But with the bills piling up, taxpayers – as the investors – are right to start asking why we aren’t getting any bang for our borrowed bucks (not to mention the mounting debt).
According to Flyvbjerg, the Oxford professor who has dedicated his life to assessing such things, 91.5 per cent of megaprojects don’t deliver on time and budget.
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But brighter sparks than I have crunched the numbers and found that delivering major infrastructure projects in Australia is almost always more expensive than comparable projects in other countries (even after you adjust for purchasing power and exchange rates).
The reasons for this include our labour and industrial relations settings (primarily the remit of the federal government), lower productivity rates due to workforce shortages and stricter safety, and environmental rules.
The state government has also blamed “unforeseen global circumstances”, including the COVID-19 pandemic, the war in Ukraine, the rising cost of materials and inflation for some of the recent cost blowouts and delays.
All mitigating factors, but hardly an acceptable excuse for all the unresolved issues with Victoria’s current pipeline of work. Projects no one forced the government to take on.
Take this week’s revelation that trains in Melbourne’s Metro Tunnel will have to run slower near the new Parkville station to limit interference with sensitive cancer and medical scanning equipment.
This was something planners started warning the government about in 2015. A decade on it is still unresolved.
In a similar vein, in 2021 the government announced a plan to run longer nine car trains on the Melton and Wyndham Vale corridor to boost capacity by up to 50 per cent. The only problem was, no one seems to have told the station designers.
Two years on Deer Park station was rebuilt, as part of the Level Crossing Removal Project, but they left 10 metres, off meaning they are too short for nine-car trains.
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Hardly a problem that can be blamed on Putin’s invasion of the Ukraine or global shortages of steel and cement.
Experts believe many of these costly mistakes aren’t inevitable. And with some simple changes, some of the blowouts and delays could be reined in.
For example, the Grattan Institute suggests state governments ensure all board appointments for mega-projects are limited to experts with a track record of delivering major infrastructure. Even if such a rule wouldn’t bode well for the Suburban Rail Loop Authority Board.
Similarly, the think tank recommends introducing new laws to beef up the powers of the state’s infrastructure body to ensure it has a greater say in approving projects before funds are committed. It also argues that requiring governments to publicly release post-completion reviews for major projects would also ensure we don’t repeat out mistakes.
Until then, the government is taking a punt that once voters are driving on new roads or using new stations (right before the next election) the cost and delays will all be forgiven.
Annika Smethurst is state political editor.
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Source Agencies
