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Gain worth the pain as light rail construction ramps up

By Charlotte Harper 14 March 2017 79

Gold Coast light rail rushes past. Photo: Charlotte Harper

This year, Canberrans who live and commute along what will be the light rail route between Civic and Gungahlin are the have nots and the rest of us the haves, but once construction is completed, those roles will be reversed for good.

Residents and workers in the Inner North and Gungahlin will be affected all year by works associated with the mammoth construction project, from lane closures on Flemington Road to changes to traffic flow in the Gungahlin Town Centre and cycleway and bus diversions (see the latest update on changes below).

The rest of us will feel smug as we cruise through our daily commutes, but it won’t last. Come 2018, when the light rail comes online, all the upheaval will be forgotten, as those who live on or near the route become the haves to us have nots.

Gold Coast light rail rushes in. Photo: Charlotte Harper

They’ll be wandering down to their nearest light rail stop, tapping on and sitting down to read a book or listen to a podcast while they enjoy a smooth ride on state of the art public transport to their destination.

Gold Coast light rail passenger with backpack. Photo: Charlotte Harper

The rest of us will be sitting in traffic or at a bus stop wondering whether we’ve missed our bus and will have to wait another 25 minutes for the next one, while the light rail commuters will have certainty and stress free travel.

Gold Coast light rail on approach. Photo: Charlotte Harper

Similarly, those of us who are whinging now about the loss of trees and the fact that tourists arriving via Northbourne are greeted by the city’s lengthiest construction site will in time appreciate the fact that our primary gateway will feature our most modern and high tech public infrastructure at its heart. Contemporary landscaping and the renewal of fading urban developments along the route will add to the buzz after decades of living with a tired-looking entrance to the city.

Gold Coast light rail stop. Photo: Charlotte Harper

You may not agree now, but I reckon in a couple of years, you’ll have forgotten all the inconvenience and construction mess and either moved to the light rail catchment or be kicking yourself for locking yourself in elsewhere.

Canberrans will be scrambling to move to or invest in a suburb along the route as the project nears completion – or looking ahead to the Woden link and considering apartments there or houses in suburbs like Curtin, Deakin or Yarralumla. Property prices have already risen in these areas, but will boom as the infrastructure becomes a reality.

Not convinced? Try commuting from the suburbs to the city in Sydney during peak hour. There’s a reason everyone tries to live on a train, ferry or light rail line in the harbour city. Cars are a passport to hell. If you can live without one, you will.

Gold Coast light rail – updates. Photo: Charlotte Harper

Or spend an afternoon on the light rail at the Gold Coast. We visited a few months back and were amazed at the impact this project has had on the concrete jungle that is Surfers Paradise. The tram stops are bright and modern, transforming the precinct from its 1970s origins and providing a seamless link between it and the neighbouring towns. We travelled from end to end just because we could. The kids loved it. I loved it. As you can see from the images illustrating this article, I took more photos of the tramlines and trams than we did of the dolphins and penguins at Seaworld.

The Gold Coast tram has been even more successful than its planners had hoped, with more than 14 million people riding “the G” in its first two years to mid-2016, for an average of more than 20,000 trips per day.

Gold Coast light rail stop. Photo: Charlotte Harper

The tram is going to transform this town, helping it along on its journey from bush capital to world city.

We can bear the pain for the gain. Yes we can, Canberra.

Gold Coast light rail – tapping on. Photo: Charlotte Harper

FLEMINGTON ROAD CHANGES

Long-term lane closures on Flemington Road, primarily around Mitchell, between the Federal Highway and Wells Station Drive, commence March 17 and will continue till December to allow the widening of the road to accommodate the new light rail alignment. Signed detours will be in place but if motorists can, they should consider taking alternate routes in and out of Gungahlin (see below).

• Just north of Sandford Street to south of Well Station Drive, contraflow arrangement will be implemented where both southbound and northbound traffic will be realigned on the section of road currently used for two lanes of southbound traffic only. Traffic will be restricted to one lane in each direction.
• Randwick Road to Sandford Street – Northbound traffic reduced to one lane.
• Federal Highway to north of Sandford Street – The southbound bus lane will be closed with buses directed onto the remaining single southbound traffic lane.
• Access to Lysaght intersection will also be closed due to the contraflow arrangement and signed detours will be in place to redirect traffic.
• Access to the businesses on Flemington Road via the slip road between Sandford Street and Lysaght Street will remain open.

SUGGESTED DIVERSION FOR MOTORISTS

• From City to Gungahlin via Barton Highway and Gungahlin Drive
• From City to Gungahlin via Barton Highway, Gundaroo Drive and/or Gungahlin Drive
• From Federal Highway to Gungahlin via Horse Park Drive and Anthony Rolfe Avenue

GUNGAHLIN TOWN CENTRE CHANGES

Hibberson Street in the Gungahlin Town Centre will be closing to vehicular traffic from April 10 between Kate Crace Street and Gungahlin Place, with bus services diverted outside of Hibberson Street.

Construction of the new bus interchange for Gungahlin will begin in April and is expected to be completed in December.

BUS CHANGES

#The following stops will be closed during this work:
• Stops 4927 and 4928 on Flemington Road near Randwick Road

Bus stops will remain open at both Exhibition Park and Mitchell. These stops are:
• 4751: Flemington Rd Exhibition Park
• 4752: Flemington Rd opp Exhibition Park
• 6036: Flemington Rd after Sandford St
• 6037: Flemington Rd after Lysaght St

Flemington Road will remain the major bus corridor for the duration of these works.

CYCLEWAY CHANGES

Cyclists should note that the southbound shared path adjacent to EPIC will be closed.

The following lanes will be made available for cyclists:
• Both northbound and southbound on-road cycle lanes between Federal Highway and Sandford Street.
• Off-road cycle path between Sandford Street and Well Station Drive, adjacent to Flemington Road southbound lane.

MORE INFORMATION

Visit www.transport.act.gov.au for more detail on the changes and to see maps.
For up-to-date information on road closures please call Access Canberra on 13 22 81 or visit www.tccs.act.gov.au
Canberrans can also subscribe to a weekly construction update by visiting the Transport Canberra website.

Do you think we'll all forget the inconvenience of the construction stage once the light rail comes online?

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Gold Coast light rail tracks. Photo: Charlotte Harper

Pictured above are various views of the Gold Coast light rail. Photos: Charlotte Harper

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Gain worth the pain as light rail construction ramps up
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bigred 6:15 pm 25 May 17

ChrisinTurner said :

The ongoing Light Rail Stage 2 public consultations are being hampered by the reluctance of Transport Canberra to disclose travel time estimates for the government’s four route options. This is frustrating as transit popularity is very dependent on speed and frequency. For example, the Minister’s policy report “Transport For Canberra 2012-2031” mentions the word ‘rapid’ 70 times and defines ‘rapid’ as a target of 40 km/hr average operating speed (AOS).

The Blue Rapid bus currently takes 12 minutes between Civic and Woden (60 km/hr AOS) using a dedicated transit lane. If the tram replacement matches the optimistic average speeds announced for Gungahlin Stage 1 (32 km/hr AOS), the most direct (1b) route should take the tram about 22 minutes. The longer (2b) route proposal, that people are apparently preferring, through Parkes, Barton and Forrest, could add a further 10 minutes, depending on the number of stops, tight corners and street-car operation along National Circuit and King George Terrace.

Passengers currently travelling between Civic and Woden/Tuggeranong by public transport face a possible 20 minutes increase in travel time, which they could solve by either moving back to car travel or by demanding retention of the Blue Rapid bus along the existing route.

Of course, the gap between bus times along the route and proposed light rail times would narrow significantly if the buses actually adhered to the speed limits for the roads traversed. I never feel comfortable when travelling at close to 90 km/h on an articulated bus with 100 other innocents.

Also comparisons with car travel need to include door to door times, not in and out of car door times.

ChrisinTurner 5:25 pm 25 May 17

The ongoing Light Rail Stage 2 public consultations are being hampered by the reluctance of Transport Canberra to disclose travel time estimates for the government’s four route options. This is frustrating as transit popularity is very dependent on speed and frequency. For example, the Minister’s policy report “Transport For Canberra 2012-2031” mentions the word ‘rapid’ 70 times and defines ‘rapid’ as a target of 40 km/hr average operating speed (AOS).

The Blue Rapid bus currently takes 12 minutes between Civic and Woden (60 km/hr AOS) using a dedicated transit lane. If the tram replacement matches the optimistic average speeds announced for Gungahlin Stage 1 (32 km/hr AOS), the most direct (1b) route should take the tram about 22 minutes. The longer (2b) route proposal, that people are apparently preferring, through Parkes, Barton and Forrest, could add a further 10 minutes, depending on the number of stops, tight corners and street-car operation along National Circuit and King George Terrace.

Passengers currently travelling between Civic and Woden/Tuggeranong by public transport face a possible 20 minutes increase in travel time, which they could solve by either moving back to car travel or by demanding retention of the Blue Rapid bus along the existing route.

dungfungus 11:21 am 20 May 17

We should rejoice that we are going to show Melbourne how to run a tram network.: http://www.abc.net.au/news/2017-05-19/melbourne-trams-among-slowest-in-the-world/8541228

dungfungus 11:09 am 27 Apr 17

Anyone who believed that this project would be completed on budget, think again.
Transport Canberra, now claiming the deal is about “public transport” and not “urban renewal” are advertising for more people and they are all probably six figure salaries for out-of-towners. Note they are “career” jobs. That means recurring cost.

http://jobs-apac.hudson.com/en-au/transport-canberra-light-rail-career-opportunities-canberra-128365/

dungfungus 10:28 am 13 Apr 17

JC said :

dungfungus said :

I have just received my latest edition of Track and Signal (www.trackandsignal.com) and have read a most comprehensive covering of the Light Rail 2017 conference held at Surfers Paradise on 21-22 February 2017.

Among the delegates attending, according to the report by Rosalea Ryan, was Duncan Edghill, deputy director-general of Transport Canberra who started his allocated time for addressing the gathering asking the question “Why do light rail in Canberra?”

He then answered his own question by answering “For us it’s not about public transport; it’s about urban regeneration”

I might be wrong, but I always thought the light rail was about providing public transport but obviously, like a lot of other Canberrans I was wrong.

He also confirmed that when the current project (city to Gungahlin) was completed in the second half of 2018, stage two – a “complementary” line from City to Woden in the south, would enter procurement “at a similar time”.

Once again, I thought we were told the Woden stage wouldn’t start until after the 2020 election.

I feel some explanations are required.

The start date for stage 2 was not announced either way before the election.

What was said is “the government is keen to ensure there is minimal delay between the stages to ensure its employment pipeline continues.”

And I am impressed you read Track and Signal and presumably subscribe. You have gone up in my estimations.

What was quoted as being said in Track & Signal was as I said so don’t suggest it was something else.

Yes, I do subscribe to Track & Signal – I may be a rail enthusiast but I also know what spin is.

JC 10:48 pm 08 Apr 17

dungfungus said :

I have just received my latest edition of Track and Signal (www.trackandsignal.com) and have read a most comprehensive covering of the Light Rail 2017 conference held at Surfers Paradise on 21-22 February 2017.

Among the delegates attending, according to the report by Rosalea Ryan, was Duncan Edghill, deputy director-general of Transport Canberra who started his allocated time for addressing the gathering asking the question “Why do light rail in Canberra?”

He then answered his own question by answering “For us it’s not about public transport; it’s about urban regeneration”

I might be wrong, but I always thought the light rail was about providing public transport but obviously, like a lot of other Canberrans I was wrong.

He also confirmed that when the current project (city to Gungahlin) was completed in the second half of 2018, stage two – a “complementary” line from City to Woden in the south, would enter procurement “at a similar time”.

Once again, I thought we were told the Woden stage wouldn’t start until after the 2020 election.

I feel some explanations are required.

The start date for stage 2 was not announced either way before the election.

What was said is “the government is keen to ensure there is minimal delay between the stages to ensure its employment pipeline continues.”

And I am impressed you read Track and Signal and presumably subscribe. You have gone up in my estimations.

dungfungus 7:58 am 07 Apr 17

I have just received my latest edition of Track and Signal (www.trackandsignal.com) and have read a most comprehensive covering of the Light Rail 2017 conference held at Surfers Paradise on 21-22 February 2017.

Among the delegates attending, according to the report by Rosalea Ryan, was Duncan Edghill, deputy director-general of Transport Canberra who started his allocated time for addressing the gathering asking the question “Why do light rail in Canberra?”

He then answered his own question by answering “For us it’s not about public transport; it’s about urban regeneration”

I might be wrong, but I always thought the light rail was about providing public transport but obviously, like a lot of other Canberrans I was wrong.

He also confirmed that when the current project (city to Gungahlin) was completed in the second half of 2018, stage two – a “complementary” line from City to Woden in the south, would enter procurement “at a similar time”.

Once again, I thought we were told the Woden stage wouldn’t start until after the 2020 election.

I feel some explanations are required.

chewy14 7:17 pm 27 Mar 17

Southerly_views said :

Regarding the comment by Dungfungus…..Be careful what you wish for in the way of cable cars and gondolas. I remember times in the past when there were optimistic mutterings about cable cars up Mt Stromlo and Mt Ainslie. This government just may resurrect the idea.

They don’t need to resurrect the idea, they are included in the Stromlo forest park master plan.

Southerly_views 5:21 pm 27 Mar 17

Regarding the comment by Dungfungus…..Be careful what you wish for in the way of cable cars and gondolas. I remember times in the past when there were optimistic mutterings about cable cars up Mt Stromlo and Mt Ainslie. This government just may resurrect the idea.

JC 4:42 pm 27 Mar 17

KentFitch said :

JC said :

KentFitch said :

But that is not the case. The budget is in deficit, there is no $939m under the mattress, and the future tram payments must be met from future income. How much future income will be set aside is the relevant question, to which the answer is “if the rate of inflation averages 2.2% AND there are no cost overruns, $1.3billion must be set aside”.

Future income that will increase over time, essentially inline with the increases in yearly payments. Except for a few years where they are higher due to mid life refurbishment and extra maintenance.

So no don’t need that money now, and no it doesn’t have to be put into an interest bearing account. Yes it has to be found year in year out, just like every other operating expense the territory has.

There is an accepted way to quantify this, and it is to deflate future dollars to current dollars. Perhaps it is conceptually easier to look at just one year ahead (and use induction to generalise to further years ahead).

Accepted, accepted by who?

The method the government uses is quite a valid method for long term projects, though I get it it doesn’t suit your anti light rail stance.

dungfungus 5:09 pm 26 Mar 17
KentFitch 11:59 am 25 Mar 17

JC said :

KentFitch said :

But that is not the case. The budget is in deficit, there is no $939m under the mattress, and the future tram payments must be met from future income. How much future income will be set aside is the relevant question, to which the answer is “if the rate of inflation averages 2.2% AND there are no cost overruns, $1.3billion must be set aside”.

Future income that will increase over time, essentially inline with the increases in yearly payments. Except for a few years where they are higher due to mid life refurbishment and extra maintenance.

So no don’t need that money now, and no it doesn’t have to be put into an interest bearing account. Yes it has to be found year in year out, just like every other operating expense the territory has.

There is an accepted way to quantify this, and it is to deflate future dollars to current dollars. Perhaps it is conceptually easier to look at just one year ahead (and use induction to generalise to further years ahead). Imagine you had to budget for your income and expenditure in a year’s time and generate a nominal (future year) dollar value for next year’s budget. How would you anticipate next year’s nominal dollar income and expenditure? For income, (if you are a wage earner at least) you may use the latest ABS wage price index, which reports a 1.9% seasonally adjusted increase for the year to Dec 2016, and anticipate that next year it will be about the same. For expenditure, you may use the ABS CPI index which shows a 1.5% increase over the same period, and anticipate that the next year it will be about the same. Note, none of these figures is anything like 7.52%!

So, if your income was $1000 this year, you could reasonably assume it will be 1.9% more next year: $1019. And if your expenditure was was $800, you could reasonably assume it will be 1.5% more next year: $812. That is how you’d construct your next year’s budget.

If someone gave you their expenditure budget for next year, and you wanted to understand it in terms of current dollars, you’d deflate it by the CPI (if their expenditure was in consumer items). You would not deflate it by an arbitrary 7.52%!

Of course ACT Gov income will rise, as will their expenditure, partly due to inflation, partly due to increased population. Income and expenditure per-head in real terms (ie, inflation adjusted terms, not 7.52%!) cannot change much or change rapidly: for example, net (non-income in the ACT Gov’s case) tax increases above wage inflation are not sustainable (rate rises after compensating reductions in stamp duty) and are particularly regressive and disproportionally shift the burden to those with lower income in the community.

When looking at the future year dollar expenditure on schools, hospitals, roads, justice system, social services etc, no-one ever discounts this by an arbitrary 7.52% to bring it back to current dollars, or looks at current dollars and inflates them by 7.52% to produce future dollars. If they did, then budget forward estimates would be very interesting!

For example, consider the ACT Total Expenses from the 2016-17 budget forward estimates, Table 4.1.1
http://apps.treasury.act.gov.au/__data/assets/pdf_file/0008/870884/Chapter-4-Expenses.pdf

2015-16: $5131m
2016-17: $5403m
2017-18: $5312m
2018-19: $5529m
2019-20: $5712m

What is the compound growth (in nominal dollars, as shown in this table) between 2015-16 and 2019-20? It is 2.7%, compounding over the 4 years. And what component of that is due to extra expenses due of increased population? This is not made explicit, but Canberra’s population is forecast to grow from about 390,000 to about 420,000 over that period, a compound growth of around 1.8%. So, ACT Gov’s expenses per person is forecast to grow from about $13,200 in 2015-16 to about $13,600 in 2019-20, a compound rate of a mere 0.8% (that is, well below the CPI or wage inflater).

Total revenue over the same period [ http://apps.treasury.act.gov.au/__data/assets/pdf_file/0005/870890/Chapter-6-Revenue.pdf table 6.1.1 ] is forecast to grow from $4732m in 2015-16 to $5581m in 2019-20 (nominal, not current $), or in per-head terms, from about $12,100 to about $13,300, or a compound increase of about 2.3%pa (ie, above CPI and wage inflater).

The tram expenditure, in nominal (future) year dollars as outlined in the contract summary will soon be part of these forward estimates. What will they be in current dollar terms? If you use the same deflater everyone else uses for comparing future income and expenditure with current income and expenditure, you will deflate those contract summary figures with an anticipated rate of inflation, that will roughly apply to income and expenditure. Sure, there IS some difference between CPI, the wage index, and goods and services Gov buys (although these ARE mostly wages), but the RBA’s inflation outlook, at the lower end of the 1.5%-2.5% range is a resonable way to do this. Using 7.52% is most definitely not: once again, that is essentially an “opportunity cost” of money factor (and an extremely optimistic one at that) that can only be used for comparing options for financing, but says absolutely nothing about future cash flows required to support the expenditure.

JC 8:55 pm 23 Mar 17

KentFitch said :

But that is not the case. The budget is in deficit, there is no $939m under the mattress, and the future tram payments must be met from future income. How much future income will be set aside is the relevant question, to which the answer is “if the rate of inflation averages 2.2% AND there are no cost overruns, $1.3billion must be set aside”.

Future income that will increase over time, essentially inline with the increases in yearly payments. Except for a few years where they are higher due to mid life refurbishment and extra maintenance.

So no don’t need that money now, and no it doesn’t have to be put into an interest bearing account. Yes it has to be found year in year out, just like every other operating expense the territory has.

KentFitch 9:39 am 23 Mar 17

JC said :

rommeldog56 said :

You are correct Kentfinch.

NPVs are used in large procurements in order to demonstrate the cost of the ranked tender responses in roughly todays $ terms and especially where pre payments are involved. For forward commitment purposes, it is the b$1.708 that will be approved as a contracted financial commitment and will be reflected in the budget papers as such.

I raised this issue during past discussions on RiotAct about Tram stage 1 but was howled down by the usual ACT Labor/Greens glee club, those who delight in obfuscation of ACT Labor/Greens Govt decisions and those who seem hell bent on accepting what ever spin ACT Labor/Greens issue. People who say “we can afford the tram, we can do it all”, have been suckered by the use of the NPV figure. But I doubt they will ever recognise that.

Going to agree for once. It is used to determine how much something is for comparison reasons. Hence why it is the most correct figure to be worrying about in determining how much in relative terms this will cost over the 23 year life span.

And as Kent says “because a dollar in 2020 is very unlikely to have the same purchasing power … as a dollar in 2039”

So today’s value is what matters…

..

Hallelujah! I think everyone can agree that the value of the contract in today’s dollars is what “matters” in that when someone bandies about a number, if they are not doing in “today’s” dollars, they are trying to be tricky.

So, the only question that remains is: how do you convert future dollars into today’s dollars, And there are 2 proposals on the table:

1) use best-guess at inflation rate, which is the de-facto stand-in for how the value of money changes over time
2) use 7.52% pa

The inflation rate tells you the amount of cash, converted to current dollars, you are going to need to meet the commitment you have entered into, whether paying off your car on hire-purchase or the tram. Hence, it tells you the amount of money you are going to have to divert from future income to make that commitment.

Summed over the 20 year life of the project (not just the contract!) that amount, discounted at 2.2% inflation guestimate is $1.3b.

If the ACT Gov had $939m under its mattress AND could guarantee a 7.52% net return on that money, 100% risk free THEN it could invest that money and draw it down to meet the repayments and THEN it could legitimately say “We have this $939m sitting around, and we’re allocating it to the tram: hence the tram costs $939m in today’s money” and we’d all argue about whether that was the best use of $939m today (the opportunity cost of $939m wad of cash), (and we would marvel at their ability to guarantee a risk free rate of return of 7.52%)

But that is not the case. The budget is in deficit, there is no $939m under the mattress, and the future tram payments must be met from future income. How much future income will be set aside is the relevant question, to which the answer is “if the rate of inflation averages 2.2% AND there are no cost overruns, $1.3billion must be set aside”.

JC 9:37 am 23 Mar 17

chewy14 said :

JC said :

KentFitch said :

But $1.78 billion, being in future $, is just as misleading a way to represent the cost as the $939m NPV, because a dollar in 2020 is very unlikely to have the same purchasing power (or the same alternative uses for spending on say, hospital supplies) as a dollar in 2039. So, what people trying to be clear rather than tricky do is have a best guess at converting all those dollar amounts over different years into a single, uniform “2016 dollar” (in this case). In other words, in 2016 dollars, how much I am going to have to divert in future years from other claims on gov expenditure to pay for this?.

Exactly hence why a present cost figure is the best guide of how much something will cost.

And BTW the $114m contingency is already factored into the $939m cost, so not sure why you are adding that to the figure.

It is the cost or value to the government today if they had the money upfront to pay, it helps represent the opportunity cost of the money.

But the point is, they don’t have that money now, they will be raising it from external revenue sources over 20 years.

And even you can admit surely that the lower figure won’t represent either the cost or value to the people supplying that revenue at those future times.

Yes they will be paying it over 20 years. But the point is the relative cost to budget should be much the same as today.

Now give you an example. 17 years ago I built a house that cost $100,000. Today same house would cost closer to $200,000 to build.

My pay level 17 years ago was around $45,000 today if I were the exact same level in the same organisation it would be about $95,000.

Now whilst today the cost is double my relative buying power is actually better so In reality the house today is better value.

And same here. In 20 years time paying $64m is not the same as $64m today.

That is why there are comparative figures to try and estimate what it would cost in today’s terms.

It is not a hard principle to understand.

JC 9:28 am 23 Mar 17

rommeldog56 said :

JC said :

Exactly hence why a present cost figure is the best guide of how much something will cost.

You must be more knowledgeable than the ACT Auditor General who said the “cost” will be b$1.780 over the life of the contract – that’s the minimum amount that will be paid to the contractor.

Which is not present cost. As your mate Kent said the buying power of a dollar will be different in 20 years compared to now. And with that the warning power also different. Sonin compating value present cost is what matters more.

chewy14 8:11 am 23 Mar 17

JC said :

KentFitch said :

But $1.78 billion, being in future $, is just as misleading a way to represent the cost as the $939m NPV, because a dollar in 2020 is very unlikely to have the same purchasing power (or the same alternative uses for spending on say, hospital supplies) as a dollar in 2039. So, what people trying to be clear rather than tricky do is have a best guess at converting all those dollar amounts over different years into a single, uniform “2016 dollar” (in this case). In other words, in 2016 dollars, how much I am going to have to divert in future years from other claims on gov expenditure to pay for this?.

Exactly hence why a present cost figure is the best guide of how much something will cost.

And BTW the $114m contingency is already factored into the $939m cost, so not sure why you are adding that to the figure.

It is the cost or value to the government today if they had the money upfront to pay, it helps represent the opportunity cost of the money.

But the point is, they don’t have that money now, they will be raising it from external revenue sources over 20 years.

And even you can admit surely that the lower figure won’t represent either the cost or value to the people supplying that revenue at those future times.

rommeldog56 7:39 am 23 Mar 17

JC said :

Exactly hence why a present cost figure is the best guide of how much something will cost.

You must be more knowledgeable than the ACT Auditor General who said the “cost” will be b$1.780 over the life of the contract – that’s the minimum amount that will be paid to the contractor.

JC 8:59 pm 22 Mar 17

KentFitch said :

But $1.78 billion, being in future $, is just as misleading a way to represent the cost as the $939m NPV, because a dollar in 2020 is very unlikely to have the same purchasing power (or the same alternative uses for spending on say, hospital supplies) as a dollar in 2039. So, what people trying to be clear rather than tricky do is have a best guess at converting all those dollar amounts over different years into a single, uniform “2016 dollar” (in this case). In other words, in 2016 dollars, how much I am going to have to divert in future years from other claims on gov expenditure to pay for this?.

Exactly hence why a present cost figure is the best guide of how much something will cost.

And BTW the $114m contingency is already factored into the $939m cost, so not sure why you are adding that to the figure.

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