There’s nothing
particularly quick about Sydney traffic or the reporting on it, as shown by the slow
burn over Sin City’s cross-eyed tunnel. But wait, there’s plenty more
angst to come.

With the
fishwrappers and drivers finally realising what the long-planned and agreed
changes to William Street mean (constant and worse congestion), the tunnel
operator yesterday pulled off something of a PR coup with that good old standby
of promising a “review.”

As any seasoned
observer of government and corporate life knows, a “review” doesn’t really mean
anything. Heavens, the Immigration Department probably has them.

But that was
enough to win a big run in The Daily Telegraph and the front page lead of the
SMH
under the headline: “Tunnel anger sparks wide review of tolls.” The
wise Crikey reader will note that tunnel anger isn’t sparking any
promise
of a reduction in tolls, just a review that the body copy shows won’t
touch the
base toll anyway.

But there’s not
even the gossamer of a review of the contentious road changes set in contract
concrete with the State Government to guarantee the tunnel will be a very
profitable investment for the private sector.

Next year when
the Lane Cove tunnel opens, more angry motorists will belatedly find
they’re victims
of a similar devil’s pact. Epping Road’s capacity will be sharply
reduced just like in William Street, to force motorists to use the toll
road.

In a story for
Eureka Report this week on a new infrastructure fund, the political drivers for
many more such deals were neatly encapsulated: the harsh political realities of
governments operating on short-term election cycles, an unwillingness to
increase tax bases or borrow to pay for major infrastructure projects and the
greater political appeal of the private sector levying steadily-rising “user
pays” charges rather than the politicians seeking election.

I
put to Ian Smith of Lazard Global Listed Infrastructure Fund that governments
had been played for mugs by a number of operators who received particularly
good deals. I wondered if governments were smarter now:

Smith: There are
instances of concessions that have been granted that now, over time, were very
favourable to investors. Often governments have a very much narrower horizon
than the investors do and that creates an arbitrage. So yes we have seen roads
privatised that with the benefit of hindsight have proven very, very good
investments.

Pascoe: And it’s less likely to
see those in the future?

Smith: I think one can presume
that there will be learning on the side of the governments that are selling
these assets. Whether they will learn to the point that the upside is totally
eliminated, I doubt it.

Me too.

Peter Fray

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