In today’s Money Morning…chateaus to help provide you a better service…let’s build a road in five years that will help no one except the government and its crony mates…for real productivity, be a little risky, a little forward-thinking and invest in a revolution…and more…
Well hello again. It’s been a couple of weeks now since I had a chance to write to you. That’s because last week I was at Chateau de Courtomer in France.
Lovely place. Plenty of wine. Plenty of food. Plenty of information. It wasn’t a leisure visit, by the way. I was there for a marketing conference. The concept was: How can we deliver a better service to you? How can we communicate more effectively with you? How can we be a better business all round? And of course, that comes down to how we deliver what we do.
Hopefully over the rest of this year and in the years to come, you’ll see how this plays out. Whether that’s more content to you on Facebook, or perhaps more info coming to you by video through YouTube. Or just simply delivering a more exciting and informative Money Morning Australia.
Either way, we want you to know that we never stop trying to be better. And if that means a few days at a chateau in France, then we guess that’s just what we’ll have to do!
Who makes these insane decisions?
Upon my return from France, I found my way directly onto The Age website. I wanted to check in on Melbourne and see what was happening. Fingers crossed that I’d see something good, something positive…alas, that was not to be.
Well maybe the lead story might have been positive. If you’re a lunatic.
The headline read: ‘Transurban’s tunnel will cut city-western suburbs commute by just eight minutes’.
Incredible. Eight minutes — each way! That’s a total saving per day, per commute, of 16 minutes. We couldn’t believe it. Over the space of a year, that would save every commuter from the west 2.66 days in travel time. That’s based on a five-day working week, 48 weeks per year.
Well, when you put it like that, it’s actually not too bad. Now let’s say there are 500,000 commuters from the west. That’s 1.33 million days. Imagine what can be done with that amount of time.
Productivity in Melbourne should be off the chart. Imagine if all 4.8 million Melbournians could make that kind of productivity gain.
Think about what that could do for the economy.
Except…it won’t. Not in this case. In fact, this will probably result in unproductivity. And it will cost a truckload of money, too.
This is one of those situations that looks good on the surface, but underneath is utter madness. There is a way to get that productivity back though. In fact, it will be the biggest change to productivity the world has even seen. The only problem is that, in order to get it, the government needs to be forward-thinking, progressive, adventurous and even a little risky.
All things it is not.
A waste of $5.5 billion
This whole project — which is supposed to save all this time — is going to cost $5.5 billion. It’s going to be ready by 2022. And that time saving? Well, that’s just a projection — and not until 2031.
Apparently, it’s going to create a 25% boost to Melbourne’s productivity and growth. And it’ll do this solely through travel times and travel reliability. Also, it estimates a 20% reduction in commuters’ reliance on the West Gate Bridge.
These projections all sound good. But are they anything to go by? We don’t think so.
Let’s also not forget that the state government expects population growth in Melbourne to increase by 97,000 per year over the next 30 years. So by 2031, Melbourne will have added an additional 1.358 million people.
Now, if Melbourne’s current population is 4.8 million and we add 1.358 million, that’s a 28% increase in population…
When you consider the population growth, there’s going to be a crunch point for Melbourne’s infrastructure. A $5.5 billion, five-year tunnel project isn’t going to fix it, either.
It’ll disrupt the entire road network for the next five years. It will cost far too much money for too little benefit. It won’t make Melbourne more productive. And it won’t combat congestion on the roads.
It’s an insane project. And only the madmen in the Victorian government would approve such a stupid plan.
Let’s be clear. There are only two parties this tunnel will benefit: Transurban and the Victorian government. Did I forget to mention it’ll be a toll road too? That’s right — you still have to pay for it, even though you’ll already pay for most of it through your tax dollars.
While projects like these go through ‘community consultation’, the truth is it doesn’t matter. You could protest to your heart’s content and it’ll still get built. And that’s exactly why there’s no faith in government to act responsibly.
The responsible action would be to look at other transportation projects to benefit the fast-growing city. For example, the idea of a train line from Melbourne airport to the city would be a good starting point.
Melbourne airport is among the top 50 busiest airports in the world. It sees over 30 million passengers per year. But it is one of six (that’s right, SIX) airports in the top 50 without a rail link.
An hour and a half or 17 minutes? You choose
But why stop there? Melbourne’s entire metro train system operates directly in and out of the city. Not a single line out of the city connects perpendicular to another. Not one of them.
If you want to get from Dandenong to Glen Waverley on the train there is only one way to do it. You have to go all the way to Richmond station and then out to Glen Waverley.
We did a little calculation. The 6:08pm train would take 38 minutes to Richmond. You’d get to Richmond at 6:46pm. You’d probably miss the 6:50pm train to Glen Waverley, so you’d be on the 7:05pm train. And then you’d get to Glen Waverley at 7:38pm.
That’s an hour and a half.
Now, if you look on Google Maps, the distance from Dandenong train station to Glen Waverley train station is only 15.3 kilometres. And by car, that would take 17 minutes.
It’s no wonder Melbourne’s roads are getting more and more congested. There’s no reason why you’d spend an hour and a half crossing the suburbs by train when it’s 17 minutes by car.
The ineffective, inefficient Melbourne Metro service pushes people onto the roads. Instead of another road, another tunnel, or a ridiculous CBD train tunnel, the government should be connecting the outer suburbs.
I think that would be a wiser allocation of $5.5 billion.
Or if it was really forward-thinking, it would avoid spending on roads or trains. To really make huge productivity leaps, the government should pump that $5.5 billion into developing self-driving car fleets across the city.
That’s where you’ll get long-term productivity and efficiency gains. A connected network of self-driving cars will blow away the pithy projections of the West Gate Tunnel.
That’s the kind of project that will really benefit Melbourne. And that’s the future that’s coming anyway. But of course, self-driving cars won’t directly line the pockets of the government, or its mates who build the roads.
Editor, Money Morning