The well-paved road to nowhere on infrastructure

Australian Financial Review, 5 August 2013 by Mathew Dunckley

Not far from where I live there’s a little nook of a street, barely a lane wide, with glass-smooth asphalt and beautiful bluestone gutters. It was beautified under the federal Roads to Recovery program, which tipped several hundred thousand dollars into this little-travelled corner of suburbia.

It’s also a tree-lined monument to the absolute dog’s breakfast that infrastructure spending has become.

So where to begin with Melbourne’s East West Link, a project that is tying state and federal politicians of both stripes in knots?

Well let’s start with Rod Eddington. The business supremo was asked by the Labor state government to look at congestion in the city and came back with two big answers – an 18-kilometre road starting at the end of the Eastern Freeway and linking to the Western Ring Road and a 19-kilometre underground railroad. He thus planted the seeds for one of the most farcical debates in recent history.

Labor in government pledged to build the western part of the road, the bit that doesn’t go through inner-city seats where it worries about the Greens. Now Labor Opposition Leader Daniel Andrews says there is no proof that the eastern part of the road is needed and his party won’t back it.

Sir Rod’s report is simply erased, much like his once-famous moustache. Labor won’t even say if it still thinks the western bit of the road is worth doing. Not only that, but Labor’s Deputy Prime Minister, Anthony Albanese, said last week the project is “potentially worthy” and certainly worth more investigation.

Andrews says he will release later this year the full list of projects his government would build if elected.

He has also pledged to establish Infrastructure Victoria, which will assess what projects are worth doing.

He must be hoping the projects he pledges in 2013 are the same ones picked by Infrastructure Victoria in 2015. He will have his fingers doubly crossed seeing as he has invented a new political rule that governments can only build capital projects they have taken to an election.

Memory of Labor’s massive and unforeshadowed desalination plant must be in the same missing file as the Eddington report.


Oh, and by the way if, as planned, $6 billion or so is committed to this tunnel in late 2014, there will be two-fifths and five-eighths of not much left in an AAA-rated budget for Daniel’s list of pledged projects that might get built, maybe, perhaps. It doesn’t end there. Andrews slams the Napthine government for not releasing the business case for the East West Link, but refuses to commit to doing so for Labor’s projects if it wins. He is right to say the information available publicly is beyond threadbare.

There is a cost-benefit analysis that features neither the costs nor the benefits in dollar terms, nor much of anything else. My son’s typical pitch for a new Thomas the Tank Engine DVD contains more fiscal depth.

The government claims releasing more would undermine commercial negotiations. Asked how releasing material given to all bidders could be commercially prejudicial, Treasurer Michael O’Brien claimed it was simply too early in the process. Hooey.

This is a national concern because Canberra money is at stake. The federal opposition has pledged $1.5 billion towards the project, should it be elected. When Opposition Leader Tony Abbott first promised the money he said the project had been ticked off by Infrastructure Australia. It had not.

He now says that “senior people” at Infrastructure Australia tell him the project is a winner. Tony, that is not the same thing. Isn’t that obvious? Abbott pledges the Coalition will require projects to have proven cost-benefit analyses. But, hang on, he promised the money long before that ratio was available. Sigh.

What of Sir Rod’s Metro tunnel? Well, Infastructure Australia (all of it, Abbott) says that the project is a good one. Federal Labor says it backs the project but will not put any money on the table for years.

It will probably be on Andrews’ end-of-year wish-list, but at $9 billion, he will likely require a Christmas miracle to fund it.

Victorian Premier Denis Napthine says he will get to it down the track, and last week claimed Abbott was on board. Within hours Abbott insisted federal governments had no role in urban railways. Abbott says Canberra should fund only nationally significant urban roads and regional rail freight.

Well Tony, I’ve got a quiet little inner-Melbourne road to nowhere I’d like to take you down. After all, that’s where all you politicians are leading the rest of us.