Billions are the new millions

Billions are the new millions
28 May 2009

Nathan Rees reminds me of nothing so much as Hitler in the final days, holed up his Berlin bunker, moving phantom divisions of long dead teenage soldiers around the maps as the Red Army closes in.

Except Nathan is surrounded by grim RTA fanatics, sly Ministry of Transport flunkies, MacBank spivs and the sort of consultants who tell you what you want to hear.

“Ja! I vill haff a metro from here at Central station to here … vot is zis place?”

“Zat is Rozelle. Most strategic, My Premier!”

“Of course, dumbkompf. Unt build anozer metro unterground from Central to zis place.”

“Zat is Parramatta. But Premier, Marshall Kevin has betrayed us. Ve haff not any funds. Ze private sector has not any mon …”

“Zos are my orders!”

“Jawohl Premier!”

The government has been living out a bizarre fantasy and it’s the faux precision that gives the game away. Nathan reckoned the City Metro would cost $5.3 billion and the Western Metro $8.1 billion. They haven’t yet decided on a route for the Western Metro and they haven’t done any detailed design work. They haven’t even settled on how many stations there will be, or where, but they do have a price – $8.1 billion. How do they know that? Where does that point one come from? Why not, “Buggered if we know. Anywhere between four and twelve billion we guess”? At least that would be honest.

And on top of all that, maybe we’ll have the M4East for $12 billion. How about a spaceport at Barangaroo for $19.5 billion or maybe $27.7 billion. Why not? The Solar System as Nathan’s last territorial claim in the Universe.

Enough. I’m being cruel. Poor bewildered young Nathan inherited a terrible situation created by Carr, Egan, Costa and Iemma, and the feds have now delivered a humiliating awakening by giving NSW next to nothing.

The point is, we’re all numbed by the numbers. In fact, too numbed to check up on them. I mean, if you had a project worth just $50m, nobody in the NSW government would take you seriously. It’s gotta be “worth” at least a billion before it rates. But how do some of these projects compare to what governments are forking out elsewhere in Australia, or for that matter what we were paying in NSW just a few short years ago.

Here’s a fascinating comparison. Last year, the WA Labor government opened Perth’s new Mandurah line. It runs for 72 kilometres from the centre of their CBD to their south-western growth centre. There are 11 stations – two underground, and most with integrated bus interchanges and park-and-ride facilities for hundreds of cars. There’s about a kilometre and a half of tunnelling through the city centre and most of a city block was levelled to excavate the hole for the underground platforms at Perth’s version of Central. There were also two major water crossings, hundreds of metres long, a stabling yard and work to connect the line to the rest of the network. The whole job came in for about $1.22 billion – about $17 million per kilometre.

Compare that with the NSW Transport Infrastructure Development Corporation’s 2007 cost estimate for Sydney’s proposed South-West Rail Link (typically, it’s since been abandoned by the NSW Government). The South-West Link was to have been 13 km long, through unchallenging terrain with no water crossings, just two new stations, a stabling yard and work to reconfigure Glenfield station and connect the new line to the rail network. This insignificant job was to have cost the NSW taxpayer $1.36 billion (or $106 million per kilometre). On this comparison, heavy rail construction in NSW costs six times what it would cost in Perth.

How does the South-West Link’s estimate stack up against previous work in NSW? Take the Airport Rail Link. This 8 kilometre tunnel came in at around $800 million 10 years ago. There are five stations on the line and it was heroic engineering through wet sand most of the way. That’s $100 million per kilometre. Ignoring the cost of property acquisition, it’s generally said that tunneling costs at least four times surface construction, so an equivalent cost for surface construction would have been less than $25 million per kilometre against the South-West Link’s estimate of $106 million. The difference can’t be inflation because there hasn’t been anything remotely like that level of inflation since 2000.

So what’s going on? If Sydney’s South-West Rail Link had been built by West Australia’s Labor Government it would have cost a bit over $220 million, but our Labor Government reckoned it was going to set us back $1.36 billion. Something is very wrong here and we need a Royal Commission to get to the bottom of it.

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We've been online since 1997. Check out the archives or … powered by FreeFind © Nick Possum/ Brushtail Graphics	Billions are the new millions 28 May 2009 Nathan Rees reminds me of nothing so much as Hitler in the final days, holed up his Berlin bunker, moving phantom divisions of long dead teenage soldiers around the maps as the Red Army closes in. Except Nathan is surrounded by grim RTA fanatics, sly Ministry of Transport flunkies, MacBank spivs and the sort of consultants who tell you what you want to hear. “Ja! I vill haff a metro from here at Central station to here … vot is zis place?” “Zat is Rozelle. Most strategic, My Premier!” “Of course, dumbkompf. Unt build anozer metro unterground from Central to zis place.” “Zat is Parramatta. But Premier, Marshall Kevin has betrayed us. Ve haff not any funds. Ze private sector has not any mon …” “Zos are my orders!” “Jawohl Premier!” The government has been living out a bizarre fantasy and it’s the faux precision that gives the game away. Nathan reckoned the City Metro would cost $5.3 billion and the Western Metro $8.1 billion. They haven’t yet decided on a route for the Western Metro and they haven’t done any detailed design work. They haven’t even settled on how many stations there will be, or where, but they do have a price – $8.1 billion. How do they know that? Where does that point one come from? Why not, “Buggered if we know. Anywhere between four and twelve billion we guess”? At least that would be honest. And on top of all that, maybe we’ll have the M4East for $12 billion. How about a spaceport at Barangaroo for $19.5 billion or maybe $27.7 billion. Why not? The Solar System as Nathan’s last territorial claim in the Universe. Enough. I’m being cruel. Poor bewildered young Nathan inherited a terrible situation created by Carr, Egan, Costa and Iemma, and the feds have now delivered a humiliating awakening by giving NSW next to nothing. The point is, we’re all numbed by the numbers. In fact, too numbed to check up on them. I mean, if you had a project worth just $50m, nobody in the NSW government would take you seriously. It’s gotta be “worth” at least a billion before it rates. But how do some of these projects compare to what governments are forking out elsewhere in Australia, or for that matter what we were paying in NSW just a few short years ago. Here’s a fascinating comparison. Last year, the WA Labor government opened Perth’s new Mandurah line. It runs for 72 kilometres from the centre of their CBD to their south-western growth centre. There are 11 stations – two underground, and most with integrated bus interchanges and park-and-ride facilities for hundreds of cars. There’s about a kilometre and a half of tunnelling through the city centre and most of a city block was levelled to excavate the hole for the underground platforms at Perth’s version of Central. There were also two major water crossings, hundreds of metres long, a stabling yard and work to connect the line to the rest of the network. The whole job came in for about $1.22 billion – about $17 million per kilometre. Compare that with the NSW Transport Infrastructure Development Corporation’s 2007 cost estimate for Sydney’s proposed South-West Rail Link (typically, it’s since been abandoned by the NSW Government). The South-West Link was to have been 13 km long, through unchallenging terrain with no water crossings, just two new stations, a stabling yard and work to reconfigure Glenfield station and connect the new line to the rail network. This insignificant job was to have cost the NSW taxpayer $1.36 billion (or $106 million per kilometre). On this comparison, heavy rail construction in NSW costs six times what it would cost in Perth. How does the South-West Link’s estimate stack up against previous work in NSW? Take the Airport Rail Link. This 8 kilometre tunnel came in at around $800 million 10 years ago. There are five stations on the line and it was heroic engineering through wet sand most of the way. That’s $100 million per kilometre. Ignoring the cost of property acquisition, it’s generally said that tunneling costs at least four times surface construction, so an equivalent cost for surface construction would have been less than $25 million per kilometre against the South-West Link’s estimate of $106 million. The difference can’t be inflation because there hasn’t been anything remotely like that level of inflation since 2000. So what’s going on? If Sydney’s South-West Rail Link had been built by West Australia’s Labor Government it would have cost a bit over $220 million, but our Labor Government reckoned it was going to set us back $1.36 billion. Something is very wrong here and we need a Royal Commission to get to the bottom of it.