(Discussion paper — November 2017)
The ‘Discussion Paper is a document prepared by EarthCheck Pty Ltd (also known as EC3 Global) based in Brisbane, Queensland. It relates to the Cowes to Stony Point Vehicle Ferry currently being considered.
The document is part of EarthCheck’s contractual arrangements with the Bass Coast Shire and in part with the Mornington Peninsula Shire.
The discussion paper is a ‘precursory’ document to a ‘Draft Business Case’ document, also part of EarthCheck’s contractual arrangements.
The exact purpose of the document is not clearly presented in the document, but suggests that it is a summary of a community consultation relating to the Cowes to Stony Point Vehicle Ferry concept.
It also suggests that there are details on the various methods used to obtain background data for the Business Case, which at a close review only reveals methods relating to the gathering of community input by way of surveys.
There is a brief reference to a variety ‘reports’ previously relating to the Cowes to Stony Point Vehicle Ferry. These reports date back to 1995.
It is interesting that EarthCheck, as well as the two shires have shied away from calling the Discussion Paper a ‘report’ or ‘study’ and this was perhaps a good angle to take. It is highly likely that most residents on Phillip Island are probably tired of hearing of any ‘Report’, or ‘Feasibility Study’ about the Cowes to Stony Point Vehicle Ferry…again.
If one closely analysed the document, you would not be wrong for thinking it was a ‘sales document’.
Although the reader is encouraged to participate in community input, from a strictly marketing point of view, the document is really trying to isolate any objections and address those in some manner by EarthCheck when finalising the ‘Business Case’.
The document heavily focuses on ‘support’ for the ferry through various ‘surveys’ undertaken and in general, focuses on the ‘benefits’ of the ferry.
EarthCheck have used various survey methods including emails, Facebook, links to websites and workshops.
I as the author of this article have interviewed a few residents. None of those I questioned knew anything about a ‘Discussion Paper’ or much about the current ferry proposal.
I mention this because it is evident that the efforts to reach a reasonable portion of residents with the surveys and/or this ‘Discussion Paper’ have failed. This lack of knowledge on the resident’s part raises the question of the value of this ‘Discussion Paper’.
Going back to the surveys that are mentioned in the ‘Discussion Paper’, the authors use ‘fuzzy terms’ too many times and mask the true meaning of issues or skew the perceived results of issues (such as a survey).
For example, they stated on page 12 of the ‘Discussion Paper’ that a survey of Bass Coast Shire residents and non-residents suggested that the “…majority were supportive of a vehicle ferry (79.7%) with 65% Very Supportive (Subject to a number of concerns). Meanwhile 16.9% were opposed in some way with 11.7% completely opposed.” (direct quote)
Let’s analyse what is really being said.
Of the 79.7% that were supportive 65% had conditions on their support. This leaves a mere 14.7 that are unconditionally in favour. To suggest that the rest are ‘Very Supportive’ even with conditions is misleading. Their ‘concerns’ are generally the same as those that are ‘opposed’.
Interestingly, the presentation of the survey results from Mornington Peninsula were not the same as Bass Coast Shire. No conditions were mentioned for those ‘Supportive’ of the vehicle ferry.
There are some fundamental reasons for this. From a community point of view, the vehicle ferry really does not create any ‘impact’ on most residents around the Stony Point location. It is far more important for the ‘Discussion Paper’ to suggest in some way that Phillip Island residents are supportive, which to date is debatable.
Moving on, we know that this ‘Discussion Paper’ is a document that has been released to the ‘public’.
Further analyses of the ‘Discussions Paper’ reveals some disturbing issues relating to the presentation of numerical data; both financial, as well as numbers used in supporting the financial data.
Although EarthCheck Pty Ltd has inserted a ‘Disclaimer’ on page 4 of this document basically ‘absolving’ them of any responsibility as to the accuracy of the document, they have a professional responsibility to not only their clients, but also to the readers of this document. This would include the information that was printed has been reasonably verified especially where the readers are relying on factual information to make informed judgements.
The readers of the ‘Discussions Paper’ are not only the residents of Phillip Island, but also those in Morning Peninsula and the clients of EarthCheck, the councils of Bass Coast Shire and Mornington Peninsula Shire.
EarthCheck has failed in many ways as to simply recheck and verify data sources, especially basic mathematical calculations.
Before we highlight some of those failings, we would like to start by doing a quick analysis of past information on the Cowes to Stony Point Vehicle Ferry; referring to some notable documents previously released that related to Cowes to Stony Point Vehicle Ferry.
- In 2003 there was a pre-feasibility study on a Cowes to Stony Point Vehicle Ferry by consulting engineers Arup.
- In 2008 there was a report released called the Bays and Maritime Initiative – Stony Point to Cowes Vehicle Ferry, by Maunsell Australia in conjunction with Deloitte Touche Tohmatsu Limited.
- In 2010 there was an ‘Economic Impact Assessment Report – Stony Point – Cowes Vehicular Ferry by Essential Economics.
- Then in 2016 there was a report called the Phillip Island and San Remo Visitor Economy Strategy 2035 and a sister report called the Phillip Island and San Remo Visitor Economy Strategy 2035, Technical Appendicles.
- In 2017 a ‘Discussion Paper’ is released by EarthCheck.
- In 2017 a slide presentation printout is released by Mark Olsen of EarthCheck that was made to the Shires.
The reason we mention these documents is because there is an overlap of data relating to the proposed vehicle ferry that is so extremely inconsistent that one would think that someone is saying: “Well, you did not like those numbers…how about these?”.
We look at each report as to what they ‘estimate’ the viability of a vehicles ferry could be. We use the ‘Medium Demand’ scenario that all the above-mentioned reports used as a benchmark for all their calculations.
‘Medium Demand’ means that based on the Vehicle Ferry total capacity only a certain percentage of people will use it so it will never reach its full capacity in the first year of operation.
It is important to see how these numbers are presented, especially when each report indicated that there was a strong support for the ferry.
In the table below we define the following:
- Construction costs relate to the Cowes portion.
- Construction costs and jobs were not mentioned at all in the Discussion Paper.
- Medium Demand is a percentage based on how many cars would be using the ferry based on the capacity of the ferry.
- Year 1 means the year the ferry starts operation.
- Visitor spend is the amount that has been attributed totally to those using the ferry.
- Sailing means the number of trips the ferry will take each day.
- Car capacity means the number of cars that can be loaded on to the ferry.
It is important to remember that ALL numbers you see in all these documents are only ‘estimates’ or ‘assumptions’. There are no historical facts or data that has been used to prepare those documents.
| Construction Costs | Construction Jobs | Medium Demand (First year) | Cars (Medium Demand,First year) | Passengers (Medium Demand,First year) | Additional Visitor Spend (First year) | Sailings | Vessel Car Capacity | |
| Arup (2003) | $26 mil | 285 | – | – | – | – | 5 round trips (10 daily sailings) | – |
| Maunsell/Deloitte/AECOM (2008) | – | – | – | – | – | – | 5 round trips (10 daily sailings) | – |
| Essential Economics (2010) | – | – | 60% | 109,500 | 323,000 | $6.3 mil | 5 round trips (10 daily sailings) | 50 cars |
| Visitor Strategy 2035 (2016) | $20 mil | 153 | 40% | 67,500 | 186,150 | $18 mil | 5 round trips (10 daily sailings) | 45 cars |
| Discussion paper (2017) | – | – | 40% | 52,468 | 166,179 (this is a calculation error. Corrected value is 169,540) | $18.9 mil | 5 round trips (10 daily sailings) | 36 cars |
| Mark Olsen, Keynote slides (2017) | – | – | 38% | 49,275 | 159,750 (the same document states 126,900 which is a calculation error) | $18 mil | 5 round trips (10 daily sailings) | 44 cars (the same document also states 30 cars) |
What is interesting however, is that ALL the documents suggested that there is strong support for the vehicle ferry in Cowes. Yet again today we are being presented with the Cowes to Stony Point Vehicle Ferry and again being told that there is strong support for the ferry.
If there was strong support years ago, why isn’t there any car ferry to Cowes?
Some other points should be made about the above-mentioned ‘reports’, ‘surveys’, ‘studies’ and so on.
You will notice that AECOM was involved in developing the 2008 report and interestingly involved in the ‘Discussion Paper’ and ultimately the ‘Business Case’.
We also point out that EarthCheck Pty Ltd also produced the Phillip Island and San Remo Visitor Economy Strategy 2035 document as mentioned in the table above.
EarthCheck went into partnership with some other parties to produce the Phillip Island and San Remo Visitor Economy Strategy 2035 document.
These include:
- TRC Tourism
- Michael Connell and Associates (also known as MCa)
- Jeremy Ward
It should be noted that TRC Tourism is made up of ‘associates’ and Michael Connell is one of TRC’s associates. There is no mention of any other person participating from TRC Tourism.
All those listed above are identified as being authors of the Phillip Island and San Remo Visitor Economy Strategy 2035 along with EarthCheck Pty Ltd.
There is no ‘disclaimer’ relating to Phillip Island and San Remo Visitor Economy Strategy 2035 and in fact they have stated that the information was correct at the time of print.
With regards the above-mentioned partnering authors, there are no references, to or any acknowledgement as to their contribution to the document.
The reason we mention this is that EarthCheck and TRC Tourism, Michael Connell and Jeremey Ward are also involved in the ‘Discussion Paper’ document.
In a recent email exchange with Mark Olsen of EarthCheck, there was a request to establish the ‘project team’ that was assembled to develop the ‘Discussion Paper’.
The response from Mark Olsen from EarthCheck was:
Hi [redacted]
The project team members are experts in their respective fields drawn from Melbourne, Gippsland, Brisbane, and Wellington (NZ). We don’t have a consulting team member in each location but work on a daily basis with the Council staff in both locations.
Our Ferry Operations Specialist is Jeremy Ward from East West Ferries and TRC. Our demand economist is Michael Connell (MCa).
The Steering Committee is made up of agencies across the State Government, local tourism representatives and both Councils. The consulting team report to, and are therefore not on, the Steering Committee.
The Steering Committee sign off on all publications developed by the project team.
Cheers
Mark Olsen
Exact copy of email with redacted recipient name.
EarthCheck
As it turns out it is the same team as (except for one) that produced the Phillip Island and San Remo Visitor Economy Strategy 2035 in 2016 have developed the current ‘Discussion Paper’.
We point out that Jeremy Ward owns and operates East West Ferries; a New Zealand based passenger ferry service similar to the one currently operating in Cowes today.
So let’s now focus on the ‘Discussion Paper’.
Throughout the ‘Discussion Paper’ there are ‘Tables’ that are summaries comprising of statistics, assumptions or estimates and are part of Section 3 page 18 called ‘Passenger Ferry Demand Model’. (Business Model)
A ‘Business Model’ is an abstract representation of an idea that is based on theory and not anything concrete.
In many of the Tables you will notice that they are based on ‘MCa modelling assumptions’.
You will see the word ‘assumptions’ or ‘estimates’ countless times when you review any figures or information presented in these Tables. It is important to remember that assumptions or estimates are just that and should not be relied on when making an informed decision.
Aside from the Tables presented in the ‘Discussion Paper’ that are based on MCa modelling assumptions, many of the ‘Demand Numbers’ are based on TRA (Tourism Research Australia) Tourism Regional Profile – Phillip Island 2015.
We accessed this TRA Tourism Regional Profile – Phillip Island 2015 and failed to see how any of the references to any numbers in the ‘Discussion Paper’ aligned with any of the statistical numbers in the TRA Tourism Regional Profile – Phillip Island 2015.
For example, on page 23 of the ‘Discussion Paper’ there is a reference to visitor data ‘derived’ from the TRA Tourism Regional Profile – Phillip Island 2015 as follows:
“For Day and Overnight Visitors – 42% would be overnight visitors (46,957) and 58% (64,007) would be day visitors.”
Exact quote from page 23 of the ‘Discussion Paper’
The above numbers were used in Table 3.8 on page 23 of the ‘Discussion Paper’. As hard as we tried, taking numbers from TRA Tourism Regional Profile – Phillip Island 2015 we could not get even close to the numbers used in the Tables. It was impossible.
You may wish to try yourself. TRA Tourism Regional Profile – Phillip Island 2015
Going back to Table 3.2 on page 20 of the ‘Discussion Paper’, ‘Additional Day and Overnight Visitors’ are estimated at 336,020.
This clashes with the number presented in Table 3.8 that is 110,964 (225,056 difference). We pause to summarise what we have learned so far.
- TRA Tourism Regional Profile – Phillip Island 2015 numbers referred to and used by ‘MCa modelling’ are impossible to align, calculate and understand.
- Table 3.2 of the ‘Discussion Paper’ Day and Overnight Visitors are quoted as being a total of 336,020
- Table 3.8 of the ‘Discussion Paper’ Day and Overnight Visitors are quoted as being a total of 110,020
So, even cross-referencing information in just two Tables shows significant misalignment and differences.
Next we look at Table 3.3 on page 20 of the ‘Discussion Paper’.
This table is suggesting significant increases of ferry use by residents travelling to and from work and students travel to their study or training locations in Melbourne. The numbers presented in Table 3.3
is wholly based on “existing proportions of resident travel on the Sorrento-Queenscliff Ferry”. (direct quote from page 20 of the Discussion Paper)
We suggest that this table was designed to be misleading.
It is very unlikely, based on the lack of any substantial and verifiable research and surveying of Phillip Island residents and surrounding area, that you could even remotely suggest that residents of Phillip Island would use the car ferry to travel to and from work and Phillip Island students would use the car ferry to travel to their study or training locations in Melbourne.
We will now go to Table 3.5.
There are numerous calculation errors in this table.
Based on annual Medium Demand Scenario of 39.9% of 131,400 ferry capacity the estimated number of cars using the ferry would be 52,429.
The Table shows 52,468. Minor difference but in any case wrong.
The Table shows annual estimated car passengers as being 115,430, annual estimated coach
passengers as being 21,900 and annual estimated foot passengers as being 32,210. If you add 115,430, 21,900 and 32,210 you get 169,540.
Table 3.5 shows a total of 166,179 a difference of 3361. Could be argued that is not significant, but it is wrong in any case.
Puts in doubt the accuracy of any figures presented in the ‘Discussion Paper’.
Moving on to Table 3.6, (page 22 of the Discussion Paper) we now know that estimated number of cars using the ferry should be 52,429 not 52,468 and the new estimated ferry users should be 169,540 not 166,179.
This means that generally and fundamentally any figures presented in Table 3.6 are inaccurate.
It seems that MCa (Michael Connell and Associates) and/or TRC Tourism as well as EarthCheck (Mark Olsen) should be questioned as to how they perform ‘veracity’ checks on their data before releasing the ‘Discussion Paper’ to the public.
We move on to Table 3.7. (page 22 of the Discussion Paper)
Numbers in this table are based on analytical data from MCa (Michael Connell and Associates) and
also based on numbers in Table 3.2.
We already know that the data presented in Table 3.2 is highly questionable to the point of being totally inaccurate.
Putting that aside for just a moment; Table 3.7 uses data from Table 3.2 for some of the table’s calculations.
In the Table 3.7 it shows ‘New Touring Visitors’ as being 55,216 or 33.2% of ‘Potential Visitor Market’ as shown in Table 3.2.
33.2% of ‘Potential Visitor Market’ as shown in Table 3.2 is actually 55,512. Sure a small difference but wrong.
In Table 3.7 its shows ‘Additional Day and Overnight Visitors’ as being 110,963 or 66.8% of the ‘Additional Day and Overnight Visitors’ as shown in Table 3.2.
66.8% of the ‘Additional Day and Overnight Visitors’ as shown in Table 3.2 is actually 224,461 not 110,963. This is a significant numerical mistake.
We stopped our analysis at Table 3.8 of the ‘Discussion Paper’.
We have taken the opportunity to review some basic but important calculations as to their accuracy contained in the ‘Discussion Paper’ specially those Tables we mentioned earlier.
We have come to the unfortunate conclusion that the ‘Discussion Paper’ is at the very least a very inaccurate document and it could be deemed misleading.
We suggest the Business Case process cease and that the ‘Business Case Discussion Paper’ be retracted from the Business Case process and re-developed possibly by another consulting firm.
It is only then that the readers of the ‘Discussion Paper’ can be confident as to the information’s accuracy and then make a reasonably informed decision.