Sydney Morning Herald: Baird government’s dismissal of Hehir report alarming January 12, 2015
If Mike Baird’s government is re-elected in March, it must resist the tendency to dismiss well-meaning critiques of the way in which it is implementing its agenda. Photo: Jane Dyson
The Coalition government had, and has, a mandate to get the state moving. But in its desire to get cracking on a number of multibillion-dollar transport projects, the government risks betraying the trust granted it by the public.
An auditor-general’s report into the WestConnex motorway, released late last year, is an alarming wake-up call for what is undoubtedly the country’s biggest transport project, and which seems to be growing all the time.
The auditor-general, Grant Hehir, had been in his position for just over 12 months when he issued the report. And the report is by far the most damning appraisal of a government initiative Hehir has issued during his time in the job.
Hehir lists numerous failures with the governance of WestConnex, a $14 billion-odd series of motorway works to run from Parramatta to Sydney Airport and out to Beverley Hills.
But the failings tend to gravitate around one fact: the government has bypassed the regular processes of review for the WestConnex motorway, processes typically applied to all initiatives costing more than $100 million.
Why are these reviews important? “They provide a fresh set of eyes and arm’s length independence not available from even the best internal controls,” Hehir’s report says.
“This is a key principle of the Government’s Major Projects Assurance Framework. If this framework had been fully implemented, four additional gateway reviews should have been conducted in the period covered by this audit.”
It is a basic principle of corporate governance that the people managing an enterprise should not be the same people who provide oversight of that enterprise.
But in his report, Hehir documents the manner in which the government has allowed the boards and steering committees set up to build WestConnex also to provide the project’s “independent” monitoring.
“There is a fundamental conflict in such an arrangement,” Hehir’s report says. “A steering committee or board with delivery responsibility cannot provide truly independent advice to government.”
These issues matter. In Victoria, the release of the business case for the East-West Link motorway project by the new Labor government exposed the manner in which the previous Coalition administration became captive to the need to “get things moving”.
The previously secret documents released by the incoming Premier showed the benefit-cost ratio of Melbourne’s East-West Link – the key metric determining whether it was worth spending all those taxpayer billions to build the thing – could be as little as 45 cents in the dollar.
Similarly, Hehir’s report bells the cat that the benefit-cost ratio released by the NSW government for WestConnex – $2.55 worth of benefits for every dollar spent on the project – is likely to be an overestimate.
“Our analysis found that the project is still likely to have a positive benefit-cost ratio using industry-standard economic modelling techniques, although this could be lower than identified in the publicly released business case executive summary,” the report says.
But perhaps more alarming than the contents of Hehir’s report has been the Baird government’s cavalier dismissal of it.
“We respectfully disagree, we have followed world best practice on procurement and delivery and it complied with the processes set by cabinet,” was Roads Minister Duncan Gay’s only comment to this newspaper in response to the Hehir report.
What is the point, we might ask, of having an auditor-general, if the government is not interested in what that officer has to say about its very largest initiative?
If Mike Baird’s government is re-elected in March, it must resist the tendency to dismiss well-meaning critiques of the way in which it is implementing its agenda.
Nobody wants Sydney to continue to suffer the congestion it does. But even Liberal elders Nick Greiner and Lucy Turnbull have criticised the manner in which the WestConnex motorway appears to have split off from the urban regeneration objectives to which it was meant to be allied.
And there are too many examples in recent history of road projects – think the Cross City Tunnel, think the M5 East – sold as “congestion busters”, but of which little positive can now besaid.
This government has good stories to tell in transport. The Opal card is working well, numerous smaller road projects are under way.
But it should re-appraise its response to Hehir’s warnings about WestConnex. Baird’s government needs to demonstrate to the public that it is able to take a more open, self-confident approach to its major initiatives; the projects, for good or ill, for which it will be remembered.