Millions or billions? Unredacted documents give insight into potential cost of light rail stage 2B

In the late 60’s we moved to Canberra settled in a new house in Curtin . The Yarra Glen hadn’t been built yet . The ruling body was the NCDC National Capital Development Commission . They had a vision and there was virtually no say in it or politics as the ACT didn’t have self government ( those were the good old days) . Woden plaza was built near the Yarralumla wool shed it looked hideous and is still to this day . Buses to Civic were a cattle class circuitous route hurling around through all the suburbs . I have relished in the fact that at no matter what cost building light rail is indeed the best thing to ever happen to this sad little country town . WBG had a plan for trams . The thing that Canberra didn’t plan for was restaurants and malls that have sprung up and changed industrial areas like Belconnen and especially Dickson shops has been taken over by private enterprise once the bean counter nerds had gotten their little heads around the idea of rezoning tyre places and the like to a real pumping night life and culture. light rail is amazing put it every where . oh and Canberra won an international award for worst carbon footprint and car use anywhere in the world WBG has a lot to answer for the American motor car rules in Chicago.

Let’s face it, Burney Griffin’s plan looked pretty but functionally is a dud. Agglomeration economies, for all sorts of reasons, want to pull the bureaucracies to the CBD and vice versa, and also pull the other artificially decentralised offices from the artificially-developed, decentralised town centres, into the CBD. The initial concept was some kind of utopian socialism or something, completely disregarding how cities evolve their own economic gravity. Now we have to figure out how to provide connectivity between all these stupidly scattered CBD functions. Buses aren’t cool. It’s a pity trams have become so expensive, true, but in the circumstances they’re the best remediation for the planning mistake that is Canberra. Also, once transit corridors are settled, it only makes sense to line them either side with high density multi storey residential development. Once you’ve sunk in 3 billion to remediate past bungling, just leaving the corridor as grassy buffer spaces backing onto paling fences and cream brick burbs, or redundant parkland, doesn’t cut it any more.

Anyone who actually supports this mess or is silly enough to take the numbers presented seriously should actually read the Auditor Generals report on 2A… or even just the summary.

“Major Projects Canberra advised that it undertook quality
assurance activities through its review of draft reports from EY (and the other
specialist models and reports) but that its methodology and processes for quality assurance of the Cost Benefit Analysis were not documented. The lack of
documented methodology and processes for quality assurance of the Cost Benefit
Analysis, combined with the absence of spreadsheets demonstrating the calculations
or an economic model, impairs Major Projects Canberra’s ability to demonstrate the
accuracy and appropriateness of the economic appraisal of Light Rail Stage 2a.”

Even the report itself states that the figures provided had no supporting evidence or documented methodology to demonstrate even the highly doubtful and very slight positive business case provided.

They might as well have started the report with the summary of: “These numbers are pure fantasy”.

““It is expected that the project delivers marginally greater benefits [than] its costs.””

Even their business case that was (based on the 2A) full of holes, assumptions and used “proprietary calculations” for how they came up with their numbers shows that this is a terrible idea and makes no financial sense …and all this is before inflation went crazy and a bunch of building companies and suppliers went under.

Imagine what the reality will look like?

Why does this article quote Ernst and Young’s estimates, when the ACT Government’s estimates of the costs and benefits of light rail stage 2 are publicly available in Audit Office Report 8 of 2021: https://www.audit.act.gov.au/__data/assets/pdf_file/0005/1859630/Report-No.8-of-2021-Canberra-Light-Rail-Stage-2A-Economic-Analysis.pdf

The ACT Government estimates that Bus rapid transit (BRT) is a far better option than light rail. One stage of BRT offers a benefit-to-cost ratio of 2 to 4.8 and a net benefit of $243 million to $939m (compared with less than 1.04 and less than $44m for Stage 2 of light rail). We can build two stages of BRT (e.g. Civic to Woden AND to Belconnen) for the cost of one stage of light rail. The ACT Government’s 2019 estimate of the cost of Stage 2 was $1.17 billion PLUS the cost of providing wire-free operation through the Parliamentary Triangle. Audit Office Report 8 of 2021 provides official cost and benefit estimates for light rail stage 2 of light rail.

Turning a 15 minute trip into 35 is hardly saving time?

Why is it worth $101,000,000

The land value uplift is also a fake measure. As it decreases the land elsewhere.
Are we going to cut more buses to make light rail happen? that increases travel time.

If travel time is also worth $101,000,000 why did Chris Steel cut public transport and school trips, expresso buses, and some of the express routes? Do they not buy it either?

It certainly is a big stretch from $960 million to $3 billion, but it is also quite some stretch to suggest that the RBA’s Inflation Calculator (based on the Consumer Price Index, which has building costs as only one small component) provides any sort of guide to the likely ultimate cost, even with an optimistic completion date, of an ACT project which will be competing with countless other building and infrastructure projects throughout the nation for scarce skills and other inputs.

This issue is no longer just a matter of the usual partisan debate within the ACT, based on the smug assumption that if enough voters are sold on an idea, the money to pay for it will magically materialise.

Serious people are starting to raise serious questions about the finances of Australia’s sub-national jurisdictions, a concern driven not just by an objective analysis of the trajectory of those finances, but also by the dawning realisation that there won’t be a quick return to the days of cheap and easy government debt funding – big, costly projects are going to be under much closer scrutiny in the years ahead.