Stop the gravy trains! The high-speed rail study and consultants.

In the terms of reference to the recent study into the non-viability of high-speed rail from Brisbane to Melbourne it is promised that “It will draw on expertise from the public and private sectors”.

So, who did this study that concluded that Australia would need 50 years and 114 billion dollars to build a high-speed rail line that would make travel slightly longer and more expensive than just going by air?

The report was compiled by a gravy-train made up by AECOM and its sub-consultants (Grimshaw, KPMG, SKM, ACIL Tasman, Booz & Co and Hyder), all highly-paid private consultancies. There was no noticeable involvement of the public sector at all.

What is wrong with that? Everything. Private consultancies get paid for their answers, not their honesty. Just take AECOM’s strategic vision: “Our purpose is to create, enhance and sustain the world’s built, natural and social environments”. Lovely. Its a bit cheeky of course to have entirely contradictory elements (build and natural) in your mission statement as if they are not contradictory at all, but what do you expect from consultants? Honesty?

KPMG Australia then, what about their reputation for honesty? Its stated values are of course beautiful, full of words like ‘respect’, ‘honest’, ‘community’, ‘integrity’.  But what about its history in this kind of area? Well, its 2010 report into the mining tax was a great example of being paid-for-an-answer. It was selective, made false comparisons, and uninformative. My conclusion at the time was that “The report, and in particular the summary, is indeed not an objective appraisal but a piece of propaganda that was bought for a reason.”

So, it is a bunch of paid consultants that now tell us that it would take 50 years to build a high-speed rail line (whilst the Chinese took 4 years to build a longer one between Beijing and Shanghai). And how serious are its pronouncements? Well, if you use their own disclaimer, not very much for they say in their own disclaimer “The Study Team has not verified information provided by the Information Providers (unless specifically noted otherwise) and it assumes no responsibility nor makes any representations with respect to the adequacy, accuracy or completeness of such information. ”

So, it was given a set of assumptions and information by others and takes no responsibility for checking those, meaning that its conclusions could have been pre-cooked by those ‘information providers’, including the controlling ministry. How handy! How convenient to have such non-inquisitive consultants! So much for integrity!

It is basically ridiculous to have national debates on the basis of the words of hired guns. The Australian civil service should have something like its own independent budget office with the ability to calculate the effects of major infrastructural projects, as well as major tax plans.

We now in fact have a parliamentary budget office and I hope it grows into a substantial independent body that can get us out of these consultancy-lead shadow debates.

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38 Responses to Stop the gravy trains! The high-speed rail study and consultants.

  1. Ken Parish says:

    There’s also Infrastructure Australia, a statutory body established to conduct cost/benefit analyses on proposed major projects, including presumably Very Fast Trains.

    However, as I noted in a post a couple of years ago:

    However, the real problem with IA is that its functions only include evaluating the business case for new infrastructure when commissioned to do so by the Minister (see s5(2)(e) and 5(4) of the Infrastructure Australia Act 2008). Naturally the Minister doesn’t do so unless it’s politically expedient.

    Presumably the Gillard government didn’t think it was expedient to refer the VFT fantasy to IA. I wonder why? A rough guess would be that they didn’t want antagonise the Greens or any remaining green-leaning ALP supporters, but also didn’t want to raise expectations that anything concrete might actually be done during the lifetime of any member of any interest group likely to be opposed. Not to mention the damage to any remaining economic credibility that would be inflicted by any suggestion that Labor might embark on such a grandiose and extraordinarily expensive project given Swan’s deficit conundrum and the not-quite-so-scarily-expensive NBN project. Far better to have a private sector consultant report that could mean whatever anyone wanted without actually saying anything even slightly useful.

    • Paul frijters says:

      Thanks Ken, I did not know about all that. Makes the use of consultants even more a waste of public money.

    • conrad says:

      It would be interesting to know what percentage of these reports are never actually destined to be anything more than advertising for the government used to try to make themselves look smart by thinking about big issues in the future.

      • john r walker says:

        Conrad it would also be interesting to know how much of report/research sector , both private and public, is simply a make work rort.

    • Alan says:

      The Greens cannot be the problem because they support HSR. Incidentally, while somehow Australia has completely lost the ability to build large infrastructure, the story of high speed rail in China does not all run one way. There is the regrettable record of Fast Track Liu, also known as Great Leap Liu.

  2. derrida derider says:

    Paul I’ve told you before that if you ever hope to land a nice consultancy yourself then you are just going to have to abandon this childish affection for personal integrity and do as the paying customer wants ….

    • john r walker says:

      derrida
      By chance the other night I reread Freckonomics – “the Klu Klux Klan and real estate agents” about ‘information’ based frauds and also about Galbraith’s view of the meaning of “conventional Wisdom” ( he apparently coined the term).
      Have you read it…

  3. Mike Pepperday says:

    I agree with DD—get real. I had one experience of consultants. It was clear to me and other middle-level staff (we who actually got the job done) that their interviews of us were token and that their research consisted of figuring out what those who appointed consultants wanted to hear.

  4. crocodile says:

    (whilst the Chinese took 4 years to build a longer one between Beijing and Shanghai)

    Same here. 46 years for the environmental impact study, 4 years of construction = 50 years.

  5. crocodile says:

    By the way. Beijing -> Shanghai = 1421 km by rail. Melbourne -> Brisbane = 1371 km as the crow flies. Think ours would by further by a long shot.

    • Paul Frijters says:

      its part of a wider network. just that leg took about 3 years from the start of construction to being used.

      • crocodile says:

        Just one other thing, did this 4 years include all the consultation and design processes as well.

        • conrad says:

          I would hope it didn’t, but when you’re an authoritarian power that’s already built a dam displacing millions, you probably don’t need to consult too heavily about bulldozing a few thousand houses/farms etc. for something like a train line. Thus, I think your complaints about approvals processes are somewhat misplaced at least if you’re comparing to China (which has no private property rights — I think you generally lease land from the government). Of course they’re slow in any decent country for things like this where you are going to have to knock down and acquire large amounts of private property.

  6. john r walker says:

    Paul do you know who paid-commissioned, the report?

  7. mynameisno says:

    So, who did this study that concluded that Australia would need 50 years and 114 billion dollars to build a high-speed rail line that would make travel slightly longer and more expensive than just going by air?

  8. Ian Milliss says:

    I suppose everyone is overheated enough already over this particular witch hunt but i would like to point out that the biggest delay in these infrastructure projects is usually the drawn out political and public engagement processes in which every troll imaginable has to have their say multiple times. These processes were legislated to prevent the ubiquitous abuses of planning processes that occurred in the 60s but have now become a different form of abuse in themselves. The problem is that those who lament our inability to easily build major infrastructure seem to be longing for a world of diktat which fortunately just won’t do these days. It’s a perfect illustration of the need for better engagement processes and also for the rejection of the delegitimising right wing chant about how government should never do anything.

    • Paul frijters says:

      Yep, though not the topic if the blog, that’s a fair point too. How would you change the consultation process?

      • Ian Milliss says:

        Only slightly off topic because consultation processes are an enormous part of both the timing and cost of any modern infrastructure project. I should declare interest at this point, my wife until a few days ago worked for AECOM and worked on part of the report but because of confidentiality agreements etc I don’t know any more about what went on than you or anyone else. And as a 1970s green ban and resident action group activist I was one of the people who fought for these consultation processes so I’m not opposed to them, especially not in a simplistic way.

        For a really huge project like this it is incredibly difficult, really consultation just means telling people it is going to happen whether they like it or not and doing everything possible on the ground to make it a bit tolerable for those effected. As far as planning consultation goes organisations like the New Democracy Foundation have been doing an excellent job of developing and trialling a range of different consultation models as a way of gaining community acceptance of development decisions eg randomly selected citizen panels as a part of strategic planning processes. But these alternative models are a long way from being universally accepted although they have been tried with some success.

    • john r walker says:

      Agree about consultations and people who ‘live’ for meetings

      However historically speaking , our rail networks were- built of 72 pound weight (or even lighter in some case) steel rails, not the 100 pound weight rail standard in most of northern europe , had/have curves and gradients that are much greater than any mainlines in northern europe and also have bridges/foundations that limit max axle loads and so on. The reason for this was simple- a small population spread over vast distance could not afford to build to the standards needed to run the flying scotsman at full tilt.

      And I think this is still much the same. The only one that might be wort exploring is one that connected Canberra airport and Sydney. and because it is only 270 Ks a train that averaged 180kh would -by the time you factor in the time it takes to get on off and to airports for a short flight- be competitive.

      • derrida derider says:

        Yes, one of the points here is that even if a very fast train is uneconomic that doesn’t mean merely fast trains aren’t viable on some routes. Sydney-Canberra, Sydney-Newcastle and even Sydney-Wollongong-Nowra (the last faces horrible geology though) come to mind for Sydney alone. And I’m sure Melbourne has similar candidates.

        On the failure of colonial Oz to remember that “the quality is remembered long after the price is forgotten” (in Gucci’s wonderful slogan), I reckon the poms did even worse. Imagine what how fast and comfortable rail would be if Brunel had won the railway wars and we had a seven foot gauge.

        • john r walker says:

          Actually they did a pretty good job considering the resources they had.

          As for a seven foot gauge, that was needed because (most) steam engines are rigid, cannot bend in the middle, and thus their length = size of boiler = power, was limited to what length could go round a bend. Brunel’s solution was wider boilers . By 1900 many engines were garret Mallard type ie articulated.

  9. john r walker says:

    ‘Consultaion’ is rouge herring
    The TGV Paris to Marseille line connects two very big city’s -one of which is also the main port for the ‘east’ and north Africa. It also stops at cities like Lyon and Avignon- gateways to very productive and tourist popular areas like Cote de Rhone and Provence .
    We do not have anything like that situation.
    Its the fixed cost vs demand that matters in this one.

    What really needs a look at is getting our rail freight up to average speeds of 110kh.

    • conrad says:

      Marseille is a fairly small city. About the size of Adelaide.

      • john walker says:

        It is surrounded by stacks and stacks of towns and villages, its the Provence and south of France there are people all over the place. The airport is a 20 min taxi at 150km.

        • conrad says:

          John, I work in Marseille every year, and it isn’t a densely populated place. For example, if you are wondering what the population is around Marseille, you could look at the entire region here: https://en.wikipedia.org/wiki/Bouches-du-Rh%C3%B4ne .

          Even if you want consider all the little towns much further down the coast (Nice and so on), you are not going to get a big number.

          The main reason these lines are successful is because everyone takes them, and part of the reason for that is because France has the most expensive roads in Euroland (possibly the world) thanks to tolls (basically, most connecting roads have tolls, and they are not cheap). They are also convenient and fast and more reliable than planes, so you can go places easily. For example, I go to Lyon sometimes just to muck around, and that is less than 2 hours from Marseille, so it is easy to get there an back in a day (Paris is fine for the weekend). If I had to drive 6 hours and pay a large amount on road tolls (or mess around at airports), I would almost never go.

      • john walker says:

        Con
        The point I should have made more explicitly is- from the moment you go past the hill of Hermitage to the moment you get to the terminus its all very productive country, full of towns and villages every few Ks and ( a nuclear reactor or two and a few big airbases )

  10. Alan says:

    I’d think HSR would have considerable technological and environmental benefits which don’t seem to be mentioned in the report. Neither for some mysterious reason, is the issue of whether it is environmentally desirable, or even feasible,to rely on ever greater hydrocarbon consumption to keep more and more jets in the air.

    Australia’s technology standings continue to decline, largely because of very low government commitments to homegrown technology. We don’t have a Nokia or a Saab, we have a highly effective public/private commitment to technology as something you buy from overseas. One engineer commenting on Crikey calmly rips apart the engineering approach of the report and insists that the thing could be built vastly more cheaply than the bean-counters who authored this nonsense seem able to imagine. A separate study suggests that HSR could be built for vastly less than the bean-counters think:

    BZE has done its own study on the HSR route in partnership with the German Aerospace Centre (DLR). Their research, which will be published in full in May, indicates that the chosen HSR route could be built for under $70 billion, considerably less than the $114 billion quoted in the latest government study.

    The BZE-DLR analysis makes significant savings by avoiding the most difficult terrain. A kilometre of track in a tunnel can cost more than 10 times as much as a kilometre of track on level ground, so every little bit adds up to big savings for a 1,700-kilometre alignment.

    Really, it’s hard to see the opposition to HSR as a whole lot more than the kind of technical cringe so splendidly exhibited when the NBN was first proposed.

  11. john r walker says:

    Derrida
    You have reminded me of something. Much of NSW inter-urban rolling stock is old, crappy and prone to mechanical failures (and the replacements so far are tangara types with a single toilet for the whole train). Our XPTS are 40 years old and were not really built for the long distances we use them for in the first place and the Explorer trains are also getting a bit long in the tooth -though still reliable and comfortable.

    Fast enough interurban type trains would definitely be a much better idea, than a HSR. The swedes solution is trains that tilt and therefore can go faster on the same track.

    • Alan says:

      When Mies van der Rohe built the Farnsworth House one of the things that broke up his affair with Edith Farnsworth was that the house, although very pretty to look at, it is basically unlivable. In the subsequent court proceedings, Mies proclaimed ‘Less is more’ and Edith’s lawyer countered: ‘Sometimes less is just less’.

      The Mies slogan, reincarnated as ‘Doing more with less’ went on to become an iconic slogan of the market liberal project. We have crappy rolling stock and track because no matter how much governments, and their bean-counting courtiers, mumble about doing more with less, sometimes less is just less.

  12. nottrampis says:

    This has made it.

    In the best reading of the blogosphere there is if i may say so immodestly

  13. Ian Milliss says:

    While it’s an amusing conceit to blame Mies van der Rohe for neo-liberalism’s slogans I think its the Hayek-following cold war warriors who accused him of communism for his lack of decoration (the ironies abound) who are more likely the guilty party.

    But you could use the Farnsworth house as a sort of symbol of neo-liberalism nonetheless. In theory in photos and on the plan it looked clean, pure, simple and functional yet in reality it was expensive to build, even more expensive to maintain, completely dysfunctional in practice and needing ugly modifications to make it even bearable, and its simplicity was entirely fictional because it needed expensive hidden subsidisation in the form of air conditioning added later. In the end it was made completely uninhabitable by flooding, by the tide of history you might say.

  14. David Walker says:

    Paul, I share your scepticism about the value of hired-gun consultants in circumstances like these – at least up to a point. Infrastructure Australia, the Productivity Commission and the Parliamentary Budget Office – plus, you’d hope, the Department of Transport – should be capable of figuring out how much this thing will cost and what the benefits will be.

    My primary assumption on this is that the report has been done largely to keep the Greens happy and vaguely suggest that the government sees high-speed rail as “the future”, while hiding the fact that the economics are lousy. After all, the NBN is probably the government’s most popular initiative, and it was all about being the party of “the future”. It didn’t go to Infrastructure Australia or the Productivity Commission either (and if the Parliamentary Budget Office had been around at the time, it wouldn’t have gone there either).

    However, the choice between public and private experts is not necessarily as simple as you paint it, particularly in any assessment of costs. A private firm may have access to information about overseas projects that a government does not.

    To what extent is this is actually the case? I don’t know – and last time I looked, the literature wasn’t producing very convincing arguments either way.

    However, we do have a few ideas about the reasons for the high infrastructure costs that apply in most developed countries. The University of Minnesota’s David Levinson provides his list of 39 hypotheses. The leading candidates (not that I would see them all as important) include:

    * Commitment to tunnel rather than tear up big chunks of cities (probably the biggest single factor).
    * Higher standards generally (safety, social, environmental, architectural).
    * Smaller scale in markets like Australia (China is building 20,000 kilometres of high-speed rail lines).
    * High labour costs.
    * High land costs.
    * Process costs to get the power to acquire and use land. The Chinese government can happily tell 1.3 million people to move; Canberra rightly cannot .
    * Insufficient commitment to detailed benefit/cost analysis, which itself tends to bring pressure to bear on costs.
    * Lack of competition among construction services providers.
    * Poor government oversight. (I am particularly sceptical about this, as it suggests the monopoly Chinese Communist Party provides much better oversight than our well-evolved democratic system. I am amazed at people with generally right-wing politics who nevertheless assume that the Chinese government must be smarter, tougher and generally better than ours.)
    * Political pressure to add extra features (tunnels to protect creeks and forests, extra stops at smallish towns etc)

    I would add that the Sydney-Brisbane HSR line faces particularly unfriendly terrain, compared to China or anywhere else.

    By far the best public analysis of the high-speed rail issue appears to be Alan Davies’ work at The Urbanist, and he does not appear very surprised by KMPMG’s numbers. So I think it’s hard to argue those numbers are on their face ridiculous.

    Lastly – though not quite to Paul’s point – I would caution against assuming that the Chinese government is smart and Australia’s much more open system is dumb. First, much infrastructure has a higher pay-off in less developed environments because it has less competition – what you might call the catch-up effect. Second, we should be wary of trusting official Chinese figures on the cost or benefits of anything.

    It is quite possible that the Chinese are getting a very bad deal out of a massive but poorly-patronised rail system constructed on the cheap for reasons only loosely connected to rational national development. The Chinese system is too expensive for most Chinese people, which suggests their commitment to high-speed rail may not be such great policy.

    • yes, all fair points David. You should make a blog out of it!
      I am no engineer so dont have much great insight to say about the actual cost and benefit numbers. It makes intuitive sense to me to think that high speed rail is viable in a very densely populated place like China and not in a very spread low population place like Australia. Its the fact that these big projects are now ‘evaluated’ in a really expensive and non-transparent way, side-lining perfectly capable and cheaper public agencies that bothers me. The risk-aversion at the top of the ministries is now costing the community.

  15. Alan says:

    I know its drawing a long bow, but the thing about our plural modernisms is that they all subjugate reality to theory and end up demanding a leap of faith. The Farnsworth House is a great place to live if you really, really, really believe it works as a house. And market liberalism is a supremely rational project if you really, really, really believe in it. And if it doesn’t work it’s because you are not believing hard enough. Even if it can’t make the trains run comfortably, or efficiently or on time. And even if sometimes less is just less.

    • David Walker says:

      Alan, I’d be really keen to see your policy conclusions, all based in reality, without too much mediating theory.

      Meanwhile, market liberalism substantially pre-dates Mies Van de Rohe modernism. The Farnsworth House is associated with a “wet” predisposition :-)

  16. Nick De Cusa says:

    We go about this all the wrong way. We need a department of works. We need a department of works who sub-contracts out to sole traders, and revenues are not taken into account for taxes. We need to start a lot of projects, but only allocate money slowly to keep costs low.

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