The best way to fix Australia’s road and rail might be out of left-field.

Australia has a problem with Infrastructure. We keep building the wrong things.

We spend a huge amount of time developing proposals that have benefit cost ratios less than one. Then, for want of alternative proposals, we turn those proposals into reality.

There are many reasons for this – politicians serving certain electorates, powerful lobby groups, bias to action, and inability to fix infrastructure through pricing .

But part of the problem is a lack of options. We build the East-West tunnel in Melbourne because it is the only idea that’s been properly developed and discussed. We put Sydney’s new airport at Badgery’s Creek because it’s the one location that has been kicked around for years. We plan a light rail line up the middle of Canberra, because that concept has been publicly flogged since Burley Griffin.

To find one great infrastructure plan, you need to discard 99 good infrastructure plans. But Australia doesn’t have 99 to throw away.

There’s a lot of talk about developing a “pipeline” of infrastructure ideas. But politicians are very risk averse, and big infrastructure companies don’t want to waste money on business plans. So our pipeline is the diameter of a carpet python, with a couple of big lumps where it has been fed an approved mega-project.

Computers could do this part.

Infrastructure Australia was set up by the Rudd government to try to help develop a pipeline of ideas, and independently test them. But it only has a few staff, and its leader was recently fired by the Abbott Government. Just as that was happening, he took a stand, publicly saying ”Entrenched truculent bureaucracies have impeded progress… It has been heard that some good ideas cannot go ahead because they would set ‘precedents’. Among other things, this implies knowledge of, but unwillingness to address, widespread deficiencies. Such wilful attitudes test the patience of our elected masters, industry, and the public.”

Even with this courageous bureaucrat in charge, the old Infrastructure Australia was unable to renew the infrastructure planning system. With his blood all over the carpet, the new Infrastructure Australia is cowed.

Even if it makes our political leaders uncomfortable, Australia desperately needs a truly independent infrastructure development and analysis capacity. But how?

I think the answer is not a bureaucracy. I think the answer is by using technology. The same technology that has helped humanity create the biggest encyclopaedia in history and a hugely detailed map of the entire world.

A Wiki.

Imagine a website where you can start a page for any infrastructure project you might dream of.

  • You want to extend a train line by a few kilometres? Start a page with a description and a map.
  • You want a helicopter pad installed at the local sports ground? Start a page with a project description and a map.
  • You want to build a very fast train between Melbourne and Brisbane? Start a page with a project description and a map.

Each page would be able to be edited by absolutely anybody. There would be a section for environmental impacts, a section for cost estimates, a section for estimating time for planning and building, a section for land-use changes and implications, a section for creating a cost-benefit analysis.

flinders st w bikeMost pages would be the hare-brained schemes of the lone wolves of suburbia. The pages would be underdone and silly. But by asking the community to rate each page, the better ideas would attract contributions from a range of talented people and rise out of the muck.

This could bring unforeseen solutions out of obscurity.

For example, when I was writing about the ridiculousness of the state government’s plan to put a new railway station in South Melbourne, right on top of an existing tram stop and miles from the new development it ostensibly serves, I found in the depths of the internet forums the suggestion that the problem could be solved better with a train line that runs from north-east to south-west.

Fisherman’s Bend should be on a new line from Merri (Northcote) to Newport (Wydham Vale – Mernda line).”

This idea may have a cost-benefit analysis ten times better than all the existing plans. But how would we know? There is a choke-point for shining light on new ideas, and its name is the Department of Transport. Risk-averse and slow-moving, DoT can only be expected to properly consider a few ideas that it thinks the government is interested in.

Choosing between a big group of well-developed projects that each have a range of intriguing benefits and positive cost-benefit analyses is going to be difficult, politically. But it’s a better problem than the one we have now, which is a small group of infrastructure plans that mainly look like wastes of money. (I refer here to Melbourne’s East-West tunnel and airport rail, but an honourable mention should go to the plan for a very fast train up the east coast)

If you want to find one project with a cost benefit analysis good enough to build, you need to look at 100 or 1000 projects across the country. The current pipeline is starved of proposals, so it is no wonder the infrastructure policy space is so sickly and anaemic.

train pic b and w

PROBLEMS:

1. The majority of analyses on the wiki would be defective. But the community should privilege the ideas that have the most potential and these should attract rational people to contribute. I expect projects will be submitted with wild underestimates of their cost, and there will be a push by more rational people to actually use cost estimates that reflect realistic Australian pricing. On the ‘discussion’ pages  I imagine there would be fierce argument about why it is we can’t have projects delivered at the prices that apply in China, America, etc. Projects with decent estimated benefits should be most willing to use realistic pricing.

2. Monorails and personal rapid transit. It’s going to be hard to keep really wild ideas out of there, but perhaps that’s the point.

3. Splintering into too many pieces. Every little change in a proposed plan (should this freeway have an exit here or here?) would potentially lead to a new page being created, with a new set of costs, environmental impacts, etc, etc. Conventions and rules may need to be developed to guide when a change is big enough to warrant a whole new entry. But wikis are good at developing cultures and rules that make them effective.

4. The whole thing would be at risk of being ignored if there was no suggestion governments would at least look at it. The project would be a really great thing to seed with some official resources, for example, freely available mapping software for wiki users to use, some models for doing traffic and demand forecasting, recommended ranges for cost per kilometre of roads, bike lanes, tram lines etc. I’d like to see it hosted at infra.wiki.gov.au to give it a sense of official imprimatur and encourage involvement. Perhaps the government could loose a few bureaucrats or pay a few infrastructure experts to play with the wiki to get it started, anonymously having them make edits and bring in a bit of rigour.

So, is this a good idea or a mad one? Is there some aspect of wikis I have overlooked or some problem I’ve not foreseen? Leave a comment below or hit me up on Twitter!

 

Canberra’s tram plan looks suss to me.

It was with some excitement that I downloaded the PDF containing the full business case for the new Canberra light rail. 

1. I love public transport.

2. I like to see open and honest planning. The Victorian government has given us no such insight into their East-West Link plan.

But my happiness turned to confusion when I saw the way the calculations had been made. This project supposedly has a benefit-cost ratio of 1.2. But when you look into the $1 billion of benefits, you’ll see that they are a castle made of gossamer. The $823 million of costs look altogether more concrete, and the study estimates a 25 per cent chance they will blow out to be higher still.

capital metro map
Proposed route

The most obvious benefit of the tram is time savings.

These have been calculated over 30 years, even though the operating contract for the metro is for 20 years. I am suspicious here. If you assume traffic conditions deteriorate at a given rate per annum, you could get the model to show very bad traffic in 20 years time. Including those final ten years might be a substantial source of the time savings.

And it goes without saying that trying to calculate seconds saved by tram users in 2049 requires making some heroic assumptions about the way we will live then.

The patronage assumptions also look bold. They assume 15,000 passengers a day in 2021. That’s 7500 in each direction, or 416 passenger boardings each hour for 18 hours of operation. If you assume a tram every 10 minutes that’s 69.4 boardings per tram, and if you assume the average passenger goes 6km along the 12km line, you’re guessing the tram will have on average 35 passengers on board. I’ve been on a lot of ACTION buses and that seems like 35 times as many passengers as the average ACTION bus outside peak hour.

Time savings are not even the biggest source of “benefits” in this highly questionable calculation.

tram benefit graph

The biggest source of benefits is land use.

“Light rail and the anticipated resulting urban renewal will create a more grand entrance to the City befitting its status as the Nation’s Capital”

It is true that the drive into Canberra – down Northbourne Avenue – is grim. I moved to Canberra in 2005, and coming down Northbourne Avenue that fateful day I didn’t realise we were in the heart of the city until it had passed.

But solving that by building a tram is a bit like renovating your kitchen by installing a restaurant in your lounge room. Sure, it provides the impetus, but it’s indirect and probably pretty costly.

If you want to increase density near the centre of Canberra, the big question should be what’s the best way to do this?

If you pose the question that way, using an elaborate system of trams seems less efficient than changing the planning regulations.  The business case more or less admits it:

“Land development decisions undertaken by the ACT Government will influence the realisation of benefits by the Capital Metro project”

But it makes no attempt to say whether those “decisions” could be brought in without the tram.

The next biggest source of benefits is wider economic impacts.

Some people say wider economic benefits are the cheat’s way of boosting your benefit-cost ratio. Infrastructure Australia says that:

  • Wider economic benefits may be negative for some initiatives; and
  • the availability of Australian specific data needed to calculated wider economic benefits is currently sub-optimal.
  • Therefore, Infrastructure Australia will treat wider economic benefits separately to the traditional CBA.

It’s true that the ACT government does two calculations of the benefit cost ratio: with the Wider Economic Impacts and without.

bca

But given the project would not go ahead with a ratio of 1.0, the wider economic benefits are obviously key to the calculation.

META PROBLEMS and OPPORTUNITY COSTS

Benefit cost analyses are a GIGO model. You put garbage in and you get garbage out. Even more important than the garbage that goes in is what is excluded. here’s a short list.

  • There is no price paid for the public land on which the tram will run. The tracks will be 6.6m wide. The line is 12km long. If 11km is on public land, that is 72,600 square metres.  At $575 per square metre for undeveloped land, that’s $42 million that should arguably be included as an opportunity cost.
  • The tram has priority at all intersections. I see no estimate of how much extra waiting that will mean for pedestrians, cars, cyclists and buses that try to cross its path.
  • Cutting bus services is counted as a benefit, not as a cost.
  • The cost of the funds is not accounted for. Whether raised by debt or taxes, getting $100 for the government to spend does not cost society $100.

The cost of the tram plan is equal to $830 million. To put that in context, it’s $2,168 per ACT resident. And most of them don’t live near the 12k tram line.

The red line is the tram. The areas in the black circles miss out on any benefit
The red line is the tram. The areas in the black circles miss out

 

The budget for the entire ACT bus system was $123 million in 2012-13. The reason patronage is low and dissatisfaction is high is clear – low frequencies, badly designed routes and poor service hours. You could double patronage a lot more easily, for a fraction of the cost of the tram, by just improving the buses.