13 May 2022

Government didn't pay enough attention to economic analysis of light rail to Commonwealth Park: Auditor-General

| Lottie Twyford
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The Gungahlin Light Rail terminal

The Auditor-General wants the ACT Government to undertake a full economic analysis of light rail to Woden, saying it would give a better picture of the true cost of the project. Photo: Damien Larkins.

The government paid “insufficient attention” to an economic analysis of Stage 2A of light rail and should now examine the route from the city to Woden as a whole to get a better picture of the costs, the Auditor-General has warned.

ACT Auditor-General Michael Harris said he believed the total cost for the next stage to Commonwealth Park – $162 million – was, in actual fact, likely to be much greater.

But the ACT Government rejected any suggestion they had knowingly underestimated the costs of the light rail project.

An audit report released in September last year found the costs of light rail Stage 2A may have been underestimated and its economic benefits overstated.

On Thursday (12 May), Mr Harris said he feared “there were costs that were not included in the analysis which could have been reasonably foreseen”.

Some of these included the requirement for wire-free running vehicles and a need to retrofit some light rail vehicles.

The audit also found some of the benefits of light rail had been overestimated.

Auditor-General Michael Harris

Auditor-General Michael Harris said he was concerned insufficient attention had been paid to the economic analysis of Stage 2A of the light rail. Photo: File.

The Auditor-General said he was not trying to suggest the analysis purposefully hid information. Instead, he said the analysis showed “a lack of professionalism on the part of the people who put [it] together” to which “insufficient, or a lack of attention” had been paid.

He suggested this may have been because Stage 2A was viewed as only a small part of the puzzle.

Last year’s audit found Major Projects Canberra – the agency which prepared the business case – did not request further information from the consultant about their methodology and data.

“I would’ve expected a government agency to have embarked on some form of questioning of their consultants,” Mr Harris explained.

“We’re not saying they have to pay someone else to validate the information they were given by the consultant … we’re saying it’s incumbent upon them to do their own questioning.”

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But chief projects officer of Major Projects Canberra Duncan Edghill argued the team who completed the economic analysis performed well.

Mr Edghill said the same team which completed the business case had also completed the business case for Stage 1, which had been “on the conservative side”.

The government has already rejected a suggestion it prepare a fresh business case for Stage 2A of light rail in its response to the audit.

Mr Harris said it was now his view that an economic analysis of the entire light rail route between the city and Woden would better capture the project’s true costs and benefits rather than assessing smaller sections in isolation.

However, he acknowledged this would be “a timely exercise to undertake”.

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At the hearing, two experts presented opposing views on the light rail economic analysis.

Honorary associate professor at the Australian National University Crawford School of Public Policy Dr Leo Dobes described the Stage 2A analysis as “very poor” as it had failed to put forward alternatives.

He accused the government of having an “ideological preference” for a tram/light rail and said they should have instead considered alternatives, such as an O-Bahn system.

Like a tramway, an O-Bahn is a guided busway where buses roll along concrete tracks. However, the vehicles can also leave the O-Bahn and become an ordinary bus running along any other route.

But senior lecturer in economics and behavioural science at the University of Canberra Dr John Hawkins said it was important the government viewed the benefits of light rail as long-term and would therefore benefit future generations as well as current ones.

He said it was likely the benefits had been understated in the government’s analysis.

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It will be interesting when we publicly get the cost estimate for stage 2. Stage 1 was amongst the most expensive light rail development per kilometre of track in the world. I wonder if stage 2 will be the most expensive per kilometre build ever undertaken for this form of transport?

Surely it couldn’t be more expensive than the George St 12km to Randwick that blew out to $3b because of hopeless NSW Liberals managing it and crazy very old underground water pipes, conduits and cables linking businesses and dwellings in the city centre.

No one ever measured the “green” potential. Instead they took technology from the 1890s and put a modern shell on it. Then they decided that the number of new pedestrians in the centre of the road required a forty Km/h speed limit to make a major North-South road safe. And that’s not even considering the restrictions to any other tragic flow caused by all the tragic lights being reprogrammed. Waste of time and money which could have been better spent on continuing the decentralised city concept. Let people live where they work. But no, they wanted a congested city like all the others.

thoughtsonthesubject9:39 pm 14 May 22

The one excuse for the government of giving us a mode of transport that is slower and costing a multiple of that of buses is that worldwide the sales persons of trams seem to be totally irresistible. In fact so irresistible that even the author of the Simpsons felt the need to deal with the subject.

The costs were understated, the benefits overstated.
By millions of dollars. Our dollars. Taxpayer and ratepayer dollars.
There is also the huge opportunity cost of what could have been done if the tram had not been built. Like hospitals, schools and affordable housing.
This is the most irresponsible and incompetent local government in Canberra’s history and like the Norfolk Island council it should be sacked by the Federal Government and an administrator appointed.

HiddenDragon6:42 pm 14 May 22

Who cares what the Auditor-General says – It’s the vibe of it. It’s the Constitution. It’s Mabo. It’s justice. It’s law. It’s the vibe and ah, no that’s it. It’s the vibe (and it’s only mug punter ratepayers’ money being sprayed on this, so nobody who’s anybody around this town really cares).

The silliest part of this epic fiasco is that the same over-priced apartments could be whacked up along the same roads without light rail ever being constructed and they would still sell and would be occupied by just as many people who would never use public transport unless they had absolutely no alternative.

Tom Worthington5:47 pm 14 May 22

The fist of Brisbane’s battery double articulated busses has arrived in Queensland for testing. Assuming this goes well, the ACT Government could order a similar model, and run them to Woden. With a streamlined nose, covers over the wheels, and painted red, they would look like the exiting light rail vehicles, making them politically palatable as “trams”. This will save having to install steel rails, overhead wires, and an upgraded, or new, bridge over the lake. Off peak, during the middle of the day, most vehicles can be parked, plugged in, and charged using the cheap surplus solar power available. After rush-hour, they can be plugged in again to recharge from surplus wind power overnight.

@Tom Worthington What you are describing sounds suspiciously like the O-Bahn Busway operating in Adelaide (https://en.m.wikipedia.org/wiki/O-Bahn_Busway) which commenced operation in 1986. I’m sure the ever diligent ACT Government ministers and consultants would have checked it out before opting for a fixed rail solution. Yeah right!

Stuart Brown2:06 am 15 May 22

Look I’m not saying battery, triple car, dedicated busways, with stations aren’t an improvement, Parramatta light rail stage 2, will probably become one. But lithium and rubber cost money, steel lasts a long time, it distributes the load well, on to the sleepers. There’s a reason India, is going for 100% electrified passenger rail, (OK, the rails are already made and they’re building, a dedicated double height, triple length, freight train line, also electric.)

No fleet stock, out charging, no tyre replacement, steel wheel replacement, is much less frequent, so get as much light rail as you can afford and then build dedicated bus lanes around them. There might be one, from Bankstown Metro station, to the second Sydney Airport. On the Adelaide OBan, they use guide sensors and the driver can take his hands, off the wheel. The Adelaide OBan, uses concrete, instead of asphalt, to lower the cost, of road maintenance.

Capital Retro8:03 am 15 May 22

You have forgotten that some days the sun doesn’t shine and some nights the wind doesn’t blow so where is your “cheap surplus power” coming from then?

JustSaying what Brisbane is getting is nothing at all like the o-bahn. The o-bahn uses standard buses fitted with guide wheels. At the end of the o-Bahn tracks they can drive on normal roads.

Brisbane is getting high capacity bi articulated buses made to look like a tram. But there is no guidance system what so ever on them (unlike systems in China). The vehicles are also too big and heave to be Road legal on standard roads so are restricted to the busway routes only.

So in many ways what Adelaide installed over 30 years ago is a better system. What Brisbane is installing basically a high capacity bus road.

And Tom, let’s say Canberra uses these buses like Brisbane you would still have costs reinforcing the bridges (which BTW has nothing to do with lightrail) and you would still need to build a dedicated right of way just without tracks embedded.

ChrisinTurner5:33 pm 14 May 22

If Light Rail will take twice as long to travel from Civic to Woden (2A Business Plan) then the cost disbenefit of discouraging public transport needs consideration.

Capital Retro8:04 am 15 May 22

It’s not about public transport.

Capital Retro5:21 pm 14 May 22

Mr Edgehill is confirming what he said a Gold Coast national light rail conference about 10 years ago that Canberra’s light rail was about urban renewal, not public transport.

Which is not a bad thing is it?

CR, This is absolutely correct.
LR has nothing to do with public transport. It never has been about transport.
Developers want certainty and LR with it’s fixed transport route and the Government’s high-density housing policy guarantees that certainty.
Ironically, as ChrisinTurner has raised, the expected slower travel time on LR discourages the use of the public transport system that the developers are relying upon for their security.

It would only discourage through traffic not new traffic brought to the route by living nearby.

And whilst I know there is this love hate relationship with developers in this town, the one thing ghe anti high density development crew never fail to answer is how do we accomodate growth in Canberra without creating 1960’s like urban sprawl?

The usual answer is control population growth which is neigh on possible unless we start a cull which I am sure would not be appreciated by the majority.

The auditor general has consistently found issues with aspects of the Light Rail stages. I’m surprised that so many Canberrans seem happy to continually ignore the findings of the Auditor.

There’d be a lot of Canberrans who wouldn’t accept something similar from a federal government.

I think a lot of Canberrans would be happy to see the back of the Barr/Rattenbury government, bj_ACT, however for that to happen there needs to be an acceptable alternative … which to date has obviously not been the case.
As for accepting similar from the Feds? I doubt you will find too many Canberrans happy with the ANAO reports on the sports grants and the car park funding rorts.

Just Saying,
“I doubt you will find too many Canberrans happy with the ANAO reports on the sports grants and the car park funding rorts.”

Weren’t you the one here the other day promoting politicians “fighting” for better deals for their constituents in your support of David Pocock?

Surely you’re not then against other politicians doing the same?

Or is it only a “rort” if you aren’t in on it?

Chewy14,
You obviously don’t understand the difference between a politician negotiating on a specific issue/matter for their single electorate and the ANAO reporting on a minister blatantly ignoring advice on grant funding across the country, provided through an established and rigorous system used to assess applications from organisations and communities. In my opinion there is no similarity – your opinion may differ … and if it does, I don’t care.

Just Saying,
No I get it.

You’re OK with corruption as long as you support the candidate promoting it.

Chewy14
I realise you have a pathological obsession with converting everyone to see that yours is the only opinion. However, it is really pathetic when you resort to emotional lunacy to prosecute your case. If you honestly believe that a politician negotiating to get something for his/her constituents, without any personal gain, is corrupt, then you need to recalibrate whatever measure you are using and come back to reality. While I have already acknowledged your right to disagree with my opinion, adopting a baseless moral high ground is merely just frothing at the mouth. I have no desire to change your opinion, for as previously stated, I don’t care what you think.

Just Saying,
No I’m presenting you with the logical outcome of your position. The fact that you don’t like it because of the story you’re telling yourself is not my issue. But as you “don’t care”, I’m sure you won’t repeatedly comment on the issue.

Let’s go deeper into your point.

In your car park and sports “rorts” example, the minister has the discretion to male decisions outside of the assessments from the department.

Do you think he did this on his own or perhaps he did so because the members in his parry, including those vying or sitting in marginal seats lobbied him “for their constituents” of course.

Contd. comment got cut off.

Now, in your theoretical world where Pocock is “lobbying for his constituents”, how exactly will he receive extra money if he gets elected except outside the standard assessment and funding methodologies? Otherwise the funding would already be available.

What exactly does he offer in a negotiation that isn’t identical to the exact things you (and he) are criticising in other politicians.

For example, let’s say he gets funding for a new stadium, despite it already clearly failing the “standard established and rigorous” assessment methodology, where do you think that money comes from? It comes from the exact same bypassing of good governance that led to sports rorts and carpark rorts.

Or do you think it’s OK if that happens because he’s an independent and not really responsible for the outcomes of what he’s willing to trade for?

I’m perfectly OK if he actively promoted he was willing to bargain for better deals in his electorate (like Bob Katter) but don’t try to spin it into a form of integrity or principled government.

He’s shown he is no better than the rest of them.

I think Mr Edgehill’s comment that you can’t judge the financial benefit of small sections of the LR project is a fair response, however, the Auditor General is spot on when he said the Government has adopted an “ideological preference” as opposed to considering alternatives.

The thing is that as OUR Government, they are spending OUR money and owe it to all Canberrans to adopt the best public transport system; one that is flexible, cost-effective and moves people from A to B in the shortest possible timeframe.

To me, I can’t see how LR achieves any of those objectives.

Capital Retro4:56 pm 14 May 22

Mr Edgehill is confirming what he said a Gold Coast national light rail conference about 10 years ago that Canberra’s light rail was about urban renewal, not public transport.

Is anyone actually surprises by this?
We also see that Federal Labor have backed away from providing their piece of pork….sorry funding for the project.

No doubt the Light Rail cheer squad will continue their blind support regardless.

Less wait times at a hospital are not as flashy as big, white elephants

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