Opinion Pieces: Will we ever have enough government funds to sort our infrastructure?

01 / 31 / 2011

Opinion Pieces: since 2007, Prof. David Hensher has written an opinion column in the Australasian Bus and Coach magazine, where he monthly discusses a lot of different transport-related hot topics. In this section we are revisiting these columns.
October 2008
The Australian Infrastructure Fund has recently received over $235bn worth of bids for the opportunity to access the $20bn Infrastructure fund. We are advised that a proper benefit-cost analysis will be applied in the determination of what projects will get up. While we strongly support the initiative of government, we raise the more fundamental concern about how seriously the evaluation process could possibly be in determining which requests will be approved. There is a feeling abroad that such processes end up funding a few very large mega projects that have strong political visibility but may well be down the list of benefit-cost ratios, regardless of the level of detail associated with the benefit-cost appraisal. What this suggests is that we have to find other ways of funding infrastructure if we are to make a difference. The skeptic in me suggests that $20bn spread across the nation might (and between many sectors such as telecommunications and transport) deliver no more than $2bn to a capital city for transportation. With the focus on rail ‘solutions’ in Sydney and Melbourne, which will cost around $6-7bn (despite government pronouncement of the order of $4bn), it is unlikely we will see enough financial action to make a big difference. Even more concerning, projects that promote systemwide and network-based solutions in contrast to corridors are unlikely to get up. This is not good news for the bus sector unless by some marvel of turn, we see the occasional bus rapid transit system (BRT), which could if taken seriously deliver at least ten times the amount of transport capacity for the same financial outlay as expensive rail ‘solutions’ (even with tunnelling where above-ground access is not available). Brisbane has recently completed tunnelling for its BRT, demonstrating that buses can operate efficiently in tunnels, despite claims to the contrary by those who support rail.
It is time to start thinking about alternative infrastructure funds. The obvious one, that built the Opera House, is a lottery. This alone, in a nation of gamblers and risk-takers, might be expected to deliver far more dollars for public transport that the Australian Infrastructure Fund will ever deliver. I am surprised that governments have not, at the very least, sought the views of the electorate on this very attractive way of finding the huge sums that we need. Let’s look at a scenario. Suppose PT lottery tickets were sold for $10 per ticket, and that 10 percent of the population in Sydney purchased two tickets through the year. This would raise in gross terms $80m per annum. If we deducted administrative costs and prizes, this sum might decrease to $60m per annum. Over five years, a period acceptable for a decent piece of infrastructure investment (compared to 10-12 years for rail)(ignoring inflation and adjustments into present value terms), we would raise a net sum of $600m. and build at least 20-25 kilometres of high quality (Brisbane-style) BRT.
Food for thought
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