Page 1690 - Week 06 - Wednesday, 13 May 2015
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This is the ACT government report of 2012, when the cost was $614 million. Now the cost has escalated to $783 million. They are the very marginal, poor outcomes of the minor adverse circumstances that the ACT government flagged in the same year that they committed to light rail following the election.
It is for this reason that Infrastructure Australia refused to provide the ACT government $15 million to conduct a further feasibility study into light rail. Why? Because the ACT government sent a report to the commonwealth government saying, “Buses are better but give us money for light rail,” and, not surprisingly, Julia Gillard said, “No, I am not giving you money when your own report says that buses are better.”
Of course we know that it is not just Infrastructure Australia that thinks that light rail is not the best option for the ACT. The Centre for International Economics, commenting after the ACT budget last year, said:
The cost of Capital Metro is subject to a high degree of uncertainty and is a source of risk for the fiscal position of the ACT.
It is all very well for those opposite to talk about sovereign risk. Let us hear what the Centre for International Economics said:
The cost of Capital Metro is subject to a high degree of uncertainty and is a source of risk for the fiscal position of the ACT.
That was the Centre for International Economics on a contract by the ACT Legislative Assembly to provide independent advice, a contract which was supported by those opposite.
The list goes on, with the Productivity Commission taking the time to comment on the ACT government’s light rail proposal:
The ACT Government’s decision to proceed with a light rail project appears to be another example of where the results of cost-benefit analysis have been ignored without a valid explanation.
Writing in the Canberra Times last year, respected economist David Hughes, who had previously worked as an ACT Treasury official, was highly critical of the ACT government’s light rail proposal. In that piece Mr Hughes said:
The Gungahlin tram will greatly increase the cost of public transport but make little difference to patronage or, therefore, to anything else. It is folly.
Mr Hughes is, of course, not alone among economists who look critically upon this light rail proposal. Mr Phil Lewis, the head of economics at the University of Canberra, said:
From a purely economic point of view, it’s silly. If anyone was advising them sensibly this is one of the last projects they should put on the list. It’s a lot of
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