Article from SMH by Bruce Loder

Bruce Loder
April 10, 2008 SMH

In NSW, until about 1980, there was a clear separation of government and the management and administration of public works and services. The government established the public policy and the non-political public service and government instrumentalities delivered the required works and services in accordance with the law and in the public interest.

The NSW public service has accomplished some extraordinary achievements. The country rail system, the Sydney metropolitan rail system, the Sydney Harbour Bridge and associated underground railway, and the Sydney water storage are prime examples. Of these, the services of overseas consultants and contractors were used only on the Sydney Harbour Bridge and on that work all the planning, including the preliminary design and feasibility assessment, was done by the NSW Department of Public Works.

The respective heads of the departments and instrumentalities were eminently qualified to run their departments and were supported by competent staff. For the most part the heads were selected from staff groomed for senior positions within the "permanent" service and enjoyed some certainty of tenure.

The situation began to change about 1980. About that time there was a move within the public service proper, as distinct from the instrumentalities to promote the re-election of the government as a primary aim. Subsequently, the procedure and criteria for appointing department heads was changed. As a consequence, department heads are now often unable to provide ministers with the sound advice and guidance they require to administer their portfolio and ministers have assumed a greater role in the functioning of the individual departments, for which they are ill-equipped.

These are the circumstances in which the economically and financially disastrous Cross City and Lane Cove tunnels were conceived and built.

The Government, which allowed the works to be built (and even boasted of the achievement), assured us no government money was involved. Lucky for them. Governments do not have any money; they only direct how the public's money is spent. The public will pay for the tunnels through tolls that are higher than they should be, because the scope of the work was far more extensive than required to achieve an economic solution.

But of more concern is the extra travel cost incurred and extra pollution caused by those who suffer the increased congestion created by traffic diversion and lane closures and those who divert to alternative routes. While the extra travel cost for each individual is small, the total will amount to a substantial sum over the term of the toll franchise. This in turn will have an adverse affect on the economy.

Over the past 30 years the state Treasury has increased its control over the expenditure of public funds. In common with the Commonwealth and other states the NSW Treasury is opposed to public debt and does not differentiate between operating expenditure and investment. While tolls have been used on appropriate public works in the past to discharge public debt the so-called public and private enterprise partnerships evolved to overcome Treasury opposition to public debt.

Of the seven such partnerships completed on the Sydney metropolitan road system to date only the Cross City and Lane Cove tunnels have been abject failures. The Sydney Harbour Tunnel, M4, M5, M2 and M7 were all economically sound and financially feasible and were constructed to satisfy a transport need. The Cross City and the Lane Cove tunnels were seen as investment opportunities by the private sector which apparently convinced the government of their merit.

Unfortunately, the Roads and Traffic Authority failed in its role as guardian of the public interest probably because, in common with the rest of the public service, it no longer has the ability to do so.

Both the Cross City and Lane Cove tunnels are ill-conceived and doubtful economically. It goes without saying that neither are financially viable as toll roads. The Lane Cove Tunnel has the further defect of virtually eliminating Epping Road as an effective link in the Sydney Metropolitan road system. In effect a toll is being levied on a previously existing untolled road - a technique used only as a means of limiting vehicular access to a centre as in Singapore and London.

The deterioration in management and skills in the public service exemplified in the Roads and Traffic Authority extends throughout the service and explains in part the problems of delivery being experienced in health, transport and public works.

It will not be easy to restore the public service to an effective provider of works and services and guardian of the public interest, but until then and until the roles of government and public service are once more clearly defined, we can expect the standard of government in NSW to continue to decline and the quality of services in NSW to continue to fall relative to other states.

Bruce Loder is a former NSW commissioner for Main Roads.


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