I understand.

Saving public money does not put a politician on TV.

It is much better to announce that you are spending $1 billion.

A new road.

A new bridge.

Some magnificent piece of infrastructure.

Probably unnecessary.

Possibly in a small town.

But located in a very interesting constituency if you want to be re-elected.

I get it.

Avoiding the need to build infrastructure is even worse.

You risk being called:

“Cheap.”

“Short-sighted.”

“Not committed to your voters.”

I get that too.

The problem is that spending for the sake of spending is terrible business.

For everyone.

I have had this conversation with officials and politicians many times.

You explain that if a corridor has a capacity problem, you may be able to defer billions in construction by introducing a toll or congestion charge.

You manage demand.

You reduce unnecessary trips at peak times.

And you raise money for the infrastructure you will eventually need.

Or for another project that is more urgent and has a better benefit-cost ratio.

The answer?

“No. People will complain that they have to pay to use the road.”

Yes.

They will pay anyway.

Through taxes.

Through public debt.

Or through the opportunity cost of not building something more valuable elsewhere.

The only question is who pays, when they pay and whether the system encourages sensible behaviour.

Apparently, these are difficult concepts to explain on TV…

Even… if my four-year-old son can understand them.

But… explaining them to voters might cost someone an election.

So it is easier to announce the billion-dollar project, smile for the photograph and cross your fingers that the thing does not blow up while you are still in office.

That is today’s reflection.

And if you work in infrastructure and need stronger arguments to challenge bad decisions before they become extremely expensive decisions, take a look to the links below.

They will not get you on TV.

But they might help you avoid wasting a billion dollars.

​THE ROOM: 15 Great Lessons of a Successful PPP Project​

​THE ROOM: The 15 Top Lessons of a PPP Project Nightmare​

​THE ROOM: How to Break Into PPPs (Without the Bullshit)​

​The ROOM: The ONLY way of doing a proper procurement process​

​THE ROOM: Back-to-Back PPP Gap Analysis Explained​

​THE ROOM: The Top 10 Errors That Kill Your PPP Deal​

​THE ROOM: How to Deal with Frustrating Lenders' Approvals in PPPs.​

​THE ROOM: THE ROOM: Minimum size for a PPP Project​

​THE ROOM: Buildings in PPP - Discussions with an African colleague​

​THE ROOM: Key Challenges and Solutions in PPP Highway Projects - 5 Clauses You Should Improve​

Or… of course, you can have them all… and many other interesting lessons in The Room.

​The Room​

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