Article: Canberra seeks transport funds deferral

[ozbob]

From the Melbourne Age click here!

Canberra seeks transport funds deferral

Canberra seeks transport funds deferral
Michelle Grattan and David Rood
February 2, 2011

FEDERAL Infrastructure Minister Anthony Albanese will meet Victorian Transport Minister Terry Mulder today to discuss a proposed deferral of about $500 million in rail and road funding to help pay for the Gillard flood package.

The deferral of federal money will hit the $4.3 billion Regional Rail Link project from Werribee to Southern Cross Station and the duplication of the Princes Highway from Sale to Traralgon.

But the federal government argues there are delays in the projects anyway, so the cut will not have a big impact.

It is seeking a co-operative approach and today's meeting will be about precise amounts and timing.

A spokeswoman for Mr Mulder said the meeting was being held ''to secure the best deal for Victoria following infrastructure cuts and deferrals flagged by the Prime Minister''.

The deferrals are part of the $1 billion delay in infrastructure nationally to finance the government's $5.6 billion reconstruction package.

Senior Baillieu government sources last week expressed anger that up to $500 million in infrastructure spending may be clawed back.

Federal Parliament will devote next Tuesday, its first day of sitting this year, to a condolence motion for the flood victims. There will be no other business that day.

Later next week, the government expects to introduce its legislation for the $1.8 billion flood levy. Mr Albanese, who is also leader of the House, would not put a deadline on its passage, which requires crossbench support, but the levy is due to start on July 1.

Officials from the Prime Minister's Office and Treasury briefed the Greens' House of Representatives member Adam Bandt yesterday on the reconstruction package. The Greens, who have said they are open to the levy but are unhappy about cuts in climate programs, will discuss their stand at a party meeting early next week.

Mr Bandt said the Greens had asked for information about how the burden of the levy would fall between different income groups. He was pleased it was progressive.

He said the government should defer a proposed cut in the company tax rate for larger businesses - if this was done for one year, it could save $1.7 billion.

''Given that the burden of this levy is falling on individuals, I think it's fair to ask big corporate Australia to perhaps shoulder some of the burden,'' he said.

Mr Bandt said while the Greens were open to a disaster fund, the discussion about that should not be allowed to derail the ''urgency of reconstruction in Queensland and Victoria''.

Prime Minister Julia Gillard accused Opposition Leader Tony Abbott of political hypocrisy in his opposition to the levy.

She said the levy and donations made by the community would go to different purposes. ''We will fund the high-cost infrastructure,'' she said. ''By contrast, the donations so generously given by the Australian people will go to individuals and families affected by the floods.''

Next Wednesday, Families Minister Jenny Macklin will make a parliamentary statement on the anniversary of the 2009 Victorian bushfires.

[ozbob]

PTUA   http://www.ptua.org.au/2011/02/03/rrl-blowout-blessing/

Billion dollar rail blowout a blessing in disguise

February 3rd, 2011 (Federal funding, Geelong, Media releases, Melbourne west, Regional)
The billion dollar blowout in the construction costs of the Regional Rail Link, reported in the Australian Financial Review today (3 February 2011), could provide the opportunity to revise the project and fix its worst problems, the Public Transport Users Association has said.

Secretary Tony Morton said that well-chosen experts for the proposed new Public Transport Authority could now be appointed to "do the homework" on the Link that had been neglected by the Department of Transport.

The PTUA has previously raised concerns that existing plans would make Geelong trains slower and cut connections to the City loop, the University precinct bus shuttle, and the Upfield, Craigieburn and Werribee suburban train lines. Passengers may have also overloaded the trains serving the proposed new stations.

Dr Morton said the blowout was therefore a "blessing in disguise". He said a skilled team of planners could take the opportunity to publicly review the link's configuration, including alternative route options, to see if the same goals could be achieved at a lower cost.

"The Department of Transport's own reviewer, Ed Dotson, found that alternative options had not been properly tested [1]. On a then-$4.3 billion, now $5.3 billion project, that's just not good enough."

"Public transport users need to know we're getting the best value for our dollar, especially when there are so many other pressing rail lines to build."

"The billion dollar blowout on the most expensive rail project in the nation's history again confirms its hasty planning. The Regional Rail Link was never shovel-ready, and appears to have gained Federal funding based on a sketch on the back of a napkin. It's now time to do nation-building properly," Dr Morton concluded.

[1] Dotson, Edward (2008) East West Link Needs Assessment Recommendations 1, 2, 3 & 6 – Review of the Assumptions, Data And Analysis – Final Report. August 26th 2008, p. 17.

[ozbob]

From the Melbourne Age click here!

Blowout puts rail project in doubt

Blowout puts rail project in doubt
Clay Lucas
February 4, 2011

CHAOTIC planning surrounding a proposal by the Brumby government to build the most expensive rail project in the nation's history has led to a massive blowout in its likely cost, the Baillieu government says.

The blowout could ultimately lead to the abandonment of the Regional Rail Link, a 47-kilometre rail line from central Melbourne to Werribee that was to cost $4.3 billion.

The Baillieu government now believes the price tag for the rail line stands at about $880 million more than estimated by Labor.

Transport Minister Terry Mulder yesterday attacked the former government for the secrecy surrounding the project, which he said had hidden its true cost until now. He said the increase in the estimated cost of the project could introduce a ''massive black hole'' into government finances.

''[This] is another shocking legacy of the financial mismanagement and incompetence of the former Labor government,'' said Mr Mulder, pointing to two other projects begun by the former government.

These were the West Gate and Monash Freeway widening project, which was to cost $1 billion but is now costing $1.4 billion, and myki, to cost $1 billion but now $1.35 billion.

Mr Mulder said the government was now examining the funding and the timing of the railway line's construction, before deciding how to proceed.

Transport planning expert Paul Mees from RMIT said Mr Mulder's first act must be to sack the senior bureaucrats at the Transport Department behind the project. ''If he takes his advice from the people who have created the problem in the first place he may as well be Lynne Kosky,'' Dr Mees said.

Labor's public transport spokeswoman Fiona Richardson said commuters would ''not understand nor forgive the abandonment'' of the project.

But when asked whether Labor's planning for the project had led to the cost blowout, Ms Richardson would say only that she was not minister at the time.

The Department of Transport has already signed $107 million in contracts with consultants to design the project. Despite this, fundamental aspects of the rail line appear to have been overlooked. This includes failing to include the cost of two rail overpasses in Sunshine that would add at least $180 million to construction costs. Signalling was also incorrectly costed by planners, and is likely to cost $400 million more than original estimates.

The Rudd government agreed to give Victoria $3.2 billion for the project, with the state chipping in the remaining $1.1 billion. The project was described in 2009 as ''shovel ready''.

However, federal Infrastructure Minister Anthony Albanese met Mr Mulder this week to discuss funding for the project.

Having already deferred $400 million for the rail line in November, the commonwealth will hold back another $500 million as part of budget savings to pay for rebuilding after January's floods.

The Regional Rail Link is designed to give separate tracks to Metro trains and V/Line services.

A new platform at Southern Cross Station is the first stage of the project. Although a very small part of the works, it is already under way.

The Public Transport Users Association yesterday argued that the huge cost blowout revealed by the Baillieu government was a ''blessing in disguise'', because it meant the train line could now be rethought.

The group's secretary, Tony Morton, said there were huge problems with the plan, including that the existing designs would make trains from Geelong slower, and cut connections to the City Loop, Melbourne University and the Upfield, Craigieburn and Werribee train lines.

[#Metro]

How much is that just interest increases?

[Stillwater]

A $1 billion cost blowout on a project that two years ago was costed at $4.3 billion.  This is (currently) 'Australia's biggest rail project'.  The CRR, when it is built, will become Australia's biggest rail project (at $8.5 billion, but probably now $10 billion).  The CRR business case and financial model must be scrupulous and thorough, or else the project gets delayed again when the true cost is known; or is scaled back to meet a more realistic budget.  While we are at it, what would be today's cost of CAMCOS and rail in the Trouts Road corridor, etc?.

Queensland may have to follow Victoria's lead and look at a number of transport solutions with different costings.  (It's what people do each day when comparing different brands of baked beans or different models/brands of cars before buying.)  Yes, it would be nice to have a Rolls Royce project, but would the Commodore model be just as reliable and efficient at getting people from A to B?

[#Metro]

I would use values between $100 million/km to 150 million/km multiplied by the length of track in km to get an "estimate" for these.

It really makes you wonder how TransPerth managed to get their 70km of rail, including 2 bridges upgraded and two twin tunnels under the Perth CBD for just over $1 Billion and with no assistance from the federal government either.

What is happening with these rail projects? Why do they cost so much?

[Stillwater]

Here's what happens when major infrastructure projects are not costed properly, or a sloppy business case is put together.  In 2004, the Toowoomba Second Range Crossing was costed at $680m.  At that time, and that price, governments were prepared to fund it:

http://www.brisbanetimes.com.au/news/queensland/700m-pledge-for-toowoombas-second-range-crossing/2007/10/22/1192940945606.html

It was never going to cost just $680m.  What is the true cost of this project?  Today it will cost $1.75 billion to construct and the price tag is so great, versus the estimated benefits, that a re-think is required.

http://www.couriermail.com.au/news/queensland/toowoomba-bypass-in-doubt/story-e6freoof-1225708559257

[ozbob]

From the Melbourne Age click here!

Residents face lost sleep over rail project

Residents face lost sleep over rail project
Deborah Gough and Melissa Fyfe
February 6, 2011

HUNDREDS of residents in Melbourne's western suburbs face ''chronic'' sleep disturbance from noise pollution generated by the $4.3 billion Regional Rail Link, the state's environmental watchdog has warned in unreleased reports commissioned by the former Labor government.

Accusing Labor of a ''scandalous cover-up'', the Coalition yesterday vowed to investigate fully the project's environmental and health impacts.

The Environment Protection Authority reports, which came to the government's attention after a Sunday Age freedom-of-information request, predict ''significant adverse community reaction'' to the sleep interference.

The revelations will increase pressure on the future of the nation's most expensive rail project, with the Baillieu government last week warning of an additional $880 million blowout in hidden costs and the federal government seeking to divert funds to the Queensland floods reconstruction.

The reports, which warned of ''very significant environmental and health impacts'', were seen by former planning minister Justin Madden in September last year, but he approved the project with no independent study into its impacts.

Mr Madden ordered an extra assessment and options to mitigate the noise, but residents were not told how much noisier the new rail line is likely to be.

''In Footscray, for the most exposed residents, a vast majority of the population will experience chronic noise-induced sleep disturbance, with very significant proportions 'highly disturbed','' the EPA report said. ''For the most exposed residents in other areas, almost half the community will experience chronic noise-induced sleep disturbance.''

The regional rail link will separate city trains from lines running to Geelong, Ballarat and Bendigo and provide services to new suburban growth areas.

One of the EPA reports raised concerns about the Footscray park Railway Reserve, which, the consultants predicted, would be regularly affected by dangerous levels of nitrogen dioxide from the expanded rail line. The EPA said a planned risk assessment had not been done and nitrogen dioxide was known to affect human health, particularly that of children, the elderly and people with asthma.

The Baillieu government is investigating the ''timing, funding and implementation'' of the project , funded by the state and federal governments.

''Potential health and environment issues that have been uncovered will also now be fully investigated,'' a state government spokesman said. ''These previously secret documents reveal the Brumby Labor government had full knowledge of potentially significant health and environmental impacts on residents of the western suburbs and covered up the potential dangers.''

Opposition spokeswoman Emma Tyner said Labor ordered the Regional Rail Link Authority, which is answerable to the department, to explore a range of noise mitigation options to get the best result for the community in the western suburbs. Ms Tyner said the government wanted to dump the project. ''Their plan to scrap the project is nothing more than a transparent attempt to find money to fund their uncosted election promises.''

Besides Footscray, the other suburbs affected by noise are likely to be South Kensington, Sunshine, Deer Park, Ardeer and Tottenham. The main source of the noise increase is likely to come from longer carriages and increases in trains passing, particularly regional diesel-powered trains. The EPA suggests night services will rise nearly tenfold.

''The noise levels are expected to significantly to extremely exceed the criteria set in other jurisdictions, including New South Wales,'' its report said.

It is ok for constant road noise and pollution to be present 24/7, living next to the western main line here in Brisbane, with constant heavy rail freight as well as passenger trains I know what I prefer.  Rail is is a much better option.  What another useless beat up this article is ..

[colinw]

Baillieu & co trying to spin a rail project from the previous Government as "bad for the environment"? 

Perhaps the residents of Footscray would like an 8 lane motorway instead?

[ozbob]

From the Melbourne Age click here!


Fears review of rail link scandal may be tainted

Fears review of rail link scandal may be tainted
Deborah Gough
February 13, 2011

"I think we are looking at a scandal that could be worse than Myki." - Paul Mees, transport academic.

TRANSPORT Department bureaucrats cannot be ''trusted'' to conduct an impartial review of the $5 billion Regional Rail Link (RRL) project, which some transport specialists are warning could become a more costly disaster than the Myki ticketing debacle.

Instead, public transport advocates and academics are calling for independent transport experts to assess the controversial development.

The call comes after Transport Minister Terry Mulder last week said he wanted an interdepartmental review of the project after an $880 million budget blowout was uncovered.

But transport academics Paul Mees and Bill Russell and the Public Transport Users Association have argued bureaucrats are too committed to the project to provide an unbiased and critical assessment.

Professor Russell, of Melbourne University's centre for the governance and management of urban transport (GAMUT), urged Mr Mulder to include outsiders in the review.

''There are people in the department who have grown up with this project, it's their baby, and without disrespect, this sort of review requires fresh eyes and outside people can play a big role,'' Professor Russell said.

He said a thorough review would look at existing infrastructure and timetables to see if they could be adapted to fix the jumble of trains all vying for space in Melbourne's west.

The controversial rail project seeks to build dedicated rail tracks for country trains from Geelong, Ballarat and Bendigo, separating them from suburban services. It includes a plan to divert Geelong trains to Deer Park and duplicate existing suburban tracks into Southern Cross Station.

The federal government pledged $3.2 billion to the project, with Victoria contributing the rest, but it has since said it will delay $500 million to pay for infrastructure damaged by floods and cyclones in Victoria and Queensland.

Some of its big-ticket items include a new rail bridge over the Maribyrnong River, two new stations north-west of Werribee and the compulsory acquisition of some Footscray homes and businesses to make way for tracks. It is being promoted as the solution to Melbourne's chronic train delays.

Dr Mees, an RMIT transport academic, criticised the project for failing to make public its business case or planning documents. He said the department could not be ''trusted'' to review its own project. ''I think we are looking at a scandal that could be worse than Myki and a whole lot more expensive,'' he said.

Public Transport Users Association president Daniel Bowen said an independent review would also consider other options to improve congestion and punctuality in the west.

Monash University professor of public transport Graham Currie said a review could ''tweak the edges'' of the project but there was ''no escaping'' the need for it.

Mr Mulder, in a written statement, said he would not be drawn on an independent review. ''I agree with Paul Mees's and Edward Dotson's comments regarding the poor planning assessment given that the Regional Rail Link Authority [RRLA] has advised the Coalition government that the previous government had carried out very limited design work before RRL was appointed to deliver the project,'' Mr Mulder said.

He said the limited design work used to gain capped federal funding had left Victorians exposed to any extra costs discovered later, such as the $800 million blowout.

In reference to concerns raised in The Sunday Age last week about the project's effect on increased train noise levels in Footscray, he said that once the review ended, contractors would ''put forward proposals to deal with allied issues''.

The RRLA did not respond to questions from The Sunday Age.

[#Metro]

Gigantic cost blowouts and extreme expenditure seem to be standard for megaprojects.
Perth managed to contain its costs and built the Mandurah heavy rail line at a cost cheaper than light rail (per km) on the Gold Coast!
What's Perth's secret?

[Stillwater]

I'd like to think that WA prepared an accurate budget and business case.  Sometimes in the preparation of these things, an 'aspirational component' creeps in.  Contributors here, I suggest, have succumbed to this in relation to High Speed Rail.  The 'aspirational component' is the struggle of desire for what is considered good and highly desirable versus the practicalities of cost and benefits.  It can pervade the thinking of a project team.

The team can desire something so greatly, and they want to will it into being, that they are prepared to mount the most optimistic examination of a proposal, including under-estimating its cost.  Public sector infrastructure must pass a benefit-cost test.  That is, the construction cost must be exceeded by the benefits to the project over the life of the project.  Where the tolerance is fine, the temptation is to under-estimate the cost in order to get governments to commit financially, then reveal the true cost thereafter, when it is too late to pull out.

The Clem7 could be a case in point (except the private sector wears the cost there), as would be the Alice Springs – Darwin railway.

So, the CRR needs to be examined every which-way.  The development lobby, which desires this project, obviously relishes the tussle of contributing the least to the project to get the most from concessions to develop precincts surrounding it; the public servants will want to screw as much as they can from developers to limit the public financial liability.  Wary of the state government's record at costing these things, the federal government will want to restrict its contribution to a fixed dollar amount rather than (as the state would prefer) a commitment to pay 'half' or 'three-quarters'.  The 'half' becomes bigger if the project cost is higher due to under-estimation.

The delay of Victoria's Regional Rail Link, and its blowout in cost to $5.5 billion may prove to be a blessing in disguise for Queensland and the CRR.  If at $5.5 billion, it is too expensive for the benefits it will bring, then why build it?  Victoria would argue that the proposed Commonwealth contribution to the Regional Rail link is 'Victorian money' that should be reallocated to other state projects should the Regional Rail Link not proceed.  But that is not the case – Infrastructure Australia has a nationwide perspective.

So, if some money is sloshing around as a consequence of a project not proceeding in Victoria, that project gets put back on the shelf and other selected.  So, after a delay of two years, that could be CRR – provided the state has been diligent and prepared an iron clad business case.  It would be tragic if the Victorian cost blowout was to be repeated here in Queensland.

If CRR is not as goer (putting aside the aspirational desire and looking at it coldly as costs and benefits), then a lesser amount could be available for some tweaking of the network, and I am talking good money.

The danger is that Queensland would have put all its eggs in one basket (CRR), and would not have worked up a fallback suit of projects that could achieve a higher BCR (benefit-cost ratio).

That doesn't mean abandoning CRR, because the funds for that will be available eventually, provided its BCR stacks up.  The key is a scrupulous business case.

Liken it to the introduction of a carbon tax and introduction of an Emissions Trading Scheme (ETS).  Business is not complaining about the cost, they merely want to know what that cost is and how it will work so they can factor that into their business models.

The business model for CRR must be robust, and realistic; or else Queensland will be in the same strife with CRR as the Victorians now find themselves with the Regional Rail Link.  On the estimates, our project is twice as expensive as theirs, with, potentially, the possibility of a cost blowout twice that of the one discovered for Victoria's Regional Rail link.  Nasty!

[ozbob]

From the Herald Sun click here!

Cuts likely for regional Victorian rail link

Cuts likely for regional Victorian rail link

    * AAP
    * From: AAP
    * February 22, 2011 6:57PM

The Victorian government has flagged the state's $5 billion regional rail link may be scaled back.

The project, which was a central plank of the former Labor government's $38 billion transport strategy, includes 47 kilometres of new track from Werribee to Southern Cross Station in Melbourne's central business district.

Under the plan, major regional lines including Geelong, Bendigo and Ballarat, would for the first time have their own track into Melbourne.

Public Transport Minister Terry Mulder said today under a "reprofiling" of the system, options under consideration included reducing the project's scope and cost cutting.

He said the former Labor government had under-costed the project by $880 million.

Mr Mulder said the government was working with the Regional Rail Link Authority and the Department of Transport to review the project, which Labor had promised to deliver by 2014.

He said Federal Transport Minister Anthony Albanese advised him the Commonwealth were considering pulling some of its $3.2 billion in funding.

"There is a number of options we're looking at in terms of the timeframe delivery and also ... taking some of the scope out of the project," Mr Mulder said.

"There are features of the project that's been indicated to me may be able to be altered."

"You can say to the marketplace `we've got a project that is stressed financially and we're looking for innovative solutions from the construction companies to come up with ways and means in which we can cut costs within the project'."

Mr Mulder said there was no indication the project would be dumped.