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» Feature Article

5th March 2000

Putting cables underground will it work?

John Dymond takes a look at a community group's attack of the Federal Government's latest report and finds the criticism justified.

» Background

The Telecommunications Act 1997 provides that the Commonwealth Minister of Communications must cause an investigation of options for putting telecommunications and other facilities such as electricity infrastructure underground. A working group was established by the Department of Communication, the Information Economy and The Arts ("DCITA") on 16 June 1997 with the task of examining the technical, economic, legal and social issues involved in putting existing aerial cables underground.

The DCITA working group released a discussion paper in mid 1998, and a final report later that year which was largely based on the discussion paper.

» Discussion Paper

The DCITA working group established the scope of the task as putting electricity distribution and telecommunications cable up to 33 kilovolts in urban and suburban areas (i.e. cities and towns down to the size of about 30,000 people, including suburban areas around these cities and towns).

The discussion paper successfully paints a pessimistic picture by focussing on a per property cost of $6,000 and unquantifiable benefits.

» Final Report

The Executive Summary and Key Findings section of the final report appear to be largely a repetition of the discussion paper. I note that whilst the discussion paper calculates a household rate based on 5 million households the final report states that the average household cost would be $5,516 per household, and increase from $4,800 per household in the discussion paper, despite the fact that the total estimated cost falls from $24 billion to $23.7 billion! This apparent disparity is not explained.

Scrutiny of Chapter 4 of the report, however, which discusses the benefits of burying cables in detail, provides some data with which to conduct a rudimentary cost/benefit analysis. Any such analysis should be done on a household basis as medium to high density living, prevalent in built up areas, leads to one property being made up of multiple households.

The report concludes that the indicative range of annual benefits is between $28 and $114 per household per annum. On this basis it would take between 41 and 167 years to recoup the initial cost, ignoring inflation etc.

» Criticism by Sydney Cables Down Under ('SCDU')

SCDU claims that the costs of burying electricity should be completely isolated from broadband telecommunications cable. No separation of costs occurs anywhere in the DCITA report, leaving one to speculate on how much it costs to bury electrical cable, a task naturally borne by the community as part of its essential infrastructure, and how much it costs to bury telecommunications cable, a task arguably to be borne by the commercial operators as part of their cost of sales, these operators benefiting directly from the estimated reduction in outages, maintenance costs, transmission losses etc.

SCDU claims that the benefit of reduced bushfire risks is material. It states that there were 486 bushfires in the three years 1994-97 caused by powerlines in Sydney alone.

SCDU is disappointed with the effort made to discern the benefit acuring from the reduction in losses caused by power outages that would result from underground cables. It points out that Energy Australia recently spent $40 million in undergrounding the northern beaches area in Sydney and the itemised outages comparison is 645 minutes in 1990/91, 238 minutes in 1995/96 and 191 minutes in 1996/97, and in their statement Energy Australia noted "more that half the interruptions were caused by trees".

» Conclusion

The DCITA report appears to be deficient in several respects. It emphasises the cost per property, whereas the key figure for consumers is the cost per household. It shows an increased rate per household in comparison with the discussion paper upon which it is based despite at the same time showing a reduced total cost, all without explanation. In any case this cost includes the cost of burying telecommunications cable, which arguably is a cost of the commercial operators who put it there in the first place, as they derive a direct commercial benefit from cable burial.

A further independent analysis of the benefits identified by DCITA, particularly those quantifiable benefits not adequately quantified, together with a segmentation of the costs involved so that community debate may take place as to how the cost burden should be shared, would likely provide useful information for all interested parties.

» More Information

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Those readers interested in reading the full DCITA report and/or the SCDU submission can do so by visiting www.dcita.gov.au.