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TOOT! TOOT! Even the All Blacks are laughing at the tram

By Pandy 11 June 2014 24

From:

http://i.stuff.co.nz/business/opinion-analysis/10140917/Light-rail-off-Capital-agenda-for-now

“Second, the project is to be funded by a special land levy, charged on those properties that were judged by planners to receive an uplift in value from the installation of light rail. This quickly drew criticism from the Property Council of Australia who labelled it as yet another tax on an already strained sector.

Adding the final insult to injury, even before the first sod had been turned (due in 2016), the project is already expected to see costs blow out significantly, as engineers will have to reposition underground wires and pipes along the route. This comes as ACT battles to rein in A$100m budget shortfall (without the cost impact of light rail).

All in all, there are numerous warning signs suggesting Canberra’s light rail vision is going to end in taxpayer tears.”

What’s Your opinion?


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24 Responses to
TOOT! TOOT! Even the All Blacks are laughing at the tram
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davo101 10:24 am 01 Jul 14

JC said :

Good to see some Abbott/Hockey/Hanson logic going on there.

It’s actually engineering logic.

JC said :

Secondly using your light rail figures you say it has a net positive benefit, based on economics alone. So it is viable after all hey? Not a great return, but still positive and viable using your figures.

Yeap, it’s viable so long as everything goes exactly to plan. The slightest of headwinds will make that NPV negative. Seriously, would you risk over $600 million to be $10 million better off?

JC said :

Now of course none of the figures take into account the social and environmental benefits of both projects

Err, yes they do. Almost all of the benefits that are valued in these projects are social or environmental (they are things like: reduced travel times, air pollution, noise pollution, traffic accidents, urban separation). The only benefits that aren’t are reduced vehicle operating costs and avoided road damage.

As I said if you can’t tell the difference between these two project then you really shouldn’t be making the call.

dungfungus 10:09 am 01 Jul 14

JC said :

davo101 said :

Good to see some Rattenbury logic going on there. Some basic facts:

Majura Parkway:
Cost to ACT $144 million
Net present value of project $480 million

Tram Plan:
Cost to ACT $615 million
Net present value of project $10 million

If you can’t see the difference between those two projects then you really should not be making infrastructure investment decisions.

Good to see some Abbott/Hockey/Hanson logic going on there.

Firstly whilst net cost to the ACT of Majura parkway is indeed $144m, total cost is $288m. Oops I under estimated it. That is the important figure. Of course no doubt that $288m will be high by the end of it all.

Secondly using your light rail figures you say it has a net positive benefit, based on economics alone. So it is viable after all hey? Not a great return, but still positive and viable using your figures.

Now of course none of the figures take into account the social and environmental benefits of both projects hence the Abbott/Hockey/Hanson angle. Looking after the environment and people (except the well to do, who I guess prefer roads to public transport) is secondary to them isn’t it?

The carbon cost involved with setting up a light rail is enormous. Just because there may be “zero emissions” from the tram doesn’t mean it is “clean and green”.
Looking after the environment my **se!

JC 9:49 am 01 Jul 14

davo101 said :

Good to see some Rattenbury logic going on there. Some basic facts:

Majura Parkway:
Cost to ACT $144 million
Net present value of project $480 million

Tram Plan:
Cost to ACT $615 million
Net present value of project $10 million

If you can’t see the difference between those two projects then you really should not be making infrastructure investment decisions.

Good to see some Abbott/Hockey/Hanson logic going on there.

Firstly whilst net cost to the ACT of Majura parkway is indeed $144m, total cost is $288m. Oops I under estimated it. That is the important figure. Of course no doubt that $288m will be high by the end of it all.

Secondly using your light rail figures you say it has a net positive benefit, based on economics alone. So it is viable after all hey? Not a great return, but still positive and viable using your figures.

Now of course none of the figures take into account the social and environmental benefits of both projects hence the Abbott/Hockey/Hanson angle. Looking after the environment and people (except the well to do, who I guess prefer roads to public transport) is secondary to them isn’t it?

dungfungus 9:33 am 01 Jul 14

JC said :

rommeldog56 said :

I hear today that the ACT Libs have commissioned a report that shows that the Light Rail will cost about M$915, not the M$416 still regularly touted by the ACT Gov’t – a figure that is by Katy Gallaghers own admission, 3 odd years old now.

Whilst you have to take both figures with a grain of salt, the capital cost is astounding.

Given that the current ACT Gov’t is a minority Gov’t IMHO it would have severe difficulty claiming a “mandate” to implement Light Rail.

Firstly don’t think the government is claiming a mandate, however before the election both they and the Greens went to the electorate with a light rail plan. Labors was to investigate before next election, the Greens to start building.

On the cost the Government has made it clear that the costs will be higher due to inflation etc. Quite a common issue for long term projects.

As for the cost, yep $500m-$1b sounds a lot, but I am guessing you have no great issue with the $250m cost of the Majura Parkway, which will only be of benefit to those in Eastern Tuggeranong heading to the Fedral highway or Gungahlin and some Gungahlin residents.

The Majura Parkway balances out the GDE which only benefits those in Western Tuggeranong and some Gungahlin residents.
In today’s costs, the Majura Parkway was built 10 times as fast at a fraction of the cost of the GDE.
The estimated cost of the City to Gungahlin light rail has more than doubled in less that 2 years. It will be deemed unaffordable and abandoned before the 2016 election.

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