Just eight had a public business case – Vigour Priscilla
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Just eight had a public business case – Vigour Priscilla
Even the biggest lack business cases Size is no barrier. There was no published business case at the time of commitment even for the biggest $5 billion-plus projects, such as the 24 km Sydney Metro West rail tunnel between Sydney’s CBD and Parramatta, the Melbourne Airport Rail and the 10 km Torrens-to-Darlington section of Adelaide’s North South Corridor.

This means politicians committed to these projects without being willing to share – or even without knowing – if those projects are in the community’s interest to build, let alone if they are the best choice for the money.

Most of these 32 projects received federal as well as state funding.

Of the 22 large projects to which the federal government has committed a contribution since 2016, just six had a business case published or assessed by Infrastructure Australia, the federal agency established in 2008 to provide independent advice to governments on infrastructure.

Of the 16 projects without business cases, 14 were listed as “initiatives” on Infrastructure Australia’s priority list, indicating they had “the potential to address a nationally significant problem or opportunity”. But their assessment had not yet been completed when committed.

Read more: WestConnex audit offers another $17b lesson in how not to fund infrastructure

The remaining two projects are Stage 2 of the Monash Freeway Upgrade in south-east Melbourne, and the Albion Park Bypass on NSW’s Princes Highway, south of Wollongong. These two projects, worth more A$2 billion between them, had not appeared on any Infrastructure Australia priority list at the time the state governments committed to them.

As Infrastructure Australia put it in a 2018 report on decision-making principles: “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.”

Politicians love the vote-pulling power of major transport projects. They also quite like to keep details of of how they’ve decided to fund a project under wraps, avoiding the pesky scrutiny the public deserves.

Of 32 projects larger than A$500 million Australian governments have committed to since 2016, the Grattan’s Institute’s analysis shows just eight had a business case either published, or assessed by a relevant infrastructure body at the time money was committed.

A business case documents the essential elements of an argument that a particular project is worth building, and is the best available option to solve a specific problem.

Business cases should be essential to any government considering a large spending commitment. They enable decision makers to establish whether a particular project (or other policy) is a worthwhile investment, and if it is more worthwhile than alternatives. It is reprehensible that federal and state governments so often decide to invest in major projects without publishing such assessments – and often without doing them.

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