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Greater Auckland Launch Party (photo by: Non-Motorist @bythemotorway)

Late June we launched GREATER AUCKLAND (GA) – a non-profit group that recognises Auckland’s untapped potential. We call for smarter thinking on the problems our city faces: investments in quality public and active transport, and more housing choice.

GA Logo

One area we think it should help is in providing more clarity to organisations we work with and advocate to. As an example, in the past some organisations have been unsure how to deal with us – is the blog media or advocacy? In many ways it’s really a bit of both – and that confusion can affect how they engage with us and us with them. We believe that providing more formality around what we do should help in furthering our aims. It should also assist in how we undertake activities such as raising funds.

Greater Auckland’s main objectives are:

  • To provide commentary and encourage intelligent debate about transport and urban issues, in Auckland and across New Zealand.
  • To advocate for transport modes and systems that provide choice and effectiveness, including, but not restricted to, public transport, cycling and walking.
  • To operate a blog on transport and urban matters.

While we have over 30,000 unique monthly visitors and over 5,000 daily page views, we would like to be able to say that we are supported by thousands of people from Auckland and beyond.

We’ve been a bit quiet since our launch dealing with a few things behind the scenes – such as a legal challenge but now we’re ready to get going again. Showing your support is as easy as signing up as a supporter on the Greater Auckland website – it doesn’t cost anything and you won’t be bombarded with emails.

If you would like to help us further then we’d also like you to become a paid up member. The money raised will go towards supporting the costs of running the blog, as well as other things we have planned such as giving the blog a makeover. We also plan to use the funds to help support the advocacy we do.

Membership is $50 per year although there is a lower price for students or unwaged members. In exchange for helping us you’ll also get the first chance to come to events we hold – such as meeting international experts who visit Auckland.

There is also a donation option if you would prefer a one-off payment option.

If you sign up as a paid member by the end of next week you’ll be in the draw to win one of two copies of Britomart: The Story, a beautiful hard-bound 228 page book with stunning photography from Britomart Group.

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Thank you for all the support you’ve given us in the past and I hope you can join us in helping make Auckland even greater.

ATs solution, hope growth slows

We’ve questioned before whether Auckland Transport have bought enough electric trains. This has been prompted by repeated experiences of myself and others of packed trains at some times of the day. At the peak of the peak this is not unexpected but at that time services are also normally run by 6-car trains. The concern has been around services just outside of the peak where only 3-car sets are run.

Full EMU

We are also aware that there are still a few more new trains yet to come into service which can be used to lengthen existing trains and hopefully increase frequencies on the Western Line.

Yet with the extremely strong growth in train use that Auckland is experiencing any extra capacity we have will quickly be used up. It seems that AT’s solution to this is simply hope the level of growth starts to fall.

AT Metro general manager Mark Lambert said if the slowdown in growth did not fall to near the 5 percent forecast in 2017/18, the agency would consider options.

“If there’s crowding and either we can’t afford to, or there’s a long lead-in time for additional trains, an option could be, for example, to reduce fares either side of the really congested peak period to encourage people to take the less patronised services”, said Mr Lambert.

Mr Lambert said it was too soon to consider whether occasional crowding during the peak was a problem, as additional trains were still to be added, and teething troubles with new technology can disrupt travel patterns.

The agency’s decision-making is locked into forecasts made by a planning model agreed with the Government, called APT3, which would share the cost of any extra trains.

It said so far, the growth was in line with APT3, and if the existing fleet could cope until the opening of the City Rail Link in the early-mid 2020s, that downtown loop would boost the capacity of the rail network by allowing trains to circulate more frequently.

That’s quite an extraordinary statement really for an organisation that should be doing everything it can to boost growth and of course plays right into the hands of the government and Ministry of Transport who have said something similar as a justification for not starting the CRL earlier than 2020.

We expect to see continued strong rail patronage growth until around 2017/18, as the full electric train fleet comes into service and the new bus network is rolled out. From 2017/18, we expect the rate of patronage growth to slow.

The thing I do agree with though is the suggestion that AT should be looking to ideas like cheaper off peak fares to try and spread the peak out. But that is something that should be being done anyway rather than waiting till trains are full.

Another solution I heard suggested was to run some shorter running services on the western line to pick up people in the inner west. This would be a very poor way for AT to treat long suffering western line passengers in my opinion.

In another story it also seems that AT are looking in to whether they could add batteries to some trains to allow them to travel to and from Pukekohe without actually installing wires. If feasible this seems like it has the potential to be a good solution to get electrics’ to Pukekohe sooner.

Auckland Transport general manager Mark Lambert said he was in talks with the electric train manufacturer to see if whether could put enhanced battery technology into the existing trains, so they could get to Pukekohe.

The main issue with it would be that AT have said in the past that to extend electrics to Puke they would need at least two additional trains – possibly more. Without buying more trains that means trains would have to be pulled from current services which won’t do anything to help the crowding issues.

In the please no discussion about adding extra carriages, we’ve seen that a lot already.

Rail to the Shore for $11 billion ….. what?

As most of you are probably be aware, we’ve long suggested that we need to change our thinking about any future Waitemata Harbour Crossing. A $4-6 billion road tunnel and dramatically widened northern motorway which will only serve to flood the city centre with cars at a time when we’re trying to make it more pedestrian friendly.

Instead we’ve suggested that we need to look at completing the missing modes. These can provide a form of resilience in their own right, much like the BART tunnels in San Francisco did after the 1989 Loma Prieta earthquake. Soon Skypath will provide the missing active mode piece of the puzzle which leaves just a transit crossing as the missing component.

Given any new crossing will almost certainly be in a tunnel we believe that any dedicated transit crossing should be a rail one. This is for a number of reasons such as having greater capacity, not needing to deal with fuel emissions and from a purely political point of view, the idea of rail to the shore is a popular one. As we understand it, the current plans will see only one new crossing built – a road crossing. The NZTA have told us they will leave space in the designation for a rail crossing, either as a combined road/rail tunnel or separate tunnels next to the road ones. None of the options would include connections on either side of the harbour so regardless a rail crossing is a completely separate project and one for which the justification to build will be destroyed thanks to the new road crossing.

We believe that a rail tunnel could be built for much cheaper than a large road tunnel and that the money saved on the tunnel itself could then go to providing rail connections on the North Shore. There are actually a number of ways rail could be connected to the North Shore. I suspect many in the wider public would just see it as an extension of our existing rail network however this is our least favourite option. Other options include a Vancouver Skytrain style Light Metro system and AT’s recent infatuation with Light Rail also presents that as a potential option. I should point out that at this stage I don’t have a clear favourite but I do very much like the extra coverage that might be able to be achieved with the latter option.

To gain consent for the road tunnels the NZTA will have to show that they’ve properly investigated alternative options. This the failure to do this was one of the reasons they got tripped up over the Basin Flyover. We do not believe that the NZTA have properly investigated a transit only crossing as an option. This view was once again highlighted this week when they pointed us to a 2010 document which claimed a rail crossing would be astronomically expensive. By that I mean $11 billion+ expensive.

So how on earth would a rail crossing cost $11 billion? Here’s how it seems some of their thought process have gone.

They Say a rail alignment has to take in both Takapuna and Albany in a single alignment. The location of Takapuna being someway to east of the motorway is an issue and one of the reasons it’s not served by the busway. They also note that a rail corridor along the existing motorway would require substantial work to modify including pushing retaining walls by back 3m. In addition they note that other areas of higher density are not right next to the motorway – this is no surprise as motorways tend to push density away.

Next they dismiss high level operating patterns they effectively say buses are better because you can run them on lots of different (infrequent) patterns including express buses straight to the city. In contrast rail would require some people to use feeder buses – oh the humanity. Of course this was from all before the new network which in large part will see a lot more of the system operating like the rail diagram.AWHC 2010 PT Plan schematic

Taking the above into account they then try to join them all together in a rough alignment as is shown below, squiggling all over the North Shore. As you can see the line goes all of the place in a bid to serve various pockets of population and development.
AWHC 2010 Rail Alignment 2

As I’m sure you can imagine, getting consent for a project like this would be no easy task. Such an alignment would also create even more severance issues in many places on the shore. To deal with that the authors of the report state that the rail line would instead need to be underground. An entirely underground North Shore line, you can almost hear the dollar signs racking up.

Unfortunately it doesn’t stop there. Once in the city they want to send it somewhere else – ideally to link up with the existing rail network. Two options are shown for this, trains either going via Britomart then another tunnel up through the city to Newmarket or going via Aotea. The Aotea option is shown below.

AWHC 2010 Rail Alignment City Centre 1

 

So to get rail to the shore the NZTA are saying that we need a tunnel from Newmarket all the way to Albany, no wonder it will cost so much.

AWHC 2010 Rail Alignment costs

Lastly it briefly covers whether the project could be broken up and staged. Once again the short answer is no because it would limit the benefits available.

All up this appears almost like some kind of hatchet job deliberately designed to make rail look like a much inferior option. Given all the changes that have occurred in transport in just the last five years it seems it would be a good idea for the NZTA and AT to go back to the drawing board on this project and come up with some fresh thinking. We’ve been told that work is going on between the two agencies looking at what the future of the Rapid Transit Network on the shore is but it sounds like that is limited by not questioning whether the road tunnels happen. I also wonder if it will end up looking something like this from 2012.

Lots more Double Deckers on the way

Some good news today with AT and some of Auckland’s bus companies all confirming there will be 53 new double decker buses on the roads soon.

Northern Express IMG_4447

A fleet of 53 double-decker buses will be hitting Auckland roads from October. The announcement was made today by Auckland Transport Chairman Dr Lester Levy at Kiwi Bus Builders Ltd in Tauranga, where some of the buses will be manufactured.

At the same time, Transport Minister, Simon Bridges outlined new regulations which will allow the vehicles to operate on New Zealand roads.

The new buses are being introduced by three of the main operators in Auckland – NZ Bus (23 buses), Howick & Eastern (15 buses), and Ritchies (15 buses). Each can carry more than 100 passengers; conventional buses carry between 45 and 70.

With the exception of two “proto-type” vehicles built in the United Kingdom, the Howick and Eastern and NZ Bus fleets will be manufactured in Tauranga. The Ritchies Buses will be built in China and will be delivered and operational in January 2016.

Double-deckers have already been pressed into service, with great success, on the Northern Busway (between the North Shore and the CBD).

Dr Levy says an unprecedented increase in public transport patronage looks set to continue and the investment in the new fleet by companies such as these reinforces that confidence. This is one of the single biggest private investments in public transport infrastructure in Auckland ever, he says.

“There is only so much road widening we can do in some areas so we have to look at more innovative and different ways of utilising what is a limited space. Double-deckers, along with increased frequency and reliability on buses and trains are key to reducing the city’s number one problem, which is congestion.”

A separate press release from NZ Bus says that will be buying Enviro500 double decker buses from Alexander Dennis Limited (ADL) and I assume Howick and Eastern will be doing the same (seeing as Brian Souter, the owner H&E also owns part of ADL). They also say:

NZ Bus has agreed with Auckland Transport for fifteen of the buses to be introduced on Mt Eden Road, and eight buses on the 881 service on the North Shore. With both of these corridors experiencing passenger growth, due to significantly improved service performance, the introduction of double decker buses and an additional 30 percent capacity is expected to help generate even more growth.

The new buses will be assembled at the Kiwi Bus Builders plant in Tauranga and are expected to be introduced into service between April and July 2016.

This is good news for PT in Auckland – although a shame it seems that they’ll just miss the annual March Madness. Routes such as Mt Eden Rd are frequently full and I’ve heard of people waiting at stops watching up to 12 buses go past completely full. Double Deckers are also a useful interim step before considering more expensive ways to increase capacity – such as with light rail.

I’m looking forward to seeing more of these on the road.

Guest Post: $1 billion Fletcher/Crown housing development — Christchurch CBD – Part 3

This is part three in a five part series of guest posts on the Christchurch rebuild from reader Brendon Harre. It first appeared on the Making Christchurch blog.

You can read Part 1 and Part 2

Part 3: Is the Fletcher/Crown development exploitative?

Brendon Harre - Chch Part 3 - Henry George Sign

What did Mike Greer mean by “politicking on houses”? If one uses standard urban economic geography analysis to examine this situation we get some understanding of what he might of meant (note I have never met Mike Greer so this is an educated guess). The following graphs show how key variables of a typical city change from the centre to the edge of the city.

Kulish et al (2011) unconstrained

Visually these graphs would depict the following type of city.

Missing Middle

The key point is that house and land prices are typically higher in the city centre and decline towards the edge of the city. For cities it really is all about location, location, location.

Why are centrally located properties worth more than peripheral ones?

  • Centrally located properties are closer to public and private amenities — shops, parks, restaurants, entertainment, customers, employees and places of employment. This is a basic geometric law — the centre of a circle is the point closest to all other points within the circle. Note as cities get bigger they evolve secondary peaks and move from monocentric to polycentric. Also views, sun, proximity to waterfronts and other factors can skew this otherwise simple model but as a general rule the model is quite predictive.

So when one is discussing the property prices of a city you are really talking about a 3D curve. With site prices varying with location –x and y dimensions. But a city can be built in three dimensions –X,Y,Z or ‘out and up’. Businesses and residents choose where to locate themselves based on price, land area, floor area and whether to be more centrally or peripherally located.

The key features of the graphs being how high the central values are, what the median value is and how low the peripheral values are.

Actual land values in Greater Christchurch vary from industrial land in Izone Park and Carter’s Group Iport in Rolleston 20km South of Christchurch. A price list obtained by NBR shows lots being advertised for $125 a square metre up to $160 a square metre (in Rolleston). According to an industrial specialist Greg Mann, the price of similar land closer to the city at Wigram is $300–350 a square metre and at Hornby $225 a square metre. This price rises to around $1000 a square metre for the Crown’s purchases of central city land of the Eastern Frame and $3000 to $3,500 a square metre for land under the proposed convention centre adjacent to Cathedral square.

To reduce median property values to get affordable housing, the whole curve has to move lower, site prices in real terms have to be stable or falling in all locations. Construction costs have to be falling or at least stable for all locations. Then competition from cheaper new builds will cap rising prices of existing property.

There is an argument that cities need a supply vent that can quickly respond to increased demand to prevent excessive increases in land and property prices. That supply vent needs to be some combination of ‘up and out’. Typically affordable housing advocates such as Demographia argue that access to cheaper rural price fringe land through the competition effect keeps more centrally located city land prices lower and therefor median property prices affordable. They argue ‘up’ by itself is not enough to keep the property market stable. This article will focus on the other end of the market, on whether there is competition in the inner city section of the Christchurch property price curve. The underlying question is: does this section of the market need competition too?

Affordable housing has been a stated aim of this government since prior to their first election in 2008. How have their actions in rebuilding Christchurch since the earthquakes of 2010 and 2011 been towards achieving this aim?

The business model of the Fletcher/Crown agreement is that this entity would use it monopolistic control over a large part of the centre of Christchurch to extract the maximum profit possible from both the underlying land and the housing units. In other words to push up the city centre section of the property price curve as high as possible. It is hard to reconcile this monopolistic profit maximising business model against the governments long expressed goal of improving housing affordability.

Monopolistic suppliers achieve pricing power by restricting the amount supplied to the market in such a way that prices rise. In the real estate game this is called land banking. Typically land bankers exploit the difference between rising demand and inadequate new supply -delayed due to regulatory or infrastructure failure. The suspicion is that Fletchers Christchurch CBD development will price for the top dollar and if it doesn’t achieve that, it will slow construction down, until it receives the desired price. At the time Eastern Frame land was acquired by the Crown (with the threat of compulsory acquisition) many land owners questioned the morality of this “land banking acquisition process”. Many commenting on the Press’s article “Owners riled by eastern frame plan”. Here is a few examples.

Stolenbytheccdu 666 days ago

“Brownlee said the Crown did not stand to profit from on-selling parcels of frame land.” yeah right. The prices they paid for the eastern frame were low. The Government stole that land.
Freethinker 666 days ago

Great to hear Govt will make no profit on land sales so there will be no reason not to disclose the govts purchase and sale price and if there is a profit this can returned to the owners — and father christmas will visit all believers on 25/12 with a sack of goodies!!!

There has been an apartment building boom in many Australasian cities, sites for apartments have doubled in price in the past three years in Sydney, constructions costs are also rising. Vancouver in Canada is facing similar pressures. Is the Fletchers/Crown profit maximising entity trying to capture some of that boom? Australian and Canadian business commentators indicate the key driver of this apartment building and property price boom is off-shore investors. So Mike Greer may be right in that the CBD rebuild is not to service the local Christchurch community in an affordable manner. Instead, it is designed to create unearned capital gains opportunities for those outside of Christchurch. In the first instance the beneficiaries will be the Fletchers/Crown profit sharing partnership, whose priorities are nationally focused, rather than giving back to the Christchurch community. Off-shore property investors with a capital gains business model are a potential second wave of non-community beneficiaries.

The above analysis points towards a deliberate exploitative process, that the government is not interested in its market regulator duty of ensuring the property market provides affordable housing and low property related input costs for business. But the deliberate part may not be true, Gerry Brownlee the Earthquake Recovery minister firmly rejects any ‘conspiracy theory’ accusations of favouritism between the Crown and Fletchers.

Advisory bike lanes – Kiwi Esplanade

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Advisory bike lane, Netherlands. (Photo: Andre De Graff)

A few weeks ago there was an unfortunate trial of a bike facility design known as “advisory” bike lanes. Advisory lanes, sometimes called “suggested” bike lanes are common in the Germany, Switzerland, Denmark, Netherlands, Belgium and increasingly North America. There are some good examples from NL in this guest post by Andre de Graaf .

Here’s how advisory lanes work. On narrow streets the centre line is removed leaving a 2-way combined lane ranging between about 4-5m. Wide bike lanes (1.5-2m) are located on both sides. When motorists pass a cyclist they take a more central position in the street. When cars pass each other they do so slowly, crossing the dashed cyle lanes. In the rare occasion when two cars pass when there’s a person on a bike nearby, the car driver slows down until it’s safe to pass. Advisory lanes reinforce an established etiquette in European cities – give way to cyclists, slower vehicle speeds, and sharing road space. Like conventional bike lanes they also communicate the likelihood of people cycling on the street.

Advisory bike lanes are used in low speed, low volume settings where there is not enough width for formal or segregated bicycle facilities. The Dutch CROW manual recommends their use on streets with less than 4,000 vehicles a day. When used in the Netherlands they are strictly implemented in conjunction with lower speed limits and traffic calming measures. On rural roads their use is limited to local roads with no more than 60 kph speed limits. Rural roads in the Netherlands are either 60kph or 80kph and they also have comprehensive speeding enforcement making their analogy to New Zealand tenuous.

This design is being experimented in urban settings in many emerging bike-friendly cities. They are often seen as a hopeful solution to constrained street corridors and limited budgets. The City of Minneapolis (Copenhagenize Bike Friendly City #18, US Bike Friendly City #1, 2015) has recently been using the design and Portland, Oregon has plans to use them on 42 miles of new bikeways.

mpls-advisory-bike-lane-2

Advisory bike lanes in Minneapolis. (via StreetsMN).

The North American versions seem somewhat awkward as the streets don’t have the same scale or context as European streets. That said, the Minneapolis project above has had impressive safety results.

The fizzer of the NZTA trial was a unfortunate setback as I see advisory lanes being a useful tool in urban settings to expand bike access coverage into wider residential catchments where vehicle volumes are low and speeds are slow enough for sharing. That said, I have been struggling to think of a place where they might be usefully deployed, until recently.

In Mangere Bridge there is an amazing waterfront street Kiwi Esplanade which I recently discovered.

The street serves as prime cycling route in its own right, but also as it connects up to Ambury Farm, making it a useful cycling link. On my last visit the roadie-type cyclists were using the street, and the more casual cyclists were bumbling along on the windy 1.4m footpath. The later arrangement doesn’t work well as there are also a lot of people walking.

Kiwi Esplanade, Mangere Bridge

Kiwi Esplanade, Mangere Bridge

While Mangere Bridge consists of a well connected grid, most streets are ginormously overscaled complete with motorway barriers, painted medians and other armature of the Manukau era.

Web

Kiwi Esplanade

One thing that makes Kiwi Esplanade viable for sharing is that is mostly insignificant from a wider street network perspective. There are better alternatives to get around the place, to the town centre, and the motorway. The street cross section currently reflects this as well. The street is very narrow ranging between 6m – 9m, and there are also speed humps in some sections.

I could see this being a good street where sharing the carriageway with advisory lanes could work. Below is a mock-up of a segment with advisory lanes and dimensions (streetview).

Web

In addition to a speed limit change to 30kph, it would also require traffic calming treatments at intersections (see below for example). This could be achieved by favouring the network alternatives and slowing through traffic (along Kiwi Esplanade) with chokers and/or raised crossings.

mangerebridge_

Tarmac, Mangere Bridge.

At some point advisory bike lanes will become a useful tool in expanding the core cycle network beyond the main arterials and in conjunction with enabling slow speed, bike-friendly neighbourhoods. At this point I do wonder if their experimentation is a bit cart-before-the-horse.

In the short term I think it would be better to update our antiquated road rules, institute lower speed regimes, and enable a culture that better respects the rights of all users of the street.

Wise words from the (Australian) Productivity Commission

One of the best things done recently by governments on both sides of the Tasman has been the establishment of Productivity Commissions tasked with investigating the economic efficiency (or lack thereof) of various policy areas. The NZ Productivity Commission, which only started up in 2011, has been diligently building an evidence base on issues as diverse as international freight, service sector productivity, and land use policies.

Transportblog reviewed their recent inquiry on using land for housing, which had some excellent insights and recommendations. Not all of the recommendations made by the Commission have been picked up (yet), but they form a useful basis for future policymaking.

We’ve been paying attention to the NZ Productivity Commission, but it’s also worth keeping an eye on the Australian version, which is grappling with many of the same issues. They recently published a nice summary of their 2014 inquiry into public infrastructure, which highlighted some key steps for improving the efficiency of public investment.

The Commission highlighted the scale of capital investment. Australia’s expecting to spend megabucks on new capital investment, most of which will go into the built environment – i.e. houses, roads, railways, water infrastructure, etc:

In 2013-14, there was an estimated $5.1 trillion or more of installed capital that was available for use in the Australian economy — over three times the value of production in that year (figure 3.1, top panel). Over the next 50 year period, the Commission has estimated that new capital investment will be more than five times the cumulative investment made over the last half century to around $38 trillion in today’s prices (PC 2013).

The largest component of today’s installed capital is in the form of non-dwelling constructions — which consists of non-residential buildings (i.e. buildings other than dwellings, including fixtures, facilities and equipment integral to the structure) and other structures (including streets, sewers, railways and runways) — which amount to over $2 trillion (or 43 per cent of the total). The next single most important component relates to dwellings, amounting to around 35 per cent of the total installed capital (figure 3.1, bottom panel).

Given this, it’s important to get new public investments right:

Additions to the stock of capital will usually increase output and add to labour productivity. However, for productivity to improve, the growth in output must exceed the growth in inputs. Poorly selected projects can detract from productivity as the resources they use would have delivered a higher output elsewhere in the economy.

The Commission had some stern words about the quality of decision-making about public investments. Their analysis suggests that “there is considerable scope to improve the quality and efficiency of government investment in public infrastructure investment in Australia”.

This could probably be translated as: “You guys are doing a bunch of stupid stuff. For the love of god, please stop it!”

traffic avoids clem 7 tunnel

Brisbane’s Clem 7 tunnel cost heaps and has lost money for all of its investors.

So how could infrastructure investment improve? The Commission discusses public-private partnerships (PPPs) as a potentially useful option, but observes that they are not a magic panacea for bad project selection. In some cases, the PPP process can drive governments towards costly, oversized solutions:

Most relevant to enhancing the efficiency of the provision of public infrastructure is improving project selection processes. Australia’s cities and towns generally function adequately and assets undergo usual maintenance, although problems have emerged in some major cities. Nevertheless, the Commission found numerous examples of poor value for money arising from inadequate project selection and prioritisation. In particular, there was a bias toward large investments despite the returns to public investment often being higher for smaller, more incremental investments. In part, this was because the private sector is more interested in financing large investments (due to the costs involved), and governments have increasingly seen public private partnerships (PPPs) as a way of harnessing not just finance, but expertise in project delivery and operation.

Furthermore, the fact that PPPs typically involve complex negotiations and ongoing relationships between governments and private investors can make it difficult to properly assess costs, benefits, and risks. In essence, this creates a situation in which private sector involvement does not result in a better outcome, due to muddled incentives.

The Commission concluded by encouraging Australian public infrastructure providers to conduct rigorous, consistent cost-benefit analysis for all major projects and – equally important – to publish the results prior to committing to a project:

A key recommendation of the report was that governments should undertake a comprehensive and rigorous social cost—benefit analysis to all public infrastructure investment projects above $50 million. Such analyses should be publicly released during the commitment phase and be made available for due diligence. In general, cost-benefit analyses should be done prior to any in-principle commitment to a project or as soon as practicable thereafter.

Doing this would have avoided the farcical situation facing Melbourne’s East-West Link, an A$8.6 billion project to build a massive tunnel to link up several motorways:

Melbourne East-West Link tunnel portal

As far as I can tell, the project was announced and confirmed before a business case was completed or published. As a result, nobody really knew whether it was a good idea. The project was subsequently cancelled, albeit at a significant cost for cancelling the contract.

Do the figures stack up?

The truth is that we don’t know. Those against all new major road projects may not care about the figures one way or the other, but those who follow these things closely say the project is unprecedented for its lack of transparency. It’s been a nagging political problem for the government, and a key reason the East West Link is so contentious.

“Normally we would see more detail, and historically it’s been much clearer on what basis we are proceeding with projects like this,” [infrastructure consultant William] McDougall says.

“This is new for Australia,” says [transport policy lecturer John] Stone. “The fact that through all these court cases and all this political focus the government has never released its business plan – it released a back of envelope estimate – means probably there’s nothing to back it up. If they had a better number they would have put it out there.“

Fortunately, New Zealand seems to do a better job when it comes to consistent cost-benefit analysis of transport projects (although we don’t always take the findings seriously). However, there is always room for improvement. The Commission highlights three key factors that can undermine the effectiveness of cost-benefit analysis:

  • Optimism bias. There is a systematic tendency for project appraisers conducting cost-benefit analysis to be overly optimistic — the bias is toward overstating benefits, and understating timings and costs, both with respect to initial capital commitment and operation costs. Over estimates of traffic forecasts on toll roads and tunnels are a particular problem…
  • Treatment of risk and uncertainty. Costs and benefits are expected values based on the probability of different outcomes. Cost-benefit ratios may be sensitive to certain assumptions which have to be made without sufficient evidential support. For example, inappropriate assumptions about allowance for project risk in the discount rate (that is, the risk premium) may alter the ranking of projects and lead to suboptimal project selection…
  • Treatment of ‘wider economic benefits’. Infrastructure projects create direct benefits for users of the resulting service provided by public infrastructure. Where cost-benefit analysis is done, such benefits are routinely estimated and included. However, projects can also create wider economic benefits and costs. For example, investment in transportation infrastructure brings consumers closer to more businesses, potentially facilitating greater competition and leading to a more innovative and a dynamic economy. However, such wider economic benefits are hard to quantify and their inclusion in a cost-benefit analysis has the potential to show one project to be superior to another purely because of differences in the way such benefits are defined and estimated. Cautious and consistent treatment across options of wider economic benefits is warranted.

Transportblog’s highlighted a few of these issues in the past. I’ve discussed optimism bias on the benefits/usage side here and optimism bias on costs here and here. Stu’s covered off treatment of wider economic benefits here. And it’s probably high time we took another look at discount rates / risk premia…

Welcome Pānuku Development Auckland

Today marks the start of the council’s new CCO Pānuku Development Auckland. The combination of Waterfront Auckland and Auckland Council Properties Ltd. It should hopefully see some of the fantastic work that has done at Wynyard spread to other areas of the city.

Pānuku Development Auckland

If you’re wondering about the name,

‘Pānuku’ means to ‘move on’ or ‘move forward’ and the name conveys the concept of dynamism, of building towards excellence. It has been likened to the motion of a waka that requires skill to navigate, and teamwork to propel.

 

Wynyard Quarter

The purpose of the organisation is:

Development Auckland will contribute to the implementation of the Auckland Plan and encourage economic development by facilitating urban redevelopment that optimises and integrates good public transport outcomes, efficient and sustainable infrastructure and quality public services and amenities. Development Auckland will manage council’s non-service property portfolio and provide strategic advice on council’s other property portfolios. It will recycle or redevelop sub-optimal or underutilised council assets and aim to achieve an overall balance of commercial and strategic outcomes.

And its objectives are listed as:

Facilitate redevelopment of urban locations

Consistent with the urban form and infrastructure objectives of the Auckland Plan, Development Auckland will facilitate private sector, third sector, iwi and government investment and collaboration into the sustainable redevelopment of brownfield urban locations. It will co-ordinate provision of council’s infrastructure and other investment in these locations.

Accommodate growth

Development Auckland will contribute to accommodating residential and commercial growth through facilitating the quality redevelopment of urban locations with excellent public infrastructure and services. Redevelopment of the overall portfolio should offer a range of residential choices and price points to cater for diverse households.

Facilitate vibrant development

Development Auckland will facilitate the creation of adaptive and resilient places that inspire wellbeing, promote health and safety and are fully accessible to disabled people and older adults. It will harness and incorporate the local community’s unique identity, attributes and potential to create vibrant communities.

Waterfront development

Consistent with the Waterfront Plan 2012, Development Auckland will continue to lead the development of the Auckland waterfront in a way that balances commercial and public good objectives, including high quality urban design.

Optimisation of council’s property portfolio

Development Auckland may facilitate quality redevelopment of underutilised council landholdings within current urban boundaries.

Contribute to the management of non-service properties

Development Auckland will also manage council’s non-service properties in partnership with the council group.

While there will obviously still be a lot of work to do on the waterfront it will be interesting to see what tasks they take on first. There’s certainly no shortage of areas to look at. The map below shows land owned by the council.

Council Owned Land

The larger areas are obviously things like parks, cemeteries or golf courses however there are also a lot of other opportunities – often hidden by the scale of the map above. Some examples are below.

Takapuna

Council Owned Land - Takapuna

Panmure – there are quite a few sites around the train station.

Council Owned Land - Panmure

Manukau

Council Owned Land - Manukau

Here’s the press release.

Auckland Council’s new urban regeneration agency officially opens its doors for business today.

The new Council Controlled Organisation (CCO), Pānuku Development Auckland, is a merger of two former council controlled organisations, Waterfront Auckland and Auckland Council Properties Ltd, and came out of an Auckland Council’s review of all its CCOs that began in 2013.

The intent with the new entity is to bring together the commercial property and urban redevelopment skills of both legacy organisations to provide Auckland with a clearer focus on how it responds to the challenges and opportunities of a growing region.

Sir John Wells will chair Pānuku Development Auckland. He’ll be supported by three Directors from Waterfront Auckland (Richard Leggat, Susan Macken and Evan Davies), ACPL Directors (Richard Aitken – Deputy Chair and Anne Blackburn) and three new appointments (Paul Majurey, Mike Pohio and Martin Udale).

John Dalzell, the former Chief Executive of Waterfront Auckland, will be the Interim Chief Executive and David Rankin, the former Chief Executive of Auckland Council Property, will be the Director of Strategy and Engagement.

Auckland Council CEO Stephen Town, who has overseen the transition process, says with a specific mandate and visibility over all Council landholdings, the new organisation will be in a good position to assemble and shape larger scale and more integrated development opportunities.

“By co-ordinating and optimising Council assets and resources in agreed locations, and partnering with other landowners such as iwi or Central Government, Pānuku Development Auckland will enable and ensure private sector participation at pace and in step with defined outcomes in the Auckland Plan.”

“Such outcomes will include providing quality mixed-use development where good design reflects community need and culture, demonstrates sustainability and offers a diversity of commercial premises and residential dwellings.”

John Dalzell says he’s looking forward to the challenge and opportunities the new organisation will bring.

“Whether it’s a site in Onehunga or Takapuna, our role and responsibilities will be customised to each specific project, initiative and location. A few will be of high custodial nature associated with urban regeneration. Some will be at the other end of the scale with a more facilitative role; and some will be much more able to be delivered in the short term.”

Pānuku Development Auckland will have 170 staff with the majority of positions from the two previous organisations not changing or being subject to minor change.

The new head office for Pānuku Development Auckland will be at the existing Waterfront Auckland offices at Pier 21, 11 Westhaven Drive.

Wynyard - Kids Playing

I’m looking forward to more people centred urban developments around Auckland.

 

Guest Post: The Mangere Inlet – a Photo Essay

This is a guest post from reader Jeff

What do you think of when you think of the Mangere inlet?

For most of us, it’s probably the journey across the Manukau Harbour Bridge to the Airport, and those little darting concrete catwalks linking suburbs we only know by name.

AT and the NZTA revealed plans to build a nearly motorway grade link between the bridge, and the Southern motorway, right along the Manukau Inlet foreshore.

East-West Preferred Option

This is our last chance to see this piece of waterfront land properly activated. What if we could rehabilitate it? What if it could host apartments, sail-boats, restaurants and a promenade? With the old Mangere bridge soon to be removed, there’s room to do something truly special with this area.

“Oh better freight movement!” We reassure ourselves. After all, trucks are the lifeblood of the economy, they keep telling us the economy will grind to a halt without them.

Yes, trucks do link nearly everything, does that warrant such a huge investment of public money to make private KPI’s more efficient, in what is, admittedly, an industrial area that arguably won’t be industrial in only a generation’s time?

But what about Church Street? doesn’t that connect the North Western motorway with the Southern motorway, and eastern suburbs?

What is unworkable about NZTA’s proposed option B?

EW Option - Option B

Currently Church Street functions, albeit poorly, it’s cluttered, congested, and very, very stop starty. A bit of a nightmare Monday to Friday for anyone trying to deliver a consignment, B2B.

With Intersection improvements to Nelson and Church Streets including, removal of on-street parking and traffic Light sequencing, we can mitigate this need without the destruction of a previously destroyed coastline .

Foreshore Before and after

If you’ve been to Brisbane, you’ll no doubt have marvelled at their motorway, slinking around the river to inject people & cars into their CBD. But if you look a little closer, you’ll see prime,  beautiful, expensive river-front land, crushed and bound by nice, white motorway onramps. Imagine what you could do with those riverbanks… An absolute waste of prime waterfront property.

4 - Brisbane

Let’s take a trip, from end to end of this proposed new link. Will we lose anything?

Starting in Onehunga Bay, we have the Aotea Sea Scouts Hall, New Zealand’s oldest yacht club building. Famously nearly relocated during the Manukau harbour Crossing Duplication

Jeff Smith - Onehunga Foreshore 5

Looking out onto the new foreshore reclamations funded by NZTA as reparations for foreshore destructions five decades earlier. (Note the Sewerage Surge outfall bottom right)

Jeff Smith - Onehunga Foreshore 6

Heading under the bridges. Complete with a 1970’s style skypath. Imagine if this was planted with huge flax bushes, and the bridge properly lit up at night!

Jeff Smith - Onehunga Foreshore 7

Lots of unactivated land under here. Reminds me heavily of Silo Park just a few years ago.

Jeff Smith - Onehunga Foreshore 8

And onto the Path

Jeff Smith - Onehunga Foreshore 9

Under this route runs a huge gas line. The Auckland Council GIS viewer doesn’t show gas lines but if memory serves this gasline powers the soon to be dismantled Southdown Powerplant. There’s a steam output line off that which heads back up a portion of the path providing steam to neighbours.

Jeff Smith - Onehunga Foreshore 10

Now up to Waikaraka Park, war memorial cemetery. A very peaceful spot.

Jeff Smith - Onehunga Foreshore 11

Looking back on Waikaraka Park

Jeff Smith - Onehunga Foreshore 12

Jeff Smith - Onehunga Foreshore 13

There’s a Heliport down here!

Jeff Smith - Onehunga Foreshore 14

Recreational cyclists were abound, I counted just over 50. Including four families, and zero MAMILs. Despite what ones passing impressions may be of this area, it is heavily activated, and quietly beautiful.

Passing through I saw a few happy seals in amongst the mangroves, but with only my wide angle lens on, sorry no usable shots

Jeff Smith - Onehunga Foreshore 15

I love this scene. A peoples space conjoined with heavy industrial, what would surprise you is just how amazingly peaceful it is, industry everywhere, and nothing but the gentle lapping of waves and birds to be heard

 

Jeff Smith - Onehunga Foreshore 16

We’re now behind the Port of Tauranga Inland Port

Jeff Smith - Onehunga Foreshore 17

Jeff Smith - Onehunga Foreshore 18

Wow, this area had clearly had some special attention some time ago. Gently planted, with man made rock walls and Macrocapra fences run for perhaps a hundred metres.

Jeff Smith - Onehunga Foreshore 19

Westfield junction. Port of Tauranga Inland port behind me. Note the passenger EMU crossing in the background

Jeff Smith - Onehunga Foreshore 20

Heading towards the Soon to be retired Southdown Powerstation

Jeff Smith - Onehunga Foreshore 21

Jeff Smith - Onehunga Foreshore 22

Stage one? Imagine if the whole harbour was linked? Imagine being able to cycle from Mangere Bridge, to Otahuhu, train station, or Otahuhu behind Favona Rd back to Mangere Bridge or
Onehunga? This is one of Auckland’s last hidden Urban oasis.

Jeff Smith - Onehunga Foreshore 23

The point of this photo essay was to give people a little look into a place they might never think about. Would a pseudo motorway on reclaimed land beside it be of any use, when church street simply needs minor intersection, and on street parking removal? What about AT’s Option B? I simply can’t fathom reclaiming more of the already destroyed Mangere inlet to build a road that is only supporting an industrial hub that won’t be there in a generation. Simply put, Penrose-Onehunga, will be gentrified within Gen X’s lifetime.

Coming back home. This is a disused front gate to a home on the Royal Oak hill. This would have once opened onto a foreshore, before the Onehunga Motorway came though in the 60’s

Jeff Smith - Onehunga Foreshore 24

 

The Puhoi to Warkworth Business Case

A few weeks ago I wrote a post about how the NZTA had shortlisted three groups of companies to build the Puhoi to Warkworth motorway.

Confirmed route

One of our biggest complaints about the project is that despite repeated attempts over many years – including Official Information Act requests and via the CBT in the board of inquiry process – we’d never seen the business case for the project. Well the afternoon of that post the agency finally published it (4.6 MB) – although a heavily redacted version of it. As you can see by the revision history below this document has been around for a long time and has been frequently updated. The total document is over 160 pages in length.

Puhoi to Warkworth Business Case - Revisions

At a high level the business case confirms that the primary driver for this project is the simple fact that the government designated it a Road of National Significance (RoNS). The distinct impression I’m left with is that it’s a project about a decade too early and as such one that has massive consequences for a lot of other more beneficial projects. This is also backed up by the timeline of events showing that prior to being named a RoNS there was very little work – only a high level strategic study – that had been done on the project. One comment I think is particularly pertinent is below. Compare and contrast that statement with how the government have

The RoNS projects represent a ‘lead infrastructure’ approach. This means the Government is investing in infrastructure now to encourage future economic growth rather than wait until the strain on the network becomes a handbrake on progress.

Compare and contrast that statement with how the government have treated the City Rail Link for which they are requiring the rail network to be bursting at the seams before they’ll even consider funding.

From there it almost seems like the authors are trying to find reasons to justify the project – something that becomes clear when looking at the economic analysis. One of the big reasons for needing the motorway is the fact that in the Auckland Plan the council identified a lot of potential for greenfield growth. What’s not mentioned is one of the reasons the council put growth in Warkworth was because the NZTA/Government said they were going to build the motorway. A classic example of the motorway industrial complex at work

 

Another key reason is the often cited need to improve the Northland economy – even though the road stops well short of Northland. The improvement in the economy is supposedly about the fact that a motorway would allow a lot more freight to move in and out of the region. Yet the business case seems to give conflicting information about just how much more freight will be moved. In the executive summary it says:

 

Freight volumes between the regions are forecast to increase by 70% by 2042 – referencing the Ministry of Transport’s 2014 National Freight Demand Study which I talked about here.

Yet in the body of the report it says

Freight volumes are forecast to double by 2031, with the vast majority of this increase being carried by road vehicles – referencing the 2008 version of the National Freight Demand Study

The problem with both of these figures is from what I can see the 2014 freight study doesn’t support either of these claims. The tables below show the 2012 volumes vs what is forecast for 2042. Also of note is that of volumes leaving Northland, 7% go by rail and 60% by coastal shipping. Excluding the freight that stays within Northland, I’ve calculated the change in volumes at just 43% out to 2042, well short of the claims in the business case. There are also high and low forecasts with the increase range being from 38% to 48%.

2014 Freight study Regional Freight Movements - 2012

2014 Freight study Regional Freight Movements Forecast - 2042

As for why some of the potential increase in freight couldn’t go on rail, the main reason they give is that the rail network doesn’t have much available capacity. It seems to be the NZ way that a road with ‘capacity constraints’ get huge sums of money thrown at it while a parallel rail route with capacity constraints is left to rot and threatened with closure. The NZTA justify this position by effectively saying that even if the rail route was upgraded that it is unlikely to have much impact on road demand.

It seems the most valid of the justifications is that the road has a poor safety record and it suggests the road is the 16th worst in NZ. My issue with this is that by waiting for a full motorway solution to be built we will continue to have crashes in the future. Had the NZTA not been under a political directive that the road must be a motorway then it’s possible safety improvements like we’ve suggested in the past could have already happened by now.

 

One of the most interesting sections is how they say the preferred route performs against the project objectives. This is on page 43 (actually page 51) of the report. Some of the impacts are

  • Compared to not building it, traffic volumes increase from 25,000 to 29,000 vehicles per day in 2026 and from 30,000 to 42,000 vehicles per day in 2051.
  • Even in 2051 the road will achieve Level of Service A meaning the road will basically feel pretty empty almost all of the time.
  • They claim it will produce $9.1 million in crash reduction benefits in its opening year. Unfortunately no mention is made of what happens to the existing road which will still have all its existing safety issues.
  • In 2026 travel time will improve by 17 minutes in the PM peak. This is shown below and amazingly they say that with the new motorway it will take just 10 minutes to get from Grand Drive in Orewa to north of Warkworth. That’s a distance of about 24km so suggests vehicles travelling on average in excess of 140km/h.

Puhoi to Warkworth Business Case - Travel Time Savings

Also in the wider section they’ve included the following table on the risks to the project from a 2010 study. They noted that it’s highly likely that the project’s costs would outweigh its benefits and that traffic volumes would be lower than needed to justify a motorway.

Puhoi to Warkworth Business Case - 2010 Project Risks

 

So what about the economic assessment, they were right that the costs would outweigh the benefits. Assessed over a 40 year period and a 6% discount rate it achieves a BCR of just 0.92 or just scraping over 1 if wider economic benefits were included. Hardly a massive economic saviour. Unfortunately almost all details about the assessment have been blacked out.

Puhoi to Warkworth Business Case - Economic Assessment

There’s no mention of what impact tolling would have on the BCR however they do say this.

An initial toll revenue forecasting exercise has been carried out based on the forecast traffic volumes and light and heavy vehicle mix, and using the conservative price assumption that the same pricing is applied from NGTR. [Blacked out section]. The conservative price assumption was used to produce a lower-end forecast.

This analysis suggested a conservative tolling revenue forecast in the first year of operations (2022), net of collection costs and diversion (but excluding the costs of the tolling gantry equipment), of around $10M, growing to $17M in 2030 and $28M in the last year of the P-Wk PPP concession. The total nominal tolling revenue over the PPP period was forecast at $440m. The potential tolling revenue profile based on this analysis is presented in the figure below:

Puhoi to Warkworth Business Case - Toll Revenue

They suggest this may just cover the operation and maintenance costs of the road.

Lastly the project is going to be built as a PPP. There’s quite a bit of information as to why they think it should be a PPP which you can read though if you’re interested. What caught my eye was Appendix G which covers off where risk sits between the NZTA and the contractor. Below is just the first part of the table.

Puhoi to Warkworth Business Case - PPP Risk allocation