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What is Myki?
Myki (or, apparently, officially "myki") is a contact-less so-called "smartcard" ticketing system for public transport in the State of Victoria, Australia. The "myki" project begain in 2005 and is still not working properly in 2012 (it was supposed to be delivered in 2007). Its total cost is 1.5 billion Australian Dollars (that's $1 500 000 000), so far (August 3, 2012 - but it seems to go up every week or two, see below). You can read more about it at the wikipedia page on myki. A better explanation, however, is this flowchart explaining the myki system.

Just how in heck did a tram ticket system cost so much and take so long and still not work right?

Well, obviously the State of Victoria had to invent a whole new system from scratch. I mean, it's not as if anyone has ever done this before. And, after all, when you want something done quickly, efficiently, cheaply, and without endless problems, delays and general incompetence, the first thing you think is... yes, I'll get public servants to run it! Or, perhaps not. There may well be one or two reasons why myki is even more of a debacle than usual, which people without very expensive lawyers probably shouldn't write more about, so I won't. Some reasons are more likely than others, however.

What is this page for?

For those of us who don't work in government, dollar amounts like $1 500 000 000 aren't everyday occurrences that we are comfortable with throwing away on tram ticketing systems that don't really work. This page aims to put the cost of myki into some perspective.

A new unit of currency: the myki

Since governments routinely deal in (and often waste) dollar amounts in the billions and even trillions, dollars are an increasingly inconvenient unit of currency for measuring government expenditure (and/or waste). Using units of millions or billions is one solution, but there is still some confusion as to what a billion actually is (a thousand million? a million million?), and many people aren't comfortable with scientific notation (which involves superscripts so cannot always be conveniently displayed, such as in this HTML text for instance) or scientific e notation (a million being 1e+06 for example).

So I propose a new unit of currency that can measure government-sized spending in convenient figures: the myki, which is defined to be 1.5 billion Australian dollars ($1.5e+09). So myki cost 1.0 myki, and for example the new Mandurah railway line in Western Australa (70km, including 11 stations with 2 underground in the CBD) cost 0.64 myki.

If a government spends x dollars on some project, then that is x dollars it cannot then spend on something else (without raising another x dollars through increased taxes or borrowing). The other use of the myki unit of currency then is to enable easy comparison of just what else could have been done if not for myki. Just compute 1/c where c is the cost in myki of another project to see how many could have been built for the price of myki. For example instead of myki, the government could have built nearly 6 Royal Women's Hospitals, or bought London Stansted airport, or paid the entire research budget of the Walter and Eliza Hall Institute for more than 16 years.

 

What's 370 million dollars between friends?

I've used $1.5 billion dollars as the definition of a myki because that's what it (reportedly) had cost when I started this website in August 2012. However in only a few weeks, we find first that is actually now $1.52 billion dollars (The Age). And what do you know, only a week later they've chucked another $350 million (The Age) on the barbie. All that within a few weeks. And another few weeks later, we find they've thrown away another lazy $48 million (Herald Sun). We might also add the $30 million worth of short-term tickets and vending machines the government bought, then "physically destroyed" (Herald Sun), but really, only tens of millions, who cares? When, being government, these public "servants" (or, as they prefer to think of, and call, themselves, "executives", with "executive" salaries to match, at your and my expense) can just throw away hundreds or thousands of millions of dollars of Other People's Money for no reason at all (the supposed reasons are in a "report", the contents of which is, of course, a state secret, because why should the people who paid for this debacle be allowed to know why), why worry about the small change?

I think we can safely assume the cost will keep going up (both the actual cost will keep increasing and no doubt we'll learn about more costs already incurred that have been hidden so far). But for convenience we'll just fix the definition of myki at $1.50 billion, otherwise we'll have to keep redefining it upwards every few weeks, clearly.

A table of some things that cost less than myki

Description
Year   CountryCost (AUD)
Cost (myki)
Comments
Mandurah railway line
2007Australia$960 million
0.6470km of new railway line connecting Perth CBD with Mandurah, including 11 stations (2 underground in the CBD). The total cost of the New Metro Rail project was over $1.4 billion (including the purchase of a new fleet of trains and other works): still Less Than Myki. (Ref: Transport Textbook)
Space shuttle launch
2011   
USA$426 million
0.28Average per-mission cost of a space shuttle launch. (Ref: NASA)
Mars Rover mission
2007USA    $777 million
0.52Total cost of building, launching, landing and operating the rovers on the surface for the initial 90-Martian day primary mission. (Ref: MSNBC)
Construction of the new Royal Children's Hospital (Melbourne)
2012Australia   $1 billion
0.67 "a world-class, 357-bed tertiary paediatric hospital with state-of-the-art facilities ... Commissioned on time and budget, it features a stunning central atrium spanning six floors, a two-storey coral reef aquarium, a meerkat enclosure maintained by Melbourne Zoo, interactive Scienceworks displays, a Hoyts ‘bean-bag’ theatre and 85per cent single-bed room." [Infrastructure Partnerships Australia]
Construction of the Australian Synchrotron
2007 Australia      $221 millon
0.15"Officially opened in July 2007, the Australian Synchrotron is one of fewer than 40 similar facilities around the world. It is the largest stand-alone piece of scientific infrastructure in the southern hemisphere."  (Ref: Australian Synchrotron).
Construction of the new Royal Women's Hospital (Melbourne)
2005
Australia
$250 million    
0.17
"The Royal Women's Hospital is Australia's largest specialist hospital dedicated to improving the health of all women and newborn babies." (Ref:Royal Women's Hospital)
NASA Kepler telescope for extra-solar habitable planet discovery2009USA    $570 million0.38"The Kepler Mission life cycle cost is approximately $600 million. This includes the design, construction, launch and operation of the spacecraft as well as the scientific analysis of the data." (Ref:NASA Kepler FAQ)
Victorian Comprehensive Cancer Center2012     Australia$1 billion 0.67The VCCC is still under construction, but will feature: 160 overnight inpatient beds, 42 bed ICU, 110 same-day beds, clinical trials unit with 24 places, over 25 000 square metres of speciaised research space, 8 operating theatres, 8 radiation therapy bunkers, and space for hundreds of researchers. (ref: VCCC Project)
Endowment of the University of Melbourne2011Australia        $1.1 billion 0.73Currently ranked the best university in Australia, and consistently ranked one of the best, the "sandstone" University of Melbourne has one of the largest endowments of any Australian university, valued at $1.1 billion in 2011. (ref: wikipediaUniversity of MelbourneUniversity of Melbourne 2010 investment report)
London Stansted Airport2012England$1.5 billion1.0According to the Wall Street Journal, Stansted aiport has been valued at "up to" 1 billion UK pounds ($1.5 billion Australian dollars). It is the 3rd busiest aiport in London, serving 17.8 million passengers per year, 14 airlines and over 150 destinations, and with 11 000 sqm of retail space. (Ref:Wall Street JournalStansted Airport)
Airbus A3802012multinational$370 million0.25The Airbus A380 is the world's largest passenger aircraft. The average 2012 list price of an Airbus A380-800 is USD 389.9 million. (Ref: Airbus aircraft list prices 2012)
Burj Khalifa2010United Arab Emirates$1.425 billion0.95The Burj Khalifa (formerly Burj Dubai) is a skyscraper in Dubai that is the tallest manmade structure in the world. (Ref: wikipedia)
Tokyo Skytree2012Japan$766 million0.51The Tokyo Skytree is the second tallest structure in the world. (Ref: wikipedia)
Cubbie Station2012Australia$350 million 0.23Cubbie Station is Australia's largest cotton farm, being sold for "between $320 million and $350 million". According to Barnaby Joyce it is "Our biggest agricultural asset, our biggest farm in value, our biggest hold of water licence, a property responsible for ten per cent of our nation's cotton crop". According to a rather more credible and reliable source (wikipedia) it is the largest privately owned irrigation property in the Southern hemisphere, and its own website says it is 93 000 hectares in area (Ref: ABC News; Cubbie Station; wikipedia)
50 new trams2013Australia$800 million0.53The Melbourne tram procurement program to build 50 new trams and associated infrastructure [yes you and I might think that a ticketing system is just some 'associated infrastructure' that you bolt into a tram for an extra few thousand dollars - kind of like a cupholder or CD player in your car - but not in Myki World], upgrade route 96 and upgrade the Preston workshop and Southbank depot is only supposed to cost $800 million. (Ref: Public Transport Victoria) [Note PTV has nothing to do with myki, which is so "special" it has a dedicated authority packed with "directors" and "executives" just to "manage" myki - it doesn't actually do anything itself either, it is all contracted.]
Net assets of Victoria Police2011Australia$1.188 billion0.79The balance sheet for the Victoria Police in their annual report 2011 lists their net assets as $1 188 055 000. (Ref: Victoria Police Annual Report p.106 [also get this if you subtract liabilities from assets on p.25]).
Total assets of Ford Motor Company of Australia Limited2011Australia$1.5 billion1.0"Ford Motor Company of Australia Limited is a large public company with annual revenues of $2.8 billion and assets of $1.5 billion at last count. It is also an economically significant company to the Geelong region of Victoria." (Ref: The Age).
Portfolio of 70 Woolworths supermarkets2012   Australia & NZ$1.4 billion0.93"RETAILER Woolworths today will launch its $1.4 billion Shopping Centres Australasia Property Group covering 70 marketplace supermarkets, including New Zealand stores." (Ref: The Sydney Morning Herald).
Largest donation ever made for Australian university scholarships
2013     Australia$50 million0.03"A DESIRE not to "poison" his own children with wealth has led a businessman to pour a whopping $50 million into the education of strangers in the largest donation ever made to Australian university students. Twenty-five undergraduates will score scholarships worth up to $100,000 each over the next five years - creating 125 scholarships all up over that time. The scholarships are set to run in perpetuity over the next 20 years."
(Ref: Herald Sun)
Market capitalization of JB Hi-Fi2013Australia$1.2 billion0.80JB H-Fi is a retailer of TVs, computers, whitegoods, stereo equipment, portable audio devices, digital cameras, music, movies and computer games, with over 150 stores around Australia. It is the number one retailer of Apple hardware products in Australia, selling more than Apple retail stores. JB Hi-Fi reported a half-year profit of $82 million for the half-year ending December 2012. (Ref: The Weekend Australian 16-17 January 2013 [not online]; JB Hi-Fi half-year report for the half-year ended December 31 2012wikipedia)
F35 Joint Strike Fighter 2012USA$225 million0.15Unit cost for each F-35C (including weapons systems). Bearing in mind that the Joint Strike Fighter program is the world's most expensive defense program (total cost $395.7 billion USD) with notoriously bloated prices and infamous cost overruns. Yet the unit price of a fully equipped F-35 is still only 0.15 myki, i.e. less than 1/6th of the cost of a bad tram ticketing system. (Ref: ABC TV "Four Corners"wikipedia)
Record-breaking annual fundraising by Stanford University2012USA$983 million0.66"STANFORD University has set a new record in tertiary education fundraising in the US, becoming the first institution to collect more than $US1 billion ($A970.69 million) in a single year." (Ref: The Australian)
Total annual budget of the Australian Research Council2012Australia$915 million0.61The Australian Research Council (ARC) is the Australian government agency that funds research in all Australian universities. In 2011-2012, the ARC funded 1761 projects via National Competitive Grants Program worth a total of $741.8 million (0.49 myki). (Ref: ARC Budget 2012ARC Annual Report 2011-2012)
Victorian Life Sciences Computation Initiative (VLSCI)2008Australia$100 million0.07VLSCI provides a "high performance computation facility accessible to all Victorian Life Sciences researchers and staffed by technical experts who will maximise the user experience. The Facility is now operating at over 855 teraflops". VLSCI has 3 supercomputers: an IBM BlueGene/Q with 65536 PowerPC based cores and peak performance of 838.86 teraFLOPS, an SGI Altix SE cluster with 1088 Intel cores and peak performance of 11.6 teraFLOPS, and an IBM iDataplex x86 cluster with 688 Intel cores and peak performance of 7.3 teraFLOPS. In June 2012, VLSCI's BlueGene/Q was Australia's fastest supercomputer and was ranked 31 on the TOP500 world list of supercomputers.  (Ref: VLSCITOP500)
National Computational Infrastructure (NCI)2012Australia   $100 million0.07Overtaking VLSCI's BlueGene/Q, the National Computational Infrastrcuture's Fujitsu Primergy Supercomputer is now the fastest in Australia and number 24 on the TOP500 list (November 2012). "The supercomputer has approximately 57,500 cores, 160 TBytes of main memory, and 12 PBytes of disk – comparable in scale to about 30,000 desktop computers working together in parallel – and capable of achieving an internationally competitive peak performance of 1,200 TFlops. " Note that the $100 million is the total cost of the whole NCI infrastructure - the actual supercomputer is only $26 million (0.017 myki). (Ref: NCICIO magazineTOP500 [Nov. 2012])
Total annual research expenditure at Walter and Eliza Hall Institute (WEHI)2012Australia$89 million0.06"The Walter and Eliza Hall Institute is home to more than 650 researchers who are working to understand, prevent and treat diseases including cancer, particularly blood, breast, lung, ovarian and colon cancers; chronic inflammatory diseases such as type 1 diabetes, rheumatoid arthritis and coeliac disease; and infectious diseases such as HIV and malaria."
Another way to look at it: the net assets of WEHI are $364 million (0.24 myki). So 1 myki is enough to buy all of WEHI's assets and still be able to pay for its research budget for more than 12 years. (Ref: WEHI 2011/2012 annual report)
Amount of money allegedly defrauded by allegedly corrupt members of NSW alleged Government in alleged "corruption on a scale probably unexceeded since the days of the Rum Corps" (allegedly)


2013   Australia$100 million0.07Findings of the Independent Commission Against Corruption (ICAC) include allegations that the Obeid family benefited by an allegedly corrupt tender process in such a way as to profit by 'up to $100 million', in 'corruption on a scale probably unexceeded since the days of the Rum Corps'. Or to put it another way, the largest scale corruption  in government in NSW history (allegedly) only robbed the people of the State of NSW of 0.07 myki.
(Ref: ABC NewsSydney Morning Herald)
The City of Melbourne's top 10 properties2013    Australia$1.19 billion0.79The value of the City of Melbourne's top 10 property holdings: Royal Park, Fawkner Park, Fitzroy Gardens, Kings Domain, Princes Park, Melbourne Town Hall, Queen Victoria Market, Council House, Flagstaff Gardens, Birrarung Marr is $1.191 billion dollars [from the table in the paper edition of the Weekend Australian Sept. 14-15 2013, p.38; table not online, original figures from Melbourne City Council to be released in annual report]. According to The Australian, even the total of the top 20 properties is "close to $1.5 billion". In other words, if the City of Melbourne sold all of its top 20 properties (including the Town Hall, Royal Park, etc.), that would still not be enough to pay for the myki debacle.
(Ref: The Australian)
Estimated current value of the Empire State Building2013USA$1.48 billion0.98"By contrast, New York's 102-storey Empire State Building has a price tag of $US1.4bn ($1.48bn)".
(Ref: The Australian)
Largest donation ever made to Australia's higher education sector2013   Australia$65 million0.04"MINING magnate Andrew Forrest will tonight announce one of the biggest philanthropic donations in Australia's history: a cash gift of $65 million to fund research at five universities
...
It will rank as one of the biggest made to Australia's higher education sector, eclipsing the $50m that billionaire Graham Tuckwell donated to the Australian National University earlier this year."

(Ref: The Australian)
NASA MAVEN Mars spacecraft2013USA$712 million0.47"NASA has launched its unmanned MAVEN spacecraft toward Mars to study the Red Planet's atmosphere for clues as to why Earth's neighbour lost its warmth and water over time.
...
The flawless liftoff of the $US671 million ($712m) spacecraft kicked off the 10-month journey to the Red Planet."
(Ref: The Age)

Conversions from USD to AUD are made at an exchange rate of 1 USD = 0.95 AUD (approximate rate at August 2012).