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Tunnel vision: who’s driving Australia’s infrastructure spend?

By on 30 October, 2017

Australia’s state and federal governments are spending big money on transportation — but are these projects actually improving travel outcomes for citizens and businesses? Position magazine founding editor Jon Fairall reports. This article was originally published in the October/November 2017 issue of Position magazine.

Australia spends an enormous amount on infrastructure. In May, the Federal Treasurer, Scott Morrison, announced the most ambitious spending program in a generation. His budget provides $20 billion in capital spending.

The most high-profile commitment will be a $5.3 billion investment in a new airport at Badgerys Creek, west of the Sydney CBD, and the proposed construction of an inland freight line from Melbourne to Brisbane. $8.4 billion is slated for the line.

Road spending dominates state budgets. New South Wales alone will spend $20 billion, mainly on new roads. Nationally, over the next four years, state and federal governments have committed a massive $73.3 billion — about four percent of the national budget.

With such large amounts of money in play, one might suppose hard, evidence-based policy and planning would be the norm. At the very least, one would assume that roads and railways are being built in the places where need is greatest, under a clear methodology for evaluating and comparing competing projects.

Australia is crying out for a more rigorous, evidence-based approach to building infrastructure that the community understands.”

 

On the surface, information infrastructures exist that are tailor-made for the task. At both state and federal level, bureaucrats in planning and infrastructure departments enjoy the fruits of years of development of spatial, statistical and financial analysis packages.

Consider the Australian Urban Research Infrastructure Network. ‘AURIN is designed,’ its website states, ‘to enable planners and researchers to make informed decisions about future infrastructure and urban environments based on realistic scenarios and evidence-based analysis.’ AURIN was established in June 2010, by the Federal government as part of the National Collaborative Research Infrastructure Strategy. Today, AURIN has grown to cover more than 70 institutions including many universities. They have access to more than 1600 datasets from over 60 different data sources. AURIN offers a suite of tools covering spatial and statistical modelling, planning and visualisation for interrogating those data sets.

Clearly, information infrastructures such as AURIN derive much of their power from their ability to model every conceivable impact of a new road, railway or building. In contrast, some engineering consultancies run special-purpose modeling services that may not be as comprehensive, but claim greater accuracy because of their tighter focus.

Veitch Lister Consulting is a transport engineering consultancy with a specialty in forecasting the traffic density on unbuilt roads. The company has created the Zenith transport model for this purpose. It claims to have made accurate assessments of future traffic volumes even when governments relied on overly optimist forecasts from project proponents.

However, the evidence seems to be that the investment in time, energy and money in these information systems is not having the desired result. Billion-dollar projects that have run off the rails, or at least, have had unintended consequences, are a dime-a-dozen.

Consider the 4.8 km Clem Jones Tunnel which runs under the Brisbane River between Woolloongabba and Bowen Hills. The $3.2 billion tunnel was proposed in 2001 by Lord Mayor Jim Soorley and enthusiastically endorsed by Premier Campbell Newman. It opened in 2010. Motorists stayed away in droves.

By 2011, the owners were bankrupt.

The Cross-City Tunnel in Sydney found a similarly dismal fate. Introduced with much fanfare by the then transport minister, Carl Scully, its first private operator lasted less than two years. Forecasters predicted that 90,000 vehicles a day would use the new link. But the NSW Auditor General reported, five years after it was opened, less than 40,000 cars a day passing through the tunnel.

Sydney’s current Lord Mayor, Clover Moore, has argued that the same fate will befall the Westconnex Motorway. Initiated by then Prime Minister Tony Abbott, the project is currently the flagship of the state government’s infrastructure program. It is a $16.5 billion behemoth that will wend its way across the inner suburbs of the city.

What’s going on? Why is the value of evidence not self-evident?

“Australia is crying out for a more rigorous, evidence-based approach to building infrastructure, that the community understands”, says Andrew Dingjan, the director of AURIN.

One central issue seems to be overly optimistic traffic forecasts. In 2006, Bent Flyvberg reported in an article in the journal Traffic Reviews that globally, in over half of transport infrastructure projects, the difference between projected and actual traffic flows was 20 percent; for a quarter of projects it is almost 50 percent. A study by Standard and Poor’s estimates that globally, on average, forecasts overestimate demand by 30 percent.

Transport models have been in development since the 1950s, but utility increased drastically as spatial information processing matured throughout the 1990s. A typical four-step model consists of a land use layer, divided into suitably small zones described by relevant characteristics such as homes, work places, places of entertainment and so on. A trip generation layer can be created by adding household demographics and other socio-economic factors. Trip distribution can be generated by matching sources and sinks for journeys. People in households have an empirical propensity to go to work, go home, go out to play, go home to sleep and so on.

At this point, it may be relevant to consider the question of mode, that is: a percentage of people will prefer to do some of their travelling by car, other by public transport, riding a bicycle or walking. Critically, they will also choose between different routes. Some drivers will choose the shortest route, the quickest, or perhaps the cheapest.

This sort of model underpins traffic modelling by most government planning bureaucracies in Australia and quite a few consultancies. However, they have been criticised for not providing a realistic picture of the way drivers make decisions about when and where to drive.

Some newer models attempt to map the locations of the activities that people need to perform. Travel is then an attribute of the system. This makes it possible to model the relationship between travel decisions, land use decisions and environmental factors such as emissions and pollution. However, the big problem is that they require finer grained spatial data than four-step models to be effective.

Either way, it’s hard to understand how such a step by step approach, if done correctly, can lead to errors of 50 per cent. But that has occurred time and again in Australia.

The most effective method of reducing forecasting risk is to employ an independent expert to conduct a peer review. When the methodology is muddled, it needs to be criticised.”

 

It is little surprise that modelling has placed Westconnex under a cloud. Lord Mayor Clover Moore, a trenchant critic of the project, cites transport modeling by SOS Economics and Veitch Lister Consulting that shows traffic volumes will be insufficient to pay the interest on the loan incurred by the operators for the motorway, leaving tax payers to pick up the tab. Their analysis also shows the motorway will overload inner-city streets. Overall, critics claim that while it will move the traffic jams about a bit, it will do almost nothing to ease Sydney’s congestion.

Moore’s critique is fiercely contested by the project proponents and by the state government, both of whom insist the financial modeling has been done with due prudence.

A second factor that seems to obstruct  evidence-based spending is secrecy. Australian governments of all shades carefully manage the flow of information about new projects, on the basis that the details are commercial-in-confidence. It makes it impossible for the public to test traffic forecasts or financial models. It’s a strategy that invites tunnel vision. The people in the know have a vested interest in the project proceeding and those on the outside are left guessing.

Westconnex is a case in point. The companies involved in building the project have joined the state government in shrouding the project in secrecy. They decline to share its financial or traffic modeling. However, it is worth noting that the company responsible for the Westconnex traffic modeling, AECOM, paid out $280 million for the flawed models it used on the Brisbane tunnel.

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The real problem with shrouding infrastructure spending in secrecy is not that it is an affront to democratic principles but that it protects decision-makers from competing ideas.

Bob Nairn, a consulting engineer with experience in transport planning told the Australasian Transport Research Forum in 2016 that “the most effective method of reducing forecasting risk is to employ an independent expert to conduct a peer review.” When the methodology is muddled, it needs to be criticised.

“Unfortunately, muddled or deficient methodology is frequently encountered in Australia and elsewhere, even for major toll roads, where substantial funds are to be invested,” he says.

Signs protesting the Westconnex motorway development in Sydney’s Hyde Park, March 2016. Photo by Whiteghost.ink via Wikimedia Commons

A paper by the Westconnex Action Group, a lobby group opposed to the motorway, suggests the real problem with that project is that modeling and evidence-based data do not form the basis of the decision, they are being used to shore up a decision that is already made.

“The stated objectives for WestConnex were contrived to fit the project after it had already been announced. Its objectives have no associated targets by which their achievement can be ever be determined,” they say.

In a logical world, billion-dollar investment decisions would involve a cost/benefit analysis based on peer-reviewed modeling. Importantly, the cost/benefit analysis would also consider alternatives. But the world is not logical.

About the author

Jon Fairall was the foundation editor of Position Magazine, and now works as a freelance journalist and author.

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