Treasury’s dirty little secret
15 March 2011
“Something is rotten in the NSW Treasury”, my client said. “Back in 2006, they were pricing the 21 kilometre North West Rail Link at about $1.4 billion. Now, they’re saying it’ll cost $7.5 billion. It’s just nuts. Look how much they pay for this sort of project overseas”.
She spread out some cost comparisons. “The NWRL is going to be mostly in tunnel. Based on recent examples, the Swiss would build it for far less than $2 billion. Ditto the Venezuelans. And then there’s Hosni Mubarak. Not a nice man, but he could build underground rail. He finished a 21 km section of the Cairo Metro not long ago. Difficult job, and it only cost $1.4 billion.”
“Gawd. Maybe that’s the answer”, I muttered. “Hosni’s had his personal funds frozen and he’s rattling around his Sharm el Sheik holiday shack with nothing to do. Maybe we could pull some strings and arrange a house swap with Joe Tripodi … get Hosni over here to organize the North West project. I bet he’d work cheap, and it’d be nice to be rid of Joe.”
She laughed. “Look, down at Treasury they love motorways and hate rail. They overcost rail projects so they won’t get built. I want you to find out who’s behind it. The Herald’s got an election forum on transport tonight up at the Epping Club. Transport Minister Robertson’s going to be making a rare appearance. Maybe you should go up there and check out the scene”.
The Epping Club turned out to be a very tasteful RSL, tricked out like an upmarket hotel – all mock Tuscan detailing, quiet foyers, and expensive drapes.
There were a couple of hundred people at the forum and it was moderated by the Herald’s senior reporter, Andrew West. To set the scene they had a transport consultant called Sandy Thomas who’d been an advisor to the Herald’s independent public transport inquiry. Sandy had the air of an insider who’d seen too much madness and treachery. In summing up the situation facing Sydney he seemed on the verge of leading the audience in a chant of “No More Motorways!” They’d probably have gone along with gusto.
John “Robbo” Robertson is the very model of a modern NSW Laborite – all snappy suit, shaven head and bluff – but the bear-pit tactics weren’t impressing anyone. Understandably he’s trying to avoid being remembered as transport minister and he’d already turned down invitations to an EcoTransit forum on the North West Rail Link, a 2BL Morning Show broadcast from Central Station and even a forum organized by the Rail Tram and Bus Union. As a latecomer to a doomed government he has a hard patch to defend. He isn’t responsible for the failure, treachery and incompetence that preceded him, and there isn’t much to show for a decade and a half of Labor, except cancelled or late-running projects and a few metro buses.
Gladys Berejiklian – the next transport minister, although she’s being coy about that – is petite and very Armenian, with big dark eyes and a quietly determined manner but I got the impression Barry O’Farrell has her on a short leash. She’s allowed to say that they’ll build the North West and South West rail links and get serious about light rail, but she doesn’t want to have anything to do with the money for the Parramatta-Epping link that’s on offer from the feds. Probably she’d like to switch that money to the north west project but she can’t actually say that, and the feds probably wouldn’t go along.
The Greens transport spokes, Cate Faehrmann, is a young woman you wouldn’t want to mess with, and she sunk her teeth into Treasury’s little overcosting trick by promising an upper house inquiry after the election. I got the impression that Gladys would rather deal with this problem behind closed doors but the issue is now mainstream and it’d look really bad if she resisted the inquiry push. It’s a funny old world when the tree-huggers emerge as the guardians of fiscal rectitude.
Paul Forward, who was there as the token road-builder, is a smooth survivor. I felt he’d sensed the mood and was presenting a small target. Paul was head of the RTA until he was sacked after the Cross-City Tunnel debacle by the then Labor roads minister, Carl Scully. Nowadays he works alongside Scully at big end of town consultants Evans & Peck. Their latest project is keeping the tollways coming by conning the government into joining an entity with all the private operators and taking all the risk on their borrowings. Somehow, I don’t like their chances. Andrew West asked Forward to tell us about motorway projects he'd like to see built, but amazingly, he declined. He even said we shouldn't be subsidising motorists to drive on the M5.
But then, there was a minor sensation. Forward suggested that deliberate Treasury overcosting of rail was a bit of a conspiracy theory. Gavin Gatenby, who was on the panel for EcoTransit Sydney came back at him by pointing out that Sydney’s insignificant 13 km South West Rail Link project was costed at $2.5 billion whereas the last West Australian Labor Government had been able to finish the complex 72 km Mandurah Line project for just $1.2 billion. You just can’t dismiss comparisons like that.
And thus ended Thursday might. On Sunday morning news leaked out that Kristina Keneally had directed public servants to destroy thousands of sensitive government documents. The doomed and disgraced were covering their tracks, and I’m betting that a hell of a lot of those documents concern Treasury’s little overcosting scam.