I don’t think I’ve ever seen a more provocative government report than Infrastructure Australia’s draft industry consultation paper on roads, Spend more, waste more (1). It was hastily withdrawn last week by the embarrassed agency after the Fairfax press reported on it under the headline, Billions spent on roads in “hideously inefficient” way.
Its overall message is there’s too little focus on efficiency and value in the way road investment is managed by all levels of government. (2)
It’s debatable if such an important message from a government agency is well served by dramatic phrases like “Australia has a true gambler’s addiction to roads: the money spent is not a rational investment”; or that the nation’s near $20 billion yearly spend on roads “can only be described as hideously inefficient”.
And it’s unusual, to say the least, for a document designed to promote consultation to state baldly that efforts to get better road funding outcomes “should bypass road agencies, which in most observed cases will only suffocate or over-complicate such opportunities if given carriage of them”.
But underneath the sometimes intemperate tone, there’s a veritable motherlode of fascinating material. There’s too much to cover in one sitting, so this time I want to present what it says about forecasts of road congestion in cities. This section is brief and the tone is relatively sober; here’s the money quote (emphasis is as per the original):
The Bureau of Transport Infrastructure and Regional Economics (BITRE) publishes growth forecasts for traffic congestion in capital cities. Its current projections were set several years ago and assume that urban congestion in major cities will continue to grow steadily.
In 2010, Infrastructure Australia pointed out to BITRE that the statistical approach to these projections appeared deeply flawed and that the assumed steady growth was not being witnessed in actual congestion results, which instead suggested urban congestion levels were growing at around half or less than half the forecast rate:
At the time – and a number of times since – Infrastructure Australia asked that these forecasts be reviewed and their implications for current and planned urban road projects re-examined. In 2014 – four years later – no such review has taken place. It is not clear to Infrastructure Australia why this has not been attended to, although revising forecasts down would almost certainly result in pressure to reduce budgets for urban road programs.
Accordingly, the road system’s flawed analytical assumptions about matters of national importance appear to be giving the wrong impression to governments of the relative importance of road congestion (and the need for road spending) and public transport projects.
That’s about as self-explanatory as you can get. Doubtless BITRE has another interpretation which it’s unlikely to share publicly but, as the exhibit from the report shows, Infrastructue Australia believes there’s an enormous disconnect between the level of congestion forecast by BITRE over the ten years to 2011/12 and what in fact happened.
The charge is plausible because the inability of public agencies to adapt to what is a widely recognised structural change in the level of travel growth isn’t confined to Australia; here’s an equally remarkable US example. What’s especially worrying in the Australian case, though, is the charge that the change is being ignored.
The full title is Spend more, waste more. Australia’s roads in 2014: moving beyond gambling.
One of the report’s key ideas is to promote increased private investment in strategic roads, particularly those used for transport of freight, through implementing more sophisticated user charging systems for large trucks.