Guess which road in Australia is shaping up to cost $1 billion per kilometre to build?..
As the state election nears, the Napthine government is declaring all sorts of unfunded public works, some $27 billion in infrastructure projects crowned by the controversial East West Link. Conceptually, this road is not a bad thing, even though the city’s trains are clogged, but the price is stupefying.
Actuary Ian Bell has kindly put some figures around this for us, deploying what scant information is in the public domain. Bell puts the capital cost of this road at up to $18 billion for 18 kilometres, a grand $1 billion per kilometre. One could be forgiven for thinking that the business case for the East West should be made public so the people who are paying for it could discuss it. Alas, not so…
Infrastructure Australia head Michael Deegan told a Senate committee that the government’s unpublished business case also provided an alternative estimate, showing a benefit-cost ratio of 0.8 when ”wider economic benefits are not included”.
Under this scenario the project would return just 80¢ for every $1 spent, suggesting an economic loss if the ”stock-standard” analysis preferred by Infrastructure Australia is used…
In a submission to a federal infrastructure inquiry, Infrastructure Australia targeted Victoria for failing to submit a ”robust” business case for the east-west link, singling the project out as an example of why the public are cynical about ”big ticket” infrastructure announcements.
The Melbournians can get to the dole office quicker. That has to be good. Peter After all if they need to apply for 40 jobs a week soon then they will need to be on the road a hell of a lot. Just imagine them driving from job offer to job offer, the road will need to widened every where. Here is a film clip of the socialist utopia job application transport solution.
whoever wins it better have the numbers right, but im willing to bet they wont, the job will go arse up, the contractor will do its nuts and the whole thing will end up in court. the tax payers complain, but i can tel you at the moment, they are the only ones making a decent return on infastructure investment.
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