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Thursday, April 16, 2009

Australia's import-led recovery

BOAB crunches the numbers on Kevnet and finds a lot of it doesn't add up. And the big winner?
I can see $16 billion being spent importing switches from China...
And Opposition Leader Malcolm Turnbull on the same subject...

The assertions [Rudd] made in his announcement and which he used to solicit investments from the public are not supported by a business plan, a financial study, advice from Infrastructure Australia or, so far as we know, anything other than his desire to get a big headline (it worked)...

Consider the Cross City Tunnel in Sydney. It cost nearly $1 billion to build; today, after a bankruptcy and its shareholders losing their investment, it is worth a fraction of that. Why? Because the owners' traffic assumptions proved to be wildly optimistic.

The non-blogging MSM have been extremely slow off the mark on Kevnet, which already has the strong whiff of a major stuff-up about it.

UPDATE: More about the technical difficulties from BOAB.

2 comments:

Boy on a bike said...

And I forgot to add that whilst the fibre doesn't wear out very quickly, the switches have a finite life. For tax and depreciation reasons, they probably have a life of 4-5 years; and you generally can't get support on them past that age anyway.

So you are up for a $16 switch bill every 5 years - and the whole lot will have to be imported.

stackja1945 said...

Rudd gets what from China?