Watch the video of Lee's Matter of Public Importance speech to the Senate where she urged the Transport and Infrastructure Minister Anthony Albanese to withdraw federal support for Sydney’s WestConnex motorway, and instead develop a targeted funding strategy to boost Sydney’s ailing public transport infrastructure.
27 February 2013 - MATTERS OF PUBLIC INTEREST: Road Infrastructure
Senator RHIANNON (New South Wales) (13:15): Last week saw the demise of yet another private toll road consortium when receivers were appointed to BrisConnections, the operator of Brisbane's new $4.8 billion airport link toll road. This month the 6.8-kilometre toll road averaged 47,100 cars per day, almost a third of the forecast 135,000 vehicles per day. It is the second vehicle motorway to falter under the weight of dodgy traffic modelling, joining the RiverCity Motorway Group's Clem Jones Tunnel. CLEM7, as it is known, was Brisbane's first private toll road. It fell into a financial black hole in 2010 when it was forced to write down the operation's value by $1.5 billion. The tunnel struggled to attract half the forecast 65,000 vehicles per day. Since it went into receivership in February 2011 traffic volumes have slumped and tolls have gone up.
These failures have cast doubt over Queensland's numerous other private toll roads in the pipeline and motorway plans in other states. The chequered history of public-private partnership transport, with many failing, should make investors think again. The era of motorways should be left behind. The 21st-century challenges of worsening congestion, climate change, peak oil and air pollution are best addressed by moving freight by rail and boosting public transport services. But right now both the federal Department of Infrastructure and Transport and Infrastructure New South Wales are pushing Sydney's next big toll road—WestConnex, which Infrastructure New South Wales has dubbed as the single biggest priority of the New South Wales government.
This is bad news for Sydneysiders, particularly people in Western Sydney, who desperately need governments to fix their ailing public transport system. It throws up the question: why are the New South Wales and federal governments ignoring the lessons of history and lining up to repeat their mistakes with WestConnex? The question is not a choice between if governments should be financing new roads or if they should build them through public-private partnerships. The question is: why are we squandering precious infrastructure funding to extend heavily congested roads when the problem is caused by a lack of fast, frequent public transport?
Sydney's transport crisis results from many years of high population growth coupled with chronic underinvestment in rail and bus services in greater Western Sydney and the failure to grow innovative, light rail and bicycle networks in the inner suburbs. Expanding already congested motorways will not redress this fundamental lack. Congestion in Western Sydney is causing crises reaching far beyond transport issues. It is impacting on jobs growth, business productivity, local health and people's lifestyles.
We cannot rely on Infrastructure Australia for transport solutions. It appears to be catching this case of motorway madness. It is courting private investment to build billions of dollars worth of road projects that would extend the Sydney orbital road network. We already know this will not solve the traffic gridlock that grips Sydney on a daily basis. Many Western Sydney residents would remember the government promises that the M7 would speed up travel time across the city. Now we are told we need another motorway—the WestConnex—to address the worsening congestion.
The ears of politicians have been successfully bent by the likes of the motorway construction companies, the road and trucking industry and the NRMA. Companies like John Holland, Leighton, Thiess and Macquarie Bank have given big donations to the major parties. The public do not know if deals are done behind closed doors, but there is the perception that MPs are favouring private road building businesses at the expense of public transport. The result has been more than a decade of state and federal spending on new roads that far outstrips spending on new public transport services. From my reading of approximately $36 billion of infrastructure projects listed so far under the Nation Building Program on the government's website, over 60 per cent have been awarded to road projects, about 20 per cent went to passenger rail and active transport—and less than one per cent of that to bicycle infrastructure—about 16 per cent went to freight rail and the remaining four or five per cent was hard to account for.
There is no federal strategy to drive investment in public transport. The process is reliant on what the states and private interests bid for. The transport minister, Mr Anthony Albanese, produces excellent reports full of strategies to make our cities more livable but—and it is a very big 'but'—he does not tie his infrastructure funding to implement his own strategies. Infrastructure Australia has invested in Sydney's freight rail network but has missed a big opportunity to drive investment in public transport.
We know that in New South Wales the government is fixated on motorways. This is borne out in the New South Wales transport master plan's focus on roads. The O'Farrell government has put up $8 billion for the north-west rail link and has promised $1.6 billion for light rail in Sydney's CBD. These are positive public transport initiatives, but Western Sydney is still being denied the public transport solutions it needs. The concern is that the Premier in backing WestConnex has put forward only $1.8 billion, whereas the price tag is anywhere between $10 billion and $15 billion. As the WestConnex proposal is entirely speculative, it actually takes a guess that 75 per cent of the road's cost will be funded by Sydney motorists through tolls. So this is $10 billion project using guesswork to determine funding.
How much is being asked of the federal government? Infrastructure Australia funding this year for Sydney includes $92 million to widen the F5 freeway, $30 million towards the M4 extension and $25 million to the New South Wales government to establish a special purpose vehicle, a body to develop the business case for WestConnex and bring other private motorway projects to the market.
This is largely planning money. This raises more questions for Minister Albanese. $25 million is a lot of money. What funding source was this $25 million allocated from? What has lost out because of that allocation? The Nation Building 2 program will spend $3.56 billion between 2012-2013 and 2016-17. How much will flow to public transport? It would be a travesty if a big chunk of Nation Building 2 funds, or some other infrastructure funds, go towards the WestConnex project.
Funding WestConnex would be a lousy investment and Minister Albanese should inform the people of Western Sydney of his intent with respect to this project. It is Sydney's most expensive motorway undertaking to date. The project is still a concept with no evidence or traffic studies to prove its merit as the state's biggest infrastructure priority. The business case and investor pitch have preceded the strategic planning and traffic demand modelling.
The rationale for building WestConnex are the same reasons we should invest in public transport and more freight services. The reasons are: to address major population growth and jobs growth and growth in trade at Port Botany. There is certainly clear justification why the answer should be public transport. People in Western Sydney need faster, more frequent and more reliable public transport services. Most people commute to work in the city. They do not want to drive to work. They know it could take hours, would cost a small fortune in fuel and tolls, and there is nowhere to park. When Prime Minister Gillard is in Western Sydney next week, she should ask commuters whether their priority is a $10 billion road extension built in the inner western suburbs in 10 years or whether they want faster more frequent train and bus services for greater Western Sydney that connect them to the centres where they work and shop and study.
Many respected transport planners have also prioritised investment in rail in their advice to the state government. But that advice has been ignored. Experience shows us that motorways may reduce travel times initially, but traffic volumes soon increase and travel times subsequently blow out to where they were before—or worse.
The WestConnex proposal claims the project will revitalise Parramatta Road, a claim hotly contested by transport planners and local residents alike. The Greens are backing a widely supported plan to build on Sydney's existing light rail extension in the inner west, and further expand light rail within the CBD along Parramatta Road and to the Balmain Peninsula. It would avoid the need for the M4 East motorway extension.
Another claim has been that WestConnex will reduce congestion at Port Botany and the airport. But the concept plan for the road no longer even goes there. In Transport Minister Albanese's own community he is sitting on the fence over the WestConnex proposal, saying it is too early to oppose WestConnex based on the limited information available. I understand he has been speaking with his constituents about the impact of feeder roads and smokestacks. The minister's local community does not want another failed motorway tunnel. Locals do not want to see $10 billion wasted to push more traffic congestion closer to the inner city. They want the minister to use his position to deliver better public transport and more active transport solutions.
The federal opposition leader, Mr Tony Abbott, has signed up to Mr Nick Greiner's motorway vision, pledging to prioritise Commonwealth funds for the WestConnex project. The WestConnex project is not a solution for Sydney's transport congestion problems nor can it meet future transport needs. It serves the vested interests of private road companies and cash-strapped governments but it does not serve the public interest.
If the government ignores expert advice from transport planners, the public will not be privy to that decision-making process because the whole process becomes shrouded in secrecy under the commercial-in-confidence excuse. In 2005 I used the call for papers process in the NSW Legislative Council to challenge a commercial-in-confidence ruling and expose the dodgy traffic modelling that underpinned two of Sydney's biggest private toll road failures—the Cross City Tunnel and the Lane Cove Tunnel. Both toll roads were riddled with flaws and failures and proved to be a profoundly bad deal for the travelling public. Like the more recent road flops in Queensland, the wildly optimistic traffic modelling that underpinned the business case of both toll projects was never realised. The Cross City Tunnel people claimed it would carry 90,000 vehicles per day but it saw only half those numbers. The Cross City Tunnel became extremely unpopular when an angry public was faced with 13 road closures and rat runs designed to funnel motorists into the tunnel. The government was ultimately forced to reverse the road changes, and faced a $100 million compensation claim by the owners for breach of contract.
Greedy consortiums hatched the idea in boardrooms that you can make a killing by charging people $4 to drive underground across Sydney's CBD. They concocted a business case for these roads that would attract investors, then worked backwards to finesse the traffic modelling until they got the figures they needed to sell it—a pattern we see being repeated with WestConnex. Most of these toll roads have contracts that last for 30 to 40 years. That is a long time to be locked into a bad deal.
Getting to the bottom of why a privately built or operated transport project gets the government go-ahead or goes bung is extremely difficult. When you read the financing and funding section of the WestConnex proposal, you quickly realise that the government intends to carry the risk of this project in some way. The public may never find out exactly how it is guaranteeing the deal and how much it will be up for. When the legal arbitrator Sir Laurence Street ruled on my motion in the New South Wales Legislative Council that the Cross City Tunnel contracts be made public, the government released 30,000 documents which showed the government had effectively privatised the profits while socialising the risks. They exposed a litany of poor negotiations and bad deals, such as a clause that could trigger compensation for the motorway company if future public transport services affected the tunnel's profits. The same dodgy deal was offered to Sydney's M2 motorway operators back in the 1990s, during Mr Nick Greiner's days as Premier. Mr Greiner was also the Chairperson of Bilfinger Berger, the parent company of the Cross City Motorway Group. Today he heads up Infrastructure NSW and is pushing hard for the WestConnex motorway.
The problem goes much deeper than the Cross City Tunnel. The NSW government was forced to fork out $25 million in compensation to the private owners of the ailing Lane Cove Tunnel. $13 million in penalty payments was handed over to the private operators of Sydney's M5 East Tunnel. The Macquarie Group's Sydney airport rail link turned out to be an expensive lemon, with the NSW government outlaying $800 million from the public purse to prop it up.
The New South Wales Auditor-General has predicted $1.1 billion of public funding will be spent on Sydney's Harbour Tunnel by 2022 to ensure viability for its private sector owners. It is not just road PPPs either. Last year the New South Wales government had to hand over $175 million to bail out Reliance Rail, a $3.6 billion PPP to build the new fleet of Waratah trains for Sydney's CityRail network. A 2011 University of Sydney survey concluded that more than half of New South Wales residents believe public transport was the highest priority transport issue in Australia, and I think they are right. I urge the federal government to reject the WestConnex proposal and the Prime Minister to announce next week that, instead, her government will back public transport solutions. That is how she can deliver for the people of Western Sydney.
These private toll roads and transport ventures have proved a waste of money and a wasted opportunity at a time when the public is crying out for better public transport. But rather than learn from these mistakes we seem doomed to repeat them at enormous cost. I urge the federal government to reject the Westconnex proposal. Sydneysiders and Sydney businesses can’t wait 10 years just to move the traffic jam closer to the city. The answer is to shift the balance of infrastructure spending to public transport and active transport projects that will increase passenger rail and bus services, and expand the city’s light rail and bicycle networks. To future proof our cities, we need to build more public transport today where it is needed most.