11 ways to avoid committing taxpayers’ money to infrastructure boondoggles

By Stephen Easton

Tuesday July 24, 2018

Construction of road infrastructure
Construction of road infrastructure

Outbound Infrastructure Australia chief Philip Davies has published a new set of 11 decision-making principles along with a plea for politicians to get over their collective addiction to big announcements.

“We want to ensure that community needs are properly understood and all options are considered to solve an identified infrastructure problem, before we jump to a particular solution,” Davies wrote in his CEO’s newsletter.

“Our hope is that the Infrastructure Decision-making Principles act as a guide for Australia’s governments, while also providing the broader community with a clear set of expectations with which to hold decision makers to account.”

Philip Davies
Philip Davies

Today’s publication summarises the biggest general issues with public infrastructure projects from the independent advisory body’s perspective: too little rigour in how they are planned and assessed, and a lack of transparency.

The agency argues “decisions should be more transparent, with an enhanced focus on public release of analysis and processes that form the basis of infrastructure decisions” and adds a few other observations of what usually happens:

“Projects are often developed without fully considering all available options to solve an identified problem, including potential solutions that make better use of existing infrastructure through technology and data.

“Too often we see projects being committed to before a business case has been prepared, a full set of options have been considered, and rigorous analysis of a potential project’s benefits and costs has been undertaken.

“Governments could generally do better at engaging with communities, both in communicating the long-term plan, the benefits and risks of public infrastructure priorities, and by incorporating community input in a meaningful way in project processes.

“Despite broad agreement on the merits of undertaking post-completion reviews of projects, including the application of lessons and feedback for future investments, these reviews are rarely undertaken and published.”

Davies, who will leave the job when his three-year contract is up at the end of August, reinforced these complaints with an opinion article published in The Australian, where it is likely to get the attention of politicians.

“There are few more dangerous places to stand than between a politician and an infrastructure announcement,” Davies writes, urging politicians to resist the urge to commit funding to big-ticket projects that haven’t been assessed properly as the ‘Super Saturday’ byelections draw near.

Re-use where possible and consult more meaningfully

The 11-point checklist to aid infrastructure decision-making resulted from a recommendation in the agency’s flagship Australian Infrastructure Plan and Davies said it would complement the agency’s national list of priority projects.

“Ultimately, we want to ensure that community needs are properly understood, all options considered and communities consulted before projects are committed,” he added.

“This should include making better use of existing infrastructure by deploying new technologies or utilising the data we’re already collecting.”

The IA chief wants to see governments consult communities more about public works, explain their long-term plans, and allow community input to influence project development “in a meaningful way”.

“Part of this involves being more transparent around project decision-making by publicly releasing the analysis and processes that form the basis of funding decisions.”

Rigorous decision-making processes are particularly important for public infrastructure because it generally costs the community dearly to build and stays in place for a long time, he added.

“Our hope is that Australia’s governments embrace these Infrastructure Decision-making Principles and give the community added confidence that decisions on public infrastructure projects are robust, transparent and accountable.

The 11 new public infrastructure decision-making principles are:

  1. Governments should quantify infrastructure problems and opportunities as part of long-term planning processes.
  2. Proponents should identify potential infrastructure needs in response to quantified infrastructure problems.
  3. Proponents should invest in development studies to scope potential responses.
  4. Where an infrastructure need is identified, governments should take steps to ensure potential responses can be delivered efficiently and affordably.
  5. Governments should undertake detailed analysis of a potential project through a full business case and should not announce a preferred option or cost profile before undertaking detailed analysis involving multiple options.
  6. Proponents should assess the viability of alternative funding sources for each potential project.
  7. Project proposals should be independently assessed by an appropriate third party organisation.
  8. Governments and proponents should undertake meaningful stakeholder engagement at each stage, from problem identification and option development to project delivery.
  9. Governments and proponents should publicly release all information supporting their infrastructure decisions.
  10. Governments should commit to, develop and release post-completion reviews.
  11. Where projects are funded as part of a broader program, the corresponding decision-making processes should be robust, transparent and prioritise value for money.

Changing of the guard

IA chair Julieanne Alroe announced in May that Davies did not want to renew his contract, praising the CEO for making “an indelible mark on infrastructure policy” through the agency’s major publications and for lifting the standard of debate around the subject.

“He has built an organisation that is deeply respected in the Australian community for providing independent, evidence-based advice on the projects and reforms that are in our national interest,” she said.

In his July missive, Davies said he was proud of the contributions the organisation had made on his watch.

“We have made great strides in improving infrastructure decision-making and delivery across Australia, and I would like to acknowledge the support I have enjoyed from governments, industry, the broader community and my whole team at Infrastructure Australia.”

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