The team that produced the dumped East West Link business case – repeatedly ridiculed by Premier Daniel Andrews – is the same group behind the West Gate Tunnel business case.
Certainly sounds a bit suspicious, but is it? Well no; there are problems with this project but this isn’t one of them:
- The same “team” – transport consultants Veitch Lister and management consultants PWC – is also the one that estimated the benefit-cost ratio for the East West Link is a miserable 0.45. It was the Napthine Government – embarrassed by the tiny number – that obfuscated the real economic value of the project.
- Veitch Lister has a reputation for getting more accurate traffic forecasts than others. The firm famously did independent forecasts for Brisbane’s Airport Link that showed those of the proponent were way too optimistic (see Who got the facts on traffic forecasts wrong?).
Nor should it be assumed that merely because both firms worked on the same project that they’re a “team” as The Age implies. The transport modelling done by Veitch Lister and the economic evaluation done by PWC require different expertise; the virtues/failings of one can’t be attributed to the other.
But that’s just The Age doing its tabloid thing. It gets meatier, though, when it reports that a former transport consultant on the West Gate Tunnel project, William McDougall, reckons:
The economic and traffic benefits of Transurban’s proposed $5.5 billion motorway through Melbourne’s west were deliberately distorted and misrepresented in Victoria’s assessment of the road.
Mr McDougall’s criticisms of the way the project’s been managed are set out in a submission he made last month to the Senate enquiry on toll roads. His specific concerns are over technical issues around the traffic modelling (e.g. ‘single distribution’ vs ‘loop through distribution’) and economic evaluation (e.g. use of a methodology given in the New Zealand Transport Agency Economic Evaluation Manual). He says the decisions taken by the Government were the result of optimism bias:
This is a polite term for what I consider to be deliberate distortion and misrepresentation of traffic forecasts and the economic benefits that flow from them. This was done on what was supposed to have been an impartial assessment of the project from a Government perspective, rather than a proposal by a private proponent or tenderer.
Mr McDougall might be right (and optimism bias is a real risk with big projects), but his specific criticisms are mostly around technical matters where there can legitimately be different points of view. The Age doesn’t give Veitch Lister’s or PWC’s version of the argument, so it’s impossible for me to come to an informed and fair view at this time on the merits of all of Mr McDougall’s points. As I’ve noted before, the Government’s VITM model (that Mr McDougall accords greater credibility) has been criticised for dealing poorly with toll roads (see Are the forecasts for the East-West Link built on dubious foundations?) .
But one problem he identifies seems unambiguous and demands further explanation. He says the average base year trip distance by car calculated by Veitch Lister’s Zenith model is a whopping 14.4 km (see exhibit). That’s far in excess of what’s known about actual trip behaviour in the base year; the VISTA household survey of travel puts it at just 10.2 km. The Government’s VITM model calculates it’s 10.1 km, according to Mr McDougall. The higher figure derived from Zenith, he says, has the effect of enhancing the justification for the project.
Mr McDougall isn’t the only one using the Senate Inquiry as a vehicle to raise concerns about the West Gate Tunnel. The Grattan Institute argues in its submission:
The Victorian government is not sourcing finance for the project in the way that is least expensive to the Victorian public
The risk of cost overruns on construction and operations – which will be borne by the Victorian public – is understated
The lack of transparency surrounding the project is not in the public interest.
The Public Transport Users Association also takes the opportunity to raise problems with the West Gate Tunnel, e.g.
This market-led proposal would significantly increase general traffic directly into the Melbourne CBD and result in higher traffic volumes and serious harm to urban amenity…
In the absence of whole-of-network pricing the significantly higher tolls for heavy commercial vehicles relative to light vehicles on CityLink may act as a disincentive for HCVs to use the (tunnel) and therefore result in failure to fully resolve the problem of trucks on residential streets in the inner west.
The hearing into the environmental effects of the project which started yesterday is likely to be exciting to say the least. The Victorian Government needs to take a deep breath, get serious, and respond in detail to the mounting criticisms of this project.
It’s not directly related to the West Gate Tunnel project, but there’s a broader point embodied in the numbers presented by Mr McDougall. The exhibit indicates the Zenith model estimates public transport’s share of motorised travel in Melbourne in 2031 at between 14.3% and 14.4%. The Government’s in-house model (VITM) puts it at 13.3%. If something close to these numbers were to eventuate, it would be a significant improvement relative to the base year figure of 9.2% – 9.5%; but the important implication is it would still be a small share e.g. under the VITM model, cars would have 86.7% mode share in 2031.
I noted earlier this year one of the key implications of this forecast outcome (see Can we have a mature discussion about the future of urban transport?):
The important message is we need to stop chasing chimeras and start tackling the issue of private transport head-on…The weight of attention and effort from politicians and lobbyists needs to shift decisively toward managing private transport better rather than wishing it away.
What action should we take? I recently outlined some suggestions here (Is public transport the only solution to congestion?).