Australia Infrastructure including IA discussion

[ozbob]

A blog post on today's IA report: the exec summary praises privatisation, but the report itself isn't convincing. https://t.co/QnT5LMBffS

— Daniel Bowen (@danielbowen) May 26, 2017

[ozbob]

The Conversation --> Why touted public transport savings from competitive tendering are too high

A new report from Infrastructure Australia, Improving Public Transport: Customer Focused Franchising, and its associated technical report from Pricewaterhouse Coopers (PwC), will have state and federal treasurers salivating. The accompanying press release is clearly intended to set their fiscal juices flowing. It suggests that:

    ... subjecting the operation of Australia's government-operated bus and rail services to competitive tender processes could save Australian taxpayers up to $15.5 billion by 2040...

This A$15.5 billion is the estimated high operational cost savings scenario, in present value terms (2016 prices; 7% real discount rate). Infrastructure Australia/PwC's conservative savings estimate is still a very substantial A$11.6 billion.

The magic pudding is competitive tendering of a range of government-operated rail and bus public transport services, as well as Melbourne's privately run bus services, which are not currently awarded by competitive tendering.

Just how realistic are these savings?
Rail services

Ownership and contracting of public transport services has been a major transport policy focus for 30 years. This issue has had its own two-yearly conference, the Thredbo International Conference Series, for most of that time.

The Thredbo series (named after the location of the first conference) provides a vast array of international material that sheds light on ways to improve the efficiency and effectiveness of public transport under different operating regimes. Australian federal and state government officials rarely attend.

The PwC report presents Australian and international examples of competitive tendering of rail and bus services. It concludes that first-round rail tenders will deliver operational cost savings of 15-20% (conservative and high estimates respectively) by the end of the first tender and 25-32% by the end of the second. For bus services, the report estimates savings of 15-20% from the first tender and 30-35% by the end of the third round.

International experience on rail privatisation is sparse, with the sources that PwC cites among the more well known. We are concerned, however, that contrary evidence is given no attention. This raises questions about the objectivity of the analysis.

Andrew Smith and colleagues, in a paper to the Thredbo 6 Conference, reviewed the UK rail experience. They found costs rose after privatisation.

Total passenger train operating costs (excluding infrastructure) per train-kilometre were 14% higher in 2006 than at privatisation ten years earlier. Between privatisation and 2008-09, real average salary costs rose much faster than in the economy as a whole.

Pedro Cantos and colleagues reviewed the European experience across 16 countries. Their study concluded that tendering regional passenger services did not have a significant effect on efficiency and productivity.

Melbourne's early rail franchising experience also left a lot to be desired. One operator handed back its contracts – train, tram and bus – before completion.

As Public Transport Users Association president Tony Morton wrote in May 2017 to The Age:

    Victoria's train/tram privatisation hasn't saved taxpayers one cent. A former minister, the late Lynne Kosky, admitted as much ten years ago. We do save money relative to Sydney by not having train guards, a decision that predates privatisation.

Those labour savings were part of large reductions in Melbourne rail staff, from 18,000 to 8,400, during the 1990s. This was done in a corporatisation process that preceded privatisation.

Taking account of the sources cited above and Melbourne's experience, as well as the sources PwC cites, an assumption that rail privatisation will deliver cost savings of 25-32% by the end of Term 2 tenders is, to say the least, heroic.

We would see even the "conservative" figure of 25% as a high estimate. Melbourne's experience suggests many of the mooted savings might also be achievable by a thorough corporatisation process. Infrastructure Australia, by simply taking the competitive tendering pathway, does not do justice to the choices available.

Bus services

In a 2007 review of bus privatisation, one of us reported cost reductions from the first round of tenders as follows:

    Great Britain 50-55%

    Scandinavia most in the range 20-30% but with a range of 5-34%

    USA 30-46%

    Australia: Perth 22%; Adelaide 38%

    New Zealand: 40% ex-public operators; about 5% private operators

    Norway 10%.

The savings for Norway are lower than elsewhere because the local bus industry had been improving its efficiency over some time, mirroring NZ experience. The Norwegian study suggested the threat of competitive tendering was important in driving savings.

One of us recently analysed the tendering of private bus services in Sydney, where private operators run some existing services. The analysis found savings of under 4% on a like-for-like basis.

These various bus findings suggest the cost savings range of 30-35% selected by PwC and reported by Infrastructure Australia might be possible, if an efficient private operator replaces an inefficient public operator. We make no comment on the efficiency of the public bus operators reviewed by PwC.

But such savings will not be achievable in Melbourne, where private operators already provide service. Cost savings of less than 5% are more realistic there.

As we argue below, achieving the latter savings does not rely on competitive tendering. Importantly, all such savings, in rail and bus, are a one-off windfall gain. Our research commonly shows evidence of significant real cost increases after the initial tender round.
What about the alternatives?

Wallis, Bray and Webster, pioneers of the Adelaide privatisation experience, recognised the tendency for costs to increase in subsequent tendering rounds. They proposed that performance-based contracts negotiated with incumbent operators should replace the city's fourth round of bus tenders.

It is surprising that neither the Infrastructure Australia report nor PwC technical paper mention such contracts as an alternative to competitive tendering.

Our research suggests that negotiated performance-based contracts with efficient operators deliver cost outcomes in line with competitive tendering. And this approach provides two other benefits. Transaction costs are lower and it provides opportunities for closer partnering between purchaser and provider on service planning.

Importantly, given competition law in Australia, if it can be shown that the benefits of a particular contracting regime, such as competitive tendering or negotiated performance-based contracts, outweigh the costs, then the compliance case is strong.

It is surprising that Infrastructure Australia is either not aware of, or more likely has chosen for some reason to ignore, the opportunities afforded by negotiated performance-based contracts, particularly for bus services. This narrowing of the policy options put forward for public consideration risks loss of benefits from important transport reforms.

In short, we believe that Infrastructure Australia, and its advisers PwC, have overestimated the achievable cost savings from competitive tendering of publicly provided rail services. They have also ignored the potential for savings within existing publicly provided public transport services. Competitive tendering of such services will deliver cost savings, but it would be surprising if they were as big as suggested.

For Melbourne bus services, any operating cost savings from competitive tendering are likely to be much less than forecast, most likely under 5%. Such savings will be equally achievable under negotiated performance-based contracts.

Although we recognise that the first round of any competitive tendering will produce a windfall gain, this will be partly at the risk of service quality. Once we consider this, the one-off financial benefits are diluted.

[ozbob]

Rail Express --> Infrastructure Financing Unit will lead to more projects, PM says

Malcolm Turnbull says his new Infrastructure Financing Unit will help deliver more developments in tighter financial times, which he blames on irrational overspending by Labor Governments.

In an opinion piece that took several shots at the Opposition's infrastructure approach, the prime minister said the unit, announced in this year's Budget, would help solve Australia's infrastructure challenge, through both government grants, and private co-financing.

"It is clear our infrastructure needs have never been greater, but our fiscal circumstances have never been tighter," Turnbull wrote in the AFR on Thursday, ahead of the COAG meeting in Hobart on Friday.

"The AAA credit rating is under threat following years of Labor first piling unsustainable spending onto the budget and then blocking Coalition attempts to rein it in. Our approach to managing this challenge is simple: reduce spending that is no longer fit for purpose so we can get back into surplus and create space for new spending that boosts our productivity and competitiveness."

The Coalition is committed to working with state and local governments on the projects identified on Infrastructure Australia's Priority List, he said, but not all those projects can receive government funding.

"It's time for a smarter approach to infrastructure investment," the PM wrote.

"Of course, there are projects where grant funding is the most appropriate funding mechanism. But where there is a project that generates a return for the taxpayer and for private investors, then we want to be a partner in that as well."

Turnbull said the Commonwealth has committed to 15 out of 18 projects on the IA Priority List (split between High Priority and Priority projects), and criticised Labor for cancelling contracts for the Perth Freight Link and Melbourne's East West Link, "costing taxpayers billions and delaying vital transport for these growing cities for years".

Industry not convinced

The Infrastructure Financing Unit proposal has faced heavy criticism.

"Prime Minister Malcolm Turnbull continues to fail to match his rhetoric on infrastructure with actual investment in railways, roads and ports," shadow infrastructure minister Anthony Albanese said earlier this year.

"There is a contradiction in the Government's position on this fund. On one hand, it wants financing to be available where private financing is not. But on the other hand, it claims this unit would work on projects that would be taken off Budget as they would produce a return for government."

Industry group Infrastructure Partnerships Australia has also dismissed Turnbull's proposal, saying there is no shortage of private finance for projects that are appealing to the private sector.

"Beyond Western Sydney Airport and Inland Rail, Federal Government 'equity' and Federal Government project 'loans' can't help, because they can never be repaid," IPA boss Brendan Lyon said after the Budget announcement.

"Everyone from the Productivity Commission to Infrastructure Australia have found that public infrastructure like passenger railways, highways and most motorways need government budget grants or subsidies, because they cost more than they earn.

"If infrastructure projects were commercially feasible without government funding, they would already have been done by increasingly desperate state governments. The Federal Government has a hard job to balance its books and fix flagging productivity, but we need to be transparent about the problems and the solutions because Australia is fresh out of easy answers."

[ozbob]

https://twitter.com/RailExpressNews/status/898441316366811137

[ozbob]

Rail Express --> Rail Wars Episode III: Revenge of the Liberals?

COMMENT: The Queensland Government's disregard for Infrastructure Australia advice could soon force Australia's politicians to 'learn' an expensive lesson for the third time in as many years, Oliver Probert writes.

Infrastructure is not a sector for the impatient. Hospitals, railways, roads, airports — these are all long-term developments. They remedy long-term needs; they take years to build; they often take decades to pay off.

If there's a portfolio of government spending that should, ideally, transcend the political cycle, it's infrastructure.

But what we have in Australia is the precise opposite of that; an infrastructure agenda so directly tied to politics, it literally decides elections, time and again.

In 2014, Victorian premier Daniel Andrews was elected in what his party called a 'referendum' to cancel the East West Link toll road project, which was hurriedly awarded to a private consortium by the outgoing Liberal Government, just weeks before the election. Andrews cancelled the road, in a saga which wasted hundreds of millions in taxpayer funding.

The 2016 Australian Capital Territory election saw voters choosing between one party promising to build the Canberra Light Rail narrowly defeat another party promising to scrap it.

And then earlier this year, West Australians elected a Labor leader promising to tear up contracts for the Perth Freight Link toll road, a promise he has since followed through with.

Now in Queensland, Premier Annastacia Palaszczuk has run out of patience with the Turnbull Government, this week tearing up a funding MoU with the Commonwealth and accusing the Liberal National Party – at both the state and federal level – of opposing a good project.

Procurement will soon begin for a consortia to deliver the various aspects of the $5.4 billion project, which Palaszczuk is stubbornly saying will be built, even if it has to be entirely funded by the state.

So now may be a slightly awkward time to mention that the Queensland LNP are paying just $1.75 at the bookies to kick Labor out at the next state election, which must take place between now and May 5, 2018.

To summarise: In the most recent elections in Victoria, the ACT, and WA, we saw a major infrastructure project, already awarded to a private consortium, facing the threat of cancellation by the challenging party. In two of those three cases, contracts were indeed cancelled, an embarrassing and harmful series of events for Australian projects in the eyes of the private sector multinationals who deliver them.

Now in Queensland, we could be hurtling head-long into Episode III: Revenge of the Liberals.

What is there to save us from this damaging trend?

In this case, our caped crusader is supposed to be Infrastructure Australia, the independent body tasked with considering business cases for projects all around the country, putting them through rigorous cost-benefit analyses, among other tests.

Projects whose business cases are approved by IA's board are granted High Priority Project, or Priority Project status. Politicians around the nation are directed to prioritise (it's right there in the title) projects that are on those two lists.

More importantly, politicians are supposed to hold off on making major funding decisions on projects that are yet to qualify for either of these lists.

Two past iterations of Cross River Rail were described as "ready to proceed" by IA, in 2012 and 2013.

But a lot has happened since then, and the most recent version of the project was recently rejected by IA, with the independent body finding Queensland's passenger forecasts overblown, calling into question the benefit-cost analysis of the project.

Prime Minister Malcolm Turnbull has repeatedly said his Government will work to fund, or facilitate funding for a project once it reaches High Priority Project, or Priority Project status. To his credit, many of the 18 projects currently on the priority lists are receiving support from the Commonwealth.

Shadow transport minister Anthony Albanese, who often takes credit for fostering the independence of IA, frequently uses its lists to back up his support for projects like Melbourne Metro Tunnel, Inland Rail, the Western Sydney Airport, the Murray Basin Rail Project, and the Adelaide-Tarcoola Rail Upgrade.

It doesn't suit politicians like Albanese, however, to consider that the Perth Freight Link, a road project he campaigned strongly against, was also listed by IA as High Priority Project when it was cancelled by the new WA Government.

Or that Cross River Rail, a project he is vehemently in support of, has just received a negative review from the board.

Albanese, a friend of Rail Express, certainly isn't the only offender here.

Former Liberal PM Tony Abbott couldn't care less if IA approved a rail project – it wasn't getting funded – and WA Premier Mark McGowan was implicit in the cancellation of the IA-approved PFL in Western Australia, as a pair of examples.

The issue here is not as simple as good or bad infrastructure projects getting funding, or not getting funding. The issue is the total disregard many politicians seem to have for IA, when IA's list doesn't back up whatever they think will win them an election.

Whether it's a road project, a rail project, or another piece of major infrastructure, if you take IA's advice on one, you must take their advice on them all.

The Queensland Government doesn't have bipartisan support for Cross River Rail, and Infrastructure Australia approval could be a key factor in getting that support.

And all this doesn't have to come at the cost of elections.

In fact, with a little change in rhetoric, voters may be ready to elect politicians who are committed to following independent advice, over those who discriminate against worthy projects that don't fit their political agenda.

Stranger things have happened.

This is an updated opinion piece, taken from the original published in Rail Express' August Issue, available in digital format here.

[Stillwater]

^ Oliver Probert says it all.  Transport priorities no longer drive Infrastructure investment, the political cycle does.

[Cazza]

^ Oliver Probert says it all.  Transport priorities no longer drive Infrastructure investment, the political cycle does.

This is very, very true.

The reason is that politicians are only in for 1 (maybe 2 terms)- say 10 years at the very maximum. In that time, they only want to do things that benefit them in the short term. They could not give an utter crap about the long term. They only do things that will benefit them now because if they keep the people happy, they will be in for longer and will make more money.

For example, if the government start building a road out somewhere that has no development (but in 20 years will be a 'microcity' and have the population of a dense inner city suburb) people will be like "What the hell are you doing wasting our money on a road that is in the middle of nowhere".

The people don't know how much this area will grow and if they do, they will not see the benefits because it is not affecting them now.

And if the people start to believe "Hey, this is the guy that spends money on roads in the middle of nowhere", then it would be very hard for them to stay in Parliament for much longer.

It's a popularity thing and who comes up with the best Election Promise that will never get built.

[ozbob]

Brisbanetimes --> Politicians should get wings clipped on infrastructure

So, first, responsibility for setting politicians' salaries, and now, their expenses, has been handed over to independent bodies.

Then there was the Gonski report's proposal that responsibility for determining the size of grants to public, Catholic and independent schools be taken away from deal-making pollies and given to a properly constituted authority, following rational and transparent criteria.

The idea was rejected by Julia Gillard but, particularly now the amazing variance in the deals Labor did with different school systems has been revealed under the Coalition's version of Gonski, there's still hope we'll end up with an independent, rules-based grants authority.

Some years ago, the Business Council took up a proposal by Dr Nicholas Gruen for the example set by monetary policy to be spread to fiscal (budget) policy. An independent body would set the budget's key parameters – for spending, revenue and budget balance – leaving the government to decide the specific measures to take within those parameters.

The idea didn't gain traction, but it may have boosted the push for independent evaluation of infrastructure projects.

You can see an acknowledgement that "something needs to be done" in the establishment of Infrastructure Australia by the Rudd government, and its rejig by the Abbott government, as a supposedly "independent statutory body providing independent research and advice to all levels of government".

Trouble is, the authority has little authority. Its role is to create the illusion of independent evaluation and reformed behaviour, while the reality continues unchanged.

There's no obligation for even the federal government to have all major projects evaluated, for them to be evaluated before a government commits to them and begins work, nor for those evaluations to be made public as soon as they're completed, so voters can debate the merits of particular projects with hard evidence.

Promises to build particular projects in a state, or even an electorate, are a key device all parties use to buy votes in election campaigns.

As Marion Terrill, of the Grattan Institute, has demonstrated, few of the projects promised by the government, opposition and Greens at last year's election had been ticked by Infrastructure Australia, and many of those it had ticked weren't on anyone's list of promises.

Terrill's research has revealed the huge proportion of government spending on capital works that's unlikely to yield much economic or social return to taxpayers.

For some years the Reserve Bank, backed by the International Monetary Fund and the Organisation for Economic Co-operation and Development, has argued that fiscal policy should be doing more to help monetary policy get our economy back to trend growth by spending more on worthwhile infrastructure projects. These would add to demand in the short run, and to supply capacity in the medium run by improving private sector productivity.

This changed approach would involve shifting the focus of fiscal policy from the overall budget deficit (including capital works spending) to the more meaningful recurrent or operating deficit.

This year's budget seemingly accepted this proposal, promising to give great prominence to the NOB – net operating balance – and announcing two huge new infrastructure projects: the second Sydney airport and the Melbourne to Brisbane inland freight railway.

See the problem? Government infrastructure spending does wonders for the economy only if the money's spent on much-needed projects. As a proper evaluation would show, the inland railway is a waste of money (the product of a deal with the Nationals).

So it's little wonder that cities and infrastructure are the third big item, after healthcare and education, on the Productivity Commission's new agenda for micro-economic reform.

It's first recommendation? "It is essential that governments ensure that proposed projects are subject to benefit-cost evaluations and that these, as well as evaluations of alternative proposals for meeting objectives, are available for public scrutiny before decisions are made."

This is something the professed believers in Smaller Government, and those professing to be terribly worried about lifting our productivity, should be making much more noise about.

[Stillwater]

^^  In effect, IA stacks the political supermarket shelves with projects (and does provide a ranking for them based on benefits and state of preparedness -- the equivalent of a heath star rating).  At any time of the year, but especially at election time, the pollies go shopping and walk the aisles.  They might pick IA's Item No.4 as their Item No.1, and so on.

Sometimes they announce a project that IA has not seen or doesn't stock.  They then say something like ... 'we promise this project provided it stacks up against the IA criteria'.  The last bit of the comment is an attempt to save grace, but it does mean that politically popular projects jump the queue.  Thus, a new project gets stocked in the IA supermarket and major projects that IA might want to flog because they are 'good for us' get left on the shelf while the pollies pig out on junk food (stadiums and the like).

[ozbob]

https://twitter.com/PaulFletcherMP/status/952655150778220544

[ozbob]

Brisbanetimes --> The infrastructure boom cometh

In a big week for the Reserve Bank – board meeting, governor speech, quarterly statement on monetary policy – the attached graph provides one rock of certainty at the start of an uncertain year: Australia's infrastructure boom is getting stronger for longer.

Industry research and forecasting consultancy Macromonitor has updated its major transport infrastructure summary out to 2023, showing investment soaring over the next two years to run at more than $16 billion a year for the following three.

And that's just the big-ticket items, the ones that come with ribbons politicians like to cut. The less spectacular rats-and-mice expenditure on transport infrastructure construction more than doubles the total spend to $36-37 billion in 2020.

The infrastructure investment surge serendipitously arrives as housing construction cools, more than compensating for that slowdown and extending Australia's extraordinary run of unbroken economic growth.

When RBA governor Philip Lowe gives his first speech for the year on Thursday night ahead of the detail in Friday's SOMP, transport infrastructure should provide the base for confidence in growth over the forecast period.

Construction also is the sector with signs of genuine wages growth. It will be interesting to see what the RBA's industry liaison is telling it.

The anecdotal evidence coming from building companies is that good old construction inflation is back. Companies bidding for projects are finding a gap between expected costs and reality in the time between tendering and work starting as the price of sub-contractors is bid up.

The pursuit of broader wages growth and healthier inflation numbers remain the RBA's key domestic concerns as housing becomes less problematic. The roiling US bond market and China's debt issues are beyond Martin Place's control, however closely they require watching.

Macromonitor notes part of the stronger-for-longer evident in the graph comes from the earlier start and higher cost of Melbourne's North East Link. While the Victorian Greens and coalition are trying to make life difficult for the West Gate Tunnel, it remains in the forecasts, as does Galilee rail of some description.

The peak bulge of spending on Sydney's WestConnex and metros is still coming, even while some of the city's citizens tire of cranes and road diversions. NSW, the richest state, the one with the markedly lower unemployment rate, continues to dominate the investment, entering a virtuous cycle of growth funding the spending that spurs the growth to pay for the spending.

And by the nature of more projects being added to the pipeline, the apparent downturn at the end of the forecast period could yet disappear.

[ozbob]

Future Cities Report > http://infrastructureaustralia.gov.au/policy-publications/publications/future-cities.aspx
   
From February 2018 CEO update

Good afternoon,

There has been a lot of public discussion in the media this week about Australia's population growth and how much growth our cities can handle. Public debate about important national issues is healthy, but our view at Infrastructure Australia is that we need to be talking about how we grow, not how much we grow.

In the next 30 years, Australia will be home to 36 million people. This rate of growth is equivalent to adding a new city, roughly the size of Canberra, each year for the next 30 years. We know the vast majority of this growth, about 75%, will be centred in our largest cities – Sydney, Melbourne, Brisbane and Perth.

The speed and magnitude of the coming change means we now need a smarter and far more sophisticated approach to the way we plan our cities. And it presents everyday Australians, politicians and planners with some complex and hard choices.

Do we choose a future where we live on a quarter-acre block but commute hours to work? Should we embrace high-quality high-density living close to public transport and other amenities, or decentralise our growth centres and locate jobs closer to where people live?

These are some of the versions of the future that Infrastructure Australia has explored as part of our Future Cities report which we released today.

Future Cities: planning for our growing population

The paper models three 30-year growth scenarios – low, medium, and high-density versions of the future – for Melbourne and Sydney and assesses their performance across a range of indicators.

In each version of the future, we looked at the performance of the transport network, access to jobs, emissions from cars, access to and demand for schools and hospitals, and access to and demand for public parks and gardens.

The type of city we choose to create will have a dramatic impact on our journey to work, congestion on our roads, cost of housing and access to public transport, schools, hospitals and our public parks in the future.

The truth is we cannot have it all. It is unrealistic to expect that the family living on the quarter-acre block on the outer suburbs of Melbourne will have a metro service on their doorstep, but it is also unrealistic to think that we can have a big backyard living in the centre of the city.

This makes for some difficult decisions, with inevitable compromises. However, indecision is not an option, and neither is business as usual.

If we fail to anticipate and respond to this growth, the likely results will be declining economic productivity, increasing environmental pressures and a marked reduction in our quality of life.

Our scenario analysis shows that well-planned cities, where the location of jobs, homes and their supporting infrastructure networks are coordinated to maximise accessibility and liveability, will deliver the best outcomes for Australian communities.

You can look at the scenarios through the interactive maps for both Melbourne and Sydney on our website.

Actions for governments

Our paper outlines a comprehensive suite of recommendations for all levels of government.

While state and territory governments are doing a lot of good work in planning their cities, more needs to be done.

We also need more active leadership from the Australian Government. If we accept the proposition that our cities are a national priority – and we should – we need the Federal Government to prepare our cities for the historic opportunity in front of us.

The full list recommendations can be read in the report.

Where to from here?

It is clear from our report that we need to evolve the way we engage our communities and co-design our cities for all who live in them. We often lose sight of the fact that our cities are for our communities, not for our planners or engineers, or even our politicians.

I hope that the release of the Future Cities Paper today provokes a discussion and acknowledgment of this fact, and goes some way to helping us plan for a  future in which we can all benefit and prosper.

Philip Davies

Chief Executive, Infrastructure Australia

[ozbob]

https://twitter.com/InfraAust/status/978357630191124482

[ozbob]

http://infrastructureaustralia.gov.au/projects/infrastructure-priority-list.aspx

Current Infrastructure Priority List

March 2018 > https://ia-priority-list.herokuapp.com/pdf

https://twitter.com/InfraAust/status/978379036261941248

[ozbob]

https://twitter.com/InfraAust/status/978383401236316165

[ozbob]

https://twitter.com/InfraAust/status/978388574939697152

[ozbob]

Couriermail --> Editorial: Clear the obstacles in transport infrastructure funding

AS WE count down to the 2018-19 Federal Budget, news is leaking out about some of the major projects the Turnbull Government is regarding as priorities, especially when it comes to transport infrastructure which is clearly one of the most urgent needs in our growing nation. We heard from the Prime Minister earlier this week that his government was going to include a $1 billion commitment for an upgrade of the M1 bottlenecks between Eight Mile Plains and Daisy Hill and from Varsity Lakes through to Tugun near the border. This is an overdue and most welcome proclamation.

Yesterday, the Turnbull Government made a mega-funding proposal for one of the great missing links in the nation's road and rail networks – the Tullamarine to Melbourne CBD train service linking one of our busiest airports with the capital of our second most populous state.

It comes with an eye-watering price tag of at least $10 billion, half of which is what Malcolm Turnbull and his Treasurer Scott Morrison are putting on the table. The rest of the money is supposed to come from Daniel Andrews' Government in Victoria and follows a state and federal scoping study worth $30 million announced in budgets handed down in Melbourne and Canberra last year.

The Federal Government has already pushed along another very big transport plan – the Western Sydney airport rail link which will take passengers into the Sydney CBD from the city's second airport when it opens in about eight years. This is tipped to cost up to $20 billion with state, federal and private sector funding and involvement.

In Queensland, we've also had the news of a half- a-billion-dollar upgrade to the Bruce Highway north of Pine River, widening the rest of this section of the national route to six lanes. This will eventually ease what have been frustrating bottlenecks south from the Caloundra turn-off, and provide great economic benefits to the Sunshine Coast.

These are by no means the last words about this state's infrastructure needs, especially along a national highway that can be floodprone and needs regular upgrades. We look forward to further good news in next month's Budget as far as our future road and rail needs are concerned.

While all of this is good news for the states involved, the announcements this week have reminded us of the shortcomings and flaws of the current system. As with the M1 funding that Mr Turnbull proposed for the sections between Brisbane and the New South Wales border, the plan for the new Tullamarine railway is supposed to be a 50/50 split between the federal and state governments.

This is despite the fact another piece of "national highway" north of Brisbane – the M1 Pine River to Caloundra route – is being funded at a split that's 80 per cent from Canberra and 20 per cent from the Queensland.

Meanwhile, the pledge for the new Tullamarine railway is being made despite the fact a business case is a long way off. All we have had so far is a joint federal/state study which has done little more than draw a variety of route proposals on a piece of paper.

When Queensland had its plan for the urgently needed cross-river rail proposal, which will take the pressure off our suburban rail network, there was a complete business case which, for base political reasons, the Coalition in Canberra chose to ignore, saying it didn't stack up. But at least Queensland had one. The State Government has decided to fund the entire project, which will cost $5.4 billion.

We need some consistency in how these big infrastructure plans are devised, designed, planned and funded.

If the Federal Government can't get its act together and stick to some common rules, there might be some benefit in getting the Productivity Commission to run the ruler over all this, setting some uniform rules and evidence-based guidelines.

At the end of the day, the public doesn't care about political brawling and funding disputes. They just want the trains to run on time and to get from A to B without sitting in traffic. This is about outcomes, not posturing.

[Stillwater]

The rules are consistent, kinda.  Canberra funds major inter-regional road infrastructure on the basis of the freight transport task served.  It is interested in the semi-trailers and the B-Doubles, not necessarily the cars containing mum, dad and the kids.  This is in accordance with the Constitution, which allows the feds to invest in infrastructure that facilitates interstate trade and commerce.  Both the 50/50 and 80/20 funding splits are legitimate for different parts of the transport network.

Where the highways it funds pass through largely urban areas and serve an urban traffic distributor function, Canberra says the 50/50 split applies.  Where the traffic matrix has a higher freight component (Sydney-Newcastle), an 80/20 formula is applicable.  (Check the IA project list and see how each project is defined as an 'urban congestion project' or a 'national connectivity project'.)

Typically, Queensland designs its road network so that more traffic is funnelled onto those major roads that the federal government funds -- hence four, six, eight lanes for Bruce Highway and M1.  It is a cost-shifting exercise, as much as a traffic switch.

A while back, Canberra said it would fund rail, but again, where those projects result in a slowing of the growth in traffic volumes on the major highways.  The Bruce Highway/SCL is a case in point - and we get the situation where the RACQ (a motoring body) supports the SCL rail upgrade, because it means a better deal for travelling motorists.

The Bruce Highway serves all of Queensland north of Brisbane and is crucial to the state's economy and freight carrying capacity.  More so than the M1.

The M1 (classed a 50/50 road by the feds), gets more of us to the beach faster, or serves those satellite residential conurbations that Queensland keeps planning to Brisbane's south and south-west.

[ozbob]

Couriermail --> Hard-hatted politics fails to plan for the future of Queensland

THERE are few more dangerous places to stand than between a politician and an infrastructure announcement.

Our esteemed elected leaders swarm like flies on fresh meat whenever there's a road upgrade or a new public transport project to spruik.

Sometimes they arrive together by bus because there are so many of them, or they spill out of a train for that perfect piece of vision for the nightly television news. Then there are the speeches. Everyone wants a sound bite. They ramble on so long that some projects could be half built by the time it's all over.

Yet voters have grown cynical about infrastructure announcements.

Politicians just can't get much bang for our buck any more. And there's good reason for that. Too often we've seen projects plucked from the never-never because there's an immediate political imperative.

Voters see through that.

Then there are the funding disputes between different levels of government and the same projects being announced at successive elections while nothing actually happens in between. Both seriously peeve the average punter.

Prime Minister Malcolm Turnbull and his cohorts have done all that and more in recent weeks. They've brought out the cheque book and the cherry picker.

Federal governments of both persuasions have been guilty of this approach to infrastructure.

In 2010, for example, the Gillard government plucked Redcliffe rail from a very dusty drawing board.

Despite a century of talk, the project never stacked up financially compared to other infrastructure priorities and wasn't on the state's 30-year horizon for funding.

The route happened to run through several marginal federal Labor electorates, however, and the rest is history.

This kind of cavalier approach will have an adverse impact as our cities grow.

The problem is that the level of government with the dollars to make big infrastructure happen plays no role in planning.

Instead, it picks projects that aren't priorities and pays for proposals that don't have business cases, while forever fiddling with its funding model.

Turnbull's recent spending spree on infrastructure demonstrates why the Federal Government needs to have a proper role in planning and a concrete model for funding.

He's stumped up $1 billion to upgrade two sections of the M1 between Brisbane and the Gold Coast. There's no quibble about these projects, given both have been listed as high-priority initiatives by Infrastructure Australia, the body that gives independent advice to the Federal Government.

Yet, Turnbull wants a 50/50 funding deal with the state because the Pacific Motorway is an "urban" road, while an 80/20 deal was struck for the Gateway Motorway upgrade just a few years ago. The difference in the Pacific Motorway funding model is a $600 million impost for the state.

Meanwhile, Turnbull yesterday promised $5 billion towards a Melbourne Airport train project before it has a business case, but he won't stump up a dollar for Brisbane's Cross River Rail which does.

Before that there was $150 million for an upgrade to the M1 north of Brisbane, to add off and on ramps at the Dohles Rocks Rd interchange at Murrumba Downs.

No comprehensive study has been done into this proposal, but it just happens to run through Home Affairs Minister Peter Dutton's marginal electorate, who just happens to have promised the same project before.

Meanwhile, the Beerburrum to Nambour stretch of the rail route between Brisbane and the Sunshine Coast has been studied and costed at $722 million. It's been listed by Infrastructure Australia as one the nation's top priorities.

"The project will deliver significant economic benefits in the form of travel time savings, with associated social and environmental benefits including reduced air and noise pollution, and lower vehicle crash rates," Infrastructure Australia's latest priority list states.

Yet the Turnbull Government has decided to investigate a fast-train proposal being championed by Coalition MPs, rather than proceed with the shovel-ready rail project.

[SurfRail]

The M1 (classed a 50/50 road by the feds), gets more of us to the beach faster, or serves those satellite residential conurbations that Queensland keeps planning to Brisbane's south and south-west. connects Queenslands 2 largest cities.

FTFY

[ozbob]

https://twitter.com/InfraAust/status/986838788805574656

[ozbob]

https://twitter.com/Robert_Dow/status/987121148168101889

[ozbob]

News.com.au --> Australia's billion dollar infrastructure boondoggles

AUSTRALIA is being buttered up for a multi-billion dollar infrastructure bonanza in next week's budget. Road and rail projects are expected to be showered with taxpayer funds courtesy of Canberra.

But economists have warned that grand infrastructure projects can become billion-dollar wastes of money.

One highway upgrade in Victoria has returned just 8c for every dollar of public money invested in it. A proposed rail link could cost a motza and still be slower than the bus.

Earlier this month, Prime Minister Malcolm Turnbull announced the Federal Government would chip in half of the $10 billion cost of a rail link to Melbourne's Tullamarine Airport.

"The time for talk is over ... Melbourne is still waiting for a service almost all of the world's great cities take for granted," he said on April 12.

But for Grattan Institute transport expert Hugh Batrouney, it is still not certain that a Melbourne airport rail link is really worth it.

"My first reaction (when the announcement was made) was to look at whether the project was included on any of the infrastructure bodies' priority lists and then to have a look to see if a detailed business case had been prepared," Mr Batrouney told news.com.au.

"The answer to both of those questions was 'no'."

On the most recent priority list drawn up by Infrastructure Australia, a government body that assesses big projects, the rail link barely rates a mention. Infrastructure Victoria said the link wasn't needed for 30 years.

Amazingly, the billions spent could actually make travel to the airport worse.

Infrastructure Victoria has said an alternative plan, of spending up to $100 million on traffic priority measures, could speed up trips on the existing SkyBus to just 20 to 25 minutes. In contrast, the expensive new train would take 30 minutes to go between Southern Cross and Tullamarine.

But the urge to build is hard to resist.

"The issue, particularly in Melbourne where there is such strong population growth, is there's a perception the city is under developed in infrastructure. There's a feeling we need to make up for that perceived infrastructure deficit," he said.

It's not that Melbourne doesn't need an airport rail link; it just doesn't need a train right now. And money spent on this train, can't be spent on a train somewhere else.

Backers of big projects, with close-to-the-bone budgets, say the benefits aren't just economic. They can enhance safety and revitalise neighbourhoods.

But what other questionable infrastructure projects are being — or have been — built?

A1 PRINCES HIGHWAY, GEELONG-COLAC

Economists have long questioned the financial sense of expensive infrastructure that is not within Australian cities, or provides a link between them.

The A1 Princes Highway duplication in Victoria, which is still being built, does neither. Rather, it connects a regional city, Geelong, to a regional town, Colac.

The upgrade costing $500 million, is not included on Infrastructure Australia's priority list, and has a return of just 8c on every dollar invested, according to the Grattan Institute. By some measure, over the period of a decade, taxpayers have subsidised every vehicle on the road to the tune of 13.7c per kilometre travelled.

Only the Forrest Highway, between Perth and Bunbury — which went five times over budget — has a higher cost per vehicle kilometre.

"A project can have merits beyond the economic case, there is no doubt about that," Mr Batrouney said. In the A1's case, that included easier access for tourists to the Great Ocean Road, the elimination of accident black spots and the opening up of southwestern Victoria.

But it's been a high price to pay for those benefits.

M7 'CLEM 7' TUNNEL, BRISBANE

The M7 Tunnel is one of a number of expensive road tunnels, including Sydney's Lane Cove Tunnel, that never fulfilled its promise.

The $3 billion tunnel under Brisbane's CBD saw three times less traffic than was expected and ended up sending its private owner bankrupt.

CANBERRA LIGHT RAIL

The 12km tram project to link the CBD to Gungahlin is well under way with a price tag of about $700m. The Grattan Institute has previously found it will provide no more benefits than an alternative bus rapid transit project but will cost twice as much.

But the ACT Government has said a bus can't compete with the urban development and property price hikes that a tram line brings.

In Newcastle, where a light rail line is also on the way, the justification is even more dubious. The less-than-3km tram line will cost about $300m and will replace a curtailed commuter train line.

A leaked NSW Government report found its return is expected to be less than one dollar to the dollar. But if the train line had remained in place and development had occurred alongside it, the return would have been $2.40 per dollar invested, Fairfax reported.
The proposed Western Sydney Airport metro station: A case of too much, too soon?

WESTERN SYDNEY AIRPORT RAIL LINK

According to Mr Batrouney, the proposed western Sydney airport rail link falls squarely into the Melbourne rail link category of building too much way too soon.

The new airport at Badgerys Creek is right at the top of Infrastructure Australia's to-do list. But a rail link, speeding people from the surrounding areas to the terminal costing as much as $7b, is not. Yet both the federal and NSW governments have signed up for it.

"The airport is due to open in 2026 but the Western Sydney Rail Needs Study found rail wasn't needed for at least the first 10 years of operation so that puts it out to at least 2036," he said.
Backers of the Inland Rail project say it will take many trucks off the road.

INLAND RAIL

It's the $9b railway the vast majority of us will never see. Snaking its way 1700km from Melbourne to Brisbane, its backers say it will take masses of freight from congested highways, create 16,00 jobs and pump $16 billion into the economy. But the Grattan Institute said it would "never add up", that traffic projections were hazy and a cost overrun — likely on a mammoth project — could wipe out any benefits.
An artist's impression of the Melbourne East West Link, which was cancelled by Labor at a cost of $1 billion.

EAST WEST LINK MOTORWAY, MELBOURNE

The crowning glory of uneconomical infrastructure, however, is Melbourne's inner-city East West link, which cost $1.2 billion NOT to build.

The road was controversially signed off by the then Victorian Coalition government weeks before the 2014 state election, after criticism the project did not have a rigorous cost-benefit analysis in place.

Labor, which had campaigned against the project, won the election and cancelled it. But, said Labor, to build would have cost at least $6b.

In a piece for The Conversation, Mr Batrouney said governments shouldn't splash out on big projects until they had looked in detail at the economic impacts and opened the results up to public scrutiny.

"We shouldn't be fooled into thinking any spending is good spending. There are many examples where the opposite is more likely true: where poorly targeted infrastructure wastes resources and weakens economic growth," he said.

[ozbob]

Financial Review --> Australia to get $66b GDP boost if states rewarded for infrastructure reform: IA

Australia's GDP could be boosted by $66 billion over the next three decades if the federal government rewarded states financially for introducing road-user charging, franchising more bus and train services, and privatising water and electricity networks, Infrastructure Australia says.

New Infrastructure Australia chairman Julieanne Alroe will today call for "a new phase of micro-economic and market reform" at The Australian Financial Review's National Infrastructure Summit in Sydney, proposing that states and territories get extra money for infrastructure investment – in addition to existing federal funding for specific projects – if they delivered "agreed reforms".

It comes as Deputy Prime Minister and Infrastructure Minister Michael McCormack warned state governments the Commonwealth was "no longer an ATM", saying there needed to be a better use of taxpayer money in the funding of Australia projects, through stronger business cases, shared funding with the states, and more private sector investment.

"In the past, the Commonwealth has been regarded as an automatic source of funding for state government priorities as they arose. But this has – frankly – risked a situation where a coordinated schedule of projects relies too much on good luck instead of good management," Mr McCormack will tell the summit.

"We are no longer an ATM for the states."

Infrastructure Australia has taken five recommendations from 2016 Australian Infrastructure Plan, and forecast the impact on both GDP and tax revenues if the proposed changes went ahead.

Introducing road-user charging – whereby vehicle drivers would pay fees linked to how far they travelled and where and when they travelled – is estimated to add $36.5 billion to GDP by 2047.

Privatisation of water utilities is forecast to add $1.8 billion to GDP, while further privatisation of electricity utilities (which have already been sold by governments in Victoria and South Australia) would add $2.1 billion.

Getting rid of stamp duties on property transactions and bringing in a broad-based land tax is estimated to add as much as $24.3 billion to GDP, while outsourcing public transport services to private operators – with the aim of reinvesting some of the proceeds back into the public transport system – would add $372 million.

Tax revenues from all the proposed changes are forecast to increase by $19 billion.

In a new paper outlining its proposals, IA points out that similar incentives have previously been given to states under the National Competition Policy reform program in the late 1990s and mid 2000s, and under the federal Coalition's $5 billion asset recycling scheme between 2014 and 2016.

Under the recycling scheme, states including NSW and Victoria that "recycled" assets by privatising them received money from the federal government equal to 15 per cent of the value of the assets, which was then reinvested into infrastructure.

But some states, such as Queensland, baulked at selling off water and energy utilities, saying they were being penalised by listening to voters who did not support privatisation.

IA has not outlined how much additional money states could potentially receive from the federal government if they adopted the proposals. It says that any incentive-based program would need to figure out how much money was available for incentive payments; what the conditions would be; how big the payments would be; and outline a payment schedule.

Marion Terrill, transport program director at the Grattan Institute, said the incentive proposals were a good idea if they replaced the lists of infrastructure projects the federal government funded in its annual budget, and allowed states to decide what projects received money.

"There's no reason why the Commonwealth couldn't hand over an amount of money for infrastructure funding without specifying the projects and for the state to make a decision in the best interests of the state, and then for the Commonwealth to separately run this reform agenda where if you want extra money, you can opt into this scheme," Ms Terrill said.

But she cautioned the incentive program could be perceived as "partisan" if the Commonwealth continued to control which infrastructure projects received money.

"There is a risk of partisanship with these projects in the same way we have seen play out in the existing arrangement, where the Coalition government strongly supported [Melbourne's] East West Link and the Perth Freight Link and the state governments cancelled those two projects."

Infrastructure Partnerships Australia chief executive Adrian Dwyer welcomed IA's proposals, but said Australia should also commit to an "open market" model for infrastructure delivery.

"Over the next 30 years Australia's growing and ageing population will mean more people accessing services with less money to pay for it," Mr Dwyer said.

"As a result, we'll need a new approach to drive down the cost of services while pushing up the quality. This will necessarily involve greater private sector involvement in the provision of transport and social infrastructure services."

Mr McCormack will also use his speech to defend the Turnbull government's use of equity injections for big-ticket projects, such as the $10 billion Melbourne to Brisbane inland rail and $5.3 billion for Sydney's second airport, as the "best deal for Australians".

"Looking for innovative approaches to finance allows us to partner more effectively with state governments and industry. It allows us to be more involved in a project's conception and delivery giving greater visibility over the quality of projects," he will tell the summit.

"And importantly it allows us to use taxpayer money more wisely and over a greater number of projects. Regardless of whether is is equity or a grant, it is real money going into the construction of critical infrastructure."

But opposition infrastructure spokesman Anthony Albanese said the use of off-budget accounting – which helps improve the budget bottom line but which could come back on budget if the projects don't deliver a commercial return – was a "sham".

"It is the funding commitment you make when you don't actually want to commit funding," he will tell the summit today.

Mr Albanese said real infrastructure spending would decrease by $2 billion over the next four years, with the lion's share of federal government money for big projects not being committed for years.

"Federal infrastructure investment is on a sharp downward trajectory. Australia needs infrastructure investment now, not a decade from now," he said.

He said a future Labor government would build on Infrastructure Australia to implement reforms to help more smart technology into projects and locking in skills development as part of the procurement process.

[ozbob]

Infrastructure Australia --> Infrastructure reforms could deliver $66bn boost to Australian economy

04 June 2018

New economic modelling released by Infrastructure Australia shows that introducing incentive payments to encourage the states and territories to progress nation-shaping infrastructure reforms could boost the economy by $66 billion and deliver better infrastructure for our growing cities and regions.

Infrastructure Australia has published a new report in the infrastructure Reform Series, Making Reform Happen, which argues that the Australian Government should make additional investments in state and territory infrastructure—over and above existing commitments—in return for the delivery of much-needed reforms.

"If we don't seize the historic opportunity in front of us, we could miss out on the significant impact national infrastructure reform could have on our future productivity and prosperity," said Infrastructure Australia Chair Julieanne Alroe.

"Australia is undergoing a period of profound change—our population will grow to over 30 million people by 2031, our economy is in a state of transition, and technology is changing the way we live and work.

"We need infrastructure and services that enhance the liveability of our cities and regions, strengthen our role as a global exporter, and support the transition to a more diversified economy," Ms Alroe said.

Making Reform Happen builds on the recommendations in the 15-year Australian Infrastructure Plan to provide further evidence of the substantial long-term benefits of progressing five key opportunities for infrastructure reform:

    Introducing road user charging.
    Reforming the urban water sector.
    Reforming the electricity market.
    Reforming land tax.
    Franchising public transport services.

"The reforms we've identified in this report across water, energy, transport and land use planning could deliver a $66 billion increase in GDP by 2047 and a $19 billion ongoing increase in national tax revenue. This is money that could be used to deliver better infrastructure services for our growing communities.

"In addition to improving infrastructure services across the country, these reforms would boost Commonwealth revenue and potentially remedy Australia's stalled productivity growth.

"This is not an exhaustive list of the reforms we need to address today's infrastructure gaps and meet the challenges of tomorrow. Rather, this paper is intended to show what can be achieved through a well-designed incentive program.

"An incentive-based approach recognises that although there are significant national benefits to be gained from infrastructure reform, it is state and territory governments that wear the implementation costs—as well as any short term political pain.

"Incentive payments can help redress this imbalance between costs and impacts, and effectively drive outcomes that may not have come about otherwise.

"This approach is a win-win for Australian governments. Using incentives to drive reform can deliver a short-term boost to the economy through increased infrastructure investment, as well as delivering productivity and revenue gains in the longer term.

"We've successfully used incentive payments to spark reform before in Australia, with impressive results. We now have an opportunity to learn from these experiences and design an incentive-based reform program to boost our national productivity and ultimately build a fairer and more prosperous Australia," Ms Alroe said.

Making Reform Happen is available for download at infrastructureaustralia.gov.au.

[Stillwater]

Queensland will do none of these reforms and just continue to shout SHOW US THE MONEY at the feds.  It has not worked for some time.

This quote: "Deputy Prime Minister and Infrastructure Minister Michael McCormack warned state governments the Commonwealth was "no longer an ATM", saying there needed to be a better use of taxpayer money in the funding of Australia projects, through stronger business cases, shared funding with the states, and more private sector investment."

Queensland just wonders why its ATM card keeps getting rejected by the Federal Government Bank.   Better business cases for Qld projects would be a start.

[verbatim9]

Queensland will do none of these reforms and just continue to shout SHOW US THE MONEY at the feds.  It has not worked for some time.

This quote: "Deputy Prime Minister and Infrastructure Minister Michael McCormack warned state governments the Commonwealth was "no longer an ATM", saying there needed to be a better use of taxpayer money in the funding of Australia projects, through stronger business cases, shared funding with the states, and more private sector investment."

Queensland just wonders why its ATM card keeps getting rejected by the Federal Government Bank.   Better business cases for Qld projects would be a start.

Qld is entitled to incentive payments from the Federal Government when they go ahead with all the Harper Review recommendations. As far as I know only a couple of those recommendations have been worked through. Let's hope they go ahead with the rest, so we can get the cash that we are entitled to, for much needed infrastructure. Other states have proactively worked through these reforms why can't Qld?

[ozbob]

https://twitter.com/InfraAust/status/1011025399709437952

[ozbob]

IA --> Infrastructure Australia calls for a renewed commitment to infrastructure reform

25 June 2018

Infrastructure Australia, the nation's independent infrastructure advisor, has called on Australia's governments to renew their commitment to infrastructure reform in a new report on what has been achieved since the release of the Australian Infrastructure Plan in February 2016.

Prioritising Reform, a progress report on the key recommendations made in the Australian Infrastructure Plan, finds that while there has been clear improvement across the Australian infrastructure sector in the past two years, there is still much to do.

The Australian Infrastructure Plan made 78 comprehensive recommendations to address today's infrastructure gaps and meet the future needs of Australia's growing population. It provides a reform and investment roadmap for Australia's governments to ensure our infrastructure drives productivity, improves our standard of living and delivers world-class services in our cities and regions.

"The reform agenda we put forward in the Australian Infrastructure Plan is ambitious and politically challenging, but these proposed changes to the way we plan, deliver and use our infrastructure will deliver enduring benefits for all Australians," said Infrastructure Australia Chief Executive Philip Davies.

"Over the past two years, it has been pleasing to see progress in heavy vehicle road charging, business case development, integration of land-use and transport planning and corridor protection. However, our progress report, Prioritising Reform, finds there are also clear instances where more action is needed."

The Plan recommended that the Australian Government initiate an inquiry into the potential benefits and impacts of road market reform, with a view to transitioning to a fairer and more efficient user-pays approach. The Australian Government signalled its support for this proposal in November 2016 when it delivered its official response to the Plan, however no inquiry has been forthcoming.

"Road market reform has the potential to deliver significant improvements in network performance and address fairness issues, while also establishing a secure and sustainable source of funding for our roads. Given the significance of this change and the scale of community consultation and consensus-building involved, it's vital that governments move forward on this important opportunity for reform," said Mr Davies

Mr Davies recently announced that he would leave Infrastructure Australia at the end of July after his three-year term as Chief Executive.

"I joined Infrastructure Australia shortly before the release of the 2015 Australian Infrastructure Audit, which then informed the development of the Australian Infrastructure Plan, the Infrastructure Priority List and the Reform Series which has to date covered topics as diverse as value capture, public transport franchising, corridor protection, urban water, future cities planning and the case for infrastructure reform incentives.

"Over this period, it has been heartening to see stronger collaboration between jurisdictions, a vast improvement in the quality of business cases developed for major infrastructure projects, and the creation of dedicated infrastructure agencies to help strengthen Australia's pipeline of future investments.

"Australia has never lacked vision, but we must keep up the momentum on reform if we are to meet our upcoming infrastructure challenges.

"Our hope in releasing this progress report, Prioritising Reform, is to encourage Australia's governments to embrace this national reform agenda to secure the social and economic benefits of great infrastructure for many generations to come," said Mr Davies.

Infrastructure Australia will deliver the next Australian Infrastructure Audit in 2019 and the next Australian Infrastructure Plan in 2021.

[Stillwater]

Currently, governments raise funding for transport infrastructure via general revenue and via registration fees and fuel excise (although the latter is not hypothecated). Car rego may or may not be with us in the long term, but the states would be reluctant to give up the revenue stream.  As to fuel excise, the theory has been that the more you drive a vehicle, the more fuel you use and the more fuel excise you pay via the bowser.  Drive to the shops and back once a week and you pay less to the government than the sales rep driving a circuit through country towns.

Pretty soon we are going to have electric vehicles in greater numbers travelling the roads.  But, hang on, vehicles using the roads without buying fuel and not paying excise.    Problem for governments.

We should keep in mind also that a big truck causes more damage to the roads than a passenger vehicle -- a ratio of about 28 cars to one big truck (depends if a semi-trailer or a B-Double, with better distribution of the load across axles).

Pay by the distance travelled is inevitable - just depends on the intestinal fortitude of pollies.  Pay by time of day travelled in inner cities also likely to be the norm down the track.  Pay less if you travel at 9am rather than 7.30am.  People would then be able to weigh up the benefits -- pay extra to take the car at 7.30am, or catch the bus or train for a much cheaper cost.

[ozbob]

The Australian --> Infrastructure blueprint to fix our choked cities

The nation's infrastructure tsar has warned that population growth would cripple Australia's capital cities and consign them to a future of congestion unless ­federal and state governments radically improve the way they plan and deliver major road and rail projects.

Infrastructure Australia chief executive Philip Davies has also ­issued a clarion call to both major political parties to resist ill-­planned infrastructure commitments before this weekend's by-elections or risk burdening taxpayers with costly, pointless projects.

In an exclusive interview with The Australian, Mr Davies, who will retire from his position at the end of this month, slated successive governments for "gold-plating" infrastructure projects with­out sound business cases and being unaccountable to taxpayers on costs.

As the Turnbull government prepares a population policy, with Australia poised to reach 25 million people next month, Mr ­Davies said if planning for major projects did not change at all levels of government, the major capitals would not cope with the population growth.

"An additional 11.8 million people will call Australia home in the next 30 years, with the bulk of this growth occurring in our largest cities — Sydney, Melbourne, Brisbane and Perth," Mr Davies said.

"The reality is, if we don't ­improve the way we plan and ­deliver our infrastructure, we won't cope with this growth and our cities will be characterised by congestion and constraint.

"We need to have the right long-term planning and supporting infrastructure in place, and that begins with ensuring that ­decisions on public infrastructure projects are robust, transparent and accountable."

Issuing an extraordinary caution to the major parties, he urged governments to stop putting populist politics ahead of public benefit and strategic planning.

"There are few more dangerous places to stand than between a politician and an infrastructure announcement," Mr Davies writes in The Australian today.

"With Super Saturday by-elections approaching this weekend and federal and state elections on the horizon, governments and ­oppositions must resist the urge to commit funding to projects before the appropriate planning and ­assessment has been done.

"Across the nation, governments at all levels need to be more disciplined in doing their homework on proper infrastructure planning."

Mr Davies writes that too often projects are committed to before a business case has been prepared, a full set of options have been considered and rigorous analysis of a potential project's benefits and costs has been undertaken.

"Of course, governments and oppositions can still rightly propose infrastructure priorities to their constituents," he writes.

"But where this happens, project funding must be conditional on identifying the best solution through a proper business case. Without this analysis, there is a real risk of committing to the wrong projects or gold-plated projects, and we deny vital funding to other, worthier investments."

IA will today release a set of guidelines for future infrastructure projects designed to lift government works to the same level of accountability, planning and cost rigour as the private sector.

The principles include release of a business case for public scrutiny, post-completion reviews, consideration of different funding options and rigorous analysis of the "likely economic, social and environmental impacts of a potential project prior to a funding announcement".

In Australia there were no post-completion reviews of projects under­taken to assess the project's benefit and delivery.

Mr Davies said there had been a recent and "material" improvement in the quality of business cases. He cited the western Sydney airport project, which has an ­independent corporate management structure, as an example of best-practice infrastructure. He also praised the federal government's $250 million budget allocation for the development of high-quality business-case assessments for infrastructure projects.

When asked if he could cite a project that had stacked up to the 11 principles outlined in the document to be published today, Mr Davies said to date there had been none that had adhered to the best-practice model.

He said that the principles should be incorporated into the national partnership agreements between the commonwealth and the states, which would make funding for projects contingent on the state and territory governments signing up to them.

[ozbob]

Melbourne Age --> Why so much money is wasted on the wrong infrastructure

It's the great conundrum of government policy: we have a big shortage of infrastructure, but also waste billions on it.

This seeming contradiction is easily explained: particularly in recent years, and at both state and federal levels, much money is being spent on infrastructure projects.

Trouble is, a lot of the dough's being spent on flashy or low-priority projects, at the expense of more important but less sexy projects, particularly in the overcrowded outer suburbs.

I suspect we spend more than we should building expressways and too little on public transport – and within the latter, some argue, too much on rail and not enough on busses.

Why? Well, I'm sure it wouldn't be because the big heavy engineering companies are better at lobbying politicians than public transport providers.

There aren't many aspects of government spending – many contributors to debt and deficit – more in need of reform than spending on public infrastructure, or with more scope for making a bigger contribution to national productivity and a smaller contribution to budget pressures.

But you'd never know that from the way our politicians, the business lobby and Treasury obsess about tax reform for decade after decade. We've had lots of tax reform over the years, but it's never been enough to satisfy their appetite.

Drivers will have to pay to use a new road in Sydney's south that will link commuters to the Westconnex toll road when heading north.

So why is infrastructure spending so rife with wastefulness? Mainly because it's one of the few areas of policy left where the pollies themselves have much scope for playing Santa Claus in particular states and even particular electorates, at times of their own choosing. Byelections, for instance.

It's often too tempting for pollies to pick projects according to the votes their announcement is intended to bring, rather than the extent to which the public benefits they bring exceed their costs.

Last week the boss of Infrastructure Australia, Philip Davies, who leaves the job next month, made his last contribution by unveiling a list of 11 principles governments should follow in making decisions about infrastructure, so as to lift the quality of those decisions.

"Businesses and households across the country rightly want to know that governments are investing limited public funds in infrastructure that will bring strong productivity benefits to the economy, support our quality of life, and help to deliver a collective vision of a strong, fair and prosperous Australia for many years to come," the document states.

It nominates some respects in which governments' decisions on infrastructure still leave "room for improvement" – to coin a bureaucratic euphemism.

One is that there should be more transparency – that is, information about the stages of the decision process and the public release of analysis – in making decisions about projects.

This includes reviews on the completion of projects, showing the lessons learnt and application to future investments. Everyone agrees they're a good idea, but such reviews are rarely done and rarely made public.

Taxpayers pay a high price for the political and public service predilection for never admitting anything they've done was less than perfect, for fear of what the opposition and the media would say. Much better to always be up-front about failings, so critics stop getting overexcited but lessons are learnt.

    Taxpayers pay a high price for the political and public service predilection for never admitting anything they've done was less than perfect

Further room for improvement arises because "projects are often developed without fully considering all available options to solve an identified problem, including potential solutions that make better use of existing infrastructure through technology and data".

Too true. This happens because pollies love announcing that they're spending big bucks to build something new and wonderful – then come back five years later to cut the ribbon.

They don't get as much media attention when they merely upgrade existing infrastructure – and none when they spend money every year ensuring existing assets are well maintained.

And they'd get adverse media attention if they did what the bureaucrats were hinting at with their reference to making better use of existing infrastructure "through technology and data" – charging motorists directly for their measured use of roads and the time of day they made that use.

Yet more "room for improvement" arises because "too often, we see projects being committed to before a business case has been prepared, a full set of options have been considered, and rigorous analysis of a potential project's benefits and costs has been undertaken".

Why such travesties of good management? Because spending on what we used to call "capital works" is so closely associated with politicians using the first announcement of projects to win votes at elections. All this expediency and lack of courage is another reason we should be slow to believe politicians promising to fix budget deficits (or pay for tax cuts) by cutting government spending.

[ozbob]

The Australian --> Pain of building for growth is the price of major cities' success

It wasn't that long ago that the Howard Smith Wharves was the problem child of CBD development in Brisbane. Blind Freddy could see the potential of the riverfront spot, framed by the Story Bridge and tangerine cliffs, but plan after plan bit the dust while they argued over what could be built there.

One of the country's top events promoters told the man who finally got the nod, Howard Smith Wharves chief executive Luke Fraser, that he had run the ruler over the project 15 years ago and passed. Brisbane wasn't ready for it. When Fraser showed journalists and marketers through the teeming construction site this week, previewing a $200 million hotel and restaurant precinct that opens in November, the story was very different.

"I really sense there is a change in the outlook of the city," he said. "You can see it here ... the growth we've been talking about for years. It's happening and this is the realisation of it."

Not only in Brisbane, either. Sydney and Melbourne are entering a game-changing phase as the nation moves inexorably towards a Big Australia and megacity status for the three east coast capitals. In the space of a generation, the combined population of the three cities is projected to hit 20 million: eight million each for Sydney and Melbourne and at least four million for Brisbane by mid-century, nearly double their sizes today.

Clogged traffic, packed public transport and eye-watering property prices are causing the growth pain that underpins the debate over immigration levels and jitters about Australia's upsizing. But that's only half of the equation, the demand side, and unless there is a shift in government policy to slam the door on migrants and foreign students it will remain a given.

The supply side is where the difference can be made through masterplanning and infrastructure provision. And the numbers there are starting to stack up. The big picture is hard to discern through the welter of project announcements and the local rows that often accompany them. But the trend is unmistakeable: record spending and a pipeline of projects to re-engineer the nation's major population centres.



In Sydney alone, an unprecedented $120 billion has been earmarked for new railways, roads and capital works across the next 10 years as well as the long-awaited second airport at Badgerys Creek on the city's western fringe. Gladys Berejiklian's Coalition government says it's only the down payment on a 40-year vision to radically reshape the NSW capital to tackle housing affordability and gridlock. This would mean Greater Sydney would be decentralised into a conurbation of three interconnected centres. The so-called Eastern Harbour City, centred on the CBD, would continue to be a hub for financial and professional services while Central River City, pivoting on Parramatta in the west, would concentrate health, education and research institutions. The third centre, Western Parkland, would be focused on servicing the emerging "aerotropolis" around the western Sydney airport, due to open in 2026.

Melbourne is matching that outlay, a function of its re-emergence as the nation's growth centre. A pre-state election pledge this week by Daniel Andrews's Labor government to build a $50bn subway, spanning 90km, across three decades demonstrates how the construction imperatives have changed. Most of the $120bn-plus worth of projects in the Victorian pipeline are state funded with some help from the federal government and the private sector. Not even the transformational years under change agent Jeff Kennett in the 1990s can rival this.

In Brisbane, the tally is $26.5bn in spending to 2025. The privately funded Howard Smith Wharves development, though impressive, is dwarfed by the big-ticket projects under way. Further along Brisbane River, $3.6bn will be spent on the Queen's Wharf integrated hotel and casino resort precinct covering more than 26ha. It is set to open in 2024, the year trains are due to start running on the new $5.4bn Cross River Rail subway between Dutton Park, south of the CBD, and Bowen Hills to the north. The Brisbane City Council's $1bn Brisbane Metro hybrid mass transit system will be in operation by then, while Brisbane Airport's $1.35bn new runway will double passenger movements to 50 million by 2035.



The question is, does this staggering investment in the future represent mere catch-up on the ­infrastructure lag bedevilling Australia's big cities or genuine pro­gress to retain their liveability? Can the sea of hard hats and hi-viz vests cut through the ennui of commuters and residents fed up with the daily grind of getting to work to pay a sky-high mortgage or to save for one?

Demographer Bernard Salt says the answer is yes — and no. "I think the spurt we are seeing at the moment certainly is unique in terms of the absolute numbers," he tells Inquirer. "Neither Sydney nor Melbourne has ever added anything like the numbers they are adding at the moment in terms of infrastructure investment."

But when Salt looks around the world, he sees few other cities in developed countries that face the challenges of Australia's growth trio. Take Berlin, population 3.5 million. Size-wise, this positions the German capital between Sydney on 5.1 million, tracked hard by Melbourne, which ticked over five million in population this week, and Brisbane on 2.5 million. Yet in the strategic plan Berlin delivered two years ago, it will have roughly the same population in 2050. In the US, sprawling Los Angeles will grow to 22 million across that 30-year frame.

"That's three million on top of 19 million for LA and next to nothing for Berlin," Salt says. "Melbourne and Sydney are going to add three million on top of five each, and Brisbane the best part of two million. We need to be world's best practice at city planning and Western car-based city infrastructure delivery. And if we are not then our cities will collapse under their own weight."

James Tuma, national ­director of urban design group Urbis, agrees the population is coming whether we like it or not. But it can be accommodated. "Many of the CBDs and near areas to the CBDs have significantly more capacity to hold population so a lot of it is really about having a good dialogue with the community so that people understand the trade-offs between the benefits of increases in densities of population," he says.



"Because the one thing around population density is not doing anything is not an option. The population is going to arrive and we need to house these additional people and employ them pro­ductively, in a way that maintains our lifestyle and all the things we value."

Infrastructure Partnerships Australia chief executive Adrian Dwyer says the sheer scale of the task cannot be underestimated. "If you think about Sydney and Melbourne in 30 years, it will be like London and New York are today in terms of the number of people," he warns. "There's a huge amount of work to be done."

Now for the tricky bit: how? Sydney's struggle with its failing public transport system and maddening traffic congestion has dominated political debate in NSW for more than a decade, matched only by residents' collective angst over some of the highest real estate prices in the world. When the Coalition was ­returned to power in 2012 under Berejiklian's predecessor, Mike Baird after 16 unbroken years of Labor government, it rode in on a promise it would transform the city's infrastructure. On paper, at least, the state government has delivered.

Such is the scale of the city's masterplan, responsibility for the huge spend sprawls across five state ministerial portfolios as well as two advisory bodies in the Premier's Department, including the Greater Sydney Commission headed by Lucy Turnbull, wife of former prime minister Malcolm Turnbull. To cope with the projected eight million population, due by 2056 on current timelines, the GSC has mandated that Sydney councils find a way to provide ­almost 200,000 more dwellings by 2021, just to keep up.

The state's transport system is being radically reshaped with the promise that by 2056 up to 70 per cent of Sydneysiders will be able to live within 30 minutes of their workplace. Brisbane Lord Mayor Graham Quirk has similar ambitions for a "45-minute" city.

After more than a decade of lengthening commute times and unprecedented high-rise housing development, the planners' vision for Sydney so far has failed to win the hearts and minds of an increasingly hostile electorate. Construction hoarding and gaping building sites seem to pockmark the city.

For now, there appears little ­relief in sight as the crush of traffic, people and an increasingly overburdened public transport system continues to worsen. NSW Planning Minister Anthony Roberts says Sydney has always had to deal with growing pains "from the time the Second Fleet arrived". It has also suffered from some "disastrous" city planning. But after four years of major infrastructure spending worth $70bn and more to come, he says the city's "evolution is well under way".

"It's been painful for us but we've gone well beyond the infrastructure and our focus now is on liveability," Roberts says. "If you ask the ministers of planning around this country, they would give their left arm to be involved in what we are doing here."

NSW Transport and Infrastructure Minister Andrew Constance has a similar message. "There's no doubt Sydney has ­become one big construction site, absolutely choked by congestion," he admits. "But in the next two years the whole face of the city will change. We have two light rail networks opening, we've got WestConnex and NorthConnex, and we've got the metro (rail) opening. We are going to continue to be a global sweet spot for infrastructure, particularly congestion-busting infrastructure which is about people's quality of lives."

But let's not get too carried away. As former NSW Labor premier Bob Carr points out, the Berejiklian braggadocio is belied by the fact that after seven years in office, the state government has yet to "cut a ribbon" on one major project. In power for the decade to 2005, Carr famously tried to put a brake on population growth by ­declaring that Sydney was "full". He says "every cent" of increased funding for infrastructure has been raised by a fire sale of the state's electricity assets and ports. But the proceeds have been "squandered" on the wrong projects: from the "entirely unnecessary" light rail for Sydney's eastern suburbs to the $8bn Middle Harbour tunnel project.

All the while, the scramble to keep up with housing demand has led to an explosion in "forests of high-rise towers" across Sydney. "The stately march of the towers threatens to swamp every new ­infrastructure investment," Carr says. Predictably, he also rejects widely held criticism that infrastructure development stalled on his watch, bequeathing structural problems that snowballed into today's epic to-do list.

Insisting that Labor had lifted infrastructure spending by 40 per cent during his time in government, funding major projects from the Eastern Distributor to the Cross City Tunnel, Carr says then, as now, no amount of infrastructure spending could outpace the continuing migrant influx to Sydney and Melbourne. "What's missing in this debate is a good dose of honesty," he argues.

In February, Infrastructure Australia warned the country's major cities were facing a "watershed" moment that would lead to a decline in the quality of life and economic productivity if governments failed to plan for population growth across a 30-year span.

The message for Sydney was particularly ominous. Australia's ranking city would come under "significant pressure", including a doubling of the hours spent on congested roads, almost one million more journeys on public transport and a 70 per cent rise in the demand for schools.

Carr says the federal government has profoundly underestimated the cumulative impact of historically high immigration, running at 190,000 for this year but topping 600,000 if foreign students are put into the mix, while Sydney and Melbourne and, to a lesser extent, Brisbane carry the load as the prime destinations.

Compounding Sydney's problem, he says, is that it has been conspicuously ignored for federal funding for infrastructure upgrades. "Canberra has only ever nibbled at the problem it has ­created," he complains. "It ought to be shovelling infrastructure funding to the nation's three biggest capital cities to fund comprehensive underground metro (rail) systems."

Yet in Brisbane, Annastacia Palaszczuk's state Labor government is going it alone, for now, to build Cross River Rail, all $5.4bn of it, including 5.9km of twin underground rail tunnel beneath Brisbane River and the CBD.

The tortured history of the project is worth recounting because it's an object lesson in how politics can defy good sense and planning practice. Under Liberal National Party premier Campbell Newman, whom Palaszczuk saw off in 2015, the project was to ­include a busway that was scrapped when Labor redid the sums. The LNP-run Brisbane City Council responded by developing its Brisbane Metro project, using new-generation people movers that can carry up to 150 in rubber-wheeled trams that can be driven like a bus, running on designated carriageways with the frequency of a peak-hour commuter service.

The two networks will interface, but whether this represents the best possible value for the billions being expended remains open to question. Infrastructure Australia, the federal funding arm, lists Brisbane Metro as a priority project but has snubbed Cross River Rail, buttressing the federal Coalition government's decision to withhold funding. "We have to fit in with the arrangements of the government of the day," Lord Mayor Graham Quirk says dryly.

If the devil is in the detail of ­infrastructure development, Andrews's announcement this week of a new $50bn subway system for Melbourne certainly left much to be desired. In what was seen as a blatant pitch ahead of the November 24 Victorian election, the Premier promised 90km of new trackwork, much of it underground, 12 new stations and an airport link. But how it's to be paid for, built and operated is yet to be ­explained.

As Salt points out, subway construction is jaw-drop­pingly expensive. The new 11km Metro tunnel to "untangle" the ­existing City Loop rail link works out at $1m a metre, 10 times the cost of line construction above ground. "They are extraordinary numbers, and that's why this is the big issue," he says.

The state infrastructure budget is huge; $12bn this year followed by $10bn a year for the next four or five years. For Victorian Planning Minister Richard Wynne, there is no option but to keep going. "We simply have to keep up with the ­investment. It's a question of understanding what the challenge is ahead of us."

When Melbourne overtakes Sydney's population — sooner rather than later on the present trajectory — it will be a defining moment for the southern capital, which has the capacity to keep going because of large tracts of flat land on its fringes, as is the case with Brisbane. The Blue Mountains help squeeze Sydney into a restrictive, sausage-like footprint.

In the Melbourne growth corridors — there are three or four ­depending on how you look at the map — between 100 and 120 children are born every week in each zone. This equates to the need for four or five new classrooms each week. Central Melbourne is neither Delhi nor Nairobi but it is ­becoming less liveable; in the Kennett era, cross-city toll roads ­increasingly clogged and suburban rat runs filled with cars.

It is certainly the case that Victoria is playing catch-up; this perception is everywhere as an estimated 150,000 extra people pour into its borders annually, ­almost all bound for the big smoke. Dwyer talks about the three factors that need to be considered when assessing the future: res­ources, fatigue and funding.

The resources of an infrastructure binge are finite. Think planners, trucks, borers. The fatigue is already visible in Melbourne and, while First World, is real.

As Dwyer notes: "The old adage about cracking eggs to make omelets — it's just a reality that if you want the step change in infrastructure, there needs to be some pain on the way through." Meanwhile, the Victorian government has ruled out congestion taxes to unclog the roads, perhaps in part because it doesn't have the public transport capacity to carry the surplus passengers.

In Brisbane, Quirk is grappling with how to preserve the relaxed charm of its leafy suburbs and backyard living in traditional tin and timber homes — this while paving the way for the construction of the 188,000 new homes needed between now and 2041 under the city plan and increasing the "green cover" in parks and reserves from 37 per cent to 40 per cent. Quirk says the city can't continue to grow outward — it already covers the area of Los Angeles, with barely a fifth of the population — so the development will be infill, medium and high density close to the CBD and on desig­nated transport corridors.

But Quirk is excited about the potential of vehicle automation to reduce congestion through "platooning" and the ability of driverless cars to slot in close together. The emergent technology is being factored into the council's 30-year planning horizon.

Brisbane City Council is more like a city-state than a local authority, serving a population of nearly 1.2 million, which puts it into a ­special category. ("In Brisbane if you go out 20km from the CBD and draw a circle, there's one council; in Sydney it will be 35 and in Melbourne 31," Quirk says.) But the greater city area has had its ­issues with planning. In the 1970s, the moonlight demolitions of the gracious Bellevue Hotel in the CBD and Cloudland Ballroom in nearby Bowen Hills galvanised perceptions that Brisbane was busily tearing down its architectural heritage. As in Sydney, a useful tram system was junked in favour of bus services.

But if Joh Bjelke-Petersen was cheerleader of the develop-at-any-cost brigade, he got Brisbane's South Bank right. The crumbling wharf and warehouse district was cleared for Expo 88 and now hosts a formidable cultural and lifestyle precinct including the Queensland Performing Arts Centre, the Queensland Museum, State ­Library, the Gallery of Modern Art and highly patronised public ­spaces. This led to a surge in development along the river.

Salt argues that Australia needs to think differently about its principal cities because they are in the process of becoming very different places, one way or another. The "fried egg" model built around the creamy yolk of a single CBD has its limits, and he says a population of four million is about it. "If you are going to have a city of eight million, then that model simply does not work," he says.

"You cannot build enough freeways, you cannot build enough railways, to get people from the urban edge to the city centre."

He points to the M1 motorway between the Gold Coast and Brisbane. During peak hours, it turns into a succession of parking lots, hopelessly congested by the 25,000-plus people driving to and from work in central Brisbane. Wouldn't it be smarter to relocate their jobs closer to home?

"What you need to convert to is a multi-nodal city so you are not trying to get from Beenleigh to ­George Street (in Brisbane), from Penrith into Pitt Street (in Sydney) or from Cranbourne into Collins Street (in Melbourne)," Salt ­explains.

"The ... cowardly way to manage this is to put your head in the sand and wind back the vision so you only deal with the immediate. You need to open this up, flush it out ... have the debates about the rate of growth and what our living standards should be, then plan for that accordingly."

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WA Today --> Infrastructure Australia chief blasts plan to make dud projects easier to justify

The infrastructure watchdog has savaged a key recommendation of a parliamentary committee, warning it risks saddling the economy with C-grade investments and allowing sub-par projects through the gate.

A six-month inquiry by Parliament's standing committee on infrastructure this week recommended reducing the discount rate on infrastructure investment from 7 to 4 per cent, effectively adding millions of dollars in future value to projects that would otherwise be considered of marginal value.

The move would have a significant impact on the cost-benefit analysis of future projects - such as Sydney's light rail or Melbourne's airport link - opening the door to a wider array of approvals as infrastructure struggles to keep up with a population that will double by 2075.

In a spray at the findings of the committee led by Liberal MP John Alexander and Labor's Sharon Bird, Infrastructure Australia's acting chief executive Anna Chau said reducing the discount rate to 4 per cent would be a form of "intergenerational theft".

"We wouldn't do this for kids in our schools, just as we wouldn't lower the standards in our hospitals, so why should we do it for our major infrastructure projects?" she said.

Infrastructure development has high initial capital costs but long-term benefits. Applying a discount rate puts present and future costs and benefits on an equal footing to help governments understand which projects are most worthwhile.

"Lowering the discount rate, however, won't make this process any more rigorous," said Ms Chau.

"It's like lowering the passing grade from 50 per cent to 25 per cent".

A swathe of announcements are expected in the lead up to the next federal election due before May next year, raising the prospect expensive but worthy projects will be cast aside in favour of pork barrelling in key electorates.

"There is always a desire to lower the pass mark," said Ms Chau.

"We really need to be aware of the risks of doing that. Lowering the discount rate doesn't increase the bucket of money that is eligible for funding. You are just increasing the number of projects that are eligible for funding."

A secret report from Infrastructure Australia - completed in 2013 but revealed on Tuesday - questioned the benefit-cost ratio of 1 for Sydney's light rail, the score it must meet to be considered economically viable. It warned the appraisal was not robust, had significant problems and failed to account for the inevitable disturbance caused by the project.

Former Infrastructure Australia chief Philip Davies used his last address to warn that Australia's standard of living was being put at risk by policy short-sightedness.

"After three years in the job, my observation is that governments and oppositions need to be more disciplined around proper planning, evaluating all available options, and seeking the solutions with positive cost-benefit ratios prior to a funding announcement," he said.

The committee's 476-page report, released on Monday evening, backed Mr Davies' call for a national population plan, and challenged Prime Minister Scott Morrison and Opposition Leader Bill Shorten to act on its 37 recommendations - including appointing a "national chief planner" to drive regional infrastructure and settlement.

It recommended prioritising the development of "30-minute cities", establishing "value capture" (private funding of infrastructure in exchange for property) as a fundamental principle, and funding high-speed rail that would connect satellite and capital cities on the east coast.

Infrastructure Australia said it had yet to respond to the other recommendations. Calls to cut the discount rate have been backed by the Grattan Institute and the NSW Business Chamber, who have argued the 29-year-old rate is out of step with the current low-interest rate environment and that some regional projects have missed out due to the high barrier to entry.

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Rail Express --> Bombardier Transportation boss upbeat on Australian market

Bombardier Transportation president Laurent Troger says he sees a significant amount of opportunities coming from Australia over the next 10 years.

Troger spoke with Rail Express on the sidelines of the InnoTrans exhibition in Berlin on Wednesday.

He echoed Bombardier's recent annual report, which singled out Australia as a key growth market.

"Australia is a fantastic opportunity to grow," Troger told Rail Express. "Politicians have decided to invest massively in rail infrastructure, and also in new trains. We are well positioned in both the infrastructure side, and the train side.

"We can see those projects emerging consistently. That's not only a political promise, that's real projects."

Troger says Bombardier is well positioned to take advantage of the growing Australian market thanks to its history in the region, and its approach.

"We are today delivering some critical projects in Brisbane, Melbourne and Perth," he said. "What is clear is a solution for Australia requires some customisation.

"You cannot take a product or solution from elsewhere, land in Australia and say, 'Here it is.' So the fact we've been in Australia for so many years; we know the local product well, and we can connect this with a global product solution.

"We know to customise only what needs to be customised, and so we have a unique advantage in this area."

Troger said Bombardier had "a significant amount of resources" in Australia, adding "we intend to grow these resources".

"Australia has quite a fantastic momentum," he said. "Urbanisation in Australia is growing very fast. Sydney, Melbourne, Brisbane and Perth; these are very big localisations. The demand is going to be important."

Troger said political support for rail in Australia is in line with a growing preference for rail from politicians around the world.

"Politicians have realised the mobility equation cannot be solved by cars, and by new roads. There is a need for an alternative solution, and they have realised that rail and trains are a very good alternative as a mobility solution," he said.

"Everywhere you go in the world, you see a direct correlation between the GDP and the passenger traffic. The more you grow your economy, the more you have to move people."

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https://twitter.com/railbotforum/status/1055494535134904320

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The Australian --> Public transport infrastructure shortfall revealed in audit

More than four million people living in the outer reaches of our largest cities are not within walking distance of a reliable train or bus ­service, a damning audit of public transport has found.

As Victoria heads into a state election campaign, Melbourne has won the inauspicious crown of being the capital city with the worst access to public transport in outer-urban areas.

A detailed report by Infrastructure Australia paints a bleak picture of the transport disparity faced by commuters who live in outer suburbs compared with those who live within 20km of the CBD. Serviced by less accessible, less frequent and more time-­consuming public transport options, 88 per cent commute by car, adding substantial travel costs to family budgets and productivity-sapping congestion to city roads.

The report welcomes the multi-billion-dollar investment boom in public transport under way or planned in Sydney, Melbourne, Brisbane and Perth.



However, it warns that as the population continues to grow, the problems in our outer suburbs will require more creative solutions than new, immensely expensive transport links.

Infrastructure Australia director of policy and research Peter Colacino told The Australian: "We need to think about a different way to do public transport if we are going to cater for that growth."

Instead of recommending new rail or light-rail lines, the report urges governments to increase the efficiency of existing systems by matching services to ­demand, co-ordinating time­tables, integrating fares and ­embracing emerging forms of transport such as on-demand buses.

A key measure within the report is whether residents of Sydney, Melbourne, Brisbane, Perth and Adelaide live within a 15-minute walk of a public transport services that provides at least four services an hour.

If you live within 10km of the CBD, the answer is yes for 96 per cent of residents. If you live in an outer suburb, the answer is no for 56 per cent of people. Accessibility is worst in outer areas of Melbourne, where 1.4 million people are not adequately serviced by reliable public transport.



In Sydney, the figure is one million people, despite the city having a larger outer suburban population.

The implications of this are felt well beyond the growth suburbs, with more commuters forced to drive long distances from their homes to work in the city, contributing to a congestion bill that IA estimates will reach $53 billion in lost productivity by 2031.

It also comes at a personal cost for families in outer suburbs. Dave Sharley used to spend 2½ hours every work day on the roads, commuting to the city from his home in Epping, on Melbourne's northern fringe. He would leave home at 6am and most nights walk back in the door long after his son had gone to bed.



The house he and his wife Joanne built is 6km away from a train station. There was no park-and-go option at the station and for the first four years they were living there, no bus.

A new train line had long been promised but eventually they gave up waiting. Mr Sharely quit his job as a research scientist and started his own business to be closer to home. "In the end, I couldn't keep working,'' he said yesterday. "There was just too much stress. There were a lot of promises, a lot of under-delivery of what they said.''

According to ABS figures, outer-suburban families are ­nearly twice as likely to have a second car and spend, on average, nearly double the amount of inner-city families, as a percentage of household expenditure, filling up the tank and paying for registration, repairs and tolls.

They face longer commutes and as a consequence spend more hours of their day in traffic.

"Inadequate access to public transport and poor service levels are important drivers of disadvantage for people in outer urban areas,'' the report notes. "These conditions can have a tangible impact on the quality of life and prosperity of these communities.''

This leads to a vicious cycle, where transport services are poorly patronised, governments refuse to spend money to improve them and the quality of the ser­vices deteriorate, leading to fewer people using them. The public transport networks in the five mainland capital cites all bleed money, recovering ­between 21c in Adelaide and 30c in Perth from each taxpayer dollar they spend. By this measure, the system lags comparable systems run by cities such as Toronto, Chicago, Wellington and Auckland.



With the Victorian election looming, the major parties have announced new rail projects for Melbourne's outer suburbs. The opposition pledged to improve existing train services in the city's northeast and southeast growth corridor and the government unveiled a long-term ambition to build a $50bn outer-suburban, underground line.

The Committee for Sydney said yesterday decades of urban sprawl had left too many parts of Sydney over-reliant on cars and the IA report showed it was essential investment in public transport did not trail population growth.

In the outer suburbs of Brisbane, only one in five residents lives within walking distance of public transport. Opposition Leader Deb Frecklington said this had pitched the transport system into crisis, with congestion choking southeast Queensland roads.

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IA: Outer Urban Public Transport: Improving accessibility in lower-density areas

http://infrastructureaustralia.gov.au/policy-publications/publications/outer-urban-public-transport.aspx

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Rail Express --> Outer suburbs left behind by poor access to public transport, IA report finds

Over four million people who live in the outer suburbs of Australia's capital cities lack adequate access to public transport services, according to a new report by the nation's independent infrastructure advisory body, Infrastructure Australia (IA).

IA's report, Outer Urban Public Transport: Improving accessibility in lower-density areas, assesses the frequency and accessibility of public transport services in Australia's major cities.

Peter Colacino, IA's executive director of policy research, said that existing transport infrastructure in major cities was outside the reach of many communities living in the outer suburbs, leading to poorer access to job and educational opportunities.

"In Melbourne, more than 1.4 million people fall into this category, with more than 1 million in Sydney and Brisbane, half a million people in Perth and 200,000 people in Adelaide," Colacino said.

"In the past, it has been very costly to deliver public transport in lower density, outer suburban areas where houses and employment centres are typically spread over large distances. As a result, people prefer to take the most direct route by driving, rather than taking a train or bus – adding to congestion in our growing cities."

The report calls on state governments to improve the efficiency of existing transport networks and consider new models, such as on-demand buses and share-riding, to complement traditional transport modes such as rail.

Colacino said that this would improve the flexibility and reach of transport networks and enable them to better service communities living in outer suburbs.

"We also want governments and transport operators to do more to encourage people to transfer between public transport services, which helps to increase the flexibility and reach of the network," Colacino.

"This includes investing in well-designed interchanges, extending integrated ticketing systems to new modes, and introducing fare incentives that actively encourage people to transfer between modes to get to their destination."

Federal cities and urban infrastructure minister, Alan Tudge, said that he welcomed IA's report.

"Having effective public transport connections is critical in providing access to jobs and services – maintaining our cities as liveable, thriving and vibrant economic centres – and the Government welcomes IA's contribution to this important debate," Tudge said.

"The Coalition are investing significantly in public transport for urban areas across Australia's major cities as part of our $75 billion commitment to transport infrastructure."

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https://twitter.com/InfraAust/status/1057390052425195520