Don't let the PoMC near my money!

The Economics of Channel Deepening....... an oxymoron

 

 

·        Project cost: $969,000,000 (almost $1 billion!)

o        As quoted by the Port of Melbourne Corporation (PoMC)

o        Does not included ongoing costs of maintenance dredging!

o        Approx. $500 million goes direct to overseas owned Boskalis, owner of the dredging ships

·        Project return: highest estimate $2.2 billion

o       As quoted by the State Government (even the PoMC says only $1.9 billion!)

o       Of the $2.2 billion, approx. $1.3 billion will stay in Victoria.

o       Total return up to 2035 – ie, over 27 years! This is only $81 million a year, not much in the greater scheme of things.

o       Mainly comprised of savings to shipping companies (local and overseas owned) and importers/exporters, who may or may not choose to pass the savings onto their customers. Even if they did, it would be such a small reduction, you’ll never notice it!

o       This figure is also based on old interest and exchange rates. It  has been said that current interest and exchange rates erode the return to $1.3 billion.

·        The government only ever quotes the total return of $2.2 billion – they always conveniently leave out “over 27 years”. They also never quote the $2.2 billion return in the same breath as the $1 billion cost – they keep these figures well separated.

·        This is a return of approximately 3.1% per annum compounding. The bank will give currently better than 7% for your money in a term deposit! To compare:


They would do far better just putting the money in the bank – and no environmental risk!

 

·        The government continually tells us that this project is critically important to the state’s economy. Where is the evidence of that?

·        Surely there are better investments for this money – without any environmental risk?

AND STILL THEY ARE ABOUT TO START!



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