NSW Government infrastructure train wreck piles ever higher

By Leith van Onselen

In the wake of the massive cost blow-outs and delays hitting both the Parramatta Light Rail Project and the Eastern Suburbs Light Rail Project, the NSW Government has another rail debacle on its hands with the inter-city train network facing a huge cost blowout because the Government imported new trains from Korea that are too big to fit on the tracks. From The ABC:

[The NSW Government] has discovered the fleet of inter-city trains it has ordered from South Korea — at the bargain price $2.3 billion — will not fit the tracks in the Blue Mountains, west of Sydney.

The Government had hoped the trains would prove 25 per cent cheaper than locally made trains.

But it is going to have to spend a small fortune fixing the problem on the line from Springwood to Lithgow.

The first bill from contractor Downer EDI came in at $43 million — that is just for the construction of signalling works and modifications across the rail network.

The Government still has to change 20 stations to accommodate the new inter-city fleet, which means cutting away at the platforms and tunnels that are too narrow and too low.

…the NSW Auditor-General warned that the total cost of the project would rise to as much as $3.9 billion.

This would take it well above the Government’s projected saving of 25 per cent.

“They have made a right mess of this,” Ms McKay said.

“We said from the beginning these trains should have been manufactured in NSW, so they fit the tracks and tunnels and we don’t have this excess cost.”

The incompetence of this Government is staggering. It has messed up nearly every major infrastructure project that it has embarked upon in a futile attempt to keep pace with Sydney’s break-neck population growth.

From the above rail projects to road projects like WestConnex, to schools and hospitals, the incompetence is manifest in tumbling living standards with much worse to come:

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  1. Australian unionists are denied work and therefore the union movement is weakened and by extension the Labor Party. that’s one benefit of making trains in Korea as far as the Coalition are concerned. There are some ideological cranks therein who would view events this way.

    • Yes that’s the justification. It is better to create jobs for Koreans than in Australia where unionists might be employed. Its a big part of their motivation to build the South West Metro too. Get rid of a few unionized train drivers at the cost of tens of billions to tear up and replacing rail infrastructure.

      • invisiblehans

        The train width issue was known before the contract was executed, and raised by the ALP member for Macquarie.
        The gov proceeded for unstated reasons.
        My guess is they were prepared to wear the extra cost because the Korean trains can be operated without a guard. Presumably the political calculation was if the trains were made locally, the union would insist they could only be run with a guard and none of the automation.
        If I’m right, it is sticking the tax payer with $1b+ in extra costs so they can shaft the Rail, Tram & Bus Union.

    • It has nothing to do with unions per se. If you take one step back you will see that this is an ongoing example of software/robots taking the place of humans. We’re only at the beginning right now. There will be astronomic social consequences. Luddites? You aint seen nothing yet…

      • You still have to do a cost benefit analysis. Is spending $1.6 billion worth it just so you can (possibly) do away with 200 or so guards jobs?

        Rio Tinto is currently boasting about the $1.3 billion they spent on automating their railway so they can eliminate 140 driver’s jobs. That’s roughly $10 million spent for each job “saved”. BHP kept the drivers and upgraded their signalling systems so they can have all the benefits at a fraction of the cost.

      • I suspect they just got carried away with a vision of complete automation and paid the price, underestimating the complexity. Tesla also has been paying for the same mistake – over-automaton.

        And I’ll bet these trains still aren’t able to function without a guard despite the added cost. Not unless they also invest a few tens of billions in a (non-unionized) robo-cop who can police the ugly behaviour I’ve seen on some inter city routes.

      • Dan,
        “You still have to do a cost benefit analysis. Is spending $1.6 billion worth it just so you can (possibly) do away with 200 or so guards jobs?”
        You’re assuming the Made in Australia version came in on time and on budget. That’s a pretty big assumption.

  2. I live alongside the intercity line at Lake Macquarie. If this was any other developed country, My family would be an hour away from the ‘Global’ core of Sydney.
    The steam trains of the 1920’s where faster than the current timetable.

    Notions of human progress are an illusion.

    • good point about steam trains, in you go on google maps and look up a journey across many of the major cities at rush hour you`ll find average speeds of the journeys are actually slower than by a cantering horse. Onward progress!

    • The problem is that the tracks are the same as they were when the steam trains were running. They are trying to cram more trains on a rail network from 1900 and the end result is massive congestion in peak. The only way to significantly decrease travel time is to increase the rail lines capacity.

      • Correct Ben, bring back the Newcastle Flyer. From memory one left Central at 5.15 pm and only stopped at Broadmeadow and Newcastle. They stopped running it in 1988

      • Doesn’t matter how many stops you make, when there is only 1 line in each direction, and a slower train is in front of you. No doubt in 1988 the number of services running meant it was no longer possible to run it and have it be faster than stopping at a heap more stations due to increased numbers of trains on the line.

  3. Not only that by the 10 year old line from Chatswood to Epping will be closed for a year because of these new carriages.

    This will cause huge traffic chaos, as Sydney’s 2nd biggest CBD, Maquarie Park in on this line, and is very under-server by road links. They plan 1,000 new bus services a day using the 120 new buses. Problem is that the roads are already parking lots.

    • That’s to convert to the Metro – a different system entirely, But just be patient and at the end of the painful construction period you’ll be very pleased to experience your new trains without unionized drivers, or seats.

      • So we have:
        – Metro trains
        – Blue mountains line trains
        – North West line trains
        – Intercity trains.
        How many different train types are they running?
        Why are they all incompatible?

      • In Sydney they will have two light rail lines into the city (so far). The trains are incompatible with each other’s stations so there never can be a through service and all the added costs of operating and maintaining two separate fleets. Really clever people at TfNSW.

  4. TailorTrashMEMBER

    Gladys as transport minister would have had no small part in these disasters ….no wonder she as Premier has that permanent “I’m just about to be found out “ look on her face. Maybe she should give Baridy a call and see if there are any other million dollar openings at NAB .

    • proofreadersMEMBER

      Bairdy was the smartest one in the room.

      He could see the writing on the wall for many of the infrastructure projects and exited stage right well and truly before the sh.t started to hit several fans.

  5. Personally I can’t ever remember reading a single article anywhere, at any time which praised Australia’s execution of any government led infrastructure projects. Yet if I look back over the last 50 odd years it’s an undeniable fact that additional Infrastructure has been built and has been effective in advancing our economy and improving our standard of living. How can these two opposing “facts” simultaneously exist? And both appear to be always correct in an almost time invariant fashion….like how is that even possible?
    Maybe the real problem is with the way that our governmental accounting works, maybe it’s all just this weird idea that government bookkeeping is in anyway comparable to business bookkeeping, which it clearly isn’t.
    Or maybe all headline projects make huge losses (always have and always will) however, it’s the vast bulk of other unreported stuff that drives our average execution higher and over time creates the undeniable bulk of public infrastructure.
    I don’t really have any answers, however I suspect that we’d be better off if all government expenditure was simply expensed. The very concept that these infrastructure projects are business like and therefore can be assessed on basis of profit/loss and asset/liability columns, is really kind of wonky and therefore leads us to some equally wonky conclusions, especially wrt weird metrics like project execution efficiency, and it’s close cousin project Productivity Analysis.

    • Historically, over the long term, the cost of infrastructure has been inflated away and it serves its purpose long after cost has been amortized and it becomes free for users. But now in NSW we have a situation where costs to users will continue to rise, at above CPI levels, for decades into the future (forever basically). This is partly the privatized financing models, which demands it makes a profit for the owner or operator at little or no risk, but also very poor planning – decisions often based on electoral pork barreling, or lobbying by private sector interests.

      • Yeah, but this whole Infrastructure Privatization push results directly from the idea that Public Infrastructure development is chronically inefficient (as is well documented over the last 50 odd years that I’ve been reading about it)
        If the very basis for this conclusion are wrong then it sort of follows that the subsequent operational decisions we make based on this idea are equally wrong.
        As you’ve pointed out Inflation plays a huge role in the whole residual value equation, and to be clear it’s not CPI that were talking about here but rather Asset Inflation. Consider the value of our Electricity Distribution network, it used to be just a strange sort of depreciated sum of all prior expenses, however accountants discovered Net Present value accounting and suddenly our governmental assets have asset valuations arrived at from Net free cash flow…..and then we sell this asset because (on this analysis basis) it is under-performing.
        It’s all just too stupid to even bother digging into.

      • We are discovering that private sector is not more efficient at developing or operating infrastructure. Or if it is, the gains from efficiency are pocketed by private interests and the public invariably end up paying more. Worse, planning is based around building the value of these assets (for the supposedly public benefit of maximizing sale price) but to do this government strives to maximize revenue streams for the future private owner, which has to come from the end users obviously. So short term the budget balance will look better, but the costs in the form of private taxes will drag on the economy for decades to come.

    • This is a huge and complex issue. But, here are just a few bullet points:
      1. In the past, transport corridors were set aside, and often the transport infrastructure was built BEFORE the housing.
      2. In the past, Government projects were managed by government agencies, which is actually much MORE efficient than the complex network of contractors and sub-contractors that we see today.
      3. Neville Wran sold off a lot of the transport corridors in the 1980’s and Bob Carr refused to set aside new corridors in the 1990’s.
      4. Tony Abbott had an obsession with building roads instead of rail.
      5. The Metro West was killed off by infighting between NSW Labor and Federal Labor. The Chatswood to Epping link was killed off by fighting between the Coalition and Labor.

      • A friend of mine lives in a nice house built on land that was once reserved for the Manly to Chatswood road.

        Now they are building a road tunnel for that route. Perhaps a road would have been cheaper if they hadn’t sold off the land.

      • Reserved Transport corridors are an excellent example of exactly what I’m saying about government accounting being incompatible with business accounting.
        If a business owned this transport corridor it would be expected to list it as an asset and the companies business managers would be assessed in part on their Return on Assets (profits made from these assets). As a consequence no business manager wants assets on the books that are not directly contributing to revenue. However in the government case the land for this corridor had zero historical costs, and close to zero upkeep cost, and was reserved for an intended purpose. It would be equally wrong (from an accounting perspective) to either appreciate the asset to keep place with land value inflation or depreciate it based of some agreed historical value (and then equate this to some loss..loss of what!)…both are stupid ideas when applied to this reserved asset. Yet when viewed through the eyes of business accountant both are valid and indeed necessary, and in some cases even legally required accounting measures.

      • In the past, governments took the idea of building a state or nation seriously, and actually wanted to succeed at providing the infrastructure their population needed.

  6. azxylonMEMBER

    Oh come now. There’s a simple solution that wouldn’t cost a penny more than what has been already spent on these “state of the art” double deckers. Just don’t run them past Springwood. 🙂

  7. bskerr2MEMBER

    Speaking of infrastructure overloading and mass immigration, has anyone looked at the impacts of immigration on the internet/NBN and Telcos. I have noticed that many people are having internet speed problems and there seem to be a lot of poor single/dead areas around Sydney.

    I suspect that the internet infrastructure is maxing out and can’t cope.

    The NBN seemed to imply or blame gamers for this (like it was a surprise because we didn’t know gamers would use the internet and didn’t plan for it) But I think its mass immigration that wasn’t included in forward projections of usage and now they are looking for a group to blame, gamers are the perfect escape goats.


    • TailorTrashMEMBER

      On a more basic level has anyone noticed the drop in water pressure at the garden tap . This is one for Jacob but all those apartments on the same water mains sees the pressure drop to a weak almost dribble at times . I remember years ago the pleasures of washing a car or watering the lawn on a summers evening with a hose that would get you a 30 foot spout if water, now you need to burn electricity to power a karcher to get the same . It’s the little things that you notice that says the quality of life is being slowly strangeled in Sydney . But then there are no gardens in the new vibrant version so guess it won’t matter.

      • Desal plants dictate the water pressure in many areas. Imagine they are running at full bore now Melbourne dams are close to the halfway mark and Sydney dropping rapidly. Since they were commissioned not so long ago population growth has exceeded their capacity so I expect new ones will be needed soon.

        Melbourne water supply looks chronically sick. In the chart below of dam levels you can see how they would routinely refill to 100% after cyclical dry periods. Haven’t got close to filling since late 1990s.


  8. Gladys really needs to step aside – unfortunately for another clown to take over

  9. The decades of taking out the engineering expertise in the public sector is coming home to roost. Initially it was saving iin costs. But as the crop of engineers with the expertise and knowledge how to make the system works is either retired or outsourced, the corporate knowledge and its linkage between various internal stakeholders were lost. The people following them may not even have the required engineering training and knowledge to operate a complex system with interdependent sub-systems. They may be expert in contracts administration but rely on outside expertise to evaluate technical issues.

    Further, they have a disconnect with various phase of the project life cycle as the technical expertise does not reside in-house but dispersed widely with the consultants.

    • And the technical expertise has a vested interest in screwing the government for all it can get, so has no hope of providing impartial technical advice.

    • There is plenty of technical experts (I speak of WA now) in Transport portfolios that consistently come up with sound solutions. Sometimes, these get implemented. Sometimes, these get changed or even cancelled and efforts diverted to other “priorities” because of….

      drum roll, please….

      Politics. This is the issue. Politics have changed over the years with politicians acquiescing to small interest groups and vested interests, over the good of the larger community.

  10. One way to fix the absurdity of government screwing up infrastructure projects would be to take out any cost blowouts from the Future Fund.

  11. – Where did we see that before: trying to save costs and then discover that this “buying on the cheap” backfires.
    – Why is it so hard to get these things right ? Shouldn’t that be one of the top prioritties ? Make sure that every thing has the right size ?

    • I recommend you watch an entire series of Utopia. Then everything will become clear to you.

  12. mild colonialMEMBER

    I received hearsay that they laid the Canberra tracks at the wrong width, too. a week later the Canberra Times had an article about noise from nightwork returning for people living along the tracks. who knows the truth, but amusing. for me. as I don’t live along the tracks. not so amusing as a taxpayer.

  13. This story is a beat up.

    I’m surprised the MB fell for it. I expected better.

    The track up to Lithgow has always been only fit for Rolling Stock Narrow Electric Outline as defined in RSU 100 Series – Minimum Operating Standards for Rolling Stock – General Interface Standards (which is a NSW Rail standard).

    The new trains from Korea are based on the OSCar design (basically, it’s the next generation) which have a Medium Electric Outline (also in the above referenced standard), which have never been able to get past Zig-Zag tunnels because the tunnels were built ages ago and are too small.

    It has always been recognised that the tunnels and older stations need modification. This is a job that has been required for decades. If you don’t believe me, go to Railpage forums, where current and former rail staff and train spotters / tragics post. They will give you the same answer.

    The current NSW government have a whole lot of boondoggles like the various light rail projects, NW Metro, stadiums, WestConnex, etc. but this is not one of them.

    The idoicy of the various comments underneath the post is truly incredible.

    A special mention for astrolin and his raving about unions. The train is being built by Hyundai Rotam in Changwon, which is a heavily unionised factory and annual strikes for pay.