Project delivery fails the test

24th May 2023

Another year, another massive budget surplus for the McGowan Government.

Despite repeatedly underestimating his wealth in budget predictions, Mark McGowan has announced another massive surplus of $4 billion, exactly as I predicted in this newspaper back in March.

That’s $19 billion dollars in surpluses over the last five years. No State Government in our history has had this sort of wealth, and we may never see it again.

And like the previous years, the extra money has come from iron ore royalties, higher state tax revenue and the GST fix put in place by the previous federal Coalition Government.

Sadly, during the biggest boom in our history state debt is predicted to rise not fall. Mr McGowan inherited $32 billion in debt and his own budget predicts it will rise to $36 billion in a few years.

The question however is whether we are getting value for money from this mountain of state wealth that includes massive surpluses and higher debt?

If you look at the Government’s infrastructure delivery you will find examples that indicate otherwise.

I’ll leave the debate on the delivery of METRONET to my good friend and colleague Tjorn Sibma, after simply noting that it has blown out from $3 billion to $11.5 billion so far.

I have an example much closer to home for me.

The Bunbury Outer Ring Road (BORR) project was announced with great fanfare a year into Mark McGowan’s reign.

It had an indicative cost of $700 million of which the Commonwealth had kicked in $560 million leaving the state’s 20% contribution at $140 million.

By September 2019 when expressions of interest were called it had become an $852 million project of which the Commonwealth was paying $681.6 million and the State $170.4 million (still 20%).

At that stage the scope of the project was set, so we know what we were supposed to get for our money.

Since that point however the McGowan Government oversight and management has been a failure, and Transport Minister Rita Saffioti is the main culprit.

Mark McGowan may be the new emperor, but it is his Minister for Transport that has failed to deliver in this instance.

By last year’s budget the cost of the BORR had blown out to $1.252 billion.

This massive blowout of $400 million might have been understandable if the scope of the project had grown, but at the same time the budget blew out some of the most important parts of the BORR project were thrown out a well.

Four intersections that were supposed to have grade separations were downgraded to simple roundabouts to save money.

Grade separations are a way of aligning road junctions at different heights so that each road will not disrupt traffic flow of the other. To see them in action, look at the many examples of on ramps and off ramps on the Kwinana and Mitchell Freeways.

Having them cut out of the plan means that instead of smooth traffic flow the BORR will have multiple stop and start disruptions.

The result of the 2022-23 budget a year ago was a $400 million blowout for a significantly reduced outcome.

Jump forward to the 2023-24 budget released this month, and we see another admission of failure.

Not only has the budget for the BORR blown out again by another $100 million to $1.352 billion, but the project will now see traffic lights put onto the roundabouts that a year ago were downgraded from free flowing grade separations.

On ramps and off ramps were reduced to roundabouts last year, and now we’ll see traffic lights on them a well.

The whole point of the bypass road we call the Bunbury Outer Ring Road was to have traffic going to the South West holiday hotspots of Busselton and Margaret River avoid the traffic lights in Bunbury, and now we are adding them to the bypass to save money!

The other reason for the BORR was to make track transport more efficient and remove bottlenecks.

With roundabouts and traffic lights instead of grade separation with on and off ramps those efficiency gains will not happen.

The end result of the Government’s handling of this project is a half a billion dollar blowout in costs and a significant downgrade in the specifications.

If this is an example of the McGowan Government’s management skill, we had better hope the iron ore bubble never bursts.