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Motordom in Brisbane: Another tunnel in the hole

November 19, 2012

First it was Clem 7:

(In March 2010,) Brisbane opened the “Clem7” – a tolled tunnel under its central area almost five kilometres long, a distance sufficient to take a Vancouver driver from Lost Lagoon to Main and Broadway. At a cost of well over $3 billion, it’s only one element in a scheme that includes an even longer tunnel to the airport, along with bridges and bypasses that make up the largest road project in Australia.

Financed as a public-private partnership to be paid for by tolls … the planners had assumed an average of 100,000 toll-paying drivers a day.

But even on good days, it couldn’t attract 27,000.  By February 2011, it was in receivership, “adding to other failures of Australian city toll tunnels – the Cross City and Lane Cove tunnels in Sydney.”

And now the next tunnel in the series of three meant to address congestion in Brisbane has gone under – mere months after its opening.

From the Courier-Mail:

BRISBANE’S Airport Link tunnel – the nation’s biggest infrastructure project – could soon go bust after its owners yesterday admitted the $4.8 billion asset was worth less than it owes.


From ABC News:

The operator of Brisbane’s AirportlinkM7 toll road has entered a trading halt as it negotiates with lenders. ….

The AirportlinkM7 toll road has only seen half of the forecast amount of traffic since it opened in July this year.

An academic says the company is heading for inevitable financial collapse.

Dr John Goldberg from the University of Sydney served on a New South Wales parliamentary inquiry into Sydney road tolls.

Dr Goldberg has told ABC Brisbane radio BrisConnections has followed other failed toll roads in Australia by using traffic forecasts that have little relationship with the reality of how many cars end up using the road.

“They take the outcome for investors as a starting point and they work back to find the traffic that will produce that revenue,” he said.

“Now this is totally false. It’s an artificial thing that’s been on the books for years.”

And yet, the third tunnel is under construction – and the politician behind them all, Campbell Newman – the previous Lord Mayor – has gone on to become Premier of Queensland and has so far paid no political price for the failure of Clem 7 and Airport Link.  (They are not even noted on his Wikipedia entry.)  It is the bondholders who have been sunk.

Brisbane’s mayor Campbell Newman who was in ultimate charge of the procurement of the concessionaire to build the tunnel has said he is sad for the investors who lost their investments, but the concession got the tunnel built and will ensure it is operated for 100 years for the benefit of the people of Brisbane.

Only the next one – Legacy Way tunnel – is different: this time the local taxpayers are on the hook:

Despite the toll road failures, Brisbane City Council is pressing ahead with the $1.7 billion Legacy Way due to open in early 2015.

Forecast to carry annual operating losses of almost $100 million, the project is largely funded by ratepayers  with the Federal Government contributing $500 million. Lord Mayor Graham Quirk said he was confident about the traffic forecasts for Legacy Way which were much more conservative than those prepared for Airport Link and the Clem7.

Proving once again that when it comes to Motordom-scale road projects, Conservatives are anything but conservative.

More here.

18 Comments leave one →
  1. November 19, 2012 11:02 am

    Here’s the paradox: Either new roads, bridges and tunnels are misguided spending because they stimulate new driving and inevitably clog up after a few years (what many of us have been saying for years), OR, new roads, bridges and tunnels are misguided spending because fewer people are driving. Which is it?!

    • mike0123 permalink
      November 19, 2012 11:35 pm

      Compared to a sky train line or a light rail line, it takes relatively few people to clog up low-capacity transportation systems like the new Port Mann bridge.

  2. November 19, 2012 11:30 am

    People are apparently extremely sensitive to the immediate marginal cost of transportation. Or at least car drivers are. Transit users are used to a pay-as-you-go system and have to take 10% increases without complaint.

    It would be an interesting experiment to see what would happen if transit were free. (Not that I think that would be a good idea.) I suspect usage would go way up. The introduction of the UPass at UBC is something of a natural experiment on the subject, and usage did in fact go way up.

    All of this is a good argument for region-wide road tolling whether or not the money was used for transit expansion.

  3. guest permalink
    November 19, 2012 1:11 pm

    I would think that it’s obvious that people wouldn’t use a toll tunnel for an incremental time savings when there is a free alternative close-by (i.e. it not the same situation as a river crossing where the next crossing is far, far away).

    It’s only people who are free spending and don’t care about being nickel and dimed (i.e. those that buy $5.00 gourmet donuts or $5.00 lattes) or whose time is soo so valuable that the few minutes savings is worth the cost.

    Given the free alterative – the question is – how many people are willing to pay “extra” to do XYZ? How many are willing to pay for a reserved seat at the movie theatre? or at the Celebration of Light? to sit in the child-free lounge on BC Ferries? i.e. pay for VIP service? My guess is … not the majority.

    It’ll be interesting to see whether Seattle’s Alaskan Way viaduct tolled replacement tunnel will be a white elephant, given the proximity of alternate surface routes.

  4. November 19, 2012 1:11 pm

    This is interesting as a Vancouverite who was just in Brisbane and lives with a man from Brisbane. When we were there, I noticed how empty the roads were, and I don’t think all the tolls had been brought in. I wonder about the planning. All of these projects were overshooting the actual average, yet I look at something like the Canada line that bypassed its ridership immediately. Why can’t we figure this out better?

  5. November 19, 2012 3:10 pm

    As someone born and bred in Brisbane, now a Vancouverite after travelling and living in cities all over the world, it always makes me sad to return to Bris and see the shortsighted reluctance on the part of leaders to embrace the many alternatives to “motordom”. So many amazing possibilities in Brisbane, proposed, discussed at times, and then ultimately discarded in favour of yet another doomed roadway project. When will they learn! When they do work on alternatives, they can’t figure out how to encourage people to use them. It costs $30 for a casual rider to visit the airport and back on the airtrain, if you want to meet a friend coming off a plane. Why are charging these kinds of fares not crimes? But Brisbane is not exempt. At least they have made use of their watwerways, expensive as it is, something Vancouver is still trying to figure out. As societies we are shockingly incapable of coming together to overcome our transport challenges in sustainable, intelligent, people and environment oriented ways….where is the leadership?

  6. November 19, 2012 8:01 pm

    Not hard to see this not happening to the Port Mann… [Sigh] “Motordom Unconstrained”… again. From my analysis, the new port mann will likely produce less or equal the old bridge’s traffic experienced by the bridge (tolls).

    • November 19, 2012 8:02 pm

      Sorry: “Hard to see this not happening”, not a use of double negatives.

    • April 16, 2014 9:56 am

      MetroVan will have 50% more people in the next few decades and expanding ports with more trucks, too. As such some arterial roads ( incl tunnels or bridges ) ought to be wide enough to carry this people and goods traffic. Hwy one to Abbotsford is already too narrow as is Second Narrows and Patullo Bridge. MetroVan has 30+ ports and shipment by car or bikes is just not very feasible from the only major West Coast port to the rest of Canada !

      • April 16, 2014 10:34 am

        @Thomas, my comment was 16 months old but it still stands: Prior to the bridge opening I predicted that new tolls would decrease the magnitude of traffic on the p.mann regardless of any new capacity added.

        Simply adding new tolls to a 1965 bridge, OR adding tolls to a new 6-lane bridge would suffice. Instead, we got a 10-lane white elephant.

        • April 16, 2014 11:31 am

          what’s a white elephant anyway ?

          An anomaly ?

          Perhaps 10 lanes is too wide, perhaps 8 would have perhaps sufficed, and yes, a rail line should have been included. However, for a major major highway 10 lanes is not over capacity .. let’s check back in 2040 .. but perhaps then we have invented e-boats, e-trucks, e-planes and e-drones and a completely oil-independent way of life .. or not ..

          BC is an economically backwards province, opposing all major expansions of pipelines, highways, ports, bridges in the name of “the environment”.. further ruined under the NDP in the 1990’s .. so this is all just catch up work.

          We ought to expand S Fraser Hwy to Victoria and build a major port expansion there, too ! S Fraser Hwy is already too small ! Should have been 6 lanes .. and no traffic lights whatsoever !

          No wonder housing is so unaffordable here. This “no” to expansion makes houses prices unaffordable .. it is related. Don’t people see that ? But that is another topic .. or maybe not ..

        • April 16, 2014 11:59 am

          Agreed, that BC is economically backwards in some areas. But the key here is that what was economically viable in the 20th century will not be in the 21st.

          As it took 16 years for the 19th to transition into the 20th, we’re finding that innovation in the 21st is breaking the old traditions created in the 20th. Oil, bridges for cars, 16-lane highways will go the way of fax machines and landlines.

          As you say, shipping and port movement will be essential, and that is why we must support goods movement. But building a bridge to relieve “BC’s worst bottleneck” (aka AM car traffic)? That’s just too outdated now. Truck traffic never accounts for more than 10% of all traffic on a road, and building new highways isn’t the solution. We could start by cutting the insane $9 toll on trucks whilst maintaining the $3 toll on cars. Induced demand works on trucks too, and unlike incr. car traffic, supports the economy.

          Becoming economically viable means building infrastructure such as convention centres and high-speed rail. And transit.

  7. May 2, 2013 11:45 pm

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  8. rhodes permalink
    April 16, 2014 12:23 am

    A few additional facts to this story:
    The piece says it is the bondholders who are out of pocket but actually one of the big investors was the major public service pension funds who have put about $1 billion into it. Worse, the Chairman of the QIC pension fund (superannuation fund) was simultaneously Chairman of the company that constructed and owned Clem7! You might wonder how that could be legal. As we all do.
    In addition there were about $0.5 bn of federal and state funds also put into these tunnels. (One could make a case that it was cheap, given the expensive tunnels–except that it hasn’t solved Brisbane transport problems and of course took away money from the only thing that could do anything, public transport.)
    Everyone knew that the traffic forecasts were “purchased to order” from AECOM in order to justify the cost of these tunnels.
    The only reason Brisbane can manage at all is that it now has a fairly extensive dedicated busway system (and the Northern Busway extension tunnels were part of the northern road tunnels project which was a state project not a Campbell Newman project). However the buses have proven too popular (partly because city parking has reached astronomical levels) and at peak hours, despite their dedicated paths, there are now bus traffic jams. Also fares have continued to escalate until now Brisbane must have some of the most expensive bus fares in the developed world, especially for short distances.
    The busway system is quite good as far as it goes. Note that it has always been a state funded project. Then-mayor Newman hates it and would probably close it down if he thought he could, to force everyone onto the roads and into his tunnels. In fact the first executive action he took as mayor was to remove exclusive-use bus lanes on three of the main roads.
    The first executive order he issued when he became state premier was to cancel a $100,000 Premier’s Literary Prize! No joke. At the same time as he had made an electoral promise to give $5m of our money to a rich football club. Shows you what kind of bloke he is. Here is what Anna Funder (author of bestseller Stasiland) wrote:
    “I have spent my professional life studying totalitarian regimes and the brave people who speak out against them,” Funder told ABC Radio. “And the first thing that someone with dictatorial inclinations does is to silence the writers and the journalists.”

  9. April 16, 2014 2:20 pm

    @ Kyle Z: dream on . LNG, coal, oil will be with us 100+ years .. transit helps in Vancouver but not in rural Surrey, rural Delta, Bowen island, W-Van, N-Van, Langley and east such as Chiliwack or Abbotsford nor remote regions that will require cars. We have too much convention center space already.

    Are all those opponents to any development willing to take a salary cut, say by 30-50%, as this would be the result of a so called “clean” energy world i.e. expensive energy world ? This is the European model, now failing, i.e. electric energy costs that are quadruple to six-fold BC’s.

    Cheap energy is vital for North-America.

    Perhaps less coal as it is the dirtiest, but LNG is clean burning and oil has many other uses besides energy such as fertilizer, petrochemicals which are required on almost all consumer goods today. So even if all cars are electric, a big if, or long away if, oil consumption might just drop 20% to 30% .. plus add 50% more people and I do not see it dropping AT ALL the next 50+ years in Canada !

    E-cars have dirty implications too due to their batteries and construction costs. Yes we need more public transit in certain places but W-Canada is too sparsely populated for the car to go anyway soon. There is no alternative right now, except perhaps smaller cars.

    Traffic in Vancouver will grow with 50% more folks living in the region.


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