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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 '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 
|Airport Link: An Example +||
Airport Link: An Example of the 'Monster'?
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).
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 , 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  - and is clearly unrealistic. Earlier estimates suggested that 2016 traffic volumes on the Airport Link route could be 61,000 . 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 . 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 
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.
The secret seems to be that:
This aggressive financial engineering would seem to create significant risks for investors in Airport Link securities.
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 ). 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" . 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 .
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:
A Conflict of Interest?
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 
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.
|Why a Transport Problem||
Why Does Brisbane Have a Transport Problem?
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:
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.
|The Monstrous 'Solution +||
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 ) 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:
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 , 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:
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  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.
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:
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:
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).
And Another: the Clem7 Tunnel
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 . 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
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 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.
This might, for example, involve:
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.
Other reforms that seem necessary are outlined in Queensland's Next Successful Premier. This refers, for example, to the need for:
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:
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.
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.
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.