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I’m back, did I miss much?

After a month away travelling around and experiencing some of the sights and sounds if Europe I’m back in the country. There was so much that I saw and experienced that it can’t fit it in one post so I will try to present some of it in the coming weeks. During the course of my trip I think I used pretty much every type of modern transport. I rode on buses and bikes, caught planes and trains, hopped on trams and in cars, sailed on boats and above them (parasailing :-)) and of course walked and walked and walked and walked.

For a brief description of my trip, we started with a days stop over in Singapore before heading on to Paris. The metro system there might not be the cleanest but boy is it everywhere as there aren’t many places in the city that aren’t more than a few hundred metres from a station. This made it just so easy to get around almost anywhere pretty quickly. From Paris it was a trip up to one of Stu’s favourite places, Amsterdam where I experienced some of the things Stu wrote about in this post. Interestingly I had just finished visiting the city a few days before Stu posted it and had in my head ideas some similar ideas to write about.

Some long distance trains were better than others (this was one of the better ones).

It was then down to Koblenz on the Rhine Gorge to look at some of the old castles that line the river. Our trip then took us to Munich and Vienna, both cities which I think we could learn a lot from. They are also both cities that compete strongly in the the various surveys that rank the worlds most liveable cities and it was easy to see why. It is also important as being at the top something that Len Brown wants Auckland to achieve. We then headed further south to Venice for a bit of watery action before a mid holiday holiday in a little town called Bellagio on the shores of Lake Como. After that it was off to Nice in the South of France along with Monoco (which is just up the road/track) where we had a very Auckland type of rail experience with trains cancelled and frequently running late etc.

Lots of transport modes in this picture, I was surprised by just how many trains used both these lines and the two on the other side of the river.

The next two legs of our trip were the only ones where we didn’t get between cities using trains which meant short hop on a plane over to Barcelona. It actually ended up being our favourite city on the trip as there was quite an interesting blend of old and new buildings, especially along the waterfront. In may ways it reminded me a bit of home and why it is so important that we develop this great asset of ours correctly. We then flew back to Italy for a trip down to Siena, a small town in Tuscany where we stayed at the top of a 13th century castle outside of town which was pretty neat.

The last place we visited in Europe was Rome, luckily the worst of the heat wave they were having had passed so temperatures were only in the low to mid 30°s instead of being up over 40° like it had been a few days before we got there.  We then flew back to Singapore for another night before heading back to Auckland.

I would also like to say thanks and congratulations to all of the other bloggers who helped out while I was gone. I know just how hard it can be hard to put lots of posts together on such a regular basis. Their efforts paid off and in August we set all kinds of new page view records including our highest ever day, week and month (with a little bit more yet to go tonight). Of course also thanks to all of our readers for coming and reading the site along with contributing through comments and guest posts. There are of course some topics that get much more attention than others *cough* integrated ticketing *cough* and August certainly had its fair share of them.

Brittle Thinking

This post is a follow on from Stu’s, here, on the transport minister’s extraordinary answers to questions in parliament concerning the wisdom of his extremely unbalanced transport spending programme.

You will recall that Mr Brownlee thinks that petrol price is irrelevant to decisions about transport investment. Or at least I think that’s what he means by:

“it’s clearly evident then that the pump price is an extremely irrational input into the consideration of strategic transport policy.”

And that somehow supermarket discount vouchers are the proof of this… or something? The use of the word irrational here is apt as it is increasingly becoming the right word to describe almost every utterance by Mr B on transport matters. Regardless, let’s try to look at what he seems to be saying.

Basically the idea is that the only rational transport policy is one that builds roads whatever the price of the fuel needed to be able to use those roads. He is not saying that he thinks petrol is going to get cheaper, or even stop getting more expensive, but rather that it doesn’t matter how expensive it gets- we will still always need more roads than we have now. And why, because people will always drive more and more no matter what it costs; there can never be enough roads. And as this government always repeats, our exports need more and more roads to be able to get to port on trucks. So much so that these special new roads, despite duplicating existing ones and existing rail lines are certain to greatly add to our nation’s wealth; they are of National Significance. No matter like fuel cost can apparently have any bearing on this. It is all rather faith-based after that, because the mechanism for these great outcomes are hard to identify beyond a few incremental efficiencies; like slightly lower fuel costs, exactly the work that would be undone by higher fuel price.

As petrol has been rising pretty much all this century we can probably test this price-doesn’t-matter theory of Mr Brownlee’s with some facts. Here is the average pump price adjusted for inflation from our friends at the MED [a little out of date - we're well in the $2.20s/l now].

As has been observed we are not quite in the price territory at the pump that we were in the mid 1980s when we adjust for inflation, so we have yet to see unprecedented prices but we do seem to be heading that way. It is also interesting to note that that earlier peaks were initially because of a rise in crude price but persisted in NZ because of a crash in the NZD after the crude prices declined, as the chart below shows. The mid 80s was a time of the big retreat in price after the end of the OPEC embargo and the beginning of the long period of stable western supply from the North Sea, Mexico, and Alaskan fields, all now well in decline.

[The figures below are for continental US deliveries not the Tapis or Dubai crude that our supplies typically are- which are usually higher]

It is also obvious from the chart above that we are now in crude price territory that when it last happened was called a ‘shock’ [the red peak]. That price event, a clear discontinuity, was caused by a cartel of major producers, OPEC, withholding their supply. This time the ever rising price is caused by an inability of all the world’s producers going flat-out to meet demand. And this is despite unheard of sums of money being used to squeeze every last drop from difficult and inaccessible sites with ever trickier and more risky technology. The production from these new and expensive unconventional, ultra deepwater, and shale plays only means that the decline in older conventional fields is just being kept up with- for now. Supply/Demand on a knife edge: Price goes up. Economics 101.

Who knows what lies ahead but this is already a longer lasting and more serious discontinuity from the long term average than the OPEC shock. So at the very least there is a good risk of the crude price continuing to rise simply because of the increasing demand from the big developing nations; China, India, Brazil etc. and a continued inability to increase the rate of production simply because the accessible stuff is no longer to be found. Compounded by the fact that the marginal barrel is now so expensive to extract.

Going back to the first chart and we can see that the curve of the price rise this century at the pump in NZ is not nearly as steep as the crude price rise. This is principally because the NZD dollar has appreciated against the USD throughout this period [and because the taxation part of the price has not risen as fast]. So we have been shielded from much of the rise by our unusually high dollar.

OK so here’s a second level of risk; perhaps the crude price will stop rising, well even that won’t stop the prices at the pumps going up if the NZD settles down to its historical average of around 60 USc. Or even both could happen at once! Oil up and NZD down… $3-4 a litre anyone?

Chart below from ANZ RESEARCH here [thanks to Kent]

So the point here is that the RoNS by entrenching an already unbalanced [another way of saying inelastic] infrastructure is in fact a dangerously risky policy and the complete reverse of what Ken Shirley describes as ‘sensible’. It increases the nation’s exposure to both crude price risk and exchange rate risk. Its a radical and low odds gamble with our tax money [No Ken it is not yours]. 12 billion is not a trivial sum to gamble with.

Or does this not matter at all? No-one’s bothered by higher fuel prices; we don’t need any alternative to filling her up? We won’t change our habits; driving is too damn useful and enjoyable.

Ok so price at the pump has risen from the all time low in 1999 even if not as much as it has before or what might be ahead. Let’s now look to see if there have been any changes in driving through this period, you know; elasticity.

Here is a chart from the MoT. They aren’t so free with their info as MED, at least in terms of datasets easily available to download on their website, so this doesn’t cover as much time as I would like but still there is a lot to see.

VKT by vehicle Type

*VKT=Vehicle Kilometres Travelled.

First we can see that for all this government’s framing of transport decisions as being about what the road freight lobby wants by far the greatest users of our roads are passenger cars. So especially when it comes to congestion it is all about light passenger vehicles. Secondly we can see that there is a clear levelling off of VKT in this sector despite the population growth throughout this period. Some elasticity then. It seems we hit a kind of a wall around 2005 and have been wobbling around on a kind of VKT plateau for the next six years. Important to note that this change precedes the global downturn significantly. In 2005 the price at the pump was only around $1.50 on our chart above and of course it’s now over 25-50% higher than that. I have no idea if there’s a magic price where we are likely be ‘encouraged’ to bend in an even more visible way but it may well be that we haven’t reached it yet.

It looks like light commercial vehicles have increased their travel a bit over the period, as have motorcycles. Of course we know that in Auckland over this period PT use has grown consistently. A rise in PT and more use of lighter vehicles is a rational response to rising fuel costs and something I expect to continue. And, as described here this offers some exciting opportunities for improving our cities and our lives, as well as our efficiency.

Is this not elasticity? 3m to 11m in around 8 years. Even the plateau shows elasticity as the growth hits a limit it slows, and the limit here is the capacity of the network, critically limited by a lack of rolling stock and bottleneck and deadend at Britomart. Elasticity enabled by improvements to service and amenity. All PT use in Auckland is increasing of course; 50m to 70m in the last six years, in direct contradistinction to all the driving stats which are flat at best.

But there is way in which what Brownlee says is true and that is we have built a system that simply does not allow much elasticity in transport mode choice, because for most people there are few options if any, that are as complete, as well funded, and therefore viable as driving. So therefore we are mostly all forced to cut almost every other item of spending before we stop buying petrol at any price. At what point does that become impossible? At different times for different households and businesses I guess. Essentially though I am arguing here that there is an inelasticity of opportunity not simply a cheerfulness about paying any price at all for petrol, ‘cos we just love our cars so much!’ as the minister implies.

But this only goes to highlight the great risk of a policy that further reinforces this inflexibility; what is another word for the inelastic? Brittle.

We have an extremely brittle infrastructure set that is highly vulnerable to exactly the sort of price escalations we are seeing. And what is more likely to snap is outside of transport statistics; peoples lives and livelihoods are what will snap. For example families not being able to pay for other essentials including food because they have to buy petrol to work. As they say in the US: ‘No transit; no job’.

So by all means build huge highways to lift the profitability of big trucking and to smooth the way for Omaha bach owners, but expect to keep having to pick up the tab at the other end of society, in social welfare, unemployment, housing costs, and all the other deficits of increased poverty and inequality. As is usually the case when user pays is applied to public spending it is regressive; it reinforces advantage and increases exclusion.

So in summary:

1. people do seem to be trying to bend away from dependence on the increasing costs of driving where they can, but most have little option.

2. we may not have yet reached the breaking price point but it won’t be pretty if we do, and I’m sure it is already contributing to real hardship now.

3. having identified an inelasticity wouldn’t a wise government seek to increase options rather than be so determined to reinforce this vulnerability in our nation’s infrastructure and therefore the brittleness of society’s fabric?

Or to put it in terms that the government might understand, with its strange conflation of its work with that of running a business: The RoNS are a classic management mistake: a bold investment in last century’s successful line, which is now mature and certainly needs maintaining and some improving but is no longer growing, and missing the opportunity to invest in the new growth products ‘moving forward‘.

We can only build for the future.

 

Adendum: Comparison with the US: http://www.advisorperspectives.com/dshort/updates/DOT-Miles-Driven.php

 

Warkworth-Wellsford: in or out?

Yesterday NZTA released a map of their projects and priorities in Auckland, as part of the National Land Transport Programme release of information. The whole map (in case NZTA remove or update it) is shown below: As Cam’s post yesterday noted, there’s something in the way Puhoi-Wellsford is shown that really stood out – showing the Warkworth to Wellsford section of the road as a “possible” Road of National Significance. This is compared to the Puhoi-Warkworth section which is (presumably) a “definite” RoNS.

This is pointed out a bit clearer in the image below:

Labour’s Transport Spokesperson Phil Twyford picked up on this issue in parliament today, and in a press release. Here’s the parliament exchange with Gerry Brownlee:


But just recently NZTA have come out to say that the map was wrong, and in fact Warkworth to Wellsford still is part of the RoNS – not just a ‘possible’ RoNS:

The NZ Transport Agency has confirmed that there is no change to the status of the Puhoi to Wellsford road of national significance north of Auckland, and apologised for any confusion caused by an error in a pamphlet published yesterday as part of announcements for the 2012-15 National Land Transport Programme (NLTP).

NZTA Chief Executive Geoff Dangerfield says it is planned to upgrade the entire route, but the preferred alignment and timing of construction of the Warkworth to Wellsford section of the road of national significance is yet to be determined.

While all of the material released as part of the 2012-15 National Land Transport Programme give emphasis to the activities planned for the next 3 years, one pamphlet relating to Auckland contained an error with a map refering to the Warkworth to Wellsford section as a “possible” road of national significance.

The NZTA announced in April this year that it had determined the preferred route to build a new motorway between Puhoi and Warkworth.

“We said then, and repeat now, that the new route will form part of the whole Puhoi to Wellsford road of national significance,” Mr Dangerfield says. “We also said that an indicative route for the Warkworth to Wellsford section was not being announced at that time, because we have not yet done the necessary work to determine where this section of the highway will go and do not expect to do so within the next 3 year period. That was what the dotted line was meant to convey,” says Mr Dangerfield.

There is no change to the status of the Puhoi to Wellsford RoNS.

The government and NZTA find themselves in a really difficult position when it comes to Warkworth to Wellsford. On the one hand, the project clearly doesn’t make economic sense – with a much more basic upgrade providing far better value for money than a whole new alignment. However, on the other hand cutting the project back to Warkworth would really undermine the way it’s being sold as a connection between Auckland and Northland. A project ending at Warkworth would really come across as being largely for the benefit of those travelling to the beaches east of there during the holiday periods.

Of course the sensible approach would be to just build the Warkworth bypass section and do some safety upgrades on the existing road to buy us a decade or two until we really need to build the whole thing (assuming we ever do). That should free up well over a billion dollars for spending on more useful projects. I’m pretty sure NZTA know this too.

Is Brownlee stretching the truth? Fuel prices, vehicle demands, and the RoNS

Gerry Brownlee made some quite remarkable statements in parliament recently (this video is worth watching; Lockwood’s response to Julie’s point of order about halfway through was a moment of quite some mirth in my flat). To summarise Julie’s questions and Gerry’s answers (NB: I have quoted Gerry verbatim in some places, hence some of it is incoherent):

  1. Are the RoNs an appropriate use of money? While fuel prices “fluctuate”, supermarket’s offer fuel discount vouchers, so “it’s clearly evident then that  the pump price is an extremely irrational input into the consideration of strategic transport policy.”
  2. Should the RoNs be reconsidered in light of stagnant traffic volumes? By alleviating congestion you will reduce time and distance spent travelling, which is very good for the environment.
  3. Is the risk of high petrol prices a risk to the RoNs? “There are a number of studies that suggest that the relative price of petrol to the decisions that people make about transport modes is inelastic.”
  4. What specific evidence suggests the RoNs are the best way to improve NZ’s economic productivity? Less congestion leads to economic benefit, and National won the last election so NZers agree.
  5. Does the minister expect the economic impact of borrowing for the RonS will be similar to Greece? No, because Greece spent most of their money on monolithic rail projects.

Questions numbered 1 and 3 are, I think, the most interesting, so let’s unpack what’s going on here in a little more detail.

In response to question #1, Brownlee suggests that fuel prices are an “irrational input” into the consideration of strategic transport policy because fuel prices fluctuate, and supermarkets offer fuel discount vouchers. Now, what Gerry terms “fluctuations” is more accurately described as a long term (since 1998) upwards trend in fuel prices, with various ebbs and flows along the way. Yes, the GFC was one giant ebb – but prices have since recovered and now sit at levels similar to what they were pre-GFC (which is surprising given the economic meltdown in Europe).

Quite how supermarket fuel vouchers are relevant to the debate I’m not sure. Mainly because the lower prices one person pays has to be offset (in terms of the fuel price margins) by someone else paying more (probably those schmucks like me who don’t have fuel vouchers). And I find it quite humorous that Brownlee suggests New Zealanders should avoid higher fuel prices by spending $400 per week on groceries. That level of spending may be achieved in the Brownlee household, but it certainly does not happen in mine ($50-$100 per week on groceries is all I spend).

 

 

And while fuel prices are certainly volatile, it’s a stretch to suggest they are an “irrational input” into strategic transport policy. Indeed, Brownlee will find that most of the transport models on which the business cases for the RoNs are based actually incorporate fuel prices as an input into the generalised cost functions that they use to determine mode split. Stated differently, the fuel prices that Brownlee criticises as an “irrational input into … strategic transport policy” are actually part of the highly rational equation that determining expected traffic volumes on the RoNS. Therefore to call them “irrational” would seem to be directly undermine the validity of the models on which the RoNs’ are based. That’s an own goal Brownlee …

And now question #3. Julie’s asks whether high fuel prices would be a threat to the RoNs programme. Brownlee suggests that they are not, because the demand for travel is “inelastic.” Hmm … that actually sounds somewhat informed. But before we decide that Brownlee has awoken from his transport coma let’s first review what the word “inelastic” actually means. WikiAnswers defines it as follows:

Inelastic demand is when the quantity demanded of a good doesn’t respond strongly to changes in price. The percentage change in quantity demanded is less than the percentage change in price (% change in Qd < % change in P).

This basically means that if the price of fuel were to increase by 100% then the demand for travel would reduce by less than 100%. Brownlee’s correct to observe that the elasticity of demand for vehicle travel with respect to fuel prices is less than 100%. It’s typically around -30% in the long run, which means that a 100% increase in fuel prices would on average cause a 30% reduction in demand. That definitely fits the technical definition of “inelastic”. But does this confirm that the risk of sustained high fuel prices is no reason to reconsider the RoNs?

The short answer is no, and here’s why: While travel demands are inelastic with respect to fuel prices, they are not immutable – i.e. they still reduce when fuel prices rise, as you would expect (that is after all what economists refer to as the “universal law of demand”). And as most traffic engineers will tell you a small reduction in vehicle demands can have a major impact on travel delays, because congestion is a upwards sloping non-linear function of demand.

If you’re not one to revel in obscure mathematical jargon, then the figure below may help – it shows the type of travel delay functions likely to have been used in the transport models on which the RoNs business cases were based (source). And you can see that they ramp-up quite considerably.

 

In this graph the x-axis is the volume (demand) to capacity ratio (v/c), while the y-axis measures vehicle delays. So if you’re up around 90% v/c (x-axis) then a reduction in demand in the order of 15% might shift you quite a long way down the curve to the left, i.e. towards less delay. The non-linear relationship between vehicle demands and delays is, incidentally, the primary reason why the roads are generally so clear during school holiday periods – because the small reduction in travel demands caused by parents not dropping their children at school results in much less congestion.

So the takeaway message is this: While travel demands are inelastic with respect to fuel prices, that is not a valid reason to suggest that the economic merits of the RoNS would not be affected by a period of sustained high fuel prices. The truth is that sustained high fuel prices would reduce travel demands sufficiently that the (already tenuous) economic benefits of the RoNs would vapourise. That’s what Julie was getting at and that is what Brownlee does not seem to understand.

At some point I hope it becomes untenable for Brownlee (or anyone else for that matter) to suggest that fuel prices do not impact on the RoNs business cases. One might even think that point is approaching relatively fast; after all we’re now halfway through 2012, state highway traffic volumes have been broadly flat this year thus far, and fuel prices have now increased quite substantially in recent weeks. Of course, I hope that fuel prices plummet tomorrow and NZ’s economic growth surges – in which case most of the RoNS might be a worthwhile investment.

But that’s not something I’d be prepared to bet $14 billion on. That’s actually what National are doing: They’ve gone out and bought a $14 billion transport lotto ticket. When you put it in those blunt terms Bill English’s cries of “prudent fiscal management” start to sound quite hollow, but that’s getting off topic …

 

Guest Post: Wellington Public Transport Fare Review – Part 2

This is a Guest Post by Louis Mayo and follows on from this previous post about Wellington’s PT fare review

Following on from the discussion on the previous post I thought I’d propose a scheme that, in my opinion, would make for an excellent and ‘world class’ fare structure.

Number of zones:

There would be four zones:

  • Blue: Covering the entire Wellington City area & the northern suburbs.
  • Red: Covering Hutt, Porirua and as far north as Pukerua bay & Upper Hutt
  • Green: Covering Kapati as far north as Waikanae and South Wairarapa as far north as Greytown.
  • Yellow: Covering everywhere further north to Levin and Masterton. Does expand into the area of Horizon’s council but it seemed fair to have a reasonably straight line west from Masterton.

I have prepared a map showing indicative zones:

The gaps in between the colours are the ‘overlap’ areas. You can view a zoomed in version here.

I have decided to go for the option of having a smaller number of larger sized zones. Zones are combined into to new zones at a ratio of around 1:3.5. It will mean that each zone can have its own dedicated colour (I personally can’t think of 14 different colours!) This has a number of advantages such as simplicity and easier to understand and also encourages people to use PT to make multiple transfers because they have a larger area for them to do so.

There is obviously a disadvantage with using zone based systems. For example person A could be going just across the zone boundary and end up being stung with a high fare for an extra zone even if they were only going a few stops. Meanwhile person B could make a much longer trip from one end of the boundary and only pay a one zone fare

There are two ways that this can be partially resolved. One is by having zones ‘overlap’ at each other (i.e some stops would be in two zones). My, very crude,”measurements indicate that both zones red and blue are around 15-16 kilometres long end to end “as the crow flies”, and the overlaps I have measured at around 4 kilometres long between blue & red and red & green and 6km between green & yellow zones. Obviously this does not solve the entire problem and there will be some that still end up paying more than what may be deemed equitable.

The other way is by having clear geographical marks to establish the cut off points. An example of how this could work is on the Kapati line – almost all PT users heading into Wellington will be on the train. There is a long distance between Takapu Road and Wellington so this works as a natural zone boundary. The good thing about having larger zones is that there are only issues drawing lines at three boundaries rather than at thirteen different boundaries as there currently is.

Paper tickets:

Paper tickets would be paid for in cash and purchased on-board a bus from the driver or from a vending machine or from staffed ticket booths (major stations only). There is the possibility of having tickets that are sold on-board buses to be “no change given” as used in many overseas cities. This will speed up boarding times but I do worry a little about this that it may put off some people. If I was an inexperienced, first time user of the system and handed over a $10 note expecting $6.50 change and not getting it then I’d be pretty annoyed. It is an issue that makes for a very interesting discussion.

Vending machines and counters will have cash and EFTPOS and would be located at every train, cable car and ferry stop on the network, but you could also roll this out major bus stops, which would facilitate faster boarding times. But this has the potential for fare evasion. Currently the bus driver acts as a reasonable barrier against it so GWRC would need to employ random ticket inspections (as per below) on buses as well which will increase costs.

The paper ticket would have the zone and expiry time clearly printed on the ticket. No tickets will be sold onboard trains and all passengers must have a ticket before boarding and must retain it for the entire journey.

Smart cards:

Smart cards should be an RFID system similar to Snapper, but hopefully a lot ‘smarter’. Internet top ups (without needing to pay a horrific $40 for a USB card reader) will be available as well as the facility to have the card directly linked to a bank account for automatic topping up, two features that Snapper lacks at present. I envisage that most regular users would be on smart cards as the discounts and the benefits of not carrying cash would pay for itself over time.

The ideal would be a single smart card that works across Auckland and Wellington, and potentially other cities as well. Not sure what the chances of achieving this are, but dreams are free. Surely there must be advantages from economies of scale to be gained from using the Thales system after it has been installed in Auckland?

Time based ticketing:

All fares would be time based – more like a ‘subscription’ to the chosen zones rather than just a single trip. I propose offering two hour and daily time periods. I personally see nothing wrong with people using two hour passes to make a return journey if it is within the two hour window.

In addition for smart card users there would be weekly and monthly ‘fare caps’, i.e once you reach that cap over that week / month then you can receive free travel over that / those zone/s for the remainder of the week / month.

Concession fares:

The following people will pay discounted fares at all times:
●All people under 20 years of age.
●Tertiary students
●Senior citizens
●Beneficiaries / very low income earners.

Photo I.D would need to be carried at all times to qualify for concession fares. Children should travel free when travelling with an adult during off peak hours in order to make transport more affordable for families and will further incentivise off peak travel.

Off peak fares:

All people would receive discounted fares during the off peak hours. These would be 10am-2.30pm (deliberately set to end before the after school period) and after 7pm during weekdays as well as all day weekends and public holidays (and potentially for contra-peak journeys as well) This provides an incentive for people to choose other times of the day to travel and will help manage crowds during peak hours. Free travel for senior citizens off peak would continue.

Price of fares:

Suggested fare prices are shown in the tables below. A one zone fare is set at the price of what is currently a two zone fare, but would give you the equivalent of around three zones worth of travel which does mean that there is some cross subsidisation to longer trips from shorter trips. The reasoning is that PT is less likely to be competing with walking and cycling for shorter trips and more likely to compete with car travel for long trips and also because longer trips end up getting very expensive without some cross subsidisation and I would say that the marginal cost of providing for longer distance trips is lower.

To incentivise smart card usage, a 20% discount is offered. Weekly fares are set at day fare x 4.5 and monthly fares at weekly x 3.5. As it is an electronic transaction, fares do not need to be in fifty cent multiples. Prices are as below: 

There is again a disadvantage with the larger zones. The jump between a one zone and a two zone fare is quite large from $3.50 to $6. The next increases are not so bad.

I think these fares are realistic, as much as I’d like to have cheaper fares I am wary that budgets are at considerable strain and there is not really the scope to be charging lower fares. Although for some there will definitely be an initial shock of what appears to be a fare hike. But over time most will change their behaviour and get better value for money. For example someone making a one zone commute into work may be shocked to find their fare has increased from $2 to $3.50. But over time they will find that they can get a smart card and travel off peak and only pay $1.60 and might find that they can use the network to go for a meeting in another part of the city and avoid an expensive taxi fare.

Fare evasion:

Wellington (central) train station is easily gated. Due to the heavily radial structure of the network, most train travellers will hit the gates at Wellington, but it would be good to see some of the other busier stations to be gated as well in the longer run. Lambton cable car station already has gates which would simply need to be adapted for the new system. There is no reason why gates could not be rolled out busy bus stops as well.

I had assumed that all gated stations would need to be staffed. Stuart, however, informs me that Amsterdam have a system where people trying to exit without a ticket can press a button and the gate will open but they will be recorded on camera. I had envisaged that there would need to be staff to help people in wheelchairs, etc to get through the gates and stop the odd dunce from trying to jump over the gates. Wellington actually has quite a few staffed stations, Porirua and Waterloo I know but I think there are a few others as well. Inspections will have to be carried out regularly and officers would need to have the power to issue infringement notices as just forcing people to pay the fare will not be enough.

——————————————

I feel this system would provide a convenient and easy policy that has many advantages. There are definitely disadvantages but they are outweighed by the positives in my personal opinion. Please do comment as there is important and very interesting discussion to be had and I’m very interested in the opinions of others on this matter.

I remind you again to go to www.farereview.co.nz and fill out a quick survey (takes 5 minutes) or attach a document of a longer submission – 14th September is the closing date. The criticisms I have of the survey are that it doesn’t address transfers and they have some auto system that pre judges your survey answers before you submit.

NZTA Fudging the Figures on the NLTP?

The NZTA has announced their three yearly National Land Transport Programme 2012 – 15:

Spending on roads and public transport by central and local government over the next three years will increase by almost 13 per cent with much of the additional cash coming from fuel tax and road user charge hikes, Transport Minister Gerry Brownlee says.

Mr Brownlee and NZ Transport Agency chief executive Geoff Dangerfield this afternoon announced $12.3 billion in funding under the 2012-2015 National Land Transport Programme, a 12.8 per cent increase on the 2009-2012 programme.

Mr Dangerfield said the programme had a particular focus on growing Canterbury and supporting the recovery of Christchurch after the earthquakes.

The programme also prioritises continued work on the Government’s “roads of national significance” and work in Auckland “where there are significant opportunities for improved transport to support the city’s contribution to New Zealand’s economic growth”.

However Mr Brownlee said the Canterbury earthquakes, reduced growth forecasts and the tighter fiscal environment had put pressure on the National Land Transport Fund which contributes most of the funding – $9.38 billion in the new programme.

The “at a glance” document contains a chart showing expenditure for the next three years:

So what about public transport?  The NZTA release states:

There will be significant increases in the level of investment for many activities, including:

  •  $4.1 billion investment in local roads (14% increase from 2009-12 actual spend)
  • $5.1 billion investment in state highways (7% increase from 2009-12 actual spend)
  • $1.7 billion investment in public transport (21% increase from 2009-12 actual spend)

Wow! 21% increase in PT spend sounds impressive.  But dive into the detail, and we see:

Also included in this NLTP is provision for the loan repayments on the introduction of 57 electric trains, public transport related rail improvements, such as station upgrades, and introduction of integrated ticketing across all the city’s public transport modes in Auckland.

Eh? The $1.7bn figure includes rolling stock loan repayments from Auckland. Surely that can’t be right?  Well, yes it is apparently, because page 12 says:

A total of $1.74 billion will be invested in New Zealand’s public transport system during this NLTP period – a 21% increase on 2009–12 actual spend. This figure includes a local share of $780 million from local authorities.

So NZTA are actually investing  $960m in PT, not $1.7bn as the press release implies. And there is no breakdown of infrastructure spend vs spending on operational services.  For comparison, the last NLTP allocated $630m to PT services and $269m to PT infrastructure.  So on the face of it, there is a possible 6.8% increase in NLTF expenditure on what was budgeted previously.

On top of that, it turns out the 2009-12 actual spend on PT was down on forecast:

Public transport services and infrastructure spend was down about $94 million due to the Canterbury earthquake, which meant that a construction of the new Christchurch transport exchange could not commence and that Canterbury bus services were disrupted, as well as projects impacted by the moratorium on new funding approvals to help manage cash-flows in the latter part of the NLTP.

In short, NZTA have made it really hard to tell exactly how much central Government is allocating to PT infrastructure and services, and the other activity classes as well.  It was shown quite clearly in the old NLTP.

And of course, absolutely no mention of the City Rail Link.

The other things which is perhaps most interesting is to see that the Warkworth to Wellsford section of the “holiday highway” seems to have been cut back to a “possible RoNS”, compared to the “actual RoNS” of the Puhoi-Warkworth section. While this is a sensible economic approach, it highlights that the sales pitch for Puhoi-Wellsford – that it’ll transform Northland’s economy – is just a lie. It’s more to do with getting people to the beaches east of Warkworth during holiday periods a bit quicker. Here’s the relevant map:

I’m sure Brownlee promised parliament the other day that no further RoNS would be cut back like Otaki-Levin was. It’ll be interesting to see how he wriggles out of this.

Vancouver facing some tough decisions

The excellent “Price Tags” blognotes something that came through pretty loud and clear when I was in Vancouver over the last couple of weeks and researching a bit into their transport situation (although I was mostly focusing on land-use initiatives, you can never quite separate the two) – there’s no money left in traditional funding sources to keep improving the system, should they hold back for a while (especially as a few roading projects seem to have snuck in recently) or does Vancouver need to find different ways of sourcing funds for important further improvements to its transport network?

The region is at a turning point: whether to proceed to shape growth around expanded transit in the fast-growing parts of Metro by raising local taxes, or forgeddaboudit – which is easy and tempting to do since all the expanded road capacity from Gateway, notably the Port Mann Bridge, Highway 1 and the South Fraser Perimeter Road, will be coming on stream. Once congestion disappears on Highway 1 in the short term, it will be tempting to say, who needs transit? And TransLink, having had its legs cut from under it by Martin Crilly, the TransLink Commissioner, doesn’t have much public credibility.

But the problems don’t go away – notably the decline in one existing revenue source, the gas tax (Stephen Rees discusses that here and here), and the increasing pressure on the Broadway corridor, already the busiest bus route on the continent. Students are planning a major education campaign-cum-protest in the Fall, the City of Vancouver needs a decision to move ahead on rapid-transit for the Broadway corridor, UBC at the west end of the route wants rail to support its expansion, both real-estate and academic, and the developers and realtors themselves understand how important transit has become for directing and shaping growth. That’s a powerful political constituency if they could combine forces.

But the mayors are faced with with a dysfunctional governance arrangement, no likelihood of provincial action until after the election, the prospect of raising property taxes or cutting services, and the requirement to make a decision within weeks.

It is very interesting the difference that comes from spending a while in a place, rather than just a few days – and also researching a bit more into the problems faced by a city that you’ve so often thought of as “having it sorted”.

In many ways though Vancouver’s problems mirror those of Auckland – or at least the problems Auckland is likely to face in a few years time. It seems that quite a lot of the funding pressures in Vancouver exist because they have a small number of very large transport projects either under way or relatively recently completed. The Port Mann Bridge project, spending up to $3.3 billion (including operations and maintenance), seems a project particularly ‘out of step’ with Vancouver’s general approach to transport in the past and has a number of parallels with the Additional Harbour Crossing project that has a likely cost which has ballooned out to over $5 billion. Looking forward into Auckland’s future, it is the Waitemata Harbour Crossing project which is just so expensive that it really threatens our ability to achieve much else. One wonders whether finding a cheaper alternative will become increasingly important as time goes on.

Of course there is still much to be jealous of Vancouver about – and in the form of the Evergreen Line the fantastic Skytrain system is being significantly expanded as we speak, but beyond that project, and even to keep up service levels without significantly raising fares, Vancouver is perhaps struggling a bit more than I thought and faces some really challenging choices over the next few years. With Auckland likely to go through the same processes, but over the next couple of decades most particularly, we’d do well to keep an eye on what happens in Vancouver.

The City Centre Master Plan – Part 1

The final version of the Council’s City Centre Master Plan was released, with relatively little attention, a couple of weeks back. There’s a fairly flash little website associated with it here, or if you’re patient you can download the whole 33.2 MB document here. In essence, the Plan seems to be a huge attempt at making Auckland’s city centre a more pedestrian friendly place and, as a result of that, a much nicer place to live, work and visit.

The document is pretty lengthy and has a lot of interesting stuff which relates to transport. That means I’ll need to take a few posts to go through it all – consider this Part 1, which looks at overall elements of the Plan and a number of interesting diagrams which relate to how transport will work in the city centre in the future.

Here’s the Plan’s overall vision:

A lot of connections to how we manage transport in the city centre here. Early on there’s an interesting map perhaps confirming for the first time the approximate route of North Shore rail on the city side: clearly connecting with Aotea Station underneath Wellesley Street.

Another useful diagram highlights the changing modeshares between public transport, active modes (walking and cycling) and driving that will need to occur by 2041 – simply because there isn’t space in the city centre to build mode/wider roads. I must say I’m somewhat surprised the number of vehicles entering the area at peak time isn’t likely to fall further – I guess that’s thanks to the City Rail Link as without the project most of the streets would be bus only. Ironically one of the likely impacts of the CRL is to make it possible for people to drive to the city centre, as without the rail tunnel most streets are likely to need to be for buses only or at the very least have single or double bus lanes along them.

Another diagram that caught my attention relates to speed limits, proposing that most of the city centre becomes part of either a 30 kph or 40 kph area. This is a great idea:

The main public transport diagram shows that light-rail (of the dinky tram variety I assume) will be considered as a way of linking the city centre with its surrounding suburbs. The primary cross-town bus corridor definitely looks like it shifts to Wellesley Street:

A lot of the devil will be in the detail – how much will the Plan’s vision be taken into account in things like improving the pedestrian friendliness of Stu’s favourite intersection? To what extent will the potential of Aotea station be realised in the location of its entrances and exits? How long will it take for Quay Street to be transformed from a six lane superhighway to our premier waterfront boulevard? Will the powers to be have the courage to put bus lanes along Customs Street, even knowing that might lead to congestion?

One thing is pretty clear throughout the Plan, which I will expand upon in future posts, and that is the utter reliance this vision for the city centre has on constructing the City Rail Link.

Rolling out the AT HOP card

With confirmation that Snapper have been kicked out of the integrated ticketing project, the rollout of the AT HOP card is now underway. This will start first on the trains, as detailed on the MAXX website. The biggest change is that we are (finally) shifting our ticket sales away from the 1920s approach of selling them onboard:

On-board ticket sales are being phased out

Get used to buying your ticket before you board. You can also buy a single paper ticket before you get on the train at easy to use Ticket & Top Up machines at all rail stations where you can use cash, eftpos or credit cards.

Please Note: If you get a transfer ticket, please continue buying this on-board.

With the AT HOP card being based on stored value, there will also no longer be a need for 10 trip tickets. I presume that 10 trip tickets will also be phased out on the bus network – for some reason this wasn’t done with the first phase of implementing HOP, though it’s incredibly rare to see anyone using multi-journey rather than stored value these days.

10 Trip tickets are being replaced

10 Trip tickets will be replaced by the new Auckland Transport HOP prepay card (AT HOP). You will still keep your 10 Trip ticket discount on the AT HOP card.

10 September 2012:
10 Trip tickets will no longer be sold on-board trains or rail replacement buses.

27 October 2012:
You can still buy 10 Trip tickets from Ticket Offices and Ticket Agents until 27 October 2012.

From 28 October 2012 10 Trip tickets will be replaced by the AT HOP card. If you have a 10 Trip ticket, you can still use it until its expiry date which will be stamped on the ticket so you can use the full value.

From 28 October the new AT HOP card will be activated and will be able to be used on the rail network. On this date there will be quite a number of changes – these are listed below:

  • Tagging-on and tagging-off will ensure that you receive discounted travel automatically.
  • 10 Trip tickets for rail will be replaced by HOP Money loaded onto your AT HOP card and no longer be available for purchase.
  • Adult Monthly Rail Passes (City Monthly, All Zones, and Regional) will be replaced by loading an adult monthly pass onto the AT HOP card.
  • You can still buy the current child monthly passes at Ticket Offices and Ticket Agents.
  • Day Rover tickets will no longer be sold.
  • $1 charge for bikes will be discontinued for all customers; free travel for bikes at staff discretion through busy periods.

Single tickets will presumably still be sold on board for a bit longer, although eventually I think that will be phased out as well – as the tickets will be able to be purchased from the machines at the stations.

One big unanswered question is whether people will be able to get one of the new AT HOP cards for free, while still retaining their existing HOP/Snapper card. As it may be until this time next year before the AT HOP card is working on all bus services, resolving this issue will be critical. There will still inevitably be a lot of confusion, perhaps best summarised in Brian Rudman’s article today:

That HOP card is the one used on NZ Bus vehicles. It’s already here. But it looks different from the new AT HOP card.

The existing card tells me in large type it is “Your ticket to Auckland”, but it isn’t, and never will be. It’s not compatible with the new HOP card, as anyone who tries to hop off a bus and on to a train will soon discover.

For the minority of us who have followed the Byzantine twists and turns of this saga, this comes as little surprise. But for the ordinary commuter about to be battered by another marketing campaign to get a HOP card, I can see nothing but confusion.

I’ve already got one. No you haven’t. Get off the bus, that HOP card doesn’t work … Do you take cash?

This is going to be a bit messy.

Oil Strike!

The Herald on Saturday ran a big feature on the role of oil in the NZ economy:

Pain at pump offset by $2bn exports

The reason for this is the publication by Edison Investment Research of the first ever New Zealand Petroleum Sector Yearbook [Commissioned by whom? The government?]. The general tone of the article is reassuring or even exciting for anyone who might be concerned about the cost of filling their gas tank- with much of the emphasis going on the fact that NZ has been recently exporting around $2billion worth of oil products a year, certainly I got the impression from the report that things are booming in the NZ oil patch. So I thought I’d have a closer look at the numbers:

NZ OIL 1974-2011

Helpfully the Ministry of Economic Development has quite a lot of data on their website. The volumes are Thousands of Tonnes and seem to include every form of petroleum product; all liquids and even LPG. [Note; It isn't clear whether they are straight volumes or in 'oil equivalent' volumes, as different products have different densities and therefore value.]

Lots of interest here. Yes we have been exporting between 1-3mt per year since the mid 1980s, pretty much everything we can produce. And there has been local production since the mid 70s, around the time of the OPEC oil shock. So clearly a fair bit of work has been going on for quite a long time in the hunt for oil in NZ. And output has wobbled about a bit but this is not the most important issue visible in the chart above. The most important point is that these are not net exports; we import way more than either we used to or than we have ever produced. Its that pink line that really matters. We are a member of that most vulnerable of clubs: Net Oil Importing Nations.

The Herald article reports it thus:

The yearbook finds that in 2004 exports from petroleum sales totalled $502 million but by 2008 this had surged five-fold to $2.63 billion.

Good news! By selecting one of the weaker years, both in volume produced and oil price, and comparing it to the highest ever it can look like we’re on to an on going winner. Ok so the purpose of the report is to talk up the prospects of the industry and to persuade us that finding more oil is the best answer to our concerns about our dependence on this increasingly expensive substance. The article does go on to concede that even if much much more was produced here that wouldn’t lead to cheaper fuel -in contradiction of its own headline:

In the local market the upstream exploration and production sector has very little bearing on the downstream market for petrol, Edison analyst John Kidd says.

Actually the the real case is not ‘very little‘ but rather ‘none whatsoever‘; we’ll be paying the market price however much is produced here, especially as we won’t even own it. Regardless, the general tone here is all very bullish- don’t worry it’s all going to be great, that’s certainly the vibe for those only skimming the news. Yet it is clear that what has driven the fluctuations in the production numbers over the last almost 40 years is the geological reality in the field: the first production peak of 1997 reflects the highest ever flow rate of the Maui field which then immediately went into decline. The slightly higher 2008 peak is a result of the Pohokura and Tui fields at or near their highs. And since then these [and other minor sources] have been joined by Maari and Kupe fields. Already all of these fields are producing at a lower rate just a couple of years into their lives [the 2012 figures are lower still]. Saudia Arabia it is not.

Yes but any amount of oil is worth pumping out because the stuff is so valuable. You bet. Though of course those high prices also hold for those 7mt we are importing as well. Looking at that chart with the nation’s general wealth and balance of payments in mind we can all be grateful that the rate of growth in imports of the 1990s didn’t continue until now because then we’ed be importing- and trying to pay for- around 9mt per annum. And because we export everything we find [Marsden Pt refinery can't use the local stuff- although IIRC that will change] the level of imports flattening off is not a result of finding more locally and pulling it out of the ground, but because we have not been burning it quite so wantonly since those price rises really started hurting around 2005.

It takes a huge amount of work, expertise, and investment to find this oil, and while the government does receive royalties and locals get good jobs along the way much of the value heads off overseas to the foreign investors in the local oil industry [hitting us in the 'Invisibles' account, not mentioned in the Herald article]. So while every barrel of local oil does help to offset the ones we import it is not a straight swap in value. We still have to use a huge amount of our precious export returns to pay for this stuff; and it ain’t getting cheaper. That’s a lot of milk.

So what do we do with all this black gold and where could we best put effort into trying to reduce our dependence on the stuff? Here’s where it goes:

 

Cherry Pie: Another interesting chart. International transport is basically 3/4 Aviation fuel and 1/4 Shipping Fuel Oil. Non-Energy Use is stuff like bitumen, lubricants, and solvents. Very surprised and encouraged that Ag, Forestry, and Fishing is only 6%. There are some other bits and pieces, but wonderfully we don’t burn much of this valuable commodity to heat our homes or make electricity any more [we largely got off that after the little warning provided by the OPEC squeeze of the 70s]. So clearly Domestic Transport is the area that you would target if looking for savings in the oil import bill, so what’s going on here?:

Ok so flying and shipping aren’t the issue here. I think it is pretty clear where this is heading: We’ve struck oil! 9/10 of 2/3 of all that oil we import is all used in cars trucks and trains to move us and our stuff around on land. Not down on the farm, not at sea or in the air, but on our roads and rails. Or 4.3 mt of the 7mt.

Effort and attention to lower this figure while still improving our connectivity is surely as important as looking for new supplies. Yet this idea seems to be considered impossible by the government, if they think of it at all. It’s just not as sexy as ‘Drill Baby, Drill’. And nor does it have a multi-billion dollar industry and well funded lobbyists fighting for it. Indeed it isn’t easy as the structures that we built up in the age of the steep increase in imports in the first chart above, when oil hit the low of 10 bucks a barrel, mean we have little choice or flexibility in how we move things and people.

Well here’s one thing we should do immediately, because we are no longer in the age of cheap oil and likely never will be again, and therefore need to change our ways to face this new reality:

When making decisions around investment in new transport projects the analyses should include calculations of whether or not they help us to significantly change our lives and businesses in ways that reduce our dependence on imported oil. So clearly this would privilege all forms of electric propulsion, but also the much more efficient rail and sea freight over truck freight. As well of course urban, provincial, and intercity public transport. But especially active and electric urban modes where there is growing demand and a high number of, frankly, low value car journeys that could easily be substituted if appealing alternatives were more available.

Individuals and individual businesses have been doing what they can to reduce their exposure to the increasing cost of road travel; we can see this not only in the flattening off of the import line above but also in the flat-lining of the kilometres travelled on our roads since around 2005. A date that precedes the global financial crash but not the start of the steep increase in oil price. But this isn’t enough, individuals and businesses cannot do much more by themselves. They need options to allow them to make the changes that they clearly want to be able to do.

It seems that there is an idea that has a hold in the minds of many who have mostly lived through the age of ever increasing vehicle growth and fuel use that it is in some way causally linked to economic success. But research shows here that is no longer true. In fact the reverse is almost certainly the case now, as we continue our dependence on this increasing expensive input we put our competitiveness further at risk.

The challenge is to grow the economy while reducing our exposure to this input. And if anywhere can New Zealand can; we have a fantastic renewable electricity resource, the sea freight we so rely on for export is a relatively modest user of hydrocarbons, as is the primary production sector, and we have already arrested the growth in waste so now it is time to really turn that pink line in the first chart around. The first step is to let go of the lazy and out of date assumption that nothing can be done, that hydrocarbon use is, as Mr Brownlee says; ‘inelastic’.

Well it will certainly remain fairly inelastic while there is no policy to address this in land transport. The charts above clearly show this where the opportunity lies. The national significance of spending $12 billion on new duplicate highways is increased dependence on oil imports, while at the same time letting a huge opportunity to invest in a better and freer future slip by. Tragic.

I am not calling for us to stop looking for oil, but I am calling for an active effort to reorient our infrastructure away from inefficient and inflexible oil dependence with just as much vigour; the results will almost certainly be quicker, more significant, and longer lasting. We just have to stop thinking like it is still last century on energy and land transport matters. Governments love to talk about innovation, but it is no good just wishing for miracle new technologies while investing in yesterday’s world; there are fresh things we could start doing today, like these Smart policies for example.

Because after all just how valuable that oil we do find is depends on how much we are using ourselves. It’s the net figure that really matters.

 

POST SCRIPT: Here is a link to the current government’s Petroleum Action Plan. Precisely one half of the problem, looking for more; not thinking anything about how to use less.

Here is a more sophisticated view of the world we are now in:  http://gregor.us/policy/the-demise-of-the-car/

‘A paradigmatic shift in global energy usage is underway that has finally become more well-defined, and more visible.’