When the Sydney Light Rail got Heavy!
The Sydney Light Rail project was, and still is, a debacle. It was a singular idea floated by the New South Wales premier in 2012 and rushed through to secure another term for her government.
But it became apparent that the state government had withheld information to get this signed off quickly. They didn’t reveal that the excavation work along the path of the light rail was going to turn up a lot of relics, Aboriginal sites, underground water pipes, and underground wiring. These things were not featured in the plan and the construction company kept adding on costs for this. The State Government baulked at paying out more money but in the end they relented. Finally, it was opened in late 2019 at a cost of over $3.1bn, from an initial budget of $1.6bn in 2012.
There are lots of factors involved in making such decisions. Anyone involved in a big project realises there are lots of moving parts, including external circumstances that the project manager might not have any control over. But where there is a measure of doubt, where there are dilemmas to be solved, or where there’s significant disruption, it’s helpful to stop and contemplate the process of decision-making.
Could System 3 Thinking have improved the decision-making process?
The idea imposed by the NSW Premier was evaluated on its engineering merits and contracts were awarded relatively quickly. However, emotional regulation was suspended in the political heat of an election campaign. The Premier was insistent: ‘just get it signed off because I want to get re-elected.’
Focus wasn’t devoted to the community benefits but rather to a single idea driven by the Premier. A cost-benefit analysis wasn’t commissioned before the start of the project, so the likely social and economic knock-on effects were never questioned.
The project could have benefitted from harnessing a diversity of views and values. When the cost benefit analysis was eventually done it showed an unfavourable balance. So, a new appraisal was prepared for the NSW government in 2013. This shifted the cost-benefit ratio to positive after incorporating ‘non-conventional’ economic benefits, through monetising the value ascribed to a project by those who don’t use it. A nifty bit of creative accounting.
Project planners could have made better use of their life experience. They would have known about a similar light rail project in Edinburgh’s CBD that took six years to build as engineers struggled with ancient sewer pipes in the historic city centre. The final costs exploded from GBP 375 million to GBP 776 million.
Decisiveness is an important property of decision-making. But a more rigorous use of decisiveness is the ‘discovery process’. This seeks to uncover the concerns and considerations of stakeholders and engage in a process of networking and participation. It may take time, but it’s more likely to result in a coalition of support due to the multiple smaller decisions made by everyone involved. And it’s easier to resist competing or ill-conceived ideas being sold as a quick fix.
In the end, the trauma suffered by business owners in the central business district over seven years has never been compensated by the claimed social benefits of public transport. Had the planners approached the project with more compassion they might have seen the social, economic, and mental health costs in a more realistic light. Compensation could have been at the heart of the project rather than an after-thought.
System 3 thinking is the application of good judgement which seeks to balance the competing demands of political, economic, and engineering interests. The ‘idea imposition process’ of decision-making is four times more likely to lead to the failure of a project than the ‘discovery process’ according to Paul C. Nutt, Professor of Management Sciences and Public Policy and Management in the Fisher College of Business at Ohio State University.
System 3 thinking is a considered and practical framework which can be applied by engineers, economists, and governments to arrive at a decision which best serves ‘the common good’ rather than vested self-interests.
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