This carries on from my first post about the briefing from the Ministry of Transport to the incoming ministers.
The report makes only brief mention of what will likely be the biggest issue for transport going forward, funding. We have already seen the NZTA have to do a deal with the Auckland Council to help cover some of their funding shortfall but the next graph shows that we will only be able to cover the planned expenditure with a ‘high growth’ scenario.
Figure 18 shows projected NLTF revenue and investment projections to 2030.
Under ‘median’ and ‘high growth’ revenue scenarios, the revenue raised will be able to fund projected investments. Our modelling predicts that high oil prices and lower GDP growth could reduce revenue to the point that it is insufficient to meet current projected expenditure. However, higher oil prices would also reduce the demand for road travel and expenditure on roading, and increase the demand for public transport
1. High oil price scenario is based on the Ministry of Economic Development’s oil price reference scenario (US$ 115 per barrel in 2009$ by 2030) with appropriate fleet replacement adjustment.
2. Low GDP growth scenario assumes annual GDP growth is 1 percent lower than current GDP growth path.
3. High GDP growth scenario assumes annual GDP growth is 1 percent higher than current GDP growth path.
4. The large increase in NLTF revenue observed since 2008 is due to 100 percent hypothecation of NLTF (effective from September 2008).
5. Expenditure projections from 2011–12 to 2021–22 are sourced from Government Policy Statement (2009 and 2011 versions). Thereafter, a $100 million increment per year has been assumed.
A ‘high oil price’ scenario would erode FED revenue with the gap between revenue and currently forecasted expenditure increasing rapidly after 2020 — under this scenario, revenue would be $4.9 billion less than forecast expenditure over the periods from 2021 to 2030. This scenario is in the nature of a risk rather than a certainty
I don’t know about others but to me it seems like they are playing a game of chicken with oil prices, this might help to explain the sudden rush we are seeing with low value projects and many of the RoNS. I think this will be an area of increasing concern and one that we will need to keep an eye on closely.
One area that is made pretty clear is that there is going to need to be a lot of continued focus on Auckland (and it’s surrounding areas) in the future due to the amount of population growth that is expected. Auckland is expected to take about 60% of the national population growth while the Waikato and BOP regions will also get bigger. This is best shown in the form of graphs and these two from the document help to highlight the change we will see over the next 20 years.
This kind of population growth will put a lot of pressure on Auckland’s transport system, as we are already seeing many of the easy/low cost projects have already been completed which means that to dramatically expand capacity things start getting very expensive regardless of the mode i.e. in the billions of dollars. The MOT picks up on this a little bit: (note – when they say to urban transport it appears they are just referring to all forms of transport in urban areas)
61. Because the majority of New Zealand’s growth will be in urban areas over the next 20 years (primarily in Auckland) urban transport networks will play an increasing role. This means they will need to become more effective through better use of infrastructure, urban planning, and demand management tools.
There is also a bit of paranoia starting to creep into the report, in this case a paranoia about rail, the high level comment in the section titled Investment in Roads says:
Roads are critical to the efficiency of urban centres, with private motor vehicles and buses providing transport modes for most people. This importance will continue.
Rail’s role is supplementary. It provides commuter rail travel in Wellington and Auckland and reduces road congestion.
Rail provides about 15 percent of freight movements. This share is expected to remain about the same through to 2031.
In Auckland, commuter rail travel will account for about 4 percent of peak commuter trips in 2041 compared to less than 2 percent now
So for a comment about investment in roads we get absolutely nothing about the governments investments in the RoNS yet we get 3/4 of the comments about rail. This paranoia is something that gets repeated in other parts of the report, especially the last comment about the percentage of trips.
Carrying on with the report we get to the usual traffic growth predictions that suggest unending growth in traffic volumes despite both local and international evidence showing that is not the case, even the graphs they present show this yet they seem to expect the valve will keep being opened further, this also related directly to the amount of money that will flow into the NLTF. One thing I noticed is they also show a high growth path but never show a low one which could quite possibly happen with the way the world economy is struggling along at present.
The last area I will touch on are the comments related to Auckland. As mentioned earlier the shear amount of growth that is expected to happen in the region will add considerable pressure to transport networks that has the potential to soak up large amounts of central government transport funding. They suggest that there is a $10 to $15 billion funding gap and once again we see the rail paranoia come back as in relation to the transport projects outlined in the Auckland plan we get:
The draft Plan emphasises a shift to public transport to accommodate future trip growth and reduce congestion. It proposes over $5 billion of new rail capital spending to support this goal. The proposed spending on rail is part of an ambitious capital plan which proposes some $22 billion of new capital spending on major Auckland transport projects, predominantly roading related projects, over the next 30 years. The draft Plan canvases new funding mechanisms, with an emphasis on a road pricing scheme, to fund this programme.
So $5b or slightly over 20% of the planned funding is in rail yet that is considered ambitious while around $17b, planned mostly for roads isn’t. You would think that culling a few excessive roading projects would be recommended however slightly later directly responding to the draft plan we get:
The draft Plan does not address forecast congestion on the State highway network
Much of the forecast congestion occurs on the State highway network. The draft Plan has a heavy focus on public transport, which will reduce pressure on the State highways. However, the draft Plan does not
propose significant new highway capacity (with the exception of the proposed additional Waitemata Harbour Crossing and a possible new connection between the southern and southwestern motorways).
Those two projects alone will cost around $7b which is more than the suggested rail improvements and yet they say there isn’t enough focus on the state highway network. The MOT have also claimed that many of the projects in the draft plan “may provide limited value for money” which is odd considering that many of them haven’t even been assessed in great detail yet. Out of step with most of the report which tends to avoid making specific suggestions they have given an idea of some measures that could be taken to make better use of existing roads.
(a) improvements to traffic light timing and control
(b) variable lane markings and signals
(c) high occupancy vehicle lanes to increase the passenger capacity of bus lanes
This basically equates to “lets give cars more space”, especially the last one which is just a fancier way of saying that we should allow cars in bus lanes (also worth noting that this is the only time in the main part of the document that the word ‘bus’ is used). In the end the MOT’s recommendation on Auckland seems to be to do nothing as they say that there will be a little bit of breathing space after the current group of projects finishes before the next major round of projects needs to be decided upon. My feeling though is that in two years time when the EMU’s start rolling we will start to see some really major jumps in rail and other PT use (from feeder buses etc.) and that the window the MOT thinks it has will actually be quite small.