Brisbane residents have become desperate for a solution to
rapidly increasing traffic congestion. Unfortunately governments have been
pursuing 'solutions' that simply involve expanding
traditional transport arrangements - and the results are
inadequate.
The core of those 'solutions' involves a set of new links to fill gaps in the city's
freeway network and some increased emphasis on public transport. Unfortunately:
the state government's adoption of an 'urban footprint' in SE Queensland
to prevent urban sprawl also denies access to the cheap 'rights of way' beyond
the urban fringe that cities traditionally have had available where they focus
on freeway, rather than mass transit, options;
many of the envisaged freeway links thus involve tunnelling which makes them so
expensive (eg $500m-750m per km and thus $2-3 per vehicle per km with 100,000
daily traffic volumes) that they are unlikely to be viable or affordable;
the global peak oil event is likely to significantly affect the cost of
motor vehicle transport in the reasonably near future and require major
changes in urban form and transport systems;
the machinery for planning the development of infrastructure in Queensland
(including transport) is substandard, and subject to increasing conflicts of
interest which prevent the community gaining a true picture of their problem.
The 'solution' that was on offer to the Brisbane community might
have been seen to be appropriate 30-40 years ago but is not a 21st century
solution. A radical shift in community transportation requirements (and voter
expectations) can realistically be expected over the next decade, and
governments would be wise to take this into account.
In March 2009 the present writer was
advised by Queensland Transport of an initiative to develop an integrated and more realistic set
of transport options for SE Queensland - though this arguably did not go far
enough because the SE Queensland regional plan would be taken as given though it
probably needed adjustment to reflect likely major constraints on future transport system
options.
Finally it is noted that in August 2010 a new draft regional transport plan (Connecting
SEQ 2031: An Integrated Regional Transport Plan for SE Queensland) was
released by the state government, though the latter is not addressed in this
document. One observer suggested however that the proposal was likely to be more
of a utopian dream than a practical scheme, because it did not involved costed /
budgeted projects and would certainly be very expensive [1]
The Airport Link
project is one of three that have recently been announced by the Queensland
Government and a private consortium as a 'solution' to problems of congestion in
the vicinity of the Brisbane Airport [1, 2].
Unfortunately a rough estimate suggests that the project faces a funding
'black hole', which (as argued below) gives an insight
into the deficiencies of many other current proposals (eg the Clem7 tunnel
concerning which rough estimates are presented below).
Show: the apparent financing gap
Funding the Airport Link: According to recent press reports the
Airport Link project involves a 6.7km tunnel and would cost $3.8bn. Of this
$1.2bn would involve equity funding (on which investors would be guaranteed a
return averaging about 9% for the first 7 years) with the balance of funding
from 10 banks [1,
2]
The annual revenues for such a project would need to be around $416m
(assuming a 9% rate of return, a 50 year amortization period and that recurrent
costs are 20% of annual capital costs). At the nominated $4.30 initial toll [1],
260,000 vehicles per day would be required to produce this return. This is more
than twice the (approximately) 120,000 vehicles per day that use Brisbane's
southeast freeway [1] - and is clearly unrealistic. Earlier estimates suggested
that 2016 traffic volumes on the Airport Link route could be 61,000 [1]. At this
volume, the toll would need to be around $18.70 per trip, which common sense suggests
that few drivers would be willing to pay unless they face truly fearsome
congestion on alternative routes.
In September 2010 it was reported that Airport Link project was hoped to
attract 93,000 vehicles per day [1].
At this more optimistic volume the toll would 'only' need to be $12.25 per trip.
In March 2011 it was reported that new traffic forecasts suggested that the
Airport Link would carry 36,000 vehicles / day more than Gateway Bridge soon
after opening. 136,000 vehicles / day were expected within one month of opening
in mid 2012. This is 40% above estimates submitted in 2005. Traffic was then
expected to increase to 163,276 in 6 months (paying either partial toll of $3.50
or full toll of $4.80). However Matthew Burke (Griffith University) suggested
that these estimates had downside risk, as freeways can only carry 1700 vehicles
per hour - so a six lane road has maximum capacity of 240,000 vehicle per day -
assuming it operates at peak load for 24 hours each day [1]
Clearly the consortium proposing to develop the Airport Link are relying on
financial engineering to compensate for the initial gap between revenues and the Airport
Link's capital cost. On the surface revenues would initially cover only one
quarter of annual costs, and the project faces something like a $2.5bn
'black hole'.
Despite the complexity of such a project, the
Product Disclosure Statement (PDS) released by the BrisConnections
Consortium provides some insight into how this might be achieved.
Show: complexities
A complex spreadsheet and inside knowledge would be
needed to model the projects revenues and operating costs reliably because:
the PDS details (a) diverse vehicle categories and several tolled sectors along with
route with different projected traffic volumes that vary over time; and (b) quite complex arrangements for raising capital;
the rate of return on such projects depends on the rate at which funds are
raised, whether that debt is re-rated due to monoline insurance, the effect of
that debt on the company balance sheet, taxation levels and cash flows, the
amount of equity raised and the amount of government contributions [personal
communication];
some infrastructure companies pay distributions partly from
profits and partly from debt secured on future cash flows. Brisconnections may
be one of those because they are forecasting a firm initial distribution yield
which indicates high confidence in their figures [personal communication];
financial viability is determined in part by what facilities promoters
have available (ie if tunnelling gear is available and underused, there will
be a motive to use it that is greater than if it is unavailable) [personal
communication].
The secret seems to be that:
the cost of
operations and distributions to investors will rely on increasing debt levels
until around 2035, and only after this would debts start to be reduced (see Figure 9.2 in the PDS). Thus the very
long term compounding effect of both inflation and projected
increases in traffic volumes (about 2% pa) are being relied upon to (eventually) defray capital
costs;
the extremely reliable cash flows from infrastructure assets have
apparently allowed: (a) a much higher level of gearing (ie 70% of capital costs
has tended to be provided by banks) than is normal for corporate
borrowers (ie about 40%); and (b) the small equity component to carry an
apparently high rate of return [1]
- if everything goes according to plan.
This aggressive financial engineering would seem to create significant risks for
investors in Airport Link securities.
Show: risks
Firstly the global
credit crunch may make it impossible in future to continue increasing debt
to cover operating deficits (or even to refinance existing debts [1]). The Bank of International Settlements has
realistically suggested the current destabilisation of the global economy is the
product of "excessive and imprudent credit growth over a long period" [1].
Thus easy credit is unlikely to be as available in future as it has been in the
past, and projects reliant on this must be suspect [1].
Secondly the core assumptions underpinning prevailing attempts to improve
transport systems in Brisbane (ie the enhancement of a freeway system - of which
the Airport Link project is an example) could well prove invalid, because:
Brisbane, like all Australian cities, is now subject by planning
regulations to an urban 'footprint' which the balance of this document will
argue, probably makes it impossible to obtain the relatively cheap
rights-of-way that urban sprawl allows as the basis for freeway-based
transport systems.
the global 'peak oil' event will almost certainly occur well before
2035
and presumably disrupt
(and perhaps even reverse) assumptions about growth in traffic volumes which
are critical to the project's apparent long term viability. Even the
possible development of oil alternatives will not, unless those alternative
provide cheap energy, solve this problem - and the increased fuel efficiency
vehicle manufacturers are seeking [1]
will at best delay it.
While media commentators have
suggested that the effect of high oil prices
should have been analysed (rather than merely mentioned) in evaluating the
Airport Link option, it is of more concern that the state government did not
require such analysis before the project was approved, as the Coordinator
General has apparently required
that oil availability / price be considered in the environmental impact study
for another tunnel option (ie the Northern Link tunnel). If a steady decline in
traffic volumes is the likely outcome in a post global-peak-oil-event
environment, then this will radically alter the economics of any major road
project (and the commercial viability of toll roads);
passenger vehicle traffic on Brisbane roads (as
measures by total distance travelled) appears to have declined at about 7%
pa from 2003-04 to 2005-06 ie from 16.1bn to 13.9bn km (Apelbaum Consulting:
Queensland Transport Facts - May 2008, Table 3.1-2, p50) - while travel by
all road vehicles in Brisbane fell by around 5% pa (p51). The same document:
indicates that for Queensland as a whole the total road passenger task
declined by 3.3% in 2005-06 (due to both a 1.3% fall in vehicle km travelled
and to a decline in vehicle occupancy - mainly in rural areas) (p 3). This
was in spite of a 4.7% increase in the number of vehicles registered (p4);
suggests that increases in oil prices accounted for a 0.8% decline in
total distance travelled (p5);
includes a diagram (Figure H4, p 6) projecting, without any
obvious reason (though one can be speculated), a resumption of past rates of growth in total vehicle
km in Queensland after 2008 - following the post 2003-04 stagnation;
Moreover :
the way in which private infrastructure packages currently tend to be structured has
caused apparently-credible analysts to fear that the promoters of such
projects can profit even if investors do not (see below);
Brisconnections' traffic estimates for the proposed Airport Link have been
claimed to be double those by other groups who put forward proposals and by
the state government [1];
there seems to be a fundamental inconsistency between projections of
substantial growth in traffic volumes (which the project's financial
engineering requires) and the fact that a report showed
at the same time that this project was committed that road traffic in Brisbane
had actually been declining. Likewise in 2010, it was
reported that a suggested strategy for transport in SE Queensland
(Connecting Queensland 2030) included projections of declining numbers of car
trips in the region. In May 2011 it was reported that growth in car usage in
all Western cities essentially ceased in 2004 [1];
the project would only be a limited solution to traffic congestion - as
substantial levels of congestion must continue to affect alternative routes to
force some drivers to pay significant tolls;
the RACQ has argued (with unknown validity) that even modest tolls (eg $4
that could be charged for using a major tunnel if most costs are deferred by
borrowing to pay early distributions) would discourage use of toll roads and
force traffic back onto other heavily congested roads. They favour congestion
charges as an alternative [1].
(Note: one observer suggested the costs of congestion charging could outweigh
the benefits [1])
The massive longer term growth in
revenues needed to make the project financially viable may or may not happen. The problem is that under current practices for
private infrastructure, risk is taken by investors in securities who may not
be aware of, or able to evaluate, those risks. Moreover project
promoters tend to be rewarded by large initial and ongoing fees related to the capital invested rather than to the project's viability.
A recent analysis by Riskmetrics Group cast serious doubt on the
sustainability of current models for private infrastructure funding from the
viewpoint of investors - because: return to investors is often paid out of
capital; management fees are not linked to project cash flows; aggressive
approaches are taken in purchasing assets; more equity capital often needs to be
raised; and debt financing is also aggressive (see
Infrastructure Funds: Managing, Financing and Accounting: In Whose Interests?,
April 2008). Riskmetrics suggested that private infrastructure promoters have a
conflict of interest with those who invest in the securities that they promote.
A worrying parallel may well exist between the securitization of subprime mortgages by US financial
institutions, whose deficiencies have been exposed, and current practices for the securitization of investment in
private infrastructure assets. A desire to be able to claim a high value for
their holdings of many existing similar securities might encourage promoters of
new projects to present an over-optimistic view of the latter's prospects.
In September 2010 it was noted that many projects
funded through PPP-type arrangements had experienced financial difficulties
because actual traffic volumes fell well below those that has been forecast.
Other potential (but strenuously denied) conflicts of interest have emerged
in relation to the Airport Link project related to: (a) a large success fee
(allegedly $500,000) for their consulting efforts paid to two prominent ex-ALP
ministers; (b) the free holiday at a Sydney mansion made available to the state
premier before the deal; and (c) the large purchase of BrisConnections shares by
QIC (a state-owned investment company), when both have the same chairman [1]
Show: the ongoing surface-level congestion needed to sustain such a project
Motivating drivers to pay the tolls associated with such a project requires
something between a modest and a monstrous level of congestion on alternative
routes. How much congestion can be quantified.
Some people would pay quite high tolls
without question, as money is no object to them or their time has a large direct
monetary value. Others would never
pay even low tolls, as they don't have the money or don't value their time.
If an average person values their time at $10-20 (say $15) per hour, a
willingness to pay a initially-nominated $4.30 toll implies an expected time saving of 18
minutes. The estimated travel time along the 6.7km Airport Link has
been suggested to be six minutes (an average of 67km/ hour). The corresponding
travel time along surface roads would thus need to be 24 minutes (ie 6+18) over
(say) 8 km - an average of 20km / hour (cycling speed). This implies that a considerable
level of surface road congestion is expected to continue to face those who
choose not to pay the toll. Thus at best construction of the Airport Link is only a
solution to congestion for those whose circumstances make paying the toll
worthwhile.
However, if the toll were $18.70 (the level needed to cover costs without reliance on
future increases in tolls and traffic volumes to cover about 75% of those costs), the required time
saving would be 75 minutes and the overall travel time by surface roads
81 minutes (requiring an average speed of 6 km / hour - like that of a fast
walker). This implies a truly
horrendous level of ongoing congestion on surface roads.
Brisbane has long suffered deficiencies in arrangements for development of
its transport system (eg see
Failure of Planning for Brisbane's Transport System as a Whole). The latter
includes a very brief account of the history of this process, and of the growing
chorus of criticism several years ago that prompted renewed efforts by all levels
of government to find solutions.
In the 1960s a road transport plan for Brisbane was formulated by US
consultants (Wilbur Smith). This plan involved an at-the-time-progressive system of freeways and arterial roads, whose effect on encouraging urban sprawl
was not really considered. Public transport options were
not evaluated for another decade, and in doing so Brisbane's road systems and
evolving urban form were taken as given.
However the philosophies underpinning such plans were not the only source of
later problems.
Since the 1970s there has been both (a) an acceleration in
population growth in SE Queensland and (b) a steady erosion of the capacity of governments
to plan and develop infrastructure generally (as is well illustrated by other
infrastructure crises that have emerged - eg those related to electricity distribution,
hospitals and
water supply). A
general account of the history of the latter decline in institutional capacity is presented in Defects in
Infrastructure Planning and Development. The latter refers, for example, to:
federal fiscal imbalances which, especially since the 1970s, have (a) made it difficult for states
to take real responsibility, or be held politically accountable, for their nominal functions,
and (b) encouraged a shift in control from those with skills in 'doing the
job' to those skilled in lobbying for funding;
neglect of mainstream public administration in the 1980s, as the interests
of private investors in 'major projects' were emphasised by the government of
the day;
failure of amateurish attempts at reform in the 1990s
which (for example): eroded the knowledge and skill base in the public sector; fragmented
responsibility for planning infrastructure in an attempt to promoted commercialization and corporatisation; and
established centralised and regional strategic planning machinery which
separated 'decision making' from those with the knowledge needed to do so
competently;
the complexity added by trying to promote private responsibility for functions
in which
effective competitive markets can not be developed.
Because of such institutional defects, practical action to cope with the
pressure on Brisbane's transport system from rapid population increase
has been limited and the city has been suffering
increasingly serious traffic congestion.
Unfortunately, rather than a solution, Brisbane's citizens are now being
presented with a 'monster' - largely because the political establishment is
responding to past public expectations that
existing transport systems merely need to be expanded rather than transformed.
In particular public comment has been sought by the State Government on a
series of future transport routes
as an interim outcome of the $17m Western Brisbane Transport Network Investigation. In essence these
involve: diverse proposals for cross-city freeways (often super-expensive
projects through tunnels like the Airport Link mentioned
above) to close gaps in the city's freeway network, combined
with several new especially-outer-suburban public transport routes.
One problem is the freeway tunnels seem to cost about $500m-750m per km,
which (based on a parallel with the Tugun bypass [1])
seems to be about 7-10 times the cost of an equivalent surface road if rights of
way are available. As illustrated by the Airport Link example
above the super-expensive freeways envisaged would:
produce a poor return on capital which will quickly discourage further
investments, if unrealistically low tolls are claimed to secure project
approval.
be
financially viable only if surface-level roads remain so congested that
some desperate drivers pay huge tolls - if the latter are realistic.
These problems would clearly be exacerbated if the
global 'peak oil'
event (which could well occur in the next few years)
prevents the rapid growth in traffic volumes that seem to be required by the
aggressive financial engineering techniques apparently envisaged in funding
such projects.
Another obvious problem is that the planning process does not ensure that outcomes reflect the community interest. That
process is anything but transparent (see example below), and potentially involves serious conflicts of interest
between the promoters of privately financed infrastructure
projects and the community (in addition to those with the investors in infrastructure securities
mentioned above). And unfortunately Queensland's
system of government currently seems highly susceptible to unethical behaviour
by state officials (eg see [1],
Reform of Queensland
Institutions or a Rising Tide of Public Hypocrisy?)
A set of proposals which continue to focus transport on road / freeway
networks might have seemed reasonable
30-40 years ago but is not appropriate in the 21st century. For example:
SE Queensland's regional plan now seeks to limit the
urban sprawl typically associated with a freeway-based transport system - and
this seems to leave no options for freeway locations other than those which
are very expensive. If urban sprawl is to be prevented there may be no
practical alternative to making the painful transition to a transport system
based on mass transit. Needless to say, this would also require substantial
changes to land use patterns so that the high population densities required
for viable mass transit emerge;
a global 'peak oil'
event in the planning period (given the costs,
infrastructure and time required to implement currently-unplanned alternative
technologies) could well force such
changes in transport systems (eg steadily declining, rather than ever
increasing, traffic volumes while demand for public transport rises) and urban forms, that it is irresponsible not to
formally make this the subject of an alternative scenario for which a complete
set of transport options would be developed.
The present writer
suggested the need
to develop such an alternative scenario in
response to 'business as usual' options put forward by the WBTNI. Independently advice [1]
was received from the consultation team for the Northern Link (Option 4) that
the Coordinator General required the peak oil
issue to be addressed in relation to investigating that specific route. This
seems like 'passing the buck' as it is surely critical in deciding the core philosophy of the transport
system as a whole, and should not have to be determined in evaluating
individual links.
Note: It was drawn to the present writer's
attention that the state government is developing an
oil vulnerability strategy
which is considering what would be required to
mitigate the effect of peak oil. However this seems to be being done
independently of the governments transport planning processes. Moreover the
Brisbane City Council produced a report ('A
Call for Action' respectively) which
considered both climate change and peak oil issues; did not seem to deal with
the peak oil challenge in much depth; produced mainly motherhood proposals; and
was rejected politically.
Show: Another Illustration of these problems: The Brisbane West Bypass
Another Illustration of these problems: The Brisbane West Bypass
These concerns can be well illustrated by the debate about the development of a
Brisbane west bypass to fulfil the same function as the Gateway Motorway does to
the East. Considering such an option was a key focus of the WBTNI.
However, even before public submissions were sought on WBTNI's possible
transport options, its first two options which involved western bypass routes were
rejected supposedly on
the basis of high costs, low traffic volumes and encouraging urban
sprawl inconsistent with the SE Queensland regional plan.
The alternative appears to be a 10 km tunnel north
from Toowong (WBTNI's Option 3) which, together with the Western Freeway / Centenary Highway and a
new surface freeway to the north, would fulfil the necessary bypass function to
Brisbane's west -
though it would pass through, rather than around, Brisbane's west-side suburbs.
The trouble is that a reasonable
guess-timate of the
required average toll over the life of such an inner-suburban tunnel could be something like $17
per trip (assuming a capital cost of $5.7bn and average traffic volumes of
100,000 vehicles per day). As with the Airport Link this
project seems to face a large financial 'black hole', and to have no prospect of
'commercial' viability without:
continued congestion on surface roads on Brisbane's west-side to force
desperate drivers to pay high tolls;
a very large cash contribution by governments; and / or
investors who tolerate poorly-understood risks in purchasing
infrastructure securities.
Thus the most pressing reason for the State Government's decision to reject
an outer-suburban western bypass route is likely to be to concentrate and congest traffic in Brisbane's
inner west-side suburbs to the potential financial benefit of the private promoters of such a tunnel
(and / or to reduce necessary government cash contributions).
This might or might not be desirable, but the issues involved need to be
publicly disclosed. However in making claims about low traffic volumes and high
costs on an outer-suburban western bypass, there was no public disclosure about
the technical basis of such conclusions. For example:
there was no way to compare the estimated cost of an outer suburban bypass
with the cost of the inner-suburban alternative (a 10 km
tunnel (say $5.7bn) plus the cost of upgrading existing freeways and developing others).
the transport modelling which has been used to estimate usage of
alternative routes could well be unreliable. In response to an inquiry about
this, the present writer received
advice [1] about traffic volumes which implied that the models did not
properly allow for the effect of tolls on some routes (the effect of which
should be to increase the perceived 'time' involved in using a tolled route,
so that the model would assign more traffic to alternative routes). If such
allowances are not made, modelling would over-estimate traffic on tolled
routes and under-estimate it on competing routes (such as the outer-suburban
western bypass options).
Finally the fact that such a super-expensive
tunnel would presumably be funded through a public private partnership gives rise to huge potential fees and
thus to concerns about possible
conflicts between the
interests of the general community and the promoters of such projects (including
public officials who may profit through a later change of career).
The funding 'black hole' that appears to affect the Airport Link project (ie a reliance for covering about 3/4 of the capital costs on: (a)
borrowing to pay distributions to investors for many years; and (b) the
expectation that inflation and future traffic volumes will allow costs to be
recovered sometime in the long distant future) seems also to affect the
Clem7 tunnel.
The annual revenue needed to cover the costs of this project (assuming construction costs (say) $3.5bn; 9% return
on investment; 50 year amortization period; and 20% operating costs that are 20%
of capital costs) is about $320m - ie about $0.9m per day. Traffic estimates for
the tunnel are 60,000 vehicles / day [1].
With average tolls of (say) $4.50, revenue would be
$0.27m / day.
Traffic volumes for this tunnel are
forecast, by
the project's promoters to increase to 100,000 by 2012 and 135,000 in 2026
- even though state government estimates that the total number of car trips in the region is
actually likely to
decline over that period
In March 2010 other analysts concluded that the Clem 7 tunnel faced
difficulties - though these would be less serious than suggested above.
Specifically it was noted that: (a) average initial usage during
toll-free trial period was 67,000 vehicles; (b) the operators debt is
$1.355bn - which requires 80,000 vehicles per day; (c) usage typically
increases 40-60% after initial opinion - but toll-free traffic tends to
fall 50% after tolls are applied (eg for Eastlink toll-free traffic
numbers were still down 35% after 18 months); (d) this suggests that usage
in 2011 could be 50,250 vehicles per day - which (at $4.43 for average
vehicle) would generate $81.2m, and a net $50m after deducting $31m (PDS
estimated of operating costs). If interest rates average 7.1% then
interest bill would be over $90m - $40m more than operating cashflow [1]
In September 2010, it was reported that
there could be a need to change the way in which infrastructure is funded
because the Clem7 project: (a) incurred a huge loss and was written down
by $1.56bn; (b) traffic volumes were still much below expectations despite
a 50% cut in tolls; and the company might be unable to continue operating
unless traffic volumes increased [1].
It was also reported that daily traffic volumes have proved much lower
than forecast for freeway projects in Australia (eg Clem7 averages 20,000
rather than forecast 60,000; Land Cove Tunnel attracts 56,000 rather than
100,000; and Eastlink network has 160,000 rather than expected 258,000) [1]
There is a real risk that the general community (who are likely to pay
through tolls, ongoing surface congestion, taxes and investment in risky
securities) might be being misled.
The road transport
options that are currently being approved and considered by governments
in the hope of improving Brisbane's transport system seem quite inadequate
because of their: high costs; probable
inability to seriously reduce congestion;
apparent
incompatibility with the intent of the SE Queensland regional plan;
and inadequacy in the event that the global 'peak
oil' event occurs in the next few years.
Moreover the planning process appears to be affected by serious potential conflicts of interest because of:
the 'revolving door' that increasingly exists between the public
and private sectors;
incompatibilities between the interests of the community as
road users, taxpayers and investors and the interests of those who may
promote private infrastructure investment in an environment in
which market discipline is impractical.
The planning process also seems unable to envisage 'future oriented' options (eg the
likely steady decline in traffic volumes and increased community demand
for public transport that is likely when the global 'peak oil' event occurs).
It is probably necessary to significantly change the direction of current
efforts to ease Brisbane's transport woes.
Show: how
This might, for example, involve:
a deliberate shift in emphasis in development of Brisbane's
and Queensland's transport systems from roads / freeways to mass transit, and a
corresponding shift in urban forms and in logistics;
exploration of more cost-effective options for improving
the road network. For example:
existing routes might be upgraded sufficiently to cope with less ambitious
future traffic volumes;
elevated roadways (on piers) might provide less expensive scope for new rights
of way for roads than tunnelling;
if tunnelling is the only way to get new inner-city rights of way, these should
arguable be devoted to mass transit rather than motor vehicles (so as to gain
economies from larger numbers of users);
the development of an outer-suburban Brisbane west bypass could be reconsidered;
congestion pricing, as long advocated by the RACQ, might be used to reduce
demand for congested road space;
development of transport models which explicitly consider the effect of tolls on
traffic volumes - if this is not already done;
the formulation of at-least outline plans appropriate to alternative
scenarios through a process which involves those with responsibilities for
practical initiatives. It is understood that the Departments of Main Roads
and Transport undertook an analysis of the implications of various relevant alternatives some years ago (ie
of alternative urban structures in SE Queensland) and of external conditions
that could have significant effects (eg constrained energy supplies or a global economic
meltdown). However there seems to be no connection between such analysis in the
abstract and the planning of practical initiatives - though, as noted
above, constrained cheap oil supplies could radically alter
the economic and commercial viability of road projects.
It is also vital to rebuild institutional capacity to:
support more a more appropriate process for planning and development of
infrastructure; and reduce the incidence of similar problems in future.
At the very least a high level of public disclosure of technical data before,
not after, firm commitments are made is vital
to reduce the risk that decisions are distorted by conflicts of interest.
the community to support
institutions which provide more up-to-date and practical inputs to the political process (to overcome the
chronic policy weakness of the state's political system, and allow the community
to better understand their real options in dealing with complex technical issues); and
a truly (rather than nominally) professional Public Service to
provide practical support to the community's elected representatives and an
informed watch-dog role in relation to conflicts of interest.
In March 2009 the present writer was
advised by Queensland Transport of an initiative to develop an
integrated and more realistic transport plan for SE Queensland.
This involved a joint Queensland
Transport / Department of Main Roads (DMR) project ('Connection SEQ 2031'),
which:
is to
complement the SEQ Regional Plan;
will seek to
identify transport options that meet challenges such as: reducing greenhouse
gas emissions; oil supply / price constraints; lifestyle and economic impacts;
and higher construction costs;
recognises
the inadequacy of simply providing more roads, especially when taking account
of oil depletion;
is likely to
suggest some toll roads;
will seek a
transport system to suit the region's future needs.
This initiative seems to address significant and
long-standing concerns. Moreover, by seeking an integrated plan it should
reduce obvious problems that arise in trying to develop plans for
individual transport elements in isolation which can result in proposals that
simply do not fit into the regional framework.
Show: examples
Examples: Selling
a Lemon: The Kenmore Bypass considered the flawed investigation of a
supposedly 'local' road which was being studied in isolation though:
it could be of no benefit without
prior upgrading of the already-overloaded-at-peak-hour Centenary Highway / Western Freeway, and its
construction would significantly increase traffic flows through Brisbane's western
suburbs and
require the development of other very expensive roads;
the upgrades to those other highways (which were not even being
considered by the 'local' study) would not be viable because at least some of the
widely-assumed tunnel-freeway connections at the northern end of the Western Freeway
would probably be economically non-viable - and inconsistent with the likely need to
rethink the character of SE Queensland's transport system generally.
Similarly the development of the (so called) Northern Link Tunnel (from the
northern end of the Western Freeway to the Inner City Bypass) was also being
investigated in isolation, through (a) it was
only one of three freeway tunnels
that had been envisaged for various reasons as connecting to the Western
Freeway at the Toowong roundabout; and (b) it would probably be of little
benefit without prior upgrading of the overloaded-at-peak-hour Inner City
Bypass.
However even the 'Connection SEQ 2031' proposal did not seem adequate because
it was apparently intended to take the existing SE Queensland Regional Plan as a
given in defining an integrated transport plan. The problem is that the factors
that now required changes in transport systems (especially the likely effect of
the global peak oil event on fuel prices) would also significantly change
sensible decisions about the location of residential, commercial and industrial
functions within Brisbane city and SE Queensland (eg see
Time to Reassess Land Use)
Fragmented and narrowly conceived investigations
again seemed to be at fault.
the report did not seriously examine what such substitutes might
cost, or recognise that prices in the post-peak-oil era would depend on
the price of mass-produced substitutes in international markets.
Moreover;
in future planning to adapting to the peak-oil event, the report
proposed involving only those concerned with the supply of oil
substitutes, not those (eg transport and land use authorities) whose
plans would need to change if perhaps-much-higher fuel prices induced a
shift away from the use of motor vehicles and a shift in desired
locations to reduce the transport task.
It may be that a core of the problem in responding to the peak oil event lies in the
optimistic assumption
that the price of post-peak-oil fuel substitutes will be roughly the same as
oil-based fuels. This is illustrates by a CSIRO-backed investigation 'Fuel For
Thought' which apparently examined the possible transitional escalation in the
price of fuel associated with the peak oil event on the basis of computer
modelling, but did not seem to seriously study the physics, industrial chemistry
and economics of
alternative fuels so as to provide a realistic estimate of
likely future prices in the long term. The latter are likely to be significantly (eg 3-8 times)
greater than oil-based fuels - because oil reflects a huge 'subsidy' from the
earth's geological history in terms of its free-energy density and convenience (see
notes on Time to Reassess
Land Use).
Alternative fuel costs: One source indicated that a sustained price
over $US70 / barrel was needed to justify investment in "Canada's tar sands, the
deep-water fields off Brazil, and Russia's "High North" above the Arctic Circle
.. (as well as) biofuels from grains (sugar is cheaper)" and that bioethanol
accounted for 60pc of extra oil supply worldwide from 2007-2008 and so controls
the global crude price [1].
[Comment: The problem is that there is limited potential in such sources (eg
biofuels conflict with food production; (b) tar sands are
problematic [1]).
The real question is what prices might be required to support
sustained global production of (say) 50m barrels / day (or
equivalent) in oil substitutes?]
Shell's CEO suggested that
competition amongst energy sources (eg petrol, diesel, electricity (via
hybrids), bio-fuels, natural gas and hydrogen) will drive innovation that
ensures that energy remains affordable. Fuel efficiency will increase. [1]
Optimistic assumptions regarding future alternative-fuel prices is
arguably the reason that officially-supported
projections of Brisbane's traffic make the assumption that total
vehicle traffic will resume growing at traditional rates (rather than
continuing to decline as it had been observed to do since 2003) once the transitional
price escalation associated with higher fuel prices ends.
Another
example of critical interconnections between issues that have not been
effectively managed lies in the impact of the global financial crisis
on the funding of toll roads. As noted above,
this had been seen to be possible by deferring much of the cost to the
distant future by complex financial engineering, a practice which the
credit crisis has presumably rendered permanently impractical.
This (ie the fact that interconnections amongst various policy areas
make it unrealistic to deal with traditionally 'separate' issues
separately) is arguably an example of the problem of complexity that is
now one of the circumstances requiring an enhancement of Australia's
traditional governance systems (see
Australia's Governance
Crisis). Restoring
'Faith in Politics' suggests the need to enhance
cross-disciplinary communication through both: (a) purposeful / cohesive
public services; and (b) well-developed networks amongst civil
institutions that provide raw material for public policy debates.