Zoo financially up the creek
Posted: Tue Jun 21, 2011 6:47 pm
Today the government paid the Zoo $2 million to alleviate its debt of $26 million. The debt is due, says the Zoo, to visitor numbers and sponsorships falling below projected levels, because of the GFC. But the Zoo management supports the claim in the same set of projections that its panda bears have injected $60 million into the economy.
I'm posting this as yet another example of business models based more on wishful thinking than anything else in the push to justify expenditure.
There is a long list in this state of optimistic business models produced by project promoters. While private finance is very wary of the provenance of such models, enthusiastic (or naive) politicians can usually be convinced to fund projects supported by dodgy estimates. Politicians react almost instinctively, and positively, to tempting offers of the publicity of a plaque unveiling. The publicly-funded projects are virtually risk-free for politicians. It takes a while for a project to be seen as a failure; the blame is rarely pinned on one person and in the period between the grand opening and the realisation that the project is a dud a smart politician can milk the forthcoming opening for all it's worth.
The expansion of the Adelaide Zoo is a perfect example. The old Zoo had chugged along for decades, not costing us too much.
Then everything changed. A new administration took over. Vast sums were spent on everything from animal accommodation to the zoo director's house.
Then came Wang Wang and Funi, and the hopes (and expenditure) pinned on them. Money was spent like water on a grandiose scheme centred on the panda bears. Additional staff were hired, many at high managerial salaries.
And woe to he who questioned whether two slow moving bears could support all this expense. Anyone voicing that opinion at a 'friends of the zoo' meeting was quietly asked not to bother coming back. I know - I asked the question.
With Mike Rann and his henchmen making as much mileage as possible out of the huge difference Wang Wang and Funi would make to our lives, it was heresy to ask to see the basis of the numbers.
So why is the panda-led zoo expansion in the red? The GFC, of course, according to the zoo director. Remember the GFC? It was a few years ago now, and affected Australia less than almost any other country, but it can still be wheeled out as an excuse for bad planning. No politician is prepared to front the cameras.
It doesn't matter anyway. The politicians have already benefited, and the taxpayer as usual will pay the losses and subsidise future operations.
The failed National Wine Centre was going to get 3,000 visitors per week, and had to be built at Hackney rather than Waite Institute or Roseworthy where wine making is taught because - get this - it had to be within walking distance of the major international hotels!
The failed Newport Quays development was going to provide hundreds of full time construction jobs for ten years... the tens of millions being spent to move the 24 employees of the SA Film Corporation from downmarket Hendon to leafy Glenside cannot possibly return the claimed amounts.
...and there are plenty of other examples. Many are carefully structured, like the AO redevelopment, to avoid the scrutiny of the Public Works Committee.
If for no other reason than to stop it happening yet again, we should analyse what went wrong, yet again, with this hyped public project.
Sadly, any move to analyse what went wrong (again) will not get much support from the main beneficiaries of the projects - the politicians.
I'm posting this as yet another example of business models based more on wishful thinking than anything else in the push to justify expenditure.
There is a long list in this state of optimistic business models produced by project promoters. While private finance is very wary of the provenance of such models, enthusiastic (or naive) politicians can usually be convinced to fund projects supported by dodgy estimates. Politicians react almost instinctively, and positively, to tempting offers of the publicity of a plaque unveiling. The publicly-funded projects are virtually risk-free for politicians. It takes a while for a project to be seen as a failure; the blame is rarely pinned on one person and in the period between the grand opening and the realisation that the project is a dud a smart politician can milk the forthcoming opening for all it's worth.
The expansion of the Adelaide Zoo is a perfect example. The old Zoo had chugged along for decades, not costing us too much.
Then everything changed. A new administration took over. Vast sums were spent on everything from animal accommodation to the zoo director's house.
Then came Wang Wang and Funi, and the hopes (and expenditure) pinned on them. Money was spent like water on a grandiose scheme centred on the panda bears. Additional staff were hired, many at high managerial salaries.
And woe to he who questioned whether two slow moving bears could support all this expense. Anyone voicing that opinion at a 'friends of the zoo' meeting was quietly asked not to bother coming back. I know - I asked the question.
With Mike Rann and his henchmen making as much mileage as possible out of the huge difference Wang Wang and Funi would make to our lives, it was heresy to ask to see the basis of the numbers.
So why is the panda-led zoo expansion in the red? The GFC, of course, according to the zoo director. Remember the GFC? It was a few years ago now, and affected Australia less than almost any other country, but it can still be wheeled out as an excuse for bad planning. No politician is prepared to front the cameras.
It doesn't matter anyway. The politicians have already benefited, and the taxpayer as usual will pay the losses and subsidise future operations.
The failed National Wine Centre was going to get 3,000 visitors per week, and had to be built at Hackney rather than Waite Institute or Roseworthy where wine making is taught because - get this - it had to be within walking distance of the major international hotels!
The failed Newport Quays development was going to provide hundreds of full time construction jobs for ten years... the tens of millions being spent to move the 24 employees of the SA Film Corporation from downmarket Hendon to leafy Glenside cannot possibly return the claimed amounts.
...and there are plenty of other examples. Many are carefully structured, like the AO redevelopment, to avoid the scrutiny of the Public Works Committee.
If for no other reason than to stop it happening yet again, we should analyse what went wrong, yet again, with this hyped public project.
Sadly, any move to analyse what went wrong (again) will not get much support from the main beneficiaries of the projects - the politicians.