A $28b blow out in transport projects in Australia

The SMH report:

projects across the country have blown out in cost by at least $28 billion in the past 15 years, according to an independent think-tank.

And the main cause of the cost increases is the tendency of politicians of all persuasions to make promises about road or rail projects before they have been assessed, says the Grattan Institute report, to be released on Monday.

We see this in NZ where politician promise light rail despite the assessment that it has a BCR of 0.05.

The report used an investment monitor by accountancy firm Deloitte to compare the early projected cost of 836 transport projects over the past 15 years with their eventual tab. It found that the largest cost over-runs occurred when the scope of a project was announced early by a politician.

So the best thing is to let the experts do proper costings of project benefits and costs, and then have politicians commit to them. Not to have politicians commit to them before they costings.

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