It was “the way forward for land transport in Australia.” No, not the Segway, but Auslink, the Howard Government’s integration of road and rail funding into a massive five-year program that would, according to then-Transport Minister John Anderson, lead to better strategic infrastructure planning, improved cooperation between governments and better project selection and evaluation.
Under Auslink, as part of arrangements agreed by Commonwealth and State transport ministers, road projects — even those picked by politicians — would have to undergo a rigorous three-stage appraisal process to filter out all but the “best initiatives”.
Only, there was frequently no appraisal, no cooperation and no planning, and no one ever evaluated anything.
The Auditor-General’s now-famous audit of the Regional Partnerships program which went off like a bomb during the 2007 election campaign confirmed that National Party ministers in the Transport and Regional Development portfolio had engaged in systematic pork-barrelling and blatant politicisation of taxpayer-funded regional programs.
The Australian National Audit Office’s new report on Auslink shows that road funding wasn’t much better — except this time it was the fault of bureaucrats in the Department of Transport, these days burdened with the receptionist-killing title “Infrastructure, Transport, Regional Development and Local Government”.
Auslink dwarfed Regional Partnerships. Established in the lead-up to the 2004 election, it brought together existing road and rail funding programs and established a “National Network” of nationally-important transport corridors. The first iteration involved funding of $11.8b over five years from 2004-5; the second, which starts in July this year, costs over $22b, except both political parties promised even more than that during the 2007 election campaign.
Nearly all of Auslink was in Coalition-held electorates at the time. This was back when the Commonwealth didn’t fund infrastructure where most Australians live — cities.
The ANAO looked at the first five years of Auslink and found much to be disturbed about. Some of its complaints relate to its OCD-like fixation with paperwork and documenting everything and can be safely ignored. But a number of Auslink projects had blown out wildly in cost because of lack of consultation between the Commonwealth and the State Governments, who were actually in charge of building them, about what the final cost would be. The Townsville Ring Road doubled in cost to $80m. A “four-laning” in Gympie has doubled in cost to $70m. The Caboolture Motorway was supposed to get only $200m from the Commonwealth but has received nearly $100m more.
This was in spite of the fact that the ANAO had specifically warned the Department of Transport back in 2001, when it completed an audit of a roads program, about the high probability of cost overruns on road projects and of the need to prevent them as much as possible. In fact, it is becoming increasingly common for the ANAO to point out that it has identified out poor processes before, only for them to be repeated in later programs by the same Departments.
For other projects, “strategic infrastructure planning” was dumped for the convenience of the Government. In late 2005, the Howard Government, at the nadir of its fiscal discipline, realised it was heading for a massive Budget surplus, due not merely to the mining boom but its own inability to get money out the door quickly enough. Ministers were asked to hastily come up with new spending proposals that could be implemented before the end of the financial year.
Transport officials suggested a $800m duplication project on the Hume Highway in NSW, based on what were by their own admission “necessarily fairly rough” calculations about the costs and benefits, and a $268m upgrade of the Bruce Highway. John Howard liked their suggestions and promptly gave the money to Warren Truss, who had succeeded Anderson in the portfolio.
$1 billion: easy come, easy go.
Transport officials then checked for more projects and produced a list. Truss and Howard asked for details of the projects, including which electorates they were in (all Coalition except one in the Northern Territory), and another $650m was handed over without any detailed assessment either of the costs and benefits of the projects or their worth as strategic infrastructure.
But that’s okay because no one was bothering to check whether any of the Auslink projects yielded the benefits projected for them. Despite John Anderson’s assurance that Auslink would usher in a new era of evaluation and strategic planning, the ANAO found that no evaluations had been done of any of the Auslink-funded projects that had been completed and carrying traffic for at least twelve months.
In a Public Service where evaluation has been a critical aspect of program delivery for at least fifteen years and probably longer, this constitutes a staggering failure. Worse, the NSW RTA had actually conducted some evaluations of the projects it had been involved with using Federal money, but had not bothered to send copies to Transport, which had not asked for them.
And it’s not clear Transport officials would know how to evaluate the projects: despite spending $200,000 on a consultant to draw up an Auslink evaluation framework, the ANAO discovered there had been some, um, slight delays. The consultancy itself, first advertised in May 2005 when Auslink was starting, wasn’t completed until July 2006. In October 2006, the Department identified an evaluation framework as a “major priority”, with the intention of commencing evaluations in 2007, including a “mid-term evaluation” of Auslink. Sadly, that schedule wasn’t met. “Timing was delayed a little due to the November 2007 Federal election,” Infrastructure admitted to ANAO in November, three and a half years after starting. “The evaluation process has commenced…”
While the Regional Partnerships rorting was conducted from the offices of National Party ministers, these failings — barring Howard and Truss’s electorate-based assessment of projects to spend extra cash on — were entirely at the Departmental level. In particular, the failure to conduct any evaluation of the projects taxpayers had spent billions on is a remarkable lapse of basic program management. It’s hard to avoid the conclusion that the “anything goes” approach of the Department’s Ministers rubbed off on Transport bureaucrats.
The new Government has since established Infrastructure Australia to undertake tasks such as assessing the costs and benefits of infrastructure projects. Far from not obtaining enough information from the states about projects, Infrastructure Australia’s problem has been the poor quality of the information it has got and the difficulty of getting better information. As Infrastructure Coordinator Michael Deegan noted in his correspondence to the ANAO, “some of the submissions we received contained weaknesses. A number of explanations can be provided for those weaknesses. Ultimately, I believe it comes down to a simple choice. We can continue to take decision on large infrastructure projects based on poor planning and insufficient evidence — or we can take those decisions following careful planning and rigorous assessments.”