Survival of the unfittest: why the worst infrastructure gets built—and what we can do about it

Via Survival of the unfittest: why the worst infrastructure gets built—and what we can do about it:

[...] Taken together, the UK and US studies both account well for existing data on cost underestimation and benefit overestimation. Both studies falsify the notion that in situations with high political and organizational pressure the underestimation of costs and overestimation of benefits is caused by non-intentional technical error or optimism bias. Both studies support the view that in such situations promoters and forecasters intentionally use the following formula in order to secure approval and funding for their projects:

underestimated costs + overestimated benefits = funding

Using this formula, and thus ‘showing the project at its best’ as one interviewee said above, results in an inverted Darwinism, i.e the survival of the unfittest. It is not the best projects that get implemented, but the projects that look best on paper. And the projects that look best on paper are the projects with the largest cost underestimates and benefit overestimates, other things being equal. But the larger the cost underestimate on paper, the greater the cost overrun in practice. And the larger the overestimate of benefits, the greater the benefit shortfall. Therefore the projects that have been made to look best on paper in this manner become the worst, or unfittest, projects in reality, in the sense that they are the very projects that will encounter most problems during construction and operations in terms of the largest cost overruns, benefit shortfalls, and risks of non-viability. They have been designed like that, as disasters waiting to happen.

The paper goes on to say, “Professional and occasionally even criminal penalties should be enforced for managers and forecasters who consistently and foreseeably produce deceptive forecasts”. Wise words yet we shall have to hope the HS2 project and all the other infrastructure projects planned by the Government are unique in not suffering from the endemic flaws described in the paper.

I’ll leave interested parties to read the paper for themselves but I will add this: while the Government has cloaked itself in the legacy of the great British railway pioneers, they were entrepreneurs risking private capital in commercial projects. The same cannot be said of HS2.

That matters and it matters for all the reasons we have historically defended free societies from the encroach of planning.

Bucks home to school transport consultation ends on 31 Jan

Via Bucks County Council:

Time running out for consultation on the future of home to school transport

There are only [8] days left for parents to have their say on the proposed changes to Buckinghamshire’s home to school transport policy, due to be implemented in September 2012. 

The changes, likely to affect the majority of secondary school pupils, would mean that transport will only be provided to the pupil’s nearest secondary school.  Under the existing policy, pupils currently receive free transport to their choice of catchment school, including grammar schools, if they live over 3 miles away from the school. If a child is from a low income family and is entitled to free school meals; a family is in receipt of maximum working tax credit; a child has special educational needs, a disability, mobility problems or is eligible on specific road safety criteria, the Council will continue to provide free home to school transport where the statutory criteria are met.

Mike Appleyard, Buckinghamshire County Council’s Cabinet Member for Education and Skills, has already met with parents during public meetings held across the county before Christmas. A further five meetings are due to take place before the consultation ends on 31 January.

Cllr Appleyard said: “Through these meetings, I have been made aware of some specific issues that had not been fully considered when drawing up these proposals and I am now seeking solutions which will be used to form the final policy. The final policy is not a done deal and remains subject to the findings of the consultation.  I’m grateful to parents for bringing these issues to my attention and I encourage as many parents to come along to the meetings as possible.”

The new proposals will help achieve savings of £1.4m (or 10%) from the home to school transport budget, all part of the Council’s need to cut its overall spending by 50% over the next nine years. To read the proposal in full and complete the survey online visit www.buckscc.gov.uk/schooltransport

51m’s response to the HS2 decision

Via 51m.co.uk,

Councils opposing HS2 say that although they have no objections to the principle of high speed rail, they will continue to fight the current flawed proposals, following news that the Government plans to press ahead with the £32 billion project. Leaders will be examining the decision and considering whether there are grounds for a legal challenge.

“This is an immensely bad decision for Britain,” said Martin Tett, Chairman of the 51m alliance of local councils challenging the scheme, and Leader of Buckinghamshire County Council. “At a time of national austerity with rising unemployment and a massive deficit how can spending more than £32 billion on a rail line be justified? Virtually all objective analysts have condemned this project. The business case is fundamentally flawed, it doesn’t deliver the extra capacity where and when it is needed on the main commuter routes and it fails to help regenerate manufacturing industry in this country.”

The Government’s decision on HS2

The Government has announced its decision on HS2:

The Government has decided to proceed with the development and delivery of a new national high speed rail network to provide the capacity that Britain needs to compete and grow.

I just left the Chamber after listening to the oral statement and a good number of colleagues’ questions. The mood is overwhelmingly in favour, on both sides of the House. I remain convinced of the point of view I put to the FT:

Steve Baker, MP for Wycombe, said he was unconvinced that the huge cost of the scheme was justified. “The maths doesn’t add up; this is just sinking capital into a lossmaking project. If you’re going to use the power of the state to do that, then you shouldn’t be surprised that this country is getting poorer.”

Since people often ask me and since I have asked so many questions already, I asked the Secretary of State if she had considered tunnelling the width of the Chilterns. She had: it would cost £1.2bn, which was considered unaffordable.

So the project goes ahead. In the meantime, I’m reading a brief which sets out the tale of woe which is the failure of high speed rail projects in Portugal, Spain, France, Poland, The Netherlands, Norway, Taiwan, China, the USA and  Brazil…

In 1953, the economist Ludwig von Mises wrote:

In a capitalist country the railroads and the telegraph and telephone companies pay considerable taxes. In the countries of the mixed economy, the yearly losses of these public enterprises are a heavy drain upon the nation’s purse. They are not taxpayers, but tax-eaters.

Perhaps little changes, but I should prefer value-creating infrastructure, not infrastructure which makes us poorer.

Criticising HS2 via the FT

Via High-speed rail link must be built, economists insist – FT.com:

Steve Baker, MP for Wycombe, said he was unconvinced that the huge cost of the scheme was justified. “The maths doesn’t add up; this is just sinking capital into a lossmaking project. If you’re going to use the power of the state to do that, then you shouldn’t be surprised that this country is getting poorer.”

I’m grateful to Guido Fawkes for making this his quote of the day.

Voters turn against HS2

Via AGAHST:

Nearly two thirds of population opposed to money being spent on HS2

A YouGov public opinion poll has found that nearly two thirds of the public oppose money being spent on the planned £32 billion high speed rail link between London and Birmingham (HS2).

64 per cent of those surveyed in the poll (commissioned by groups opposed to HS2) believe that it is wrong to spend money on the proposed line at this time. In June this year 48 per cent of respondents to a YouGov poll for the Tax Payers’ Alliance were opposed to plans to fund what will be, per mile, the world’s most expensive railway.

Voter opposition

The latest poll found that 66 per cent of Labour’s general election voters are opposed to HS2, which was originally proposed by a Labour Government. 68 per cent of Liberal Democrat voters are against the line along with the majority of Conservative voters, 59 per cent.

North South DivideWhile supporters of HS2 believe that it will help close the North-South divide both regions are already united in their opposition to it. 62 per cent of Northern respondents; 64 per cent of those surveyed in London and 66 per cent of respondents in the South think that it is wrong to spend money on it at the current time.

Despite the Scottish Government’s enthusiasm for the line, 70 per cent of Scottish respondents are opposed to HS2, which will cost UK taxpayers £773 million in planning and consultants in the current Parliament alone. Perhaps most interestingly, respondents from the Midlands and Wales, the region that takes in Birmingham where the phase of the line will terminate, came out 64 per cent in favour of shelving spending on the project.

Extra £500m for high-speed rail tunnel to protect Chilterns – Telegraph

Ministers have found an extra £500million to pay for a new tunnel under the Chilterns to pacify MPs who have been protesting against the high speed rail link between London and Birmingham, The Daily Telegraph can disclose.

via Extra £500m for high-speed rail tunnel to protect Chilterns at The Telegraph. I have no further information.

The project still wouldn’t make sense, but at least the AONB would not be scarred. That would be little compensation when finally the penny drops that the age of grand government projects is over.

Debate on fuel prices

There has been a tremendous turnout today for the debate on fuel prices, with Rob Halfon leading, supported by Fair Fuel UK.

I am delighted so many members are today pressing for lower taxes on behalf of constituents. Fuel taxes are a scandalous cash cow for the Treasury and it is time the motorist received a fair deal. As I replied to the many constituents who first wrote to me about the campaign, a substantial, sustainable cut to fuel duty requires the elimination of the deficit plus cuts to public spending. That is a tough task, but it is right that the Treasury should stop further rises in duty and consider reductions, which might actually result in greater revenues.

Beyond that, the Government needs to explain to people that the Country’s commitment to decarbonising the economy and transport, begun by the last government, would mean profound changes to the way we travel. Just this morning in a Transport Committee seminar, we heard from three groups of witnesses who described various, sometimes crazy, uses of taxpayers’ money to encourage a move to low-carbon transport. For example, a network of recharging points is thought necessary to give people confidence to buy electric cars, even as proponents believe that network would scarcely be used. This policy agenda is risky and expensive for taxpayers. One of my colleagues described the conversation about behaviour change as “totalitarian” and of course he is right that there is today no apparent limit to the scope of government action for our own good.

Finally, I am concerned that the level and volatility of the price of oil may have as much or more to do with the Federal Reserve and Dollar debasement as to do with supply and demand. The following chart shows how the price of oil was low and stable in Dollars and gold until Bretton Woods broke down, after which it remained low and relatively stable in gold but high and volatile in Dollars.

There’s not much the British Government can do about the Fed, but we ought at least to understand the problem before trying to deal with it. Unfortunately, it does look like oil and fuel prices are way too dependent on the actions of a few wise men in the central banks.

It’s wonderful that another petition has been so well supported in debate and I look forward to hearing the Government’s response shortly.

Transport Committee report on HS2 released

The Transport Committee’s report into High Speed Rail was released today. You can find it here.

I voted against the report. In my view, it is too supportive of the present proposals.

In committee, a number of us brought forward and voted for amendments which would have softened the report substantially. Some of these were defeated by just one vote. Full details can be found in the formal minutes at the end of the first volume.

I remain concerned that there are significant issues which need to be addressed before a decision on HS2 can be made. These include the strategic policy context, the assessment of alternatives, the financial and economic case, the environmental impacts, connections to Heathrow and the justification for the particular route proposed. I am pleased the summary makes that point.

The debate will continue.

Transport Committee to publish High Speed Rail report

Via Transport Committee to publish High Speed Rail report:

The Committee has agreed to publish its Tenth Report of Session 2010–12, High Speed Rail (HC 1185-I), at 00.01 am on Tuesday 8 November.

Embargoed advance PDF copies of the Report will be emailed on Monday 7 November at 8.00 am to all those who gave oral evidence.

Media representatives wishing to receive embargoed PDF copies of the document should contact Hannah Pearce: pearcehm@parliament.uk.

The Report will be available on The Stationery Office (TSO) Ltd’s website and the Committee’s website shortly after the publication hour has passed: Transport Committee Publications.

The Report may also be purchased from TSO—Tel: 08457 023474.

More details to follow when the report is released.