Governments made dramatic responses to challenges posed by Covid-19. New ideas are being sought in many areas of public policy. However, transport infrastructure is a lamentable exception – instead of a reassessment of plans in light of the new realities, the reaction of its boosters has been to double down their egregious rent-seeking.
Almost as soon as the Covid restrictions took effect, the infrastructure club argued now is the time for Governments to spend more of your – and future generations’ – money on them. Not because of congestion which results from economic growth etc. but the opposite – because the economy has stalled.
The recommended approach: projects should continue apace; assessments should pretend nothing has changed.
Projects to continue
Several Governments advertised acceleration of big capital city projects that were dubious even in the pre-Covid world. They highlighted jobs ‘created’ by projects, with lack of traffic making construction easier.
Who could believe such guff? Most big projects are capital intensive, with relatively few workers per $million spend – a possible reason for exemption from the lock down. The necessary project skills can be highly specific. Undoubtedly the spending does support jobs. However, it isn’t cynical to think the key jobs in question are those of infrastructure club members and associates – rather than ordinary workers, especially those displaced from other industries.
Despite upheaval in the community, the bad habits of transport infrastructure continue – multi-billion-dollar projects are going ahead without adequate or any ‘business case’.
For example, despite the Sydney Metro extension lacking a real business case – a finding of the Upper House inquiry that contradicted claims by the NSW Government and Infrastructure Australia – the Government kept digging. Indeed, it decided to double-down by proceeding with another sans-business-case-Metro: Parramatta-CBD.
A new Parramatta-CBD commuter rail line would be a good idea. Making it a $20billion or so Metro – which cannot take commuter trains – is not. Even worse is the idiotic promise of a 20-minute trip along its 25 km route – the likely reason for the bizarre absence of stations on its route in western Sydney.
The proposed $50billion (or much more) Melbourne rail loop, more suited to a city like Tokyo or Mexico City, is another case in point. Completion of a business case, promised by the glossy brochure, is not scheduled on the project development time line – at least not before ‘procurement’ i.e. start of construction.
Assessments as if nothing has changed
Project assessments, already suspect, have been rendered even more doubtful by the new environment. The typical twaddle prefacing project proposals, and all-too-brief assessments, refers to surging transport demand due to strong growth.
Readers of Pearls and Irritations know the outlook for population and economic growth is much less – and much less certain – than what is was. Yet this – like the potential of working-at-home to continue to reduce travel to CBDs – was overlooked in the assessments of the only projects recommended by Infrastructure Australia since February: MetroNet (Perth); Port Botany rail (Sydney).
Moreover, Infrastructure Australia’s other recent pronouncements – its monitoring of ‘market capacity’ and another revision of cost: benefit methodology – ignore the issue. This is a surprise since a board member is CEO of the National Covid Co-ordination Commission which is to advise National Cabinet on e.g. investment.
Previous posts said infrastructure advice stubbornly refuses to acknowledge any change in circumstances surrounding projects – no matter how significant or obvious. The lack of recognition of changes wrought by Covid reinforces the appearance of advisers living in a different reality to the rest of us.
A better direction
Given the new world we face, Governments and the community should expect the most comprehensive, searching and public review of all transport infrastructure plans and major projects. Nobody can be confident present ‘audits’ and ‘plans’ are worth the paper they are written on.
The best strategic response to uncertainty is to maintain flexibility. Hence, big transport projects – those which are most committal and inflexible – should be put in abeyance until there is far more confidence about the future.
We are yet to see such rational repositioning – instead cognitive dissonance is on display. For example, while Governments loudly warn about use of mass transit, they plough full steam ahead with exactly those type of projects.
A fundamental change is in order. As a start, all new assessments of projects must account for the changed and uncertain environment. Every current assessment on Infrastructure Australia’s list needs to be reviewed. The ‘Australian infrastructure plan’ must be redone so it identifies and meets the challenges facing Australia, rather than the challenges facing the infrastructure club. The focus should shift from grandiose schemes – especially for inner city motorways – to less costly, more flexible and practical improvements including for walking and cycling.
As Australian Governments will face a shortage of funds, now is the time to move towards road charges that ensure revenue at least covers aggregate costs, and that only economic major road projects proceed.
The Commonwealth should stop being the donor of last resort for State wish lists, and focus on its direct Constitutional duties. The States should redirect their attention from tail-chasing so-called ‘congestion busting’ road projects and into proper stewardship of assets including in regional areas.
An implication is public sector spending on big infrastructure projects may need to be slashed – not increased – for the duration of the Covid crisis and ensuing downturn.
‘Savings’ might be directed to the least well off in the community – including junior public sector grades despite rhetoric they should ‘share the burden’ (after some of their bosses got a rise). Among the reasons is they are most likely to need and spend any extra income and thereby really support jobs.
Radical changes are being made elsewhere in response to Covid. Its past time pretending transport infrastructure should be immune.