National Broadband Network Justification "weak"

An international study finds that the benefits claimed for the NBN have been "grossly overstated". Evidence to support claims made for fibre-to-the-home networks was "surprisingly weak". The study says, "All else equal, faster is better. But faster technologies don't always triumph, witness passenger hovercraft, maglev trains, and supersonic airliners."
South Korea is cited as the world leader in providing fibre to homes, and national productivity dropped from 7.6% to 3.8% since their program was begun. The study finds this drop in productivity might have been partly because of "the massive increase in online gaming, facilitated by the high speed broadband."
When launching the NBN, Kevin Rudd predicted 78% of productivity gains. The basis for this appears to be a paper from Australia's Communications Department referring to gains of 59% to 78%, available from all forms of new technology, from biotechnology to containers, not just fibre broadband. Rather selective use of statistics, Kevin!

Kirkham Bridge - Transurban Position

Apparently the RTA and Transurban have advised that they don't have authority to demolish the Kirkham road bridge, their present approval covers single lane working over the bridge during the span extensions. It seems they are considering options, including demolition as a way to speed up the work, but would need extensive community consultation and a major planning approval process, before they could take up that option.

M2 Upgrade Conditions of Approval

This document, signed on 21 October 2010 by NSW Department of Planning, is available on the net at http://www.hillsm2upgrade.com.au/files/101021_M2%20Upgrade_Conditions%20of%20Approval.pdf.

It talks at length about the project's effect on waterways and wildlife, but makes no mention at all of disruption to the lifestyles of the people who use the Kirkham Road bridge over the M2 between Kirkham Road and Beecroft Road. Obviously if the bridge is completely closed even for a few days that would seriously inconvenience school kids who walk to and from school, and commuters who walk from home to the railway and bus stations in Beecroft.

One would like to think that the lack of information indicates that there is no intent to interrupt access to that road bridge. So why the rumours?

Section 5, "Community Information, Consultation and Involvement", requires the project to establish and maintain a website for provision of electronic information associated with the project. This will include a copy of each current strategy, plan, program or other document required under this approval.

A telephone number is to be provided on which complaints and enquiries about construction and operation activities may be registered, along with a postal address and an email address. These shall be published in a newspaper circulating in the local area prior to the commencement of construction and prior to the commencement of project operations. The details shall also be on the website mentioned in Section 5. So far as I can tell none of this has yet happened, so work cannot yet commence.

Section 5.4, Community Consultation, requires the project to prepare and implement a Community Communication Strategy for the project. The specification for this document is extensive, and so far as this blog can determine no such document has yet been published. So again presumably work cannot yet commence.

Section 6.3 requires a major Project Management Plan for the widening of the Norfolk tunnels. If there was a plan to demolish the Kirkham Road Bridge, which would be even more disruptive than widening the tunnels, then that must surely have been mentioned in great detail in this document. One therefore is forced to assume that no such plan exists.

As soon as any more information is uncovered, this blog will post it.

Australian Home Price reports

An article by Nick Gardner in the Sunday Telegraph says that property investors are being advised to hold off from putting money into Australian homes, given low yields and limited prospects for capital gain. He quotes Shane Oliver of AMP Capital as saying commercial property is a better bet than residential.

If home owners and investors lose faith in the housing market, then there could be a surge in properties being offered for sale. Indeed arguably this is already under way. Ray White Beecroft, tracking statistics in the Beecroft and Cheltenham areas, notes there are more properties listed for sale in the area than at any time in the last two years. The last dramatic rise in listings was in October 2008, at the peak of the Global Financial Crisis, when many people had to offload investments to pay margin calls and other debts.

But rents are going up dramatically, and as Ray White Development Marketing Group explained in the recent RWB Investment Seminar, an investment property becomes more attractive to the individual investor in these conditions, getting tax relief on interest and negative gearing on the income. Finance the property on an Interest Only mortgage, and use income to pay off your household debts.

The article finishes on an optimistic note. "The situation is less of a problem for buyers looking for a home, with experts saying that as long as buyers choose a property that they will be happy to live in for a few years, they will have time to ride out any fluctuations in house prices, and should not be put off buying."

Kirkham Bridge Roadworks Plans

The Northern District Times had an article on 31 October saying the Murray Farm/Kirkham Road bridge over the M2 in Beecroft "may be reduced to one lane of traffic for 20 months while it is lengthened" as part of the M2 widening.
Transurban and the RTA confirmed to the newspaper that this is one of the options being considered for when the project begins in January 2011, but the decision has not been finalised and a variety of measures are being considered. The residents of Beecroft and Cheltenham are entitled to know what the other options are. The latest report, from the BCCT, implied that they have heard the bridge might be demolished and not replaced for "at least six months".
Does it make any sense at all to be starting a Half a Billion Dollar project when such factors have not yet been decided? Before the NSW government signed the contract authorising this work to begin, the local residents should have been given full and open facts about their intentions, and where those intentions are not yet firm, the government, and the RTA, should have listed all possible options. And that list must be exclusive, so the contractor can't come up later with a new cheaper but more destructive, option. Nor should the contractor be able to charge the taxpayer for selecting a more expensive but less disruptive option.
An RTA spokesman apparently said "The impact of the proposed bridge closure on local traffic is still being assessed." This blogger can find no word on this in the earlier RTA and M2 Project documentation.
The spokesman went on, "Consultation with residents has not yet started and will be carried out before any decision is made."
The statements available so far are ambiguous, and could be read as meaning work on the bridge won't start for six months, and might be limited to minor lane closures. But the actual wording was that "it will be at least six months before a replacement bridge is constructed."

Kirkham Bridge

The M2 Upgrade Environmental Assessment document issued by the NSW Roads and Traffic Authority says under the heading "Adjacent road network - Activities undertaken within the adjacent road network are listed in Table 53", and that table shows
"Kirkham Street/Kirkham Street Lengthening of bridge spans over M2 Motorway." Clearly that does not cover demolishing the bridge, so presumably that reading of the RTA statements must be incorrect. But what are the RTA's plans as they affect residents of Beecroft and Cheltenham?

M2 Project intentions for Kirkham Road Bridge

Dear Fellow Resident,
This is an extract from an information sheet from the BCCT:

Beecroft-Cheltenham Civic Trust President Michael Stove’s media release below, raises real concerns about the integrity of our suburbs. The loss of the bridge across the M2 Tollway, linking Murray Farm Road and Beecroft Road, as below, is unacceptable. The Trust has contacted Greg Smith SC MP, NSW Member for Epping, to lead our representations to the appropriate NSW Minister, to reduce the huge impediment that the M2 augmentation will place upon our suburbs.

The attached photo has been sent to local media. I will keep you posted!

Regards,

Colin Johnston
Secretary, Beecroft-Cheltenham Civic Trust

This is the media release by Mr Stove:

Bridge demolition will divide Beecroft

Michael Stove the President of the Beecroft-Cheltenham Civic Trust said residents were very concerned by Transurban’s intended demolition of the Murray Farm Road Bridge, ahead of the widening of its M2 Tollway.

“Transurban has not provided residents with detailed information” Mr Stove said at a weekend gathering of concerned residents and local Councillors at the bridge.

Transurban’s media message is the M2 project ‘aims to provide efficient and integrated transport for the community of Sydney’s North-West’,” Mr Stove quoted. “Murray Farm Road bridge is a key link in Beecroft – its demolition is not transport integration”, Mr Stove said.

He added: “Beecroft will be a suburb divided. How do our students get to local schools, our elderly get to doctors and chemists? There will be no local link from Beecroft Road to the Murray Farm Road area of Beecroft.”

“Our community has to put up with M2 construction, with loss of greenspace and local amenity. It is unacceptable that Beecroft residents will also be cut off from shops, services, friends and neighbours by Transurban’s ill-considered bridge demolition.” Mr Stove also noted: “Transurban advises The start of major work is expected to commence in late 2010 and is expected to take approximately two years to complete. It will be at least 6 months before a replacement bridge is constructed.”

Mr Stove commented that there is an engineering solution which should be pursued by Transurban, instead of subjecting our residents to months of inconvenience.

Contact:
Michael Stove:
President, Beecroft-Cheltenham Civic Trust
0401 991 927

Sales Soft

Interest rate rises sent a tremor through the property market yesterday with softer auction clearance rates reported. Clearance rates were 54.6%, down on the 57.5% last weekend.

Buyers Fooled by Low Quotes

Posing as a potential buyer, a Sunday Telegraph reporter phoned 85 real estate agents and asked for a price guide on a property. Almost one in three of those agents turned out to have significantly underquoted.
The NSW Minister for Fair Trading responded "A blitz on under-quoting and dummy bidding earlier this year uncovered no evidence of under-estimating prices." One wonders how the OFT failed to find any evidence at all, when the Telegraph found one in three agents doing it.
She also said "The onus should be on the buyer to do their price research instead of relying on real estate agents." Thanks Virginia. All the buyer wants is that the agent be required to tell something approaching the truth, isn't that the definition of Fair Trading?
The problem is the conflict under which the agent operates. If he underquotes to the owner, he won't get the listing. So the agent puts an optimistic price on the agency agreement, just to get that precious listing, and then starts "conditioning" the vendor to accept less.
Meanwhile the agent quotes below the likely price to prospective buyers, to persuade them to invest in a building survey before going to the auction. Having made that investment, buyers are more likely to bid up rather than throw away that initial expense.
There is an easy answer for this. Vendors have to display the contract at the sale property during Opens. Why not also require them to display the Sales Agreement?

Commonwealth Bank Ups the Ante

In a move almost forcing a government response, the Commonwealth Bank followed the RBA's announcement of a .25% rate rise with an immediate .45% rise! The banks say they have to do this because of the cost for them to borrow money, but then they declare huge profits so it's hard to accept their argument.

There is much debate between the politicians on how to prevent this, but no action. Wayne Swan said last month that he was "looking at tougher powers to increase banking competition".

Banks are not like retail shops. Bank customers can't just walk into the shop next door when the shop they normally use raises its prices. Bank customers own mortgage for many years and moving to another bank involves large fees that are difficult to quantify in advance. There is no point moving your account unless you can be sure the other bank is going to keep their rates lower for long enough to cover those moving fees.

Surely the simplest solution is just to forbid banks from charging more than the actual cost of doing the paperwork when mortgage holders move their accounts elsewhere. Then a bank would have to try to retain its customers, instead of just milking them.

Interest Rates Up

Rather against expectations, Reserve Bank increased interest rates today. It will be interesting to see how this affects house prices.

"Solar Flare-up will burn Every Pocket"

According to the Sun-Herald, NSW households will pay an extra $600 on their electricity bill over six years to cover the $2 billion cost of the Kineally government's failure to cancel the solar power scheme when concerns were first raised.

Apparently so far the government has refused to admit when it first became aware of the problem, although Country Energy was telling officials in May that the target had already been breached. The government "dithered until August" before holding its review, which only reported last week. There seems to have been no reason why the 60c tariff could not have been cut back then, or at least a sunset clause could have been put on the duration for which the 60c tariff would be paid. Instead because the government did nothing for five months, NSW taxpayers are now saddled with this enormous and quite unnecessary problem in addition to all the unavoidable factors that are forcing up energy costs.

And lots of honest and respectable businesses are likely to be forced into bankruptcy by their inability to sell the stocks of solar panels they built up, in good faith, to meet the government's promulgated solar panel program.

I am all for green policies, but this one seems to have done as much harm as the Federal government's aborted home insulation program. The cost of paying the excessive tariff is likely to delay investment in the cheaper and cleaner generating plants that NSW desperately needs.