Category: advocacy public policy sustainability governance

Traffic congestion – Is it a problem?

Post author By Roger Taylor
Post date 19/10/2020
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Congestion is frequently raised as a huge cost in our cities and it is often promoted in fearful terms like the following : Cities afraid of death by congestion.

The first paragraph reads: “A plan to widen part of Interstate 10 in metropolitan Phoenix from 14 lanes to 24 lanes is the USA’s latest giant superhighway proposal designed to ease the kind of gridlock that some planners say could stunt economic growth.”

Similar messages are being conveyed to government by companies that have a vested interest in promoting similar outcomes in Melbourne. These include Transurban, engineering construction companies, the road lobby and others who have the government’s ear and are defining the transport ‘problem’ in their terms ie in terms of congestion and potential gridlock, and solutions being to build more, larger, and vastly expensive road projects, user pays solutions and public private partnerships promoted with very slick marketing. It also includes finance companies, superannuation funds and others looking for “rent seeking” opportunities.

The current political mindset has been described by Prof Graham Currie “as a negative spiral which focuses on congestion ‘solutions’ in which politicians claim we will solve congestion with big investment. Expectations are raised (despite the fact that congestions can never be solved), congestion gets worse leading to credibility loss , followed by a positive approach which admits congestion can never be solved but will address worst impacts with more big investment thereby lowering expectations and credibility gain because congestion outcomes are as expected”.

But is congestion such a bad problem anyway. Transport analysts such as David Metz in the UK have shown that congestion can have a positive function, that there is no such thing as free flow of traffic (at average 80kph) in a city the size of Melbourne, and that congestion points filter traffic on to narrow city streets preventing terminal gridlock.

This view is supported by Wesley Marshall and Eric Dumbaugh Wesley E. Marshall & Eric Dumbaugh, 2020. “Revisiting the relationship between traffic congestion and the economy: a longitudinal examination of U.S. metropolitan areas“, and their findings that ” current concerns about traffic congestion negatively impacting the economy may not be particularly well founded. “Our findings suggest that a region’s economy is not significantly impacted by traffic congestion.

In fact, the results even suggest a positive association between traffic congestion and economic productivity as well as jobs,”. “Without traffic congestion, there would be less incentive for infill development, living in an location-efficient place, walking, biking, and transit use, ridesharing, innovations in urban freight, etc,” “And if your city doesn’t have any traffic congestion, there is something really wrong.”

If we are to get better transport outcomes in Melbourne we need to change the current political mindset. Instead of thinking about congestion as a cost, we need to persuade government that traffic congestion is an indication that we are not using the transport system efficiently and encourage it to develop policies and strategies to make this happen.

This strategy also avoids the risk of stranded assets as the economy and transport environment change in a post covid world, when social and economic conditions remain depressed and there is greater environmental pressure for change.

Tags failure of governance, State Government, Victoria

advocacy public policy sustainability governance governance public transport traffic congestion value for money

Why Is Melbourne’s Transport System So Costly?

Post author By Roger Taylor
Post date 12/10/2020
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This has been the subject of extensive research over many years and it is not possible to discuss it in detail in this blog, other than in general terms.

The main reason our transport system is so costly is that it promotes the least efficient modes of travel and transport ie motor vehicles for personal travel and most of the freight task (some of which could be transported more efficiently on rail). This in turn demands more infrastructure to support them and has been supported by city planning and development policies, particularly since WW2.

This problem is compounded when precious funds are wasted on infrastructure we don’t need or would not need if we operated our transport system more efficiently but must still be managed and maintained at considerable cost. Some of this infrastructure takes up valuable city space that could be used for other purposes, such as housing or community facilities including parks or growing food. Transport infrastructure – particularly roads and motorways also contribute to the “heat island” effect by elevating surface temperatures which increase stress, service disruptions and reduce liveability in cities – particularly during heat waves, the frequency and intensity of which is expected to increase in the future.

Melbourne’s transport is also costly because of the way we use it. Our transport fleet needs to be more efficient with a greater focus on fuel economy and operated in a way that minimizes pollution – air, noise and groundwater. We need to minimize impacts on human health; not just from pollution but also from accidents and fatalities. Transport related health impacts manifest themselves in a wide range of diseases: cardiovascular, neurological, respiratory, muscularskeletal diseases, and severe mental health impacts. Many of these the result of physical inactivity more likely to occur in car dependent societies such as Melbourne. There are environmental impacts as well and an imperative to reduce greenhouse emissions.

These costs are under reported and tend to be dismissed as the price we pay for progress but they have a profound impact – not just at a personal level but for the economy and livability of the city as a whole. Reducing them requires good governance in the form of sound policy, strategic intervention, appropriate regulation, and effective administration to make it happen. Some cities do a far better job managing them than Melbourne so there is considerable scope for improvement.

There are also costs which some economists and politicians exaggerate such as congestion and use it to justify major infrastructure works, particularly for building new motorways. This will be the subject of my next blog.

Tags failure of governance, inefficiency, State Government, Victoria

advocacy public policy sustainability governance governance public transport value for money

Beware China’s Belt and Road for Melbourne

Post author By Roger Taylor
Post date 06/10/2020
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We have long argued that infrastructure investment must be justified in its merits – on the basis of need (our collective needs and affordability), and fitness for purpose in the most cost effective manner. Further, that the development of infrastructure programs and projects should be the responsibility of relevant government departments as part of a well prepared strategic plan. It should not be used as a political football for other purposes but unfortunately that is exactly what it has become, particularly in Victoria by becoming linked with China’s One Belt One Road (“OBOR”) project.

Premier Andrews has argued that this is a way to increase jobs. That in itself is inappropriate – there are far more effective ways to create jobs and as I have explained in earlier blogs, using it for this purpose always runs the risk of it being used for political purposes for poorly conceived projects developed in haste that we don’t need.

More important concerns have been raised (The Age 6th October 2020) however by Paul Monk, a former head of China analysis at Australia’s Defence Department about “OBOR” being used to subordinate us into China’s sphere of influence in a way that could impose unacceptable political and economic risks. In the same article Senator Patrick said the freedom of Information documentation revealed “an extraordinary case of a state government pursuing a shadow foreign trade policy, quite separate and independent from the federal government”.

Use of grand infrastructure projects to secure political advantage by major powers is not new. The US through the agency of powerful multinational corporations pursued this for decades, convincing poor countries to accept huge development loans to ensure they were forever in debt to US companies, but often ended up taking over strategic assets when promised benefits failed to materialize forcing these countries to default on their loans. Some political analysts believe China’s “OBOR” has similar objectives.

Whilst the Victorian economy may be more robust than many of the third world countries seduced by these schemes, it is vulnerable nevertheless. Business cases for the Victorian mega projects which would be candidates are expected to provide very poor returns and I have outlined this in earlier blogs. These returns, miserable as they may be will be further diminished as we enter a covid induced recession or worse and recovery may take many years. It may also expose us financially – not just for annual repayments which could be onerous but more so when the debt needs to be repaid. Political implications in this case could be profound. We believe these risks are unacceptable and the federal government has every right to be concerned.

Tags belt and road, china, failure of governance, State Government, Victoria

advocacy public policy sustainability governance governance public transport value for money

Why Is Melbourne’s Transport System So Poor And So Costly?

Post author By Roger Taylor
Post date 05/10/2020
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Covid has forced significant changes in our travel patterns. Some of these will become permanent so it is timely to reflect more broadly on our transport system, the way we use it and the extent to which it really meets our needs.

This was a question many people would have asked after returning from a holiday in Europe, Japan, Singapore, China and many other parts of the world where it was easy to get around at relatively low cost without the need for a car. There are many cities that we can learn from that have become accepted as models of excellence and It is not rocket science. Nor are we unique. Some of these cities are not unlike Melbourne and had been confronted with similar problems. Nor is It a matter of cost and whether we can afford it or not. We are a very wealthy city and we can, particularly when so much of the infrastructure necessary to achieve it is already in place. So what is stopping us from achieving from achieving world best practice?

There are several reasons for this and these will be discussed in a series of blogs over the next few weeks but the most fundamental reason is the absence of any desire to change. This is a mindset problem. If government had the mindset to develop a world class transport system it could do so and within a relatively short time. In fact the foundations could be laid within a parliamentary term. So what is this mindset and how do we change it?

The mindset is a collective one, comprising the government itself, the Department(s) that advises it and the community. Overall we seem very comfortable with our grossly inefficient transport system but oblivious to the extraordinary high cost it imposes on us.

Since WW2 much of our city and transport planning has been developed on the presumption that the motor car and road based transport in general will be the transport of the future and this has become embedded in our economy. But the high cost of this inefficient system – not just in economic but also in social and environmental terms is starting to catch up with us and covid is exposing many of the flaws in this strategy. This will be discussed in my next blog.

Tags failure of governance, State Government, Victoria

advocacy public policy sustainability governance North East link value for money

How Can You Tell The North East Link Is A Dud?

Post author By Roger Taylor
Post date 25/08/2020
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Smart cities stopped building motorways long ago, some of them never built them realizing they were hugely costly and did not solve their transport problems in the first place. In short the business case for the community as a whole simply did not stack up.

In Victoria the government has overcome this problem by constructing them in a way that makes them viable on a commercial basis by over- designing them and creating a monopoly situation in which alternatives are made more difficult, and passing the risk onto a third party like Transurban. Tolling companies require sweateners from the government to enable them to make these deals profitable (at the public’s expense ofcourse). In the case of the Westgate Tunnel project the sweetener was a ten year extension of hugely profitable tolling rights to City Link plus a significant contribution to the capital cost of the project.

The State government has attempted to use these strategies for the North East Link. Its original purpose was to act as the final link for a ring road but in order to make it more profitable for a toll operator It has grossly overdesigned it in a way that also promotes city bound traffic from Melbourne’s north east. As a result the cost of the project has ballooned. Despite these inducements the business case is so poor the private sector is reluctant to take it on. On this criteria alone the project is a dud.

But it gets worse. Both projects are propped up by biased traffic forecasts and distorted business cases to get them across the line (and garner federal contributions). These are based on business as usual projections that do not anticipate a covid induced recession. The State government now says it might build it themselves then run the tolling themselves (presumably at a massive loss). I rest my case – the project is a terrible dud.

advocacy public policy sustainability governance value for money

Investing in Public Infrastructure

Post author By Roger Taylor
Post date 17/08/2020
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Are we getting value for money and what we can do to achieve it

Infrastructure is the latest buzz word on every politician’s lips. It is seen as the answer to restoring our staggering economy, an opportunity to promote economic growth and create more jobs. Governments at every level are spending a lot of money building new infrastructure projects. The Victorian government’s “Big Build” boasts the delivery of approximately $70 billion of transport projects including 119 major road and rail projects and the creation of over 15,000 jobs across Victoria. But most of this is being spent on a small number of mega projects. The latest on the Victorian government’s drawing board is the Suburban Rail Loop (SRL). The Government says it will be “the biggest public transport project in Australian history” with a proposed start date of 2022 and completion date of 2050. The guestimated cost at this stage is ‎$50–100 billion” although is it likely to be much higher given the absence of a detailed feasibility study and an increasingly uncertain economic environment which is likely to compromise many of the assumptions that underpin its viability. The question we must ask – is this investment in areas where needs are greatest? Are we getting value for money, remembering that it is our money government is spending, and what are the risks?

The growth of mega projects is not confined to Australia. As Bent Flyvbjerg (Said Business School University of Oxford) notes in his in 2014 paper “What You Should Know about Mega projects and Why” ” total global megaproject spending is assessed, at US$6 to US$9 trillion annually, or 8% of the total global gross domestic product (GDP), which denotes the biggest investment boom in human history”. But as Flyvbjerg notes they have a terrible track record which he describes as his “iron law” of megaprojects: “megaprojects are systematically subject to “survival of the unfittest,”- “over budget, over time, over and over again

This would not be so bad if these were inherently good projects and designed to meet community needs, but this is rarely the case. As Bent Flyvbjerg notes “Like the Tower of Babel, nations’ rulers want to create the tallest, widest, biggest projects they can; and so often these are driven by ego rather than financial good sense”. He describes these drivers as the four sublimes

the technological sublime as the rapture engineers and technologists obtain from building large and innovative projects, with their rich opportunities for pushing the boundaries for what technology can do,
the “political sublime”, which is the rapture politicians obtain from building monuments to themselves and their causes
the “economic sublime”, which is the delight financiers, business people and trade unions get from making lots of money and jobs from megaprojects. Given the enormous budgets for megaprojects, there are ample funds to go around for all rent seekers, including contractors, engineers, architects, consultants, construction and transportation workers, bankers, investors, landowners, lawyers and developers.
the “aesthetic sublime” is the pleasure designers and people who appreciate good design get from building, using and looking at something very large that is also iconically beautiful, such as San Francisco’s Golden Gate bridge or Sydney’s Opera House.

There is a fifth sublime ofcourse and that is the use of capital projects for shameless political pork barreling often linked to pressure from vested interest groups (rent seekers).

And this is how much of the community’s money – our money paid from taxes and charges is now being spent today, and explains to a large extent why many areas of need become run down because they have been starved of funds. All of this is built on debt of course, which ultimately must be repaid but comes at a huge opportunity cost when investment in areas of real need remain neglected. This includes much of our existing infrastructure that is in poor condition because of inadequate maintenance or is in urgent need of upgrading or renewal.

It is time to get back to “basics” and understand what infrastructure is, its role, the way it creates value for the community and investment criteria that should be applied when evaluating and approving projects in the first place. It is also time to start applying proper processes to the evaluation, assessment process and ranking of projects as part of an overall planning framework and plan for the future. At a more detailed level it requires the identification of alternatives. For example many of the outcomes that could be achieved by an SRL could be achieved by improving the bus network, much of it to smart bus standard. This could be achieved at a fraction of the cost and very quickly, probably within a parliamentary term instead of decades and with minimal risk. It would also create many new jobs. There are other options ofcourse. The question needs to be asked why these have not been included in the evaluation process. It is likely this option does not satisfy Flyvbjerg’s sublimes. Whatever the reason pursuing the current trend will rapidly impoverish our State/nation and lead to disastrous social outcomes.

Government financing will become increasingly difficult in the future. This should force a radical cultural change in which governments and the community at large will be forced to do more with less. Some cities have demonstrated how this can be done. Frugal but appropriate and well designed investment in physical infrastructure releases government funds for other areas of need, particularly in social infrastructure: public health, education, research and development, community services, and many others that are highly valued by the community and contribute to its livability and its place as a civil society. It also enables communities to focus more sharply on the social and environmental challenges ahead, challenges that will dwarf those of the past and will need to be tackled seriously and effectively with increasing urgency.

Future investment in public infrastructure must become an integral part of a broader sustainability strategy in which resource use will be a key issue. This will require a fundamental shift in thinking by government and many of its agencies about the role of infrastructure, the way it is operated and managed and the demands placed on it in the future.