The long -awaited public release of the updated light rail business case took place last Friday, 31/10/14 with much fanfare. It concluded that light rail would provide a cost/benefit ratio of 1:1.2. That is, for every $1 spent, ACT would get $1.20 of benefits.
The Government thinks this is a good deal. BUT, the devil is in the detail. $222 million of benefit results from a productivity increase. The reasoning is that light rail will reduce peak congestion in Northbourne Ave. This will enable car drivers to get to work, say, 10 minutes earlier and so be more productive. This supposed benefit is very ‘airy fairy’. Does Canberra get any benefit if these drivers work for the Federal Government? Some of the other ‘claimed benefits are similarly ‘airy fairy’. (Go to Capital Metro’s website if you want to read it).
There doesn’t have to be much of a budget blowout in terms of cost increases before that $1.20 benefit becomes $1.00. Our Government has a poor track record in delivering major infrastructure projects on budget and this is the most expensive ever proposed by any ACT Government.
The earlier business case which was rejected by Infrastructure Australia and more recently by the Productivity Commission at least had a comparison of light rail versus buses. The cost/benefit clearly favoured the bus solution but the Government ignored this and pushed on with light rail. In this latest business case, there are no alternative solutions examined. It only looks at the light rail case. You have to wonder if the Government is deliberately keeping us in the dark about the cost/benefit of other solutions because they are only interested in a light rail solution.
The Government claimed that , in publicly releasing the business case, they are honouring their undertaking to be ‘transparent’. The problem is that they are holding back THE most important relevant financial information which the TCC has been asking them for months to reveal. That is, how much does the Government expect to have to pay the PPP Contractor each year for 20-30 years? (Explain that Government doesn’t pay during construction. Only after trams start rolling). This money has to come out of the Government’s annual budget each year and so directly affects all of us.
The Government claims that if they divulge this figure, it would give tenderers an unfair advantage. While this sounds sensible, it doesn’t really stack up because anyone with basic maths and business skills can calculate a ballpark figure. I think it will be about $100 million. Others have figures ranging from $70-$150 million. Mine is about in the middle so I’ll use it for further calculations.
So where is the Government going to get this money? If they recover it from ratepayers, it will add about $700 each year to your rates. Alternatively, they could just increase the annual budget deficit – this means putting it on the credit card. The budget is already in deficit by about $350 million this year. It would increase the deficit by about 30%.
Ratings Agency Standard & Poors have recently issued a report that estimated ACT Govt debt would reach $7 billion by 2017, up from $1.7 billion in 2011. That’s about $18,000 of debt for every man, woman and child in the ACT. This project will further increase this debt.
The fundamental issue the TCC has with this project is that it must further increase the cost of living of all Canberrans for a very small benefit. Many of us, particularly those on fixed incomes, are struggling to pay their bills. We don’t nee d Government decisions that add to the problem. Keep in mind that this is not the only project that the Government wants to do that will cost us money. The new Law Courts, the new building for public servants and others.
What else has been happening?
As a membership drive, we teamed up with the AFP when they had their ‘Safe Plate’ Day in the Hyperdome car park on Saturday 25 October. Wayne, Beverley, Tom and I spent a couple of hours talking to drivers as the AFP staff were fitting tamper-proof screws to their number plates. It was a great way to tell them what the TCC was doing. Hopefully, we might have a few new faces here tonight as a result.
Carole and I went along to the open day at the Monash mosque also on Saturday 25 October. There was certainly a good crowd there and we enjoyed talking to our Muslim neighbours. The main purpose of the open day was a thankyou for all the help they got from the local community to repair the serious damage done by vandals some months ago.
I’ve sent out quite a few emails to members last Sunday. They covered a wide variety of topics.
– Electoral Commission is inviting submissions of the proposed 5 new electorates,
o their boundaries and names. Remember that the 2016 election will introduce 5
o electorates with 5 MLAs in each. So the number of MLAs will increase from 17 to 25. This is a very important topic and the TCC should prepare a submission.
o I’ll be sending out another email to members after the Electoral Commission
o make more information available on their webssite on 5 November.
– Ashley Drive duplication. Plans are available for comment and ACT Roads will
o be at the Erindale Shopping Centre to discuss the plans with you. Dates/times
o given in the email.
– Drakeford/Isabella/Athllon Drive roundabout changes. New traffic lights on Isabella Drive. Comments invited but not much time before close.
– Kings Swim Centre at Calwell Shops has now opened. A good outcome from a
o project that almost was abandoned. My thanks to Treasurer Barr for sorting out
o the ‘late fee’ issue that allowed the project to proceed.
I wrote to Minister Rattenbury a few weeks ago asking for an update on the
proposed Southern Cemetery on Mugga Lane. He replied basically saying that it
was subject to normal budgetary considerations. I think that probably means we won’t be seeing anything happening in the near future. This one is probably low on the totem pole compared with many other projects. The Mr Fluffy project is certainly going to impact on the Government’s budget priorities.
– You might recall that the TCC responded to the Treasurer’s invitation to submit
ideas that would help him frame the FY 15/16 budget. I sent an email to members advising how to find this submission if you wanted to read it
The main points were :
– no money for light rail or other projects that are going to add to our cost
– provide funding for the new CIT Tuggeranong campus and duplication of
– learn to live within your means like the rest of us.
We have booked a stall on Saturday at the Tuggeranong Festival which is on Friday to Sunday (21,22,23) November. We use this to raise our profile in the community and sign up new members. I hope Tuggeranongites support the Festival. It has a new Director and new activities. You can get more information from their website.
The TCC will be hosting a meeting of the Combined Community Councils on Saturday morning 15 November in the Tuggeranong Community Centre. Light rail is sure to be on the agenda. Russ Morison has proposed that the Councils support a petition. Watch this space.
Since it’s our last meeting for 2014, I’d like to thank my fellow Committee members for all the good work they’ve done this year. They’ve all been a big help to me. We believe that the TCC performs a worthwhile purpose for all Tuggeranong residents and businesses and will continue to advocate on their behalf.
And thanks to all our members who support our monthly meetings and provide us with
valuable ideas. I’d like to wish you all a safe and joyous holiday season and look forward to seeing you at our first meeting next year in February.