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Is being “visionary” sufficient to justify new infrastructure?

All the talk around at the moment about ‘visionary’ infrastructure projects like High Speed Rail (HSR), the National Broadband Network (NBN) and a rail link to Melbourne Airport, reminds me how much Australians love to gamble.

Big and costly projects that don’t stack up on conventional evaluation criteria are often justified as being in the ‘national interest’; or the result of ‘big thinking’; or comprehensible in the “big picture’; or contributing to ‘nation building’.

Proponents frequently resort to the Field of Dreams argument: “if it’s built, they will come”*. Some cite ambitious projects like the Snowy Mountains Scheme, the Ord River Scheme and the Sydney Opera House, contending that they would not have been built if it weren’t for some big thinking. However they conveniently omit to mention the downsides of these projects, or any ‘visionary’ schemes that are widely thought to be disappointments (let alone any that were unmitigated disasters).

More informed proponents will focus on the foresight of previous generations who built infrastructure like the national and urban rail systems, water supply and sewerage systems and the electricity generation and distribution networks. Some even mention the elaborate freeways within and between our major cities.

The argument is commonly put that if the visionary politicians, engineers and financiers of a century and more ago hadn’t looked beyond economic and financial criteria at the time, much of the infrastructure we value today would not be available for the use of current generations. And we are very fortunate they did, so this line of argument goes, because it would be impossibly expensive to provide infrastructure on that scale today.

That’s all very well, but I don’t think this interpretation tells the whole story.

It seems to me that luck, chance and serendipity had at least as much to do with our fortuitous infrastructure legacy than vision and foresight. Nineteenth and early twentieth century politicians, investors, bureaucrats, cowboys and robber barons may have had a longer time frame than today’s five to ten year paybacks, but 100 years? Or even 25 years? Despite their expansive rhetoric at the time, I don’t think so.

In fact there were innumerable cases in Melbourne and other cities in the late 1800s and early 1900s of infrastructure projects that failed as a consequence of entrepreneurs competing to invest in horse drawn trams, cable trams, train lines, water supply, electricity supply and so on. Some projects failed because of competition or poor commercial judgement, others because of political chicanery and many because of the increasing rate of technological obsolescence.

I expect the infrastructure planners of the late 1800s and early 1900s had more than their fair share of white elephants. They lacked the more sophisticated investment evaluation methodologies, the vast improvements in data availability and manipulation, and the stricter rules in politics and business around governance, accountability and transparency, that we enjoy today (not that they’re perfect).

Decisions that we see as far-sighted may have been the result of grubbier politics than even we take for granted. That some projects have come into their own many decades later might be fortuitous but it doesn’t mean that the decision to build was either a wise one or the “right” one at the time.

It is only relatively recently that rail, for example, has emerged from a protracted period of poor performance. The cost of all those years of under-utilisation should be taken into account when calculating the net benefits we are getting today and are likely to get in the future.

Today we laud visionaries like Sir Robert Risson for his single-mindedness in defending Melbourne’s trams against ‘progress’, but forget that it was also single-mindedness that drove Robert Moses, the Master Builder of New York City, to “build bridges, tunnels and roadways, alter shorelines and transform neighbourhoods forever”. Moses was lauded in his heyday for favouring roads over transit but today his legacy is widely condemned. Some visionaries look good in hindsight, but overall they’re a high-risk group.

Some projects actually are genuinely “visionary” and are genuinely likely to contribute to “building the nation” but that should be pretty clear from formal evaluation processes if the terms are rigorously defined. Too often however “visionary” is a synonym for gambling or for political opportunism. If projects like High Speed Rail really are visionary then we should be able to establish that with less uncertainty than rolling the dice.

UPDATE Saturday 14 August 2010 – This report from The Onion has just been received:

Nation Demands Tax Dollars Only Be Wasted On Stuff That’s Awesome

WASHINGTON—Acknowledging that the outrageous misappropriation of public funds is inevitable, an estimated 500,000 Americans gathered in the nation’s capital Sunday to demand their misused tax dollars at least be squandered on something really awesome that everyone can enjoy.

Protestors from every state in the union voiced concerns that the federal government is misusing its wasteful spending on special interests, bloated no-bid contracts, and other boring shit like that.

“Washington has been pouring our hard-earned dollars down the drain for too long,” said activist Brian McGill, addressing a crowd on the National Mall. “And that won’t ever change—we understand that. But we have a message for our elected officials: When you waste taxpayer money, you’d better waste it on something that seriously kicks ass.”

“Our government throws away billions on the hopelessly inefficient bureaucracy that runs the Pentagon,” McGill continued. “But has it thrown away even one red cent of that same inflated defense budget on, say, a huge fucking laser cannon that we can take turns shooting?”

* The actual quote from Field of Dreams is “if you build it, he will come”.

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  1. By Hiding under a rock « Oz Man and The Rat on November 16, 2010 at 11:05 am

    ...] like the “Nation Building trumps cost-benefit” argument, myself included, Alan has a nice post on this as well. Categories: Uncategorized LikeBe the first to like this post. Comments [...

  2. ...] argument I see frequently in relation to massive infrastructure projects like High Speed Rail (HSR) is that we should simply [...

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