Daintree Crossing Options / Cost Benefit Analysis shows Two-Ferry Option is Best

DOUGLASNEWS.NETWORK

• The Daintree River Crossing Options Report prepared by the Douglas Shire Council is not an economic analysis that governments would use to determine if an option is worth funding

• Cost Benefit Analysis reports are used to show if a project generates a net public benefit or cost

• The most attractive option for the State and Federal Governments will be one that has a net public benefit and is financially viable

• The Cost Benefit Analysis shows:  Two Ferry Option yields a $6.817 million net benefit while the Bridge Option yields a $40.644 million net cost 

• The net cost assumes that the Council does not borrow any money

• It is highly unlikely any government would commit over $60 million to build a bridge when the result is a massive cost instead of a benefit

DouglasNews.Network commissioned a Cost Benefit Analysis (CBA) to compare the Bridge and Two Ferry Options. The CBA was prepared by Mladen Kovac, a professional who prepares CBAs for governments.

A Cost Benefit Analysis is the government-mandated methodology used to show if a project generates a net public benefit or cost.  If it generates a net public benefit then the project is worth proceeding with.  A CBA is also used to decide which of two projects is the better option – that is, which project will give a larger net public benefit.  

It is important to understand that the Daintree River Crossing Options Report is not a CBA, though it does provide useful information that can be used in a CBA to determine which of the Bridge or Two-Ferry options is better.  From a State or Federal government perspective, the most attractive option is the one that has a net public benefit and is financially viable.

This CBA, using information from the Options Report (and other Council reports) has compared the Bridge and Two-Ferry options and shows:

Two-Ferry option: $6.817 million (a net benefit)

Bridge option: -$40.644 million (a net cost)

The CBA finds that the Two-Ferry option provides a much larger net public benefit than the Bridge option – the Two-Ferry option is $47.461 million better.  The Bridge option is so expensive that it results in a net public cost of $40.644 million.  

The Council’s Options Report finds that the Two-Ferry option is financially viable for the Council, but that the Bridge is not.  Taken together with the findings of the CBA, the Two-Ferry option is clearly identified as the preferred option. 

This CBA report is an important analysis because the Mayor has made it clear that the State and Federal Governments are expected to fund the full cost of a bridge, so that Douglas Shire businesses, residents and ratepayers will not be burdened with higher rates and charges to pay more than $60 million needed to build it. 

The net public cost of $40.644 million means that it is highly unlikely any government would commit over $60 million to build a bridge when the result is a massive cost instead of a benefit.