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When it comes to infrastructure, the Coalition prefer announcables to planning

Much has been written about the dismal failure of the NBN.  We are spending $50 billion on an unreliable system that cannot be upgraded.  This enormous investment in yesterday’s technology has seen the 13th largest economy in the world saddled with an internet speed ranking of 50th in the world behind many developing nations.  Why?  Because it was a Labor initiative that had to be destroyed.

When it comes to energy, the Coalition’s fixation with coal has been met by resistance from a market who is moving inexorably towards a low carbon future.  So Malcolm, in order to look like he is doing something constructive, embarked on his “nation-building” Snowy Hydro 2.0.  The announcement was made less than two weeks after the idea was first mentioned and with no consultation with the majority shareholders, the NSW government who own 58% and the Victorian government who own 29%.  The federal government only own 13%.

In March 2017, without any studies having been done, Turnbull announced the scheme would cost about $2 billion and take 4 years to build.  By December, that figure had blown out to $3.8 to $4.5 billion with a time frame of 7 years and that doesn’t include the essential transmission upgrade to actually get the power to the grid which will cost an apparently unknowable amount but media reports speculate at least another $1 billion.

A look at the feasibility study raises many questions.

“The detailed financial evaluation and commercial conclusions are confidential to Snowy Hydro. The benefits to Snowy Hydro have been modelled under a range of scenarios and future NEM outcomes. The financial benefits that have been modelled are conservative and are likely to understate the potential earnings that could be realised by Snowy 2.0.”

To me, that reads that the business case does not stack up so we are keeping it a secret.

The 27 km of 9m diameter tunnels necessary to link the two reservoirs will be concrete lined.  A mix of tunnel boring machines as well as drill and blast techniques will be used for the tunnelling and excavation.

According to the study, the Kosciuszko National Park will be impacted by surface works.

The key environmental aspects and their potential impacts include the following:

  • Establishment of construction work areas that may restrict the access of recreational users and temporarily impact the amenity of the Park

  • Establishment of surface earthworks that require the clearing of vegetation, may damage critical habitat and fauna, and may spread weeds

  • Underground excavation that may cause changes in groundwater levels

  • Spoil disposal that may impact surface waters and terrestrial environments

  • Inter-catchment water transfers that may spread pest species of fish

Renewable energy will certainly require storage to be reliable but there are alternatives.

In September this year, researchers at the Australian National University released a study, funded by a $449,000 grant made by the Australian Renewable Energy Agency, identifying at least 22,000 suitable locations for pumped hydro.

ANU engineering professor Andrew Blakers said “No matter where you are in Australia, you will find a good pumped hydro site not very far away from where you, or your wind or your solar farm is located.  We only need to build about one or two dozen to support a 100 per cent-renewable electricity grid.”

Dr Stocks from the ANU Research School of Engineering said “Annual water requirements would be much less than half that of the current fossil fuel system because wind and PV do not require cooling water.”

Co-researcher Mr Bin Lu said all of the potential short-term off-river pumped hydro energy storage (STORES) sites were outside national parks and urban areas.  Each site had a storage potential range of 1-300 GWh which could deliver maximum power for five to 25 hours, depending on the size of the reservoirs, going from zero to full power in about one minute.

It would certainly be worth investigating if these projects could be built quicker, at less cost, closer to existing transmission lines, with less environmental damage, and providing local employment opportunities in different regions.

But that would require actual planning and wouldn’t lend itself to photo opportunities.

There are similar questions about the advisability of Barnaby’s baby, the inland rail.

At an estimated cost of over $10 billion, the business case states “Inland Rail is expected to increase Australia’s GDP by an estimated $16 billion by 2050.”

That doesn’t seem like much of a return.  Infrastructure Australia requires the use of a discount rate of 7 per cent when assessing the benefit of a project because a dollar of benefit in the future is worth less than a dollar of benefit today.

Using that approach, the benefit cost ratio of the inland rail is 1.02 ie every dollar invested will bring a benefit of 2c.  And to get that, they are counting less accidents on the road and reduced emissions from using rail rather than trucks, ignoring the likely arrival of electric trucks which may even be driverless.

Unsurprisingly, and in a move reminiscent of our emissions reduction accounting tricks, they chose to quote a 4% discount which gives a supposed cost benefit of 2.62 – a very big difference.

“A four per cent discount rate has been adopted in preference to a more conventional seven per cent discount rate. The long term nature of the project, which is consistent with international practice for large scale infrastructure projects, together with a review of the 20 year historical Australian Government bond rates supports the application of a four per cent discount rate for Inland Rail.”

Farmers will still have to get their produce to and from the railway, presumably by truck. It will do nothing to revitalise regional towns as endless freight trains barrel on through.

Would it be better to build high speed passenger rail?

The cost would certainly be higher but it would free up road, rail and air transport for freight and allow people to move out of the cities giving regional Australia the boost it needs.

It might also make Badgery’s Creek airport unnecessary.

Speaking of which, no plan has yet been made for a rail link from the new airport – another stellar example of lack of planning in favour of an announcable.  Apparently there is an “Options assessment underway” with six alternatives being considered (read we haven’t even made a plan yet).

This is despite their own report stating:

“Provision of efficient transport options connecting the Western Sydney Airport to other key hubs such as the CBD, Parramatta, Western Sydney Employment Area, and North West and South West Growth Centres is critical to avoid unnecessary travel delays and enable sustained economic growth.”

The way this government works is to jump on a plane with the media in tow, fly somewhere, don a high viz vest and hard hat (shovel optional), make a huge announcement….and then start doing research into if it’s a good idea or not.

It would be a tad more convincing, and much more productive, if they did the research first and made a coherent plan before they announce things.


25 comments

  1. bobrafto

    I just made a discovery.

    I have a 4g smart phone and just took out a plan with a xmas special vodaphone plan with pensioner concession it is $31pm with 20gig of data, unlimited calls & text + 150mins of Int’l calls.

    My discovery is that I can hotspot my phone to my laptop for internet use and I get speeds up to 43mbps, nothing lower than 26. Compare that with the NBN which is about 12mbps and you’ll wonder why you would bother to connect to the NBN.

    Keep that in mind next time you have an NBN outage.

  2. Jai Ritter

    @bob 4g is still unreliable, even compared to adsl. We still need hi speed fibre to run 4g and even 5g into the future. Even then optus, telstra etc will still cap the speeds and data plans. I get 34 gb a month with my phone and tablet for around 160 a month, but top of the line Samsung products but I’d still rather pay 99 a month unlimited for my adsl2 home broad which is 19mbps, because I’m 100 metres from the exchange. I live in a popular tourist destination coastal town and come holidays and weekends, 4g is non existent. It’s completely unusable due to congestion.

  3. Keith

    California is coping it, the Thomas wildfire is now recorded as the biggest fire ever experienced, it is still not fully contained; it is their winter!

    http://www.nationalobserver.com/2017/12/23/analysis/californias-thomas-fire-torches-record-books-normal-climate-burns-away

    Louisiana is planning for people to move people from low lying flood planes:

    http://www.bloomberg.com/news/articles/2017-12-22/louisiana-sinking-fast-prepares-to-empty-out-its-coastal-plain

    Meanwhile Alaska is baking:

    http://www.washingtonpost.com/news/capital-weather-gang/wp/2017/12/19/baked-alaska-49th-state-is-having-an-insanely-warm-december/?utm_term=.8912719e5d7c

    http://www.nytimes.com/interactive/2017/08/23/climate/alaska-permafrost-thawing.html

    At the AGU Media Presentation in December 2017, it was stated that 3 events could not be explained by anything other than climate change in 2016, those events are discussed early in the film:

    http://www.youtube.com/watch?v=9bpVP4uOcdY

    The AGU Presentation was about 2016, 2017 has provided some extra catastrophic events!!

    An interesting article about Inuit culture and climate change with an archeological theme:

    https://insideclimatenews.org/news/30112017/alaska-global-warming-archaeology-permafrost-history-artifacts-sea-ice-hunting-whaling-traditions?utm_source=InsideClimate+News&utm_campaign=b507e160f8-Weekly+Newsletter&utm_medium=email&utm_term=0_29c928ffb5-b507e160f8-327850601

    The point being that It is reckless to downplay climate change as the LNP is doing.

  4. David Stakes

    If Labor floated this idea, there would be cries from the LNP about Cost Benefit Analysis, all sorts of modelling. They the LNP can float ideas willy nilly, and MSM go all goo gaa over them.

  5. James Cook

    Thanks Kaye. I always thought this scheme was dodgy and you’ve confirmed that for me. A few months ago I had a chat with a bloke from the Snowy who was involved in the “feasability study” for Snowy 2.0. I asked him about terms of reference, completion dates and a few other things and it was obvious from his answers that there were no concrete guidelines and that they were just “winging it”. My strong impression was that the team was told to come up with “positive” answers for the scheme. And [my favorite hobbyhorse] the MSM are running with it! Merry Xmas to you and other AIMN journalists. May 2018 bring about the demise of this corrupt government.

  6. Phil

    Announcables – what a wonderful political word – get all the credit for no input and no outcome – how totally Turnbull – how deviously conservative.

    Turnbull likes riding on the back of others – a free-loader. He did it with NBN, Gonski and Snowy and he’ll do many times more before enough voters realise he really is the dud he appears to be.

    I have switched off from this government – no point in asking for anything – no point in hoping things will change for the better whilst these ignorant bastards are in power – Turnbull, and his corrupt party, has nothing to say that isn’t defined by deciet, lies, spin, crap, bullshit and balderdash.

  7. 2015terry2

    I’ve had a lot to do with the NBN people over the last six or so months, mainly with their support personnel in the Philippines.

    Apart from the decision by this government to move away from Fibre to the premises I have identified the principal failings in their business model.

    That is that they are a wholesaler only : contractors will lay the cable and link you up to the system , give you a fixed wireless modem or in my case a satellite dish for skymuster and a modem but then they’re gone from your life and forever after you are told to deal with your service provider as they will sort out all your problems : they don’t !

    NBN should have had a retail division providing all of the service necessary to remain connected to the system. The way it is at the moment, it’s like going into a coffee shop and ordering a flat-white and they provide you with a cup and coffee and bring a cow to your table and tell you to find somebody to milk it.

    The other major problem they have is a highly trained support system based in Manilla, that’s not Manilla near Inverell, that’s Manilla in the Philippines. These talented people have been trained on what should be happening in Australia and when it doesn’t happen in accordance with the training module – most of the time – they have no solutions and refer you to your service provider……..see above.

    Have a wonderful Christmas all and thank you Kaye for your analysis and research
    capabilities : I stand in awe !

  8. Graham Parton

    I agree, all praise to Kaye for her analysis of a wide variety of issues and her ability to bring it to us so many times.

  9. townsvilleblog

    vODOPHONE is a yank company so I wouldn’t be giving them any of my precious money, anyway the NBN could be giving us lighting speeds if the copper was removed and replaced with fibre. The copper idea was Communications Minister Turn bull’s as he did a job on the NBN for then Prime Minister Abbott. It will now be a huge job to remove the copper and give the population what they originally paid for before this tory meddling.Comparing countries like New Zealand and the Philippines is like comparing apples with oranges. Both countries as as big as a postage stam compared to Australia so would be easier to service when they don’t have our vast lands, that said our speeds could be among the fastest in the world if Turnbull hadn’t sabotaged the network bu adding copper. A huge job for a future Labor government.

  10. Kaye Lee

    There are other concerns with the Snowy Hydro plan because there is no real independent oversight.

    The company they chose to do the study, SMEC, started out as the government-owned Snowy Mountains Engineering Corporation but was later privatised and, last year, was purchased by an Asian engineering company. The company had several of its subsidiaries banned by the World Bank in October after an investigation into “inappropriate payments” linked to projects in Sri Lanka and Bangladesh. Are they truly independent enough to give advice and will they actually be able to deliver?

    http://www.smh.com.au/federal-politics/political-news/turnbull-government-faces-questions-over-snowy-hydro-20-as-firm-banned-over-corruption-allegations-20171004-gyu7q4.html

    Also, in 2013, the NSW government axed the independent Snowy Scientific Committee and replaced it with an advisory committee funded and picked by Snowy Hydro itself. The independent body was tasked with overseeing environmental flows to rivers affected by the Snowy Hydro scheme.

    http://www.abc.net.au/pm/content/2013/s3699789.htm

  11. townsvilleblog

    With Australian emissions not at record high’s it’s time for a simple tax on carbon pollution as introduced by Prime Minister Gillard, of course Abbott cancelled it but it was and still remains the way to tackle the bog polluters. In India recently a Test match cricket contest had to be delayed because of carbon pollution, and yet some want to burn more coal to make electricity when cleaner renewable energy methods exist, to my way of thinking it’s lunacy! Personally we have gone solar with batteries to put my money where my mouth is.

    Why can’t this tired old federal LNP government understand that the climatic results of burning coal creates carbon pollution, while solar creates none, costs nothing to run, and with battery storage completes a no cost system aparty from the initial cost. We have had 3kw of solar on the roof since 2010 but have saved enough money due to the savings from the 3kW system to go the whole way ans add another 3kW and a battery which we are very happy with. True North Solar installed the new system in a day, and we have dealt with them since 2010 and found the service and after sales back up second to none.

  12. Glenn Barry

    That is a wonderful observation – the Announcables – that would make a brilliant political satire series

  13. Kaye Lee

    Speaking of announcables with no thought…..

    The national pesticides authority may have to hire staff from overseas to make its forced move to Armidale work and avoid a drain on its skills, a new report says.

    The pesticides authority will also have to outsource more of its work to external scientists for the relocation to succeed, the Pegasus report said.

    “Given the likely availability of experienced assessment staff, a higher proportion of scientific assessments would be provided by external reviewers,” it said.

    http://www.canberratimes.com.au/national/public-service/apvma-may-have-to-hire-overseas-staff-for-armidale-move-to-work-20171222-h094e9.html

  14. Frank Smith

    Snowy Hydro 2 is just that – an attempted “snow job”. The 500MW Wivenhoe pumped hydro generator west of Brisbane has been operating since 1984. All the transmission lines and infrastructure are already in place – all it needs to make it a “huge battery” as envisaged for Snowy Hydro 2 is solar and/or wind generated renewables to power the pumps rather than “off-peak” coal fired generators.

    And right there in the Snowy is the 1500MW Tumut 3 pumped hydro power station, again with all the necessary transmission lines and infrastructure already in place. And the only investment required is again renewable energy systems to power up the pumps rather than “off-peak” generators. Tumut 3 + Wivenhoe already have the “huge battery” capacity of 2000MW that is being bandied about for Snowy Hydro 2 – what is missing is the renewable energy generators to power the pumps. So, why is anyone talking about investing billions into Snowy Hydro 2? Spend that money on sufficient renewable energy generators to run both the grid and the pumps on these already existing pumped hydro generators.

    Merry Christmas to all!

  15. Glenn Barry

    I think when it comes to Turnbull’s obsession with Snowy Hydro 2 – it’s a plaque infatuation – he desperately wants his name on one somewhere

  16. bobrafto

    TV
    Vodaphone is a pommy co.

  17. Rob

    The IPA wishlist, written by now LNP senator James Patterson not so long ago does state that priviatising Snowy Hydro scheme is high on their list of things to do soon. (written in 2013) That Snowy hydro is owned by both NSW and Victoria did NOT go unnoticed by Patterson et al. THE right of politics decided just this week to make both State Govts stump up the cash and oh sooo generously the Libs chip in a chunk of loose change. So the question is what about the Utility company Red Energy? Do their customers chip in as well Red is owned by Snowy Hydro !! Australia, brought to you by a right wing think tank, mascerading as an elected Government.

  18. jim

    Good post and good comments, Hopefully Labor will replace this paralysed government soon. Turnbull is fighting internally and externally with IPA backed Mrabbit chomping at the bit for the leadership.

  19. Harquebus

    The NBN, as envisaged and specified by Conroy was flawed from the start. It was never going to achieve its full potential. It was inflexible, did not consider new technology and was, for a very expensive outlay, limited in its functionality.
    The Coalition, in their usual style, turned a poorly made plan into a dogs breakfast and now we are stuck with it but, the blame lies with Conroy and if we go back a bit further, can include Richard Alston.

    Never let a politician design a computer network.

  20. Kaye Lee

    It might be more helpful to expand on emerging technology harquebus.

  21. Kyran

    Like anything this government does, any inspection (let alone close inspection) results in more questions than answers.
    If you go to the Infrastructure Australia (IA) website, they have lists of current and previous priority lists.

    http://infrastructureaustralia.gov.au/projects/infrastructure-priority-list.aspx

    Whilst a few $bill of spending would presumably require some scrutiny by the appropriate authority, we all know this government just doesn’t do facts. This major development is nowhere to be seen on any ‘priority list’. So, who is doing the ‘feasibility study’? From your imbedded link, it would appear ‘Snowy Hydro’ is going to do it itself. Down at the very bottom of the ‘Feasibility Study Summary’ is quite possibly one of the most bizarre disclaimers I have ever seen.

    “IMPORTANT NOTICE
    You must read this notice and disclaimer if you intend to read this Feasibility Study Summary (Study). By continuing to read the Study, you accept that this Study is provided on the terms and conditions of this notice. If the terms and conditions are not acceptable, this Study and any copy of it, in your possession or control, must be destroyed or returned immediately to Snowy Hydro.
    This Study has been prepared by Snowy Hydro Limited (ACN 090 574 431) (Snowy Hydro) solely for the benefit of Snowy Hydro, and only addresses issues that are relevant to Snowy Hydro.
    The concepts and information contained in this document are the property of Snowy Hydro. Use or copying of this Study in whole or in part without the written permission of Snowy Hydro constitutes an infringement of copyright.
    Nothing contained in this Study is, or may be relied upon as a promise, representation, or warranty, whether as to the past, present, or future. No express or implied representation or warranty is made by Snowy Hydro to any third party that the contents of the Study are suitable for any purpose. Snowy Hydro does not accept a duty of care or any other legal responsibility whatsoever and however arising to any person in relation to this Study. Any person who receives a copy of this Study does so on the basis that he or she acknowledges and accepts that he or she may not rely on this Study nor any related information provided by Snowy Hydro.
    To the fullest extent permitted by law, Snowy Hydro disclaims all responsibility, liability, direct, indirect, or consequential loss (and whether or not arising out of the negligence, default, or lack of care of Snowy Hydro) for any loss or damage suffered by any third party arising out of, or in connection with, any use of or reliance on this Study.
    Map of the Snowy Scheme including Snowy 2.0 Copyright © Snowy Hydro Limited. All rights reserved.”

    So, the government wants to rely on a Feasibility Study, commissioned and conducted by the venture itself, that discounts itself as being worthy of consideration.
    Seriously? A search of “infrastructure australia snowy 2” revealed;

    https://www.infrastructureaustralia.com/utilities/gates-open-for-snowy-mountains-2-0-feasibility-study/

    IA is aware of it and their link includes details of a partner for the feasibility study, which is left off Snowy’s own ‘Feasibility Study Summary’.
    “Selected through a tender competitive process which attracted interest from a field of world-class engineering firms, SMEC has now been appointed as the lead consultant engineer for the feasibility study into the first major expansion of the Scheme since construction days.”
    “SMEC and Snowy Hydro have a long history, having worked together to develop the iconic 4,100 megawatt (MW) Snowy Mountains Hydroelectric Scheme under the auspices of the Snowy Mountains HydroElectric Authority, established in 1949.”
    ‘SMEC’ has, apparently, a long history with the Snowy. From their website “History” portal;
    “SMEC has a long and proud history which dates back to the iconic Snowy Mountains Hydroelectric Scheme, one of the largest and most complex hydroelectric schemes in the world.
    The scheme was a multi-purpose project undertaken between 1949 and 1974. The project brought together over 100,000 workers from 30 countries who constructed 16 major dams, seven power stations, one pumping station, 145 km of tunnels, 80 km of aqueducts and 2,000 km of roads.
    Today, SMEC is a progressive global company with over 5,800 people working within an established network of more than 80 offices around the world.”

    http://www.smec.com/

    SMEC. Has anyone ever heard of them? But wait, there’s more. From the “About Us” portal on the same site;
    “SMEC, as part of the Surbana Jurong Group, provides global consultancy expertise in urban, infrastructure and management advisory.”

    Surbana Jurong Group is one I have heard of. The Singaporean Government has been investing in infrastructure on a global basis for decades with a simple rationale. If sovereign nations don’t want to own their own infrastructure, we will buy it. Surbana Jurong is wholly owned by the Singaporean Government. From their ‘Wiki’;
    “Notable acquisitions
    In June 2015, Surbana Jurong acquired KTP Consultants Pte Ltd in Singapore and Sino-Sun Architects & Engineers Co. Ltd in China.
    In November 2015, Surbana Jurong acquired 20% equity stake in China’s CITICC (Africa) Holding Limited and a 8.4% stake in FLUX Factory, Inc. (a spin-off from Google X).
    In August 2016, Surbana Jurong announced the acquisition of Australia-based SMEC Holdings for S$400 million.
    In October 2016, Surbana Jurong acquired security firm, AETOS Holdings for an undisclosed amount.
    In November 2017, Surbana Jurong acquired Robert Bird Group, a global consulting engineering firm.”

    https://en.wikipedia.org/wiki/Surbana_Jurong

    Anyone smell a rat?
    Thank you Ms Lee and commenters. Take care

  22. Kaye Lee

    That disclaimer is extraordinary Kyran.

  23. Kronomex

    Kyran, your reply is an eye-opener and it all stinks to high heaven and dare I say it, corruption at the highest levels.

  24. Kyran

    Indeed Ms Lee and Kronomex. Reading the link was hard enough due to the amount of ‘fine print’ and ‘commercial spin’, but that disclaimer is simply staggering. I’ve read a few and I have never seen anything like it.
    It’s funny how you become sus about anything this government does. When the spin comes that hard and that early, you wonder if it isn’t simply a ploy to get the Snowy off the states and flog it to Singapore. When the involvement of SMEC is buried in the detail, and the ownership by Surbana Jurong is buried further down, there are questions worth asking.
    Thank you, again. Take care

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