusations of bias and miscalculations – see today’s CT letters here (scroll down to ‘Light rail costings’:

http://www.canberratimes.com.au/comment/ct-letters/if-welfares-too-much-who-started-the-cash-splash-20140613-3a2wr.html

But what I still don’t get is how, before all the ACT Governments consultants reports and studies have been finalised and costed, how Simon Corbell can say that the BCR WILL be >1 ?

Does anyone, smarter than I, know please ?

Even if there are shortcomings in the Nairn report, is it possible for the ACT opposition to fund a duplicate study to the same depth/complexity as the ACT Government has (by necessity), done ? I think not because the ACT Government has sunk 10’s of millions of taxpayer $ into that. Plus, as well as all the resources of Government and taxpayers $ at its disposal, the ACT Government now also has it’s Capital Metro Authority (or what ever its called) to further add to and co-ordinate the spin and push its agenda.

If it is true that who ever pays the consultant calls the tune (directly, or by implication), where does that leave the poor mug ACT Ratepayers/Taxpayers/residents if no one has deep enough pockets to argue against the ACT Gov’t with the same detailed counter arguments/studies/co-ordinated spin ?

By Corbell’s statement, it seems to me to indicate that the decision has been made and its going ahead come hell or high water ?

It may be that they only way this will be stopped is by people power – and keeping the pressure on the ACT Government !

What else can be done ?

Well, the “stop the boats” campaign has worked so why not follow through with a “stop the trams” one.

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10
dungfungus 11:29 am
14 Jun 14
#

rosscoact said :

He who pays the piper calls the tune. What a good little consultant.

If I recall correctly, ACT Labor had commissioned at least two studies before the 2012 backflip that confirmed that a light rail was unviable.
They didn’t need another study to do the 2012 backflip either. It only took a look at their polling and after the deadlocked election a quick chat with the last standing Green.

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11
milkman 11:52 am
14 Jun 14
#

And still no-one can answer the simple question: why light rail and not a busway?

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12
rommeldog56 1:23 pm
14 Jun 14
#

milkman said :

And still no-one can answer the simple question: why light rail and not a busway?

A good question, milkman. I too have been expecting an answer, without success. Maybe the answer is in the post by bigfeet “Light rail is good and anyone who disagrees is a dumb-dumb head. I assume this is followed by poking out ones tongue” ?

Given the backflip by ACT Labor in 2012 on this, maybe that isn’t so far from the truth.

However, maybe “Never confuse rank stupidity for rat cunning”, is also the answer ?

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13
miz 1:40 pm
14 Jun 14
#

Because there is no answer. A busway would, of course, do all the things they are touting for way, way $less. Not to mention, without spending years of massive expense and inconvenience digging up and relocating cables and pipes under the blessed road.
Continuing to support the light rail plan simply makes the govt look ‘a bit thick’, or fixated, (or both). It really, really is not ‘worth it’ on any level.

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14
gooterz 7:02 pm
14 Jun 14
#

We need a slogan:

No war no boats no light rail.?

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15
Pandy 8:42 am
15 Jun 14
#

Like the rigorous estimates that saw the Gold Cost light rail costs jump from $360 million to over $1.8 billion? A whooping 600% increase.

http://www.sunshinecoastdaily.com.au/news/light-rail-cost-will-blow-out-expert-sunshine/1528493/

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