Articles: Brisbane road tunnels

[colinw]

I can feel a scandal coming on ...

Clem7 tunnel forecaster gains indemnity - The Courier-Mail - click here!

Clem7 tunnel forecaster Maunsell Aecom gains indemnity

    * Tony Grant Taylor and Robert MacDonald
    * From: The Courier-Mail
    * September 02, 2010

THE company that prepared the wildly-off-the-mark forecasts for RiverCity Motorway's Clem7 tunnel has made sure it is protected if disgruntled investors ever sue.

Traffic forecaster Maunsell Aecom gained an indemnity from RiverCity restricting its liability to $500,000, if it were to be successfully sued by a third party over its forecasts.

Maunsell was paid $2.5 million for its qualified forecast that more than 60,000 vehicles a day could be using Clem7 within a month of opening and 90,000 after six months.

Five months after opening, the tunnel is being used by just over 27,000 vehicles a day, despite the toll for cars being cut to $2 against a projected charge of $4.28.

RiverCity this week wrote down the value of its operation by a staggering $1.56 billion.

Investors, who collectively pumped $740 million into RiverCity in 2006, have seen their $1-a-unit investments slide to just 1.9¢ each.

Some are talking of legal action, but have not yet begun formal proceedings.

Industry observers say the failure of the Clem7 usage forecasts highlighted the fact that, in the words of one, "traffic forecasting is a black box", which relied on highly complex computer modelling and hundreds of assumptions.

"Transport modelling sounds like a science but it's more of an art," Griffith University urban management academic Dr Jago Dodson said.

He said it was also hard for outsiders to audit the modelling because of its highly technical nature.

"Relatively few people have the skill to evaluate it and those who do tend to work for government or private consortiums," Dr Dodson said.

Maunsell, in RiverCity's 2006 prospectus, said it believed its forecasts were "based on sound inputs and appropriate modelling processes and (were) reasonable for the assumptions made in the modelling".

It said, however: "Traffic volumes set out (in) this summary letter are forecasts only and there can be no guarantee that the projected volumes or other outcomes will be achieved."

[Dean Quick]

I bet the brains trust responsible for the next big white elephant road project (airport link) are nervously watching these developments. Hopefully this debarcle will preclude any start on the proposed northern link road tunnel!

[ozbob]

Brisbanetimes --> Bonuses for Clem7 bosses despite losses

[ozbob]

Brisbanetimes --> Bolton questions Airport Link forecasts

[paulg]

Brisbanetimes --> Bolton questions Airport Link forecasts

That's a good article.

Airport Link will be an even bigger financial disaster than the Clem7, in my opinion. Luckily most of the small investors have escaped after the installment fiasco last year. Macquarie and Deutsche will wear most of the losses (along with Qld public service super funds invested by QIC).

Cheers, Paul

[Jonno]

The Govt employees are all on preserved super so if the fund losses money the Govt has to fund the difference.  So you and I will fund QIC's bad investments.  Just great!!!!!

[somebody]

The Govt employees are all on preserved super so if the fund losses money the Govt has to fund the difference.  So you and I will fund QIC's bad investments.  Just great!!!!!

This scheme has (finally) been closed to new entrants.  And it wasn't the default scheme.

[Mozz]

I understand the defined benefits QSuper scheme closed to new members back in the late 1990's.

[somebody]

I understand the defined benefits QSuper scheme closed to new members back in the late 1990's.

I thought it was 2008?  Perhaps there were two schemes.

[Mozz]

Did some research - apparently in 2000 the default account for new public sector employees switched to the "accumulation" account however you could still switch and start a new "defined benefits" account then in 2008 no new "defined benefits" accounts were allowed.

[Jonno]

Still a big exposure for the Govt from the bad decisions of the QIC

[ozbob]

Courier Mail --> Brisbane City Council warned Clem7 operators of mismanagement before $1.6 billion loss

[Jonno]

Courier Mail --> Brisbane City Council warned Clem7 operators of mismanagement before $1.6 billion loss

Oh how quickly they turn!!!talk about setting up the fall guy!

[ozbob]

From the Courier Mail 8th September 2010 page 32 and 32.   A turning point?

Well done Courier Mail and Jago Dodson!

All roads point to putting the brakes on city's grand tunnel schemes

[#Metro]

So the "Clem 7 saved traffic on the Storey Bridge" story could be baloney because traffic levels apparently were decreasing during the construction phase?

http://www.couriermail.com.au/business/clem7-operators-lose-470-for-each-vehicle-through-the-tunnel/story-e6freqmx-1225912533108

"If it goes into receivership, the ratepayers aren't exposed. We paid a total of $770 million to get it to happen and that's it," Cr Newman said.

Hmm. If only that were put into PT or more rail.

I see a problem here. The transport funding model. It has problems. I don't know what the solution might be.
BCC's responsibilities are roads and buses within its boundaries. So BCC will always champion road and bus-centric solutions by the simple fact of that is all they have control over and can fund. They can't fund rail, even if they wanted to, it makes no sense. And it is impossible to just improve rail services in one council area, and not another.

[ozbob]

Yes,  it would be much better if the bus system was like the rail system, then proper balance and integration achieved.  Imagine if the rail system was constrained by council boundaries.  Clearly the market garden model is falling down with the urban expansion and considerable transport pressures.

[#Metro]

Problem is, what is the alternative? Councils have a (rightly) vested interest in providing PT, but the problem is that it is for PT within their area only, to the exclusion of all others.

Some good results have come about- BUZ, Sunshine Coast FlexiLink but on the other hand this kind of dual funding stream has its own problems in that it is almost exclusively biased towards bus only solutions/improvements because it is easy to keep buses from straying outside the council boundaries.

In an ideal world, TL would be blind to this kind of thing and just improve service, but in the real world, correct me if I am wrong-- there is additional council money for bus improvements which cannot be used for rail services, even if they were the same area.

BCC could never have introduced or funded TUZ services on the QR rail network.
It did fund one rail service IIRC when the Go-Between bridge was being constructed, but that was very exceptional. It is much easier for BCC to introduce new roads or new bus routes than new train services.

Vancouver has some deal going with surrounding councils but I don't have the details on that.

[ozbob]

Brisbanetimes  --> Northern Link tender to be revealed

[#Metro]

http://www.brisbanetimes.com.au/queensland/inside-northern-link--brisbanes-next-big-decision-20100917-15fjg.html

Inside Northern Link - Brisbane's next big decision

Council is about to spend $1.8 billion of your money to build Brisbane's newest tunnel: Northern Link. But how much do you know about it? Tony Moore examines where it runs, what the traffic projections are and how much the toll will cost?

On Monday, Brisbane will learn how the city's newest toll road tunnel will be built and who will build it.

And - importantly - how much the toll for the tunnel will be.

[#Metro]

Lord Mayor Campbell Newman believes Northern Link is a challenge that Brisbane has to accept.
"Traffic congestion is the number one issue in Brisbane and I am committed to tackling it head on," Cr Newman said.

I have mixed feelings about this one. I would like to see the traffic routed off Milton Road and Coronation Drive. Especially trucks. And I would like to see Milton Rd/Coronation Drive reclaimed for PT, although there is no guarantee that this would happen once the tunnel is built.

It is likely that a self-fulfilling prophecy will occur- the motorway will facilitate traffic, not "reduce it", simply because it is an increase in road supply, allowing demand to expand to fill it. If supply is constrained, then demand cannot expand and those trips will have to be on alternative routes, or at alternative times or on PT or not made at all.

However the toll price level will determine how fast demand will fill this supply.

There really is no benefit for public transport as claimed on the project website, because of four simple facts:
1. When you increase car lane capacity, you pull riders off PT and into cars because they now have more space on the road to
drive themselves.

2. There is no need to run buses on the motorway to speed them up- an interchange trunk and feeder service would have the same effect, and might be far cheaper to do.

3. The rockets are only used in peak hour, and within this peak hour window only a few rocket services run, so the project's benefit to car users is far greater than that to PT

4. It's a bypass. The Peak hour PT destination is the CBD not bypassing it, because people need to get to work.

[ozbob]

Brisbanetimes --> Inside Northern Link - Brisbane's next big decision

[Jonno]

The claim that this road will reduce congestion is false, miss-leading and just plain stubborn.  It does not matter how much the toll is, this tunnel will never reduce congestion. 

[somebody]

The claim that this road will reduce congestion is false, miss-leading and just plain stubborn.  It does not matter how much the toll is, this tunnel will never reduce congestion. 

Reminds me of the "Bear Patrol" episode of the Simpsons.  Mayor Quimby: "Hmm, the people want the Bear Patrols, but don't want to pay for them.  Dodging this issue will require real leadership!"

[ozbob]

Brisbanetimes --> Clem7 firm may go bust

[Jonno]

Boy do I have some bets to claim when it goes belly up!!

[#Metro]

Boy do I have some bets to claim when it goes belly up!!

[#Metro]

Jonno is on the money!!!     

Rising Brisbane City Council debt turns screw on rates, wages

BRISBANE City Council plans to raise rates above the inflation rate and slash its wages bill as it faces a doubling of debt in the next five years.

But the latest Queensland Treasury Corporation review into the council's financial position has put a question mark over its ability to shoulder its future debt burden.

The QTC warned electricity and water increases might limit council's capacity "to increase revenue by further increasing rates" and said its plan to cut its wages bill would be tough to achieve. It said council had a strong credit rating but a negative outlook, with gross debt expected to double by 2015.

Its $1.5 billion Northern Link tunnel as well as soaring employee costs were identified as two of the main reasons for the negative outlook.

Some of these costs would have come from the bus division ---> http://www.brisbanetimes.com.au/queensland/bus-boom-causes-council-staff-crunch-20100914-15atl.html

It is just dreaming to think that staff can be cut down and down and down when demand for buses, bus routes and operators are going up, up up. They can try, but a growing city, let alone a rapidly growing one is going to have a hard time cutting council staff IMHO!

http://www.couriermail.com.au/money/money-matters/rising-brisbane-city-council-debt-turns-screw-on-rates-wages/story-fn3hskur-1225933024151

[#Metro]

People are starting to realise how didgey the BCC's financial situation is though. The article the other day was a big pointer saying rates were going up, yet they are trying to cuts staff costs. I cannot see how they plan to run an ever expanding bus network without hiring more drivers. Unless the current drivers aren't working much per week. They even stated that their method for cutting staff costs was to let staff numbers drop by natural attrition so if drivers leave then they won't be hiring any replacements. Perhaps its time they took down all the "We want you to drive this bus" signs off the backs of the buses?

The bus operations, AIUI is starting to cannibalize the other functions of the Brisbane City Council, correct me if wrong!
There is nothing wrong with a successful and rapidly growing bus service.
However, the core business of the council is far wider than just running buses.

(Don't even get me started on the idea of BCC buying motorways around the City  ---> http://www.brisbanetimes.com.au/business/could-council-buy-queensland-motorways-20100609-xwco.html)

There is a simple solution to this- public takeover of BT by the State Government.
Will they do it, or will they wait until crisis hits?

http://www.brisbanetimes.com.au/queensland/bus-boom-causes-council-staff-crunch-20100914-15atl.html

[mufreight]

Not if they can get out of it, the prefered option would be to have it privatused with the operators contracted to Translink and so the non-productive bureaucracy grows

[Jonno]

Not if they can get out of it, the prefered option would be to have it privatused with the operators contracted to Translink and so the non-productive bureaucracy grows

Here here!!

[#Metro]

Not if they can get out of it, the prefered option would be to have it privatused with the operators contracted to Translink and so the non-productive bureaucracy grows

If the private sector is to be involved anywhere in this, I would only go as far as operation.
IMHO, ownership should not be handed over.

IMHO the problem with full private ownership is:

* A large bus fleet is required to serve Brisbane
* There are economies of scale and operational flexibility with having many depots and buses
* This means one operator, for the whole area

If the fleet and depots are sold off to one operator (that is, full private ownership) then a private monopoly is instantly created.
Even if TransLink were to 'competitively tender' under this scenario, because the resulting market will be uncompetitive-- because all the other operators have far smaller bus fleets, and it would take time for them to get new buses and staff etc, competition will be weak. If competition is weak due to this, IMHO, bids would likely to be higher than what they would be.

While its possible to fragment the BT areas into smaller pieces or compete for individual routes- this then destroys the economies of scale as each fragmented 'piece' needs to hire its own private management bureaucracy, own workshops etc. Flexibility is also lost. This increases costs.

Therefore, if private operation is to be pursued, the vehicles, depots, land etc should be publicly owned
by the state like the CityCat model has. It should also not be 'fragmented' IMHO.

[ozbob]

From the Brisbanetimes click here!

'I am sorry for them': Lord Mayor's apology to Clem7 investors

'I am sorry for them': Lord Mayor's apology to Clem7 investors
Tony Moore
November 3, 2010 - 5:54AM

Lord Mayor Campbell Newman has apologised to small investors who poured their money into the Clem7 toll tunnel shares.

During a council debate over the traffic projections of the Clem7, which runs between Woolloongabba and Bowen Hills, Cr Newman said sorry to the mum-and-dad investors who had seen value in the project.

Shares in the private company behind the tunnel, RiverCity Motorway, plummeted after it posted a $1.67 billion annual loss in August.

RiverCity Motorway has also openly canvassed the idea of the company going bust next year.

"The model of the public private partnership of the delivery of the Clem7 has shown its value because - while I am sorry to small investors who really appear to have lost their money, and I am sorry for them - clearly the ratepayers have been protected," Cr Newman said.

"This is a piece of infrastructure that is delivering huge savings in traffic time for motorists and has delivered huge reductions in traffic congestion on surface roads."

The bill to Brisbane ratepayers for the Clem7 was $773 million, with the rest of the cost absorbed by RiverCity Motorway.

Cr Newman said an 18 per cent reduction in traffic on the Story Bridge was an example of the congestion-saving impact of the Clem7.

Labor leader Shayne Sutton questioned the effectiveness of the tunnel, first proposed by Labor Lord Mayor Jim Soorley, after traffic on the Clem7 tunnel dropped in the months after its opening.

Cr Newman said the weekday average for Clem7 traffic was now about 33,000 vehicles per day, which he conceded was below council projections of 38,000 when the tunnel was opened.

"So, we are not at council's projections yet, but we are reasonably close," he said.

RiverCity Motorway had estimated 60,000 vehicles per day, while in the earliest models of the then-North South Bypass tunnel in the TransApex feasibility studies, council's traffic estimates were 34,000 vehicles per day.

Cr Newman said critics of the tunnel misunderstood the project.

"You need to separate the commercial situation of Clem7 from the actual objection of dealing with traffic congestion," he said.

"Our objective is dealing with congestion. Our objective is to continue to roll out out world class infrastructure for a new world city. That is what we are about."

The company that prepared the traffic estimates for RiverCity Motorway, Maunsells, was paid $2.75 million for its traffic expertise.

The wide variation in the traffic forecasting for the project was first reported in the brisbanetimes.com.au last November.

Council figures supplied to brisbanetimes.com.au show traffic volume has reduced by 18 per cent on the Story Bridge, 27 per cent on Ipswich Road, 15 per cent on Gipps Street and the Pacific Motorway by 10 per cent since the tunnel was constructed.

[ozbob]

From the Brisbanetimes click here!

Clem7 tunnel toll on the rise

Clem7 tunnel toll on the rise
Marissa Calligeros
November 5, 2010 - 8:26AM

Tolls on the Clem7 tunnel will rise with the facility's operator, RiverCity Motorway, facing mounting financial trouble.

Cars will now pay $3 for each trip from November 15, with motorbikes paying $1.50, light commercial vehicles shelling out $4.95, while heavy commercial vehicles will pay $9.90.

The toll for cars was slashed to $2 in June in an attempt to attract drivers to the troubled tunnel, but RiverCity Motorway chief executive Flan Cleary said the number of trips had only increased 35 per cent with the discount.
Advertisement: Story continues below

"Unfortunately, due to the financial challenges facing our company, it is no longer possible to absorb the cost of maintaining the current toll discount,'' he said in a statement today.

"We apologise ... the Clem7 remains great value for money and it's here to stay."

The $3 charge remains well below the $4.28 car toll the company is permitted to charge.

About 32,000 trips are made on the Clem7 each workday, well below RiverCity Motorway's original projection of 60,000. Brisbane City Council forecast 38,000 trips per day.

The October average was 27,876 vehicles each day - 500 fewer cars than the previous month.

Mr Cleary told ABC Radio the company would re-evaluate the tolls in January.

"We won't be changing tolls from January 1. We will have to have a look at it next year and see where it goes from there,'' he said.

He said the tunnel itself was secure, despite the financial pressures on the company.

"Someone will always be operating the tunnel, it will always be there, and it will always be charging tolls. It's a great piece of infrastructure for Brisbane," he said.

[ozbob]

 

[#Metro]

During peak times, the 77 bus (2 zones) is only 11 cents more than the toll.
During off peak times, the bus is cheaper than the toll.

Catch the bus!!!

[colinw]

Perhaps they could operate the Clem 7 on the Airtrain model.  Open it for only part of the day, and charge a toll which makes it profitable even if only 1/10th of the projected users materialise.    Switch the ventilation & lights off at 8:30PM

Seriously 'though - it will be interesting watching what happens to the traffic volume after the rise in toll.

It also amazes me that as the financial side of Clem 7 has deteriorated, the drive toward ever more tunnels has sped up.  A lot of dough is going to get blown on these monstrosities - starting with Airport Link.  The money & engineering that has gone into road tunnels has reached the scale where we could have had ourselves quite a decent metro system.

[Jonno]

At least I had a choice not to invest in Clem 7 but the Lord Mayor is making that decision for me with the remaining tunnels.  What legal avenues might exist to stop him making bad financial investment on my behalf as a tax payer?

[somebody]

What legal avenues might exist to stop him making bad financial investment on my behalf as a tax payer?

Don't think you have any.

It also amazes me that as the financial side of Clem 7 has deteriorated, the drive toward ever more tunnels has sped up.  A lot of dough is going to get blown on these monstrosities - starting with Airport Link.  The money & engineering that has gone into road tunnels has reached the scale where we could have had ourselves quite a decent metro system.

That is impressive to me too.  However I cannot see how the Mayor can get up and say "my strategy hasn't worked so we're going to try something else" and then expect people to vote for him next time.  At least persisting with the current strategy will probably get him one more term.

[Golliwog]

But if he knows it isn't working, he should have the balls to change his strategy (mistakes are after all, only human) or have the good grace to step down in favour of someone who is willing to change the strategy as well.

[colinw]

The thing is, I think he believes it is working.  I don't see Campbell Newman as being someone who will back down readily.