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Sunday, 24 August 2014

Lack of Transparency in Transport Priorities

The STC has been concerned for some time about the lack of transparency in the selection and prioritisation of transport investments - particularly when the choice is between two very costly projects (MAX light rail and the Perth Airport Link) that have entirely different contributions to make to the future of travel in Perth.

This concern has been echoed by the Productivity Commission in its report on Public Infrastructure that was released last month. The Commission called for "subjecting all public infrastructure investment proposals above $50 million to rigorous cost-benefit analyses that are publicly released … prior to projects being announced". 
The West Australian, 23rd August 2014. Click to enlarge
We'd suggest that the threshold trigger should be much lower than this, although the detail of the assessment could vary, but this recommendation clearly catches MAX and the Airport Rail Link - as well as many other potential rail projects, as Gareth Parker also pointed out.
The West Australian, 23rd August 2014. Click to enlarge
Even without rigorous analysis, the widely differing relativities between cost and passengers for these projects requires investigation before committing to any of them. It is not good enough for Transport Minister Dean Nalder to say, with respect to benefit-cost studies, that "some had not been done, while others had been done but would not be released". It's public money being spent (or not spent) here, and we have a right to reassurance that it is being spent wisely.

Mr Nalder is wrong when he says that "public transport projects typically struggled to exceed BCRs of 1". The Government's own public transport plan (Public Transport for Perth in 2031) was assessed as having an overall BCR of between 1.8:1 and 2.2:1 (reported on page 34 of that plan). The Airport Rail Link, on Mr Nalder's own figures (BCR of 1.5:1) performs less well than most of the rest of the public transport plan, which is presumably why it was put into Stage 2 projects not into Stage 1.

This raises yet another question raised on Saturday - why has the Government chosen different priorities from those identified in it's own plan? And it isn't good enough for Mr Nalder to say that it reflects higher population growth forecasts since the Plan was developed - his BCR of 1.5:1 for the Airport Rail Link presumably includes that faster growth and such growth would also increase the returns from other public transport investments.
The West Australian, 23rd August 2014. Click to enlarge
No one disputes that we need to invest more in public transport, but this is not an encouraging assessment of the way in which decisions are made on how our taxpayer dollars are being spent. 

Posted by Ian Ker, Deputy Convenor, STCWA

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