Alon Levy, co-lead of the transportation and land use program at New York University’s Marron Institute, has spent years studying why some countries are able to build transport infrastructure cheaply and others aren’t.
Though the preliminary business case of the expansion of Gold Coast light rail includes few details, Levy estimates that the project may ultimately cost as much as 10 times more than comparable European infrastructure.
Those include, Levy says, a lack of contracting transparency, over-engineering, politicisation, poor allocation of cost risk – and above all, contracting out to the private sector.
This is the best summary I could come up with:
Though the preliminary business case of the expansion of Gold Coast light rail includes few details, Levy estimates that the project may ultimately cost as much as 10 times more than comparable European infrastructure.
The state government had a steady supply of work planned years or decades in advance, with economies of scale, zero profit margin, and extremely low borrowing and insurance costs to manage risk.
“This desire to have just simple competition on lowest fixed lump sum price was based on the delusion that the private sector is better at managing risk than government,” Elaurant says.
Many transport engineers, planners and economists spoken to for this story said the public sector bureaucracy no longer has the skills to complete infrastructure projects in-house.
That means governments have little choice but to hire a private expert firm to act as “lead contractor” – responsible for the entire job, not just a small part of it.
The federal Labor government has ordered the commonwealth bureaucracy to set targets for banishing their use in core business, bringing skills and knowledge back in house.
The original article contains 1,675 words, the summary contains 180 words. Saved 89%. I’m a bot and I’m open source!