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From:
Philip Johnston [mailto:scribepj@bigpond.com] Attention: Marion Terrill, Grattan Institute (Please left mouse click on the below embedded threads) a) provides URL threads to a welter of articles/reports of cost blowouts, construction completion delays and usage/patronage paucity in too many recent major infrastructure projects that have wasted many billions of dollars of the Public Purse; and b) includes three articles written by you, incl the most recent Taxpayers lose out when governments rush transport projects. In
2009 the Productivity Commission offered to take carriage for
"systematic auditing of cost–benefit analyses .... by being a centre of
excellence or reference for cost–benefit analysis within the Australian
Government."
(5th
Attachment) Explained below. Ms. Marion Terrill Transport and Cities Program Director Grattan Institute 8 Malvina Place, Carlton Victoria 3053 The CD (2nd Attachment) will auto-open in a Windows Operating System at (1st Attachment) which is my Letter to Ms. Marion Terrill dated 11 July 2021 that informs inter alia that back on 31 March 2021 the Writer recommended (in CDs, USBs and A4 and two emails) that the Shadow Federal Treasurer place in the House Despatch Box during Question Time a 'Written Question With Notice' (4th Attachment) for attention of the Federal Treasurer. (A burnt CD enables greater integrity than files copied onto a USB Stick). The Writer is a retired Infrastructure banker that worked at CBA bank for 37 years. He wants the Public Purse expended cost-effectively and has spent well over 100 hours preparing his Discussion Paper that seeks the Commonwealth Govt to legislate (relying upon Section 96 and Section 98 of the Australian Constitution) that the States submit a Conforming Cost-Benefit Analysis to the Productivity Commission for each prospective future rail transport infrastructure project with Capex over $20m. The a Conforming Cost-Benefit Analysis must include a Base Case Financial Model of at least 20 years of projected cashflows in a large Excel spreadsheet that calcs that –
SECT 96 'Financial assistance to States' of the Australian Constitution –
Below is an extract from section 6.4 Conclusions of 6. Evaluating major infrastructure projects: how robust are our processes? (page 162) published on the Productivity Commission website in 2009: “We are not optimistic that changes to cost–benefit analysis processes alone can counteract these powerful trends. Nonetheless, we think three changes would have merit: • a requirement for all cost–benefit analyses to be disclosed that would also highlight which projects had not been subjected to economic project evaluation • far greater and systematic auditing of cost–benefit analyses, both at the stage of the financing decision and post-project completion. In contrast, there is little or no such audit currently, and in many instances, cost–benefit analyses are not even updated, maintained or properly archived after the initial ‘go/no go’ decision is taken. • the establishment of a centre of excellence or reference for cost–benefit analysis within the Australian Government, preferably in an independent entity, such as the Productivity Commission.” Australia’s Productivity Commission – (i) has the specialist cost-benefit appraisal expertise that Australia’s six States patently do not; and (ii) will make objective decisions at arm’s length. As the Productivity Commission further invests in C-BA resources/skill/expertise (employing additional economic analysts and civil engineers) to even better quantity its Gatekeeper ‘Public Purse’ safety net role, the Gatekeeper will reap additional economies of scale – not attainable by individual States, too often stabbing in the dark and learning as they go. Consequently, Section 96 and Section 98 of the Australian Constitution behoove the Commonwealth Govt to enact legislation to stop Australia’s six States wasting billions of the 46% of Australia’s six States annual revenue expenditure as evidenced in my Discussion Paper. The Writer studied at Macq Uni for 10 years part-time (whilst working at CBA bank for 37 years, the latter 19 years in Infrastructure Finance) and attained two finance degrees. 6th Attachment is his Masters of Finance Degree from Macquarie University. My Discussion Paper evidences that the NSW Premier is adept at building rail projects that have proven to be highly cost-ineffective. Possibly the NSW Premier forgot that Sydney already had a heavy rail track between Circular Quay, Wynyard, Town Hall and Central Railway, when the NSW Premier agreed to build a parallel, juxtaposed, adjacent light rail (taking out George St) that cost $1 billion dollars and was completed 12 months late, with a lot of litigation. The NSW Premier is now spruiking “the possibility of an 11-kilometre tunnel between Blackheath and Mount Victoria” without an iota of an understanding as to whether the tangible Benefits would exceed the mammoth tangible tunnel building Costs. NSW government reveals plan to build Australia's longest road tunnel at Blue Mountains I welcome speaking with anyone that wants to ensure that Australia’s six States expend their budgets a lot more effectively/efficiently by accepting the Productivity Commission’s offer in 2009 to be a centre of excellence or reference for cost–benefit analysis within the Australian Government, preferably in an independent entity, such as the Productivity Commission. The Writer will respond in writing to any written questions sent to him re this matter.
Phil Johnston aka Bank
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