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inland_rail

Inland Rail

Australian Rail Track Corporation (ARTC) Website

Critique of the Business case

PDF of the Business case

Page 3 Dot point 3

“Financial analysis indicates that Inland Rail would not generate sufficient access revenues to cover the full costs of the Programme, including capital…” It does not financially stack up?

Pg 8 paragraph 2 states in part that the Melbourne to Brisbane freight is dominated by road comprising an estimated 100 000 truck trips per annum and has a citation reference number of 20. No reference number 20 exists on that or subsequent pages.

The Sydney Freight Network has a curfew. Pg 61 Under heading for Sydney. If the larges city in Australia has such a curfew why not the 3rd largest? Or if the project is truly “Inland” why does it not also bypass Brisbane as it does Sydney?

The 5th last paragraph on Pg 74 states that sections of the Newell Highway corridor are currently operating at 55 to 70 per cent of capacity. It cites the NSW Government, ‘Draft Newell Highway Corridor Strategy’, pp. 70–7, 2014 as the source. Yet that report does not show that on that pages. Rather on page 74, table 4.1 which is a Level of service definitions indicates that 55% to 70%, time following, is stable flow conditions.

Others submissions about the inland rail. We are not the only one unhappy. From page 113 last dot point

Other ARTC web pages

ARTC awarded tenders have in some cases as 2500% variation in $value. Does this show the level of reliability of ARTC estimates

Exponential technological change affecting inland rail assumptions

If you read any document that has anything to do with financial advice it always has a clause that says something to the effect that past performance is not any indication of Future performance.

It is very good advice and something that astute investors always take into account.

However because of the modern technological era we are now living in this advice should be taken even more so into account.

We live in a period of exponential technological growth. One of the factors of this is what's called Moores law, Which basically says the computing power will double every two years. For those who sit outside of information technology this probably means nothing. However if your look back in history you will see the effect that this has had.

A feel examples:

Kodak was a multinational profitable company that was severely hit by what is called disruptive technology. Disruptive technology is were traditional ways of doing things, no longer apply. In the case of Kodak it was the making of film and developing photos. Digital imaging was so disruptive that Kodak, as it once was, no longer exists. It went bankrupt.

Another example of exponential technological development and how it disrupts businesses is the taxi industry. If you're told a owner of a taxi licence a few years ago that it will be worth far less than what it is today they would have told you “you're crazy”. That was before Uber and it's technology.

A third example would be Airbnb. Once Upon a Time only those that owned property where able to make money out of it. Today without owning any buildings or real estate at all, Airbnb is making big heaps of money.

Note, that in relation to the last two examples, that the organisations making the money do not reside in Australia. This is only been made possible by exponential technological development.

If you look at the history of the human race, most of our technological developments that have had the most effect on us, have only happened in the last 10 to 20 years.

A definition of exponential is: (of an increase) becoming more and more rapid.

But words mean nothing. It is better expressed in a picture/graph showing an exponential curve.

This graph only shows 10 iterations. If it were to show more the line would become almost vertical.

The business case put forward for the inland rail, which basically states that it is not financially viable, makes no reference whatsoever to exponential technological development. Yet it is a project (inland rail) that is projected to operate for many years into the future.

If exponential technology development was taken into account, it could be said that the inland rail project would never have got off the ground.

It is impossible, because of the exponential nature of technological development, to project what items may affect the future viability of an inland rail project.

However, here are some factors that some people are predicting for the future.

Because of the move to renewable energy, in the longer term energy would have almost a zero cost. The cost would be in managing it not producing it.

Because of artificial intelligence such as driverless road vehicles and the almost zero cost of energy (renewable vs fossil fuel), the cost of road transportation, including the transportation of goods, could reduced dramatically. There are no current plans to electrify the proposed inland rail.

3D printing could dramatically reduce the need to transport many goods.

Other technological developments could eliminate the need for transportation of goods, even food.

Those taking advantages of exponential technological development may provide future business models such that the current business models become obsolete.

Society may change such that more emphasis is put on intangible things such as happiness rather than physical goods, so reducing the need for such items

Some of the material that I got for writing this is from the documentary video: A future of abundance

https://youtu.be/PcWMn-dMYQg

If you think the above is not possible consider the words of Sir William Preece, Chief Engineer of the British Post Office in 1878

“The Americans have need of the telephone, but we do not. We have plenty of messenger boys“.

inland_rail.txt · Last modified: 2018/12/14 17:37 (external edit)