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Aiming smaller with infrastructure spending

4 October 2022
From our ‘Thinking outside the box’ series
The aftermath of the COVID-19 pandemic presents a unique opportunity for governments to rethink major infrastructure spending and consider other avenues for investment to build towards a future we want, writes Matthew Beck.

While the NSW Government will continue to build selected large infrastructure projects (which may now take longer to complete), the recent pivot by Infrastructure NSW to recommend the suspension of investment in large scale infrastructure projects in favour of smaller more immediately impactful spending[1] is an eminently sensible course of action given the uncertainty coming out of the pandemic, and the “new normal” still very much in the formative stages of being established.

There is a long history of large infrastructure projects being problematic, given their scope of ambition, complexity, and the generally long lead times to bring such projects to completion. NSW is not immune from those problems, with the recent light rail projects being a prime example of how big infrastructure projects can cause big headaches.

That is not to say that all large infrastructure projects are undesirable. To move a city (or any other system) to a future state that can sustain economic, social, and environmental activity, a degree of uncertainty is inherent in decision making. There does need to be an element of taking a plunge now, to invest in the future that we want for tomorrow and taking the hits that may occur with trying to reach such a vision.

Moreover, building towards the future we want can be a difficult balance for decision makers trapped in the now. Often large infrastructure investment for a long-term benefit can often be distorted for short term gain at the ballot box (commuter car parks and sporting fields aside). The temptation is real and for that reason many have argued that big infrastructure projects should be insulated against the short-term vagaries of political cycles.

Nonetheless, even with the best of intentions, futures are notoriously difficult to predict even without the advent of a global pandemic. In a very simple example the impact of autonomous vehicles on transport activity is yet unknown. Will it erode use of public transport given that people will not have to drive themselves? Will it induce more car travel, but will that car travel be more efficient due to gains from autonomy meaning less road space is needed per vehicle[2]? There is uncertainty in the future quantum of road-based revenue as fuel excise is diminished as electric vehicles gain market share[3].

It seems likely that COVID-19 has created a structural break in the economy with regards to where work is completed. Many more people are now happily and productively working from home to a much larger extent than prior to the pandemic. While some future trends are emergent, it is uncertain what this might mean for transport investment. With a lower volume of commuting activity, there may be less need to invest in new public transport infrastructure[4] and motorways. Deferring spending on these expensive projects is eminently sensible while the new future of work is still forming.

Importantly, we have seen that car use has rebounded strongly out of the pandemic as people maintain biosecurity concerns about using public transport, and due to travelling less given they are working from home more, the otherwise more expensive private vehicle (and associated fuel and parking costs) becomes relatively more affordable. The last thing that is needed now is any investment in infrastructure that further embeds the car as the predominant form of transport, given the litany of evidence that shows the ills that doing so continues to have on our urban environments.

With more work being completed in the home, governments are presented with a unique opportunity for revitalisation of suburbia. These locational adjustments of WFH align well with promoting the 15 or 20 minute city, which remains a challenge given a strong radial and CBS focussed strategy in many cities throughout the world. We need to promote “be local and buy local” to help capture the redistributive effect of increased WFH where small business in suburban areas can benefit from increased economic activity that they would otherwise not participate in.

Local infrastructure investment is typically the remit of local councils, who have less ability to raise funds for expensive capital improvements as compared to state or Federal authorities, and many councils are still reeling from losing investment funds during the Global Financial Crisis.

With a greater focus on local activity, there may be a need to reprioritise improvements in local public transport, safer pedestrian walkways and precincts, and bicycle lanes, serving short distant trips throughout the day, with the added benefit of improving first and last mile connectivity[5] to PT and (hopefully) contributing to improved health outcomes. Local road amenity and safety may also need to be revisited, with a greater focus on localised maintenance and traffic control measures to cope with a potential change to localised traffic flow[6].

Given the large amounts of rain across vast parts of New South Wales, there are easy gains to local amenity through State government assisted schemes. For example, repairing widespread potholes, conduct repairs to local parks and sporting fields while ensuring proper drainage is created in these local green spaces and/or wetlands, improving lightening in suburban and regional streets.

All these investments to help create safer and more resilient local environments where we are spending more of our time. There are likely many gains to be had in smaller cheaper projects that better connect towns and people in regional communities, such as the active travel plan in Wagga Wagga.

We should not neglect the importance of large motorways to economic activity, but there are ways to improve the performance of that network without necessarily building more of it. There is investment in existing technology that can help create a more streamlined traffic flow to ensure less stop-start traffic and sudden braking at congestion points by controlling and coordinating entry ramps along the route, and better use of variable message signs and travel time information for road users, gained from the traffic management system in real-time.

We also need to think about how to make incremental investments to the existing transport infrastructure to get it ready for future technology. For example, how can we transition to dedicated lanes on main urban roads to support travel via a pod-systems where energy is delivered to “vehicles” from the road itself. Irrespective of such long-range futures, in the short term we do need to think about how we can elegantly support the introduction of Avs to the road-space in a similar way.

Generally, we need a rethink where infrastructure funding should go, including deferring major infrastructure spend. We might even find that active travel strategies can become embedded within investment in key public infrastructure. This is particularly true in the context of rising input costs driving increases in inflation, which in turn will cause the often significantly overrun budgets of these large projects to be some order of magnitude higher again.

The decision to defer spending on large infrastructure projects at the present point in time, is a sound one. Overall, there are many small wins out there waiting to be found for the innovative and forward-thinking policy maker, where projects can be completed quickly, and thus improve our lives quickly. The totality of these smaller wins will help show the value of infrastructure and thus the need to continue to invest in it, and maintain it, for the betterment of our desired futures.

References

[1] https://www.theguardian.com/australia-news/2022/may/31/infrastructure-nsw-calls-on-government-to-reconsider-timing-of-megaprojects

[2] AVs are still likely a long way away given the pristine nature of the infrastructure needed for this technology to work well, let alone at all.

[3] Hensher, D.A. (2020) Electric cars – they may in time increase car use without effective road pricing reform and risk lifecycle carbon emission increases, Transport Reviews Editorial Series, 40 (3), 265-266 DOI: http://dx.doi.org/10.1080/01441647.2020.1709273

[4] In particular for longer distance commuting, though there exist opportunities to improves accessibility for localised public transport options.

[5] Though not from rideshare which has proven unattractive and unsustainable thus far given high fares, so more through active transport infrastructure, the legalisation of electric bicycles and scooters with dedicated pathways or rights of access.

[6] Beck, M., Hensher, D. (2021). What might the changing incidence of Working from Home (WFH) tell us about future transport and land use agendas. Transport Reviews, 41(3), 257-261.