Saturday, August 15, 2015

Infrastructure idiots?

An interesting post at MacroBusiness which quotes comments by Peter Harris from the Productivity Commission: Grattan joins PC in slamming Oz infrastructure waste

Mr Harris challenged politicians to justify expensive but low-return projects over hundreds of smaller but more effective options.
“Make the case for why the mega project must be preferred apparently to the higher-return local project,” he said. “All of this is most obvious in roads investment; the last redoubt of the unreformed investment planning process”…
With many big-ticket road projects delivering little more than $1 for every $1 invested, there were usually many more-modest but productivity-enhancing options that could generate returns of as much as $10, such as electronic traffic management systems, he said…
If politicians made their decisions based on hard analysis, they would opt for hundreds of smaller investments over one or two big bang projects, he said.
“We treat consumers like idiots if we don’t publish [cost-benefit studies]” he said…

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