back to article Surprise! Government mega-infrastructure project cocked up

That Australia's National Broadband Network is late, over budget and chaotically managed will come as no surprise to aficionados of government infrastructure projects. It's just the latest in a long and inglorious rollcall of politicians pissing our money away on things they simply don't understand. Ten protestors at the NBN …

  1. LarsG

    I feel a little better now I know it's not just the UK who are masters of the great IT balls up.

    1. John Smith 19 Gold badge

      @LarsG

      "I feel a little better now I know it's not just the UK who are masters of the great IT balls up."

      True.

      You could buy most of a high speed rail network for that kind of money.

  2. hardboiledphil

    I would agree that it's better to have a CBA than not have one but as HS2 showed if someone wants it enough then they will happily skew the stats/figures to make it look viable.

    1. Disgruntled of TW

      s/HS2/FTTH/g

      That's all.

    2. Malcolm 1

      I think that if HS2 was sold as a capacity/reliability upgrade rather than a speed upgrade objections would have been far less. Speed is (hopefully) a side effect of building a modern rail line, being able to double traffic and perform maintenance without entirely closing the route seem like much more worthwhile gains.

      1. I ain't Spartacus Gold badge

        I think that if HS2 was sold as a capacity/reliability upgrade rather than a speed upgrade objections would have been far less.

        I'm not sure. There's a lot of people living in the area affected who are objecting becasue of that, and will take on any objection. There are also some people looking at the vast cost and thinking it's a waste.

        We've got into a bit of a rut on infrastructure. The Major government gave up on all new large road projects becasue of a combination of trying to balance the books and stop Swampy and his mates from being on telly every night. New Labour didn't really reverse that. And no-one seems to mention new roads any more. I don't think we can usefully expand the East Coast and West Coast rail lines. And we don't even have much more air capacity around London and the South East.

        Also NIMBYs seem to be becoming BANANAs (Build Absolutely Nothing Anywhere Near Anything)...

        And yet we're apparently going to have 75 million pepole living in this rather crowded country by 2030. So unless we can get most of those to live up North, we're in danger of tipping the South East into the sea (we're supposedly getting fatter as well remember). Don't laugh up in Scotland, we may all drown, but you'll start sliding as the country tips up, and then you'll end up being English...

        Did the HS2 business case take this into account? Did it compare the environmental cost of all those people flying? The NIMBYs managed to kill the Chunnel frieght link that was going to go up via Chiltern Railways and some of the old Midlands track. Which was a shame.

        I don't know if a business case is going to give any better idea of what's going on than a politician's guess. The answer that comes out is going to be just as reliant on what assumptions our economist chooses and what costs/benefits are ignored or impossible to measure.

        I suspect the correct answer would be to build a new North-South motorway. Can't see that going down too well though. So I supect one of the politicians' calculations was that surely environmentalists won't object to trains, which just leaves the locals whose house-prices might fall.

        So I'd say the real answer is it's all guesswork. And economists sometimes delude themselves that they're dealing with a science. But it can't be because it's impossible to have a spare economy to test theories on, and because politics and voter-perception are just as important as cold hard cash.

        Also how the hell can we even know the outcome of current policy and trends over the next 30 years. Let alone whatever circumstances are going to hold in 50-100?

        Although on the other hand, it's still a good thing to try to do the economics right. I just don't believe it's any more a reliable guide to the future than anything else we have.

        1. Anonymous Coward
          Anonymous Coward

          " I don't think we can usefully expand the East Coast and West Coast rail lines. "

          We could, it's just that fuckwit politicians would prefer to launch vast projects using my money to support a business case that only a complete idiot would believe.

          If you believe that public money should go on HS2 or other infrastructure projects, then you presumably accept that infrastructure is a public good. Having accepted that, then the capacity of the systems is an issue of public good. Now, take an existing Pendolino set, rip out the first class seating that infests 40% of the coaches, and replace it with the entirely adequate second class fit out, and voila, 25% increase in carrying capacity without buying or running a single extra train. How difficult is that? Is it the job of the ordinary taxpayer to pay the ridiculous price of HS2 because the WCML is clogged by fat cats travelling first class? This isn't about whether they pay their way, its just about capacity limits, and the fact that by allowing wide, first class buttocks to occupy WCML, we seem to need (case unproven) to spend £80bn on a complete new rail line.

          Add another one or two second class coaches to each train set and you'd need to extend the platforms again, but that's add another 15% carrying capacity for modest costs. If speed's an issue, then simply build a couple of brand new straight sections or straight tunnels at Berkhamsted, Linslade and Weedon curves. Capacity limits at Euston could be augmented by having (say) all Glasgow trains leave and arrive at less heavily utilised Paddington (WCML and GWR are within yards of each other at Kensal Green). Through the West Mids extra capacity and speed is available simply by four tracking the line between Coventry and Stafford via Birmingham. A long term signalling strategy for WCML could see signalling progressively upgraded to in cab signalling, and the Pendolino's then allowed to run at their design speed of 140mph. This also ignores two ten minute "holes" in the hourly fast line departures from Euston that could accomodate another four to six departures. Why are we talking about HS2 when that capacity is still not used, and the off peak trains are lightly loaded with students paying £10 a ticket?

          And that's before doing anything with the under-utilised Chiltern Line, that could easily see 8 coach trains extended to twelve (50% increase in capacity London to Birmingham without any additional trains being run).

          HS2 is a waste of money. It is an indictment of all front benchers in the Westminster House of Shame that the idea persists to spend the fat end of £100bn for something that isn't needed now, and won't be needed in future.

          1. SkippyBing

            'Is it the job of the ordinary taxpayer to pay the ridiculous price of HS2 because the WCML is clogged by fat cats travelling first class? '

            That depends, if the people travelling first class are subsidising the fares then your plan results in all the people who normally travel second class having to pay more anyway.

            1. Anonymous Coward
              Anonymous Coward

              "if the people travelling first class are subsidising the fares then your plan results in all the people who normally travel second class having to pay more anyway"

              But it avoids spending £60-80bn on a new railway line and its £1-2bn a year operating costs.

              At typical government bond rates of 4% that's around £2.5bn a year just in interest and at least a billion a year of operating costs (assuming it isn't like HS1 and ends up with a thumping great annual loss). I guesstimate WCML first class intercity journeys around 7m per annum, dividing HS2 interest-only plus opex costs by the number of first class journeys, I calculate that for us to be better off allowing the fat cats to "subsidise" the second class passengers the surplus over operating costs needs to be £485 per first class journey. That's unlikely since the average first class fare is going to be around £250 (that's a tad over the current peak morning first class fare between Manchester and London).

          2. Anonymous Coward
            Anonymous Coward

            Without wanting to go through all the debate elsewhere, one of the key benefits of building HS2 is that capacity on existing rail routes will be released when the long-distance (ie non-stopping) passenger services are re-routed onto the high speed backbone (aka HS2). The key beneficiary of this must be to provide additional train paths for freight traffic - it should not be necessary to debate the benefit of moving freight from road to rail other than for local distribution - although the passenger services that will benefit will include semi-fast inter-regional and 'commuter' traffic.

            One of the most beneficial attributes of moving fast, long distance passenger trains to a dedicated backbone is that services on both HS and classic routes can then be optimised for grouping by speed. The throughput of any discrete railway line is to a large extent constrained by the necessity to separate trains by an adequate safety margin. If a faster train is behind a slower one, then it is obvious that if the faster train must have sufficient 'space' into which it runs before catching up with the slower one (where of course the slower one must be regulated - switched to a holding or passing loop - while the faster one passes it by). When trains run at the same speed then relatively fixed spacing works. It is this principle that will allow Thameslink / Crossrail / Underground to run in the order of 25 - 35 trains per hour (TPH) where mixed speed main lines sometimes struggle to provide 15 - 20 paths in the hour. That's a massive difference in total capacity.

            It is also worth noting that extension of train lengths can be a mixed blessing and very expensive indeed - and in some cases virtually impossible, typically where station geography is not suitable. Look at the work involved in the Waterloo area to extend 8-car trains to 10- and in future 12 (if it were not for the ex-Eurostar area I believe that Waterloo would need to loose at least one platform to permit train length extension).

            Cab signaling? it you mean ETCS - its on the way (eventually) but ECML and GWML are ahead of WCML!

            1. Anonymous Coward
              Anonymous Coward

              " it should not be necessary to debate the benefit of moving freight from road to rail "

              Oh Mr porter! Except that little stuff is now made in Birmingham and shipped to London (or vice versa), and our volume freight traffic comes into places like Felixstowe, Southampton, Tilbury or Liverpool in containers. If efficiently shipped, it will be coming in close to the major population centres that it will serve, although I accept there's a fair bit of inter-regional traffic. The supposed need to free the WCML up for freight is a very weak excuse for HS2, particularly since the freight consolidation model necessary for rail freight doesn't work well in the UK because of the relatively short distances involved. And even Southampton or Felixstowe freight heading north wouldn't join the WCML until Birmingham or Stafford, where the four tracks from Stafford to Weaver Junction are under-utilised because there's little slow line passenger traffic compared to the stretch south of Birmingham.

              Regarding train speeds, the whole WCML model was got right (remarkably) by British Rail back in 1960 when the WCML was electrified. You don't allow slow traffic onto the fast lines, the fast line traffic operates similarly capable traction equipment that operates to similar performance curves, and you can despatch "flights" of trains in quick succession. Build rail flyovers to stop slow traffic crossing over the fastlines and you're done. For the most part this is already done, and if Network Rail are mixing high speed passenger traffic with slower services on four line routes then that's simple incompetence that doesn't involve £60-80bn to resolve.

              Unfortunately Network Rail are full behind HS2 and the fictitious traffic forecasts. Search out the DIRFT3 expansion report, and you'll see that they project that by 2030 WCML will be carrying 132 freight trains per day compared to 22 today. Obviously we need HS2 if that's correct, but where is the traffic going to come from for more than 100 additional freight trains? Will you be buying, using and throwing away six times as much stuff as you do today? Or will their be 400m people living in Britain? Maybe it could come off the roads, but we're talking about over half a million containers a day (read the report, all there in black and white) and that compares to M6 traffic flows of around 120,000 vehicles per day of all types - so perhaps 30,000 container lorries.

              The arguments for HS2 are bad on so many levels that collectively they can only be considered a Work Of Great Evil (tm).

        2. rh587 Silver badge

          "I'm not sure. There's a lot of people living in the area affected who are objecting becasue of that, and will take on any objection. There are also some people looking at the vast cost and thinking it's a waste."

          Yes and no. In my area much of the proposed HS2 is either tunnelled or below-grade. i.e. you won't see it because you'll look over the top of it, and won't hear it unless you're close.

          Nevertheless, according to the extremely vociferous local No-HS2 group it will destroy the environment (yes, all of it, according to their campaign literature) and cause the coming of the apocalypse. As you say, they've long since passed from NIMBYism to plain BANANAs.

          I would actually prefer it to have a somewhat larger impact and actually come into our main station. It would involve demolishing rather more houses than the edge-of-town station (or tunnelling under half the town) but it would also be a lot more useful in terms of changing for local rail and bus services and getting into the actual town you're travelling to rather than getting a bus from the new station to the main station for stopping services... but then my house also wouldn't be one that needed demolishing in the process so I'm biased...

          As for CBAs. They wan tot be as good as possible, but sometimes the intangibles are very difficult - by their nature - to quantify. Municipal art has no tangible value (unless people come specifically to see it and you can measure the cash inflow), but generally it's a good thing to have if it improves the environment and encourages people to locate their home/business there. We don't mind councils spending a bit of money on communally "nice" things so long as it's not silly.

          Likewise, quantify into financial terms the benefit of residents having a municipal park to enjoy and relax in, or a kid on a farm being able to play CoD with his town-dwelling school friends. Having grown up in a backwater I know how lonely it can be when you can't just walk round to a friend's house to play or socialise.

          So as near to 1 as possible, but that shouldn't be a cut-off where it doesn't happen if it can't pay for itself. Same as the Royal Mail wouldn't have their service conditions of serving everywhere for the same stamp price. Sometimes you need to apply a fudge factor for "this is also a generally good thing to do".

  3. Disgruntled of TW
    Joke

    Guillotine ...

    ... reintroducing this wonderful device may improve both the number and quality of CBAs produced by government projects when justifying the eye watering amounts they spend on IT projects which invariably (pretty much) fail.

    In the commercial world, I can't recall a single government IT project that would pass muster at the "project mandate" stage never mind a business case that is believable.

    1. IHateWearingATie

      Re: Guillotine ...

      That's because you never hear about the successful ones as they are not news worthy, just the ones that screw up.

      And from my experience the private sector screw up just as much, they just don't have the public accounts committee to publicise it.

      1. Pisartis

        Re: Guillotine ...

        When private sector companies screw up in a big way, the people responsible tend to need a new job. Either because they were fired, or because the entire company went tits-up.

        When was the last time you heard of a civil servant being fired for spaffing billions on a failed project?

        1. Denarius Silver badge
          Happy

          Re: Guillotine ...

          @PIsartis: really ? In private sector most seem to become CEOs somewhere and repeat stuffup. I am aware of a public serpent contractor who supposedly squandered several departments infrastructure budgets for a while while still being employable. Light dawned among the PS CIO equivalents who allegedly blackballed that individual. No doubt HR would be appalled if they knew. However given Qld Health IT project failure with incorrect tendering process, you have a point.

  4. Chris Miller

    UK still leads the way in ripping off the taxpayer

    At least down under they managed to build a new railway from Alice to Darwin (1,000 km) for under a billion Aussie Dollars. Compare the cost of HS2 - £50 billion (and rising) for a few hundred miles. I accept that the Ghan fits no-one's definition of high-speed rail and there aren't many tunnels, but then HS2 doesn't have to cross deserts and croc-infested rain forest (although some bits of Cheshire are a bit dodgy, I'll admit). And two bloody orders of magnitude! WTF?

    1. AndrueC Silver badge
      Meh

      Re: UK still leads the way in ripping off the taxpayer

      but then HS2 doesn't have to cross deserts and croc-infested rain forest

      It does, however, have to travel across some of the most densely populated land on the planet and fit between/into/over a lot of important infrastructure. No-one much cares how you smash a railway through desert in the back end of beyond but when you're linking London, Birmingham and Manchester you have to be more thoughtful.

      Mind you my thinking on the subject of HS2 is that we don't need it and it'll be an expensive white elephant. We should have spent the money on national FTTP. Just so long as we did a better job on that than the Aussies. Which is unlikely. Most western governments are pretty shit at that kind of thing.

    2. SundogUK Silver badge

      Re: UK still leads the way in ripping off the taxpayer

      Deserts are easy. The UK is the 51st most densely populated country in the world, Australia is 235 (out of 243) - there's a lot of stuff we have to route around...

      1. AndrueC Silver badge

        Re: UK still leads the way in ripping off the taxpayer

        The UK is the 51st most densely populated country in the world, Australia is 235

        And of course HS2 is running through England where most of the UK's population is. The first third being where most of the English population live. I can't easily find any figures for it but this page shows the the HS2 is basically following the line of greatest population density from SE to NW. Between 1000 and 250 people per Sq km it looks like.

      2. The Axe

        Re: UK still leads the way in ripping off the taxpayer

        The UK is densely populated but we mainly live in towns & cities. Over 90% of the UK is rural, park, or undeveloped.

        1. SkippyBing

          Re: UK still leads the way in ripping off the taxpayer

          'The UK is densely populated but we mainly live in towns & cities. Over 90% of the UK is rural, park, or undeveloped.'

          Yes but annoyingly the railways tend to what to go where the people are as park benches and cows rarely use their service.

          1. Phil O'Sophical Silver badge
            Coat

            Re: UK still leads the way in ripping off the taxpayer

            cows rarely use their service.

            EU rules on live animal transport won't let them, they're too crowded.

      3. Fluffy Bunny
        Devil

        Re: UK still leads the way in ripping off the taxpayer

        You don't route around stuff when you're building a high speed railway. You go straight through, or else it isn't high speed. And that means you have to buy the land back from people that don't actually want to sell it to you. I reckon that $50B to do that is an underestimate.

    3. Jim Hague

      Re: UK still leads the way in ripping off the taxpayer

      I've ridden the Ghan from Alice to Darwin. It doesn't go across any rainforest. It's single track most of the way, and you bimble along at speeds that would shame a Reliant Robin. Most of all, it doesn't go anywhere near London - check out how much of the HS2 cost is just the final few miles into London.

      Nevertheless, it cost $1.2bn to build.

      On a sample of 1 each, travelling prole class on the Ghan is crap compared to the Canadian.

  5. Anonymous Coward
    Anonymous Coward

    While I agree a CBA is important we must remember that they are generally full of poorly understood, or at least poorly priced, costs and benefits. The HS2 CBA is a prime example, a few percent difference in some of the assumptions would probably swing that project from marginal to catastrophic. My gut feel is that by the time HS2 is actually operational we'll be starting to see a general downward trend on commuter style travel. My only hope is that it can pay for itself before it becomes essentially obsolete. Far better to have spent the HS2 money on FTTP, that would have given us 21st century infrastructure, saved on carbon emissions (less commuting) and opened us up to innovation (e.g. combine it with IPv6 roll out - did I just say that out loud?).

    1. Anonymous Coward
      Anonymous Coward

      "The HS2 CBA is a prime example, a few percent difference in some of the assumptions would probably swing that project from marginal to catastrophic."

      I agree. Some of the assumptions used in CBA are astonishing. When the costs and benefits of a scheme are well understood and reasonably predictable (e.g. cost of concrete, value of power generated) then it is fair enough. But when the elements used in the CBA are very uncertain, or benefits or costs are indirect (sometimes very much so), then you get problems.

      That is before we consider bias - whereby the folk doing the CBA know what the public authorities want and strategically leave out or introduce elements to the CBA to get the answer desired!

    2. An0n C0w4rd

      assumption - better network = less commuting

      unfortunately, a large percentage of businesses still think that unless you park your bum on your seat in an office with all your co-workers then you're not working. I suspect the opposite is quite often true - you get more work done at home as co-workers aren't popping over to you to talk about yesterdays football/rugby/cricket/whatever.

      I'm still in awe of Google, perhaps the biggest purveyor of cloudy infrastructure, insisting on staff being in an office (which is the primary reason I'll never work at Google or Facebook or a host of other companies - I refuse to move to a big metro area like London and sit in traffic for hours a day). If there was one company that should be promoting telecommuting it should be Google. (yes, I am aware of the "unplanned collaboration" idea). The fact that companies like Google are encouraging people to move to London, which is already creaking under the strain of the existing population, is just plain daft and they should be shot (or at least heavily fined) for encouraging that. Probably a new tax should be levied for each person a company encourages to move to London to pay for the infrastructure needed for that person (power, water, public transport, etc)

      The reality is that better networking at home probably means Netflix/Amazon/Sky sell more PPV movies.

      1. AndrueC Silver badge
        Facepalm

        Re: assumption - better network = less commuting

        unfortunately, a large percentage of businesses still think that unless you park your bum on your seat in an office with all your co-workers then you're not working.

        My current employer (like my last one) allows us to work from home occasionally as long as there's a good reason. But 'because I want to' is not considered a good reason. The irony is that for both employers I worked in a satellite office, hundreds (thousands in the previous job) of miles away from anyone who could see whether I was working or not.

        But there you go. My previous job I had to drive 12 miles to sit in a small office with a lousy internet connection instead of staying at home with a very good connection. My current job I commute 60 miles mostly by train in order to sit in a small office. At least this one has a reasonable internet connection though.

        Come my annual review I might suggest he consider allowing me to work from home three days a week instead of giving me a pay rise. That should be an interesting discussion.

      2. I ain't Spartacus Gold badge

        Re: assumption - better network = less commuting

        An0n C0w4rd,

        I'm not a coder myself, but my brother is - and he claims that if you're working in a team you often have to talk to the other members and discuss stuff. Presumably with a computer, some pads, a whiteboard, coffee and doughnuts...

        I do work in a technical sales job, and there is no substitute for meeting people when it comes to building relationships. Also, when you're working through some difficult problem, you both need to be at the same table, with the drawings spread out in front of you - or sometimes onsite looking at the actual building. Usually in some smelly and dark basement plantroom, or perched on the roof, hoping not to drown or get blown over the side.

        There will always have to be travel. Apart from anything else, some people like to visit friends and relatives. Whether better transport would mean more people try to fit into London, or fewer, as it's easier to get to when needed, is another matter though.

        1. rh587 Silver badge

          Re: assumption - better network = less commuting

          "I'm not a coder myself, but my brother is - and he claims that if you're working in a team you often have to talk to the other members and discuss stuff. Presumably with a computer, some pads, a whiteboard, coffee and doughnuts..."

          Define "coder".

          Yes, for come applications, you're all working together, tightly integrated. My boss used to work as a pair with his colleague. He did the front end, his colleague did the database, so they'd sit opposite each other and be constantly passing handlers and such back and forth to each other - "What's that table called?", "Do you need column x in this query I'm writing?"

          Conversely, for some tasks where you are writing a plugin, or some specific module, or you're a mathematician who sits and works out algorithms to throw to "the coders", you can quite happily sequester yourself away in piece and quiet and just submit your work for inclusion.

          This is how Open Source works after all - people checking out code, working on it, merging it back into the code base, often on different continents, with most communication and "whiteboarding" done via mailing lists, forums, etc.

          1. I ain't Spartacus Gold badge

            Re: assumption - better network = less commuting

            rh587,

            I'm sure more people can work from home. Many more in fact. However many can't. That's not including the unwillingness of management to lose physical access to their staff. Also, having done so myself, I'd say that quite a lot of peole aren't suited to it. It can be quite a lonely life and there are two temptations to avoid. One is that seeing as the work's there you can end up burning out by doing too much. And/or the opposite, where the cricket's on and the sun's out. So get a beer, and relax... It's also (in my opinion) morally wrong to take business calls while naked. At the moment I work from the office, but we have 3 people working from home. However we've recruited two people who hated it, and left.

            Personally I don't think that HS2 is all that relevant to commuting anyway. Most users won't be commuters, they'll be travelling for meetings and visits.

    3. Fluffy Bunny
      Mushroom

      "CBA is important we must remember that they are generally full of poorly understood, or at least poorly priced, costs and benefits"

      A good example of that is the CBA to build the Canberra tram line. It should be simple, $x to build, versus y customers per day at $x giving a net return of r% per year. But that doesn't give a profit, so just add "intangibles", an increase in value of properties along the route and a few more inventive things.

      Yes, Canberra is going to build rattlers, even though there is no benefit to justify the cost. It's going to cost us over $600m to build, go hardly anywhere, not be integrated into the transport system and carry few passengers, yet it has to be built to justify the Assemblie's "green" credentials. Because the balance of power is held by the Greens.

      Worse, it isn't even proper light rail. It's going to be built on dedicated land - not shared with cars like proper trams. Why? Because bycicle wheels would get caught in the tracks and our minister for urban services is a dedicated cyclist. So he won't allow it.

      A trifecta of flaws - the disadvantages of light rail, heavy rail and taxpayer funding.

  6. Phil O'Sophical Silver badge

    All depends on your audience

    I can't help thinking that if this discussion were to be held on a transport enthusiasts website it would be full of people raving about the need for HS2, and dismissing FTTH as pointless.

  7. Destroy All Monsters Silver badge
    Holmes

    From Henri Hazlitt's "Economics in One Lesson":

    The distinction may seem obvious. The precaution of looking for all the consequences of a given policy to everyone may seem elementary. Doesn't everybody know, in his personal life, that there are all sorts of indulgences delightful at the moment but disastrous in the end? Doesn't every little boy know that if he eats enough candy he will get sick? Doesn't the fellow who gets drunk know that he will wake up next morning with a ghastly stomach and a horrible head? Doesn't the dipsomaniac know that he is ruining his liver and shortening his life? Doesn't the Don Juan know that he is letting himself in for every sort of risk, from blackmail to disease? Finally, to bring it to the economic though still personal realm, do not the idler and the spendthrift know, even in the midst of their glorious fling, that they are heading for a future of debt and poverty?

    Yet when we enter the field of public economics, these elementary truths are ignored. There are men regarded today as brilliant economists, who deprecate saving and recommend squandering on a national scale as the way of economic salvation; and when anyone points to what the consequences of these policies will be in the long run, they reply flippantly, as might the prodigal son of a warning father: “In the long run we are all dead.” And such shallow wisecracks pass as devastating epigrams and the ripest wisdom.

    But the tragedy is that, on the contrary, we are already suffering the long-run consequences of the policies of the remote or recent past. Today is already the tomorrow which the bad economist yesterday urged us to ignore. The long-run consequences of some economic policies may become evident in a few months. Others may not become evident for several years. Still others may not become evident for decades. But in every case those long-run consequences are contained in the policy as surely as the hen was in the egg, the flower in the seed.

    From this aspect, therefore, the whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence. The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.

  8. IHateWearingATie

    The problem with CBA...

    While a useful tool the CBA has some serious limitations when dealing with infrastructure investments that will have payback periods beyond 20 years. Things like smaller road and rail schemes are easy to work out, as they payback in 10 years or less, and the assumptions that they are built can be made reasonable particularly with a well done sensitivity analysis.

    Things like the severn barrage are almost impossible to evaluate quantitatively - taking that as an example, it would have had an operational life of 100 years or so. You can do some work on the electricity price projected forward (which is what they did), but the qualitative benefit of having a power source that will provide a predictable amount of electricity twice a day (or more depending on the configuration of the tidal pools) 50 years hence when we may be running out of hydrocarbons is really only a qualitative point to be evaluated. What really killed the Severn Barrage was how unlikely it would have been to get a private sector partner involved given the huge uncertainty.

    That applies to the NBN now - a full analysis has to be guided by a qualitative look at what the infrastructure could do for the economy over the next 40 years, as well as the more predicable payback over the next 20 years. Just because the CBR is lower than 1, does not mean we should not do it.

  9. Player One
    Joke

    The Australians did do CBA, sadly though to them CBA=Can't Be Arsed.

    1. Fluffy Bunny
      Mushroom

      Not all

      " sadly though to them CBA=Can't Be Arsed" - please, don't blame all Australians for the stupidity and self-agrandisement of one fool.

  10. ForthIsNotDead

    HS2

    I don't know much about so just ignore (or correct) me if I'm wrong but:

    * Are the train companies not private companies?

    * Are the track companies not private companies?

    If so, why in hell does the "country" have to pay to build a fucking railway line? Let the private companies build their own railway line. What's that? Not economically viable? Well don't fucking build it then.

    Problem solved.

    1. Anonymous Coward
      Anonymous Coward

      Re: HS2

      Hopefully useful corrections.

      >> Are the train companies not private companies?

      In some cases, yes and in others no. Many of them (sometimes in consortium with private companies) are actually foreign state companies - DB (German Rail) owns the largest UK freight company (DB Schenker) and several Train Operating Companies (TOCs) both franchise and open access. The only UK state operated 'franchise' today is East Coast Trains (Directly Operated Railways - http://www.directlyoperatedrailways.co.uk/html/about-DOR.php) and by some measure Eurostar / London & Continental Railways (recently transferred the stock ownership from Department for Transport to the Treasury - https://www.gov.uk/government/speeches/london-and-continental-railways).

      >> Are the track companies not private companies?

      In a word - No. And from the 1st September 2014 even less so as Network Rail becomes effectively nationalised.

      You're obviously happy for all future motorways and other roads to be built by private enterprise?

      If so, why in hell does the "country" have to pay to build a <road> ? Let the private companies build their own <roads>. What's that? Not economically viable? Well don't build it then.

      Or have I misunderstood some thing about society and the national good?

  11. Identity
    Boffin

    I agree, but

    one thing typically missing from Cost/Benefit Analysis is often termed 'externalities.' As a crude example, when we look at clearing a section of Amazon rainforest, we'll count the cost of bringing in the people and equipment, reduced by the value of the lumber removed, and then tossing in the value of the jobs created and the cattle raised. Ignored is the value that forest provided in CO2 —> O2 (including carbon sequestration), habitat for the forest denizens and even the potential value of pharmaceuticals that might be developed from the existing flora and fauna.

    As Mr. Worstall says, it all hangs on the assumptions you make. People seem inclined to make only those assumptions that benefit themselves in the short run.

  12. Gray Ham
    Pint

    "There was no business case or any cost-benefit analysis, or independent studies of the policy undertaken, with no clear operating instructions provided to this completely new government business enterprise, within a legislative and regulatory framework still undefined, and without any consultation with the wider community."

    Somewhat like sending 700 drunken convicts and 200 corrupt plods half way round the world to found a colony - no CBA (or even a coherent plan), no consultation with stakeholders, no legislative framework, and no studies that would have revealed the extremely dangerous fauna occupying the proposed site,

    Still, it worked out well (in the end) - and better than some expeditions that were properly planned.

    1. Denarius Silver badge
      Meh

      Gray Ham. True. There was also no reporting back to head office on morning conference calls, no OH&S droids, HR discrimination drones and the Govenors job was to govern. He took his job seriously. Oz was lucky there. Despite the unpromising material, Oz was also an enlightened attempt at reformation which worked. In 40 years the first university was started.

      CBA has a role, especially as the costs rise. What is missing in the entire discussions are why the pollies are allowed to mislead and outright lie. Howard explicitly excluded political, charitable and religious statements from advertising rules. Perhaps the problem is the allowing of nostrums as solutions. The truth in advertising laws should be extended to politics and charities so that all products and promises must be as described or purveyors go to jail. Reducing incorporation protections so that the executives and board become more vulnerable to action due to stupid behaviour might assist also. That way the perverse incentives for business and politicians to push their own wheelbarrows, lie and underquote might be reduced if not eliminated.

      Finally as citizens, while we can, we should be far less forgiving of weasel words from the elected leadership.

  13. Mi Tasol

    "No clear operating instructions? is not correct

    To say there were "No clear operating instructions? is not correct.

    To say there were "No PUBLICLY REVEALED clear operating instructions" would be correct.

    The Labor governments secret instructions were to create a modern version of the late 60s Telecom. A massively overstaffed MONOPOLY organization with no concept of service or inclination to actually achieve anything on time or on budget, featherbedding on a grand scale, etc. and no need to be efficient. The perfect place for people who could not get a job in the real world.

    In Telecom days you usually had to wait at least 6 weeks for a "new" connection (in the city), it cost a fortune to install a new phone and before Optus arrived every local phone call cost you 30 cents.

    Ten years later Telecom had shed over 75,000 staff, completely new connections could be done within 48 hours and the cost of a local call had dropped to 18 cents. Now it is even cheaper.

    Like Telecom, NBN is a monopoly that takes weeks to make a connection and months to answer a simple question like " approximately when will the new wireless tower currently being built 2 km away be operational" (one reply that avoids the question but no answer since April). A recent newspaper report shows that a ludicrous percentage of connections are substandard (over 25%) and that rectification is woefully slow - two other Telecon "standards".

    I am currently on the NBN satellite "service" and that even times out fairly regularly on gmails "slow connection" option.

  14. HMinney

    Alternatives to HS2

    HS2 serves London. Unfortunately the politicians all live in, and care for, London. What we really need is the incentive to bring jobs to the North, in which case the housing will follow, and all the vast infrastructure costs of overcrowding in the South East won't be needed. But bringing jobs out of London means changing the habits of a hundred years.

    North South rail lines can work. But they can only work if they enjoy a new paradigm - high speed long distance links which are non-stop, and which don't go near major centres of population. You might ask "what's the point?", so here goes. What about linking the major airports? A high speed link Heathrow->Leeds/Bradford->Newcastle->Edinburgh. Every airport has high speed links to its corresponding city centre already. A train with few stops could rival the speed of an internal flight, without the waits at start and finish. Frees up airspace at our airports from domestic flights and internal connecting flights, makes UK into one enormous airspace, instead of all the activity being concentrated around London.

    But there are alternatives, and motorways are one of them. With the advent of driverless cars (expect driverless cars to be widespread well before HS2 to Birmingham is finished), getting into your pod and travelling long distance is viable - not only do you start from your own office and end up right at your destination, but you can work, conference, eat, do all the things that you can do on train or plane. Cars are getting much more efficient by the week, and pretty soon it looks as though car commutes will be lower cost per passenger mile than train commutes - that's saying something.

    So if you need door to door or short distance, use a car. If you need to travel around UK, including changing flights (airports) on your way through, use a train. If you need to go abroad, use a plane. An integrated transport policy - oh, but too many people want their name on the blue plaque that says "HS2 was built here"

  15. Colin Tree

    cost efficient

    We pay for the NBN once, it's a truck load, but then we will use it for decades and it will generate truckloads every year.

    1 truck = lotsa trucks = good

    All I see is economists and accountants wanting to control something else. Sorry guys you stuff up everything you touch, e.g. G.F.C.

    First the country wide backbone and redundant paths should have been boosted.

    Second paths from backbone to exchanges should have been boosted.

    Third boost exchanges to nodes.

    Fourth build FTTP.

    The politicians wanted the accolades immediately, they run on a 3 year cycle so they had to show fast user connections now. It's going to take years to do it properly. Get the work started and be patient, set sensible milestones, keep an eye on contractors ripoffs.

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Other stories you might like