‘Why the worst infrastructure gets built’

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When big ticket infrastructure projects such as highways, tunnels, bridges and airports are pushed through, the lack of proper business plans and robust cost-benefit analyses is often glaring.

In the process, costs are underestimated (we have seen happening with the North South Expressway and the Second Penang Bridge) and the benefits overstated. The social and environmental costs are often ignored or downplayed.

A research paper ‘Survival of the unfittest: why the worst infrastructure gets built—and what we can do about it’ by Bent Flyvbjergsays, published by Oxford Review of Economic Policy) provides much food for thought. The author points out we should not trust “the budgets, patronage forecasts, and cost–benefit analyses produced by promoters of major infrastructure projects”.

As the promoters try to steamroll these projects through, financial projections and project feasibility are often inadequately and inaccurately carried out while public consultation is often reduced to a formality, a public relations exercise:

In his paper, the author notes:

The consultants interviewed confirmed that appraisals often focused more on benefits than on costs. But they said this was at the request of clients and that for specific projects discussed ‘there was an incredible rush to see projects realized’.

One typical interviewee saw project approval as ‘passing the test’ and precisely summed up the rules of the game like this: ‘It’s all about passing the test [of project approval]. You are in, when you are in. It means that there is so much focus on showing the project at its best at this stage.’

In sum, the UK study shows that strong interests and strong incentives exist at the project approval stage to present projects as favourably as possible—that is, with benefits emphasized and costs and risks de-emphasized. Local authorities, local developers and land owners, local labour unions, local politicians, local officials, local MPs, and consultants all stand to benefit from a project that looks favourable on paper and they have little incentive actively to avoid bias in estimates of benefits, costs, and risks.

Thus, genuinely independent oversight and review are needed to ensure that the cost-benefit analyses are accurate and the projects viable.

But such is the indecent haste in bulldozing these mega projects through that other alternative, smaller and more financially manageable and sustainable projects are overlooked.

Read this Sydney Morning Herald article, “When it comes to infrastructure, small can be beautiful too”. (Thanks to S H Tan for the link.)

Haven’t we overlooked more sustainable options in our haste to push through big-ticket infrastructure projects?

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Kometenmelodie

I can’t recall a time when the CM of Penang and his administration being involved in so many controversies. Look at LGE now. Penang World City, mega projects, destruction of heritage buildings, eSPICE, selling off state’s prime land, sky-rocketting property prices, shortage of affordable housing,hazadous solar plant, etc. While all these issues are raging,like the Emperor Nero, our NGOs like Aliran continue to close both eyes and prefer to focus on national issues merely to attack the Fed govt. They talk about Lynas but ignore Bosch’s plant right here in Batu Kawan. Look at the people here. Defending to death… Read more »

Fred Yong

Stop RAPID, Save Pengerang!

RAPID = Refinery and Petrochemical Integrated Development

Yang

Sorry off topic Sunday, 25 March 2012 05:15 posted by Aussie Ex-Malaysian in Chronicles A huge tsunami swept across Queensland, Australia last night. Over 10 state ministers were swept away. Premier Anna Bligh was only one of six out of 44 Labor MPs left standing in the aftermath. Heartiest congratulations to ‘New Man’ Can Do Campbell! The former mayor of Brisbane made a historic sweep and a new dawn arises. Will the tsunami travel across the Pacific Ocean to reach the shores of Malaysia? Will ABU continue the winds of change? YOU … BET!!!!!!!!!!!!!!!! Lets make it happen this time… Read more »

tunglang

First we need a national earthquake in the minds of voters to shake them minds out of senang-lupa (a favorite habit of ApaNama) and register a more than 10 richter scale shock! Then with the combined offshore voters’ quake power, we will definitely see a Mother of all Tsunami sweeping inland reaching Putrefied Jaya to sweep off the decay once and for all. Pray for ‘tsunami’, the kind that can only exterminate the widespread corruption and lying entities from Malaysia. FYI, the Mongolian steppes are now shaking day and night with tremors and unearthly shrieking cries of revenge anticipating the… Read more »

Gerakan K

Then you have a hard time to cope with hudud or launch another campaign ABH (anything but hudud). Why waste time and energy ??? Under BN there is no hudud.

AndrewvI

Anything but unbridled corruption – ABUC.

tunglang

Gelakan, I don’t steal anything from Ah Kong’s national coffer from buying Yellow Submarines or building Twin Phallic Towers, so no need to worry about chopping of hands or fingers and finger nails. Nor my precious manly since I have no controversial Melaka court case acquittal over gatai-gatai.
In fact, I am looking forward to see closure of some sundry shops, cow milking condo in SingLand and a branded bakery shop in Langkawi.
In the meantime, I can still sleep soundly after a cup of Kopi-O kau kau kau!

Gerakan K

No, hudud is everyone business even you are a saint in Malaysia and do no crimes.

Why ???

You will feel obligated to do ABH (anything but hudud) when you see news of hudud punishment for other Malaysians. Don’t be selfish, OK ??? Save Malaysia, say no to hudud.

tunglang

You mean to let go scot-free the ‘criminals’ for causing irreparable damages to the nation and innocent lives?
What kind of corrupt thinking is this!
Just because hudud laws are terrible (painful), swift and no compromising unlike our justice system of ‘forgiving’ & ‘compromising’ to a selected few?
If that is so good for criminal minded, there is no bright future for Malaysia.

moo_t

Malaysian just need some common sense and a bit of critical thinking to learn why most of the government project … up and unsustainable.

Najib now try to push the unsustainable, feels good “new rapid railway” stuff propaganda around Klang valley. With 5 incompatible train system, 5 incompatible ticketing system, I don’t need any freaking expert to tell me it will become another SNAFU (Status Normal, All … Up) project by barisan nasional.

Ho Ho Ho

Ho 🙄 Ho :mrgreen: Ho 😆

😆 I salute U..let’s UNITED n kick out those 👿 cOwgate once n for all !!! 😳

semuanya OK kot

Putrajaya alone is rumoured to have cost RM 20 billion. Has any MP bothered to inquire how this arose, where the money came from, and what interest is being paid on it? Was it even approved by Parliament? What of the suffering imposed on ordinary folk (30% of whom earn less than RM 2000 p.m. and 60% of whom earn less than RM 3000 p.m., if I recall correctly) in trying to first locate and then reach the masters ensconed there? What about the loss of value of old government buildings in KL due to glut and being abandoned, loss… Read more »

Gerakan K

Few points for you: Do you think BN will have any difficulty passing any resolution in Parliament ??? The best LGE can do is staging a surrender walk out. Eh, tak payah kerja meh ??? Can simple walkout like that ??? Mega infrastructure is needed for Malaysia. Do you know that we have everything to organize large events like sports (CG games, SEA games, even I believe we can handle olympic games, world cup, etc) and meetings (OIC, APEC, etc). In order for “Visit Malaysia” to be successful, we need those mega infrastructures. How to handle a lot of foreign… Read more »

tunglang

WoW who? Your deep pockets lor! Mega Satu Lagi Projek that breaks down (Pg Hill fridge train), tilts (PBG arches), collapses (stadiums) and many more woes. Spend, spend but not safe or lasting or Ah Kong money’s worth to say the least. You think we are fools like ostriches that foreigners come here to be wowed or no business here? They come because they know what we have that they don’t have at home – lots of nature, cultures, Penang food & good sunshine weather. Not monorail that breaks down, expensive sub that stains our politicians, gelak-gelakan politics, rowdy gangsters… Read more »

Andrew I

The scanner will go kaput and we’ll have to spend more money to replace it.

Gerakan K

If you were PM, Malaysia will forever just like 1950s. Semua tempat = kampung ~

Invaders just need M-16 to capture Malaysia. Fortunately, we have BN. BN gave us independence and just continue to make us stronger by acquiring adequate defense equipments.

What is DAP contribution to Malaysia ??? Bersih, Hijau, Lynas demonstrations ???

Andrew I

We’ll find out once we put them in government. Really can’t compare until then.

Andrew I

Federal.

kingkong

Gerakan loves to eat Gajah pisang. Why not build more Petronas Twin Towers, bakun dam and more Free zones like Pasang Free Zones and send Gerakan Government to the moon as Gerakan loves to send people for joy rides into the atmosphere.

tunglang

Yeah, BTW what happen to the promises of uni lab analysis of his space experiments from this Sheik astronaut who got a free ride to space?
What a way to spin tops and screw bolts like auto mechanics Malaysia Boleh style!
Gelakan K is so happy for such extravagance maybe he should propose launching his sundry shop spy cams in space! Tesco or EconSave could be making the next move to his territories!

pala richie

What made you think, these foreigners visit malaysia to see your BN’s buildings, Bn’s project. No!, they are here to see Ng Yen Yen dancing and singing.

BN is the best for you, BN can buy anything with our tax money, buildings, roads. BN can buy and spend the way into developed nation by 2020. Debt level and deficit means nothing to them. When it can yield votes, it justified even it bankrupt the nation, corrupt the minds.

Ah Tuah

good reading :
http://www.themalaysianinsider.com/sideviews/article/malaysia-after-regime-change-tricia-yeoh/

Quote : The intricate nexus between the worlds of business and politics has been an age-old tradition in Malaysia. Crony capitalism, a term to describe the intertwined relationship between business, politicians and the state, where individuals in the private sector benefits by obtaining licenses, concessions, government subsidies, other forms of protection from governments and appointments to key state owned enterprises through their close relationship with politicians and bureaucrats.

Gerakan K

You meant LGE and Penang properties developers ???

Andrew I

No, he means your ilk.

kingkong

Can’t you differentiate between INFRA and PROPERTIES?
Anyway, NKKHOO says his property friends made Tonnes of ringgits. So no need for cost benefits study. Also Gerakan Government allow the developers to abandon any projects and restart using another name.

Pitt St Boy

kingkong
NKKHOO nowhere to be seen these days at Anil’s. Some say he is joining Lynas nationwide roadshow to convince the people that Lynas is safe. We will greet him when he comes to Penang and probably Anil can interview him.

Ah Tuah

Our YBs simply love the mega infr$trutures…..hence Msia Book Of Record is created; memang BOLEH create revenue$ !!!!

sunnyooi

No need for research papers. If its built by BN then we know its gonna be overpriced. Common sense.

Andrew I

Gherky will deny this. He’s the champion of low cost housing. Where got expensive?