The Auditor General, in his report Follow up of Managing the Level Crossing Removal Program, tabled in Parliament today, adds the final nail to the coffin of Daniel Andrews and Tim Pallas’ much vaunted support for business cases for government infrastructure projects.
Treasurer Tim Pallas told Neil Mitchell on 3AW on 4 May 2015, “We can’t keep these business cases in the dark, like the previous government did.”
Daniel Andrews was reported in The Sunday Age, 23 November 2014, saying, “The difference is that you’d have a transparent process and the business case would be public, not the secrecy and the botched, rushed nature of this project.”
And yet, the Auditor General in his latest report found:
“The primary purpose of a business case is to provide the government with enough information to make an informed investment decision. Preparing a business case is one of DTF’s key requirements for all HVHR infrastructure projects.
“In our 2017 audit, we found that DEDJTR did not complete a business case until the LXRP had been underway for two years. Consequently, DEDJTR did not follow DTF’s HVHR framework to provide the government with a range of project options.
“We also found that DEDJTR did not follow the HVHR framework to update the business case to reflect significant project changes. While DEDJTR added two level crossings to the project after completing the business case, it did not update it.”
“DoT and MTIA did not complete a full business case for LXRP2. As a result, the government did not receive advice about the project’s expected economic benefit before it made its decision to fund LXRP2.”
The Auditor said “the project benefits reports are not publicly available”. The Auditor further said “providing public updates on the LXRP’s benefits would improve transparency around the Project”. These project benefits reports should be publicly available now.
Troublingly, the Auditor General found costs continue to blow out, “To date, the Department of Treasury and Finance (DTF) has approved the release of $1.28 billion of the project’s risk provision to address cost escalation pressures”.
The Level Crossing Removal Program has experienced cost blow outs of over $3.3 billion since it was commenced.
Comments attributable to the Shadow Minister for Transport Infrastructure, David Davis:
“In their own words, Andrews and Pallas cannot be trusted with the Victorian public’s money. There is no complete business case for their $14.8 billion level crossing removals, no cost benefit analysis – just cost blow outs and money that could have been spent on other projects.
“Without a comprehensive business case, there is simply no proper economic justification for the Level Crossing Removal Program.
“Labor has again and again demonstrated it can’t be trusted to manage money, pandemics, or major projects.”