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How to fund the CFN and save $14 billion

On the topic of the Congestion Free Network, we frequently get asked what we would do about the roading network, and what projects we would change to go along with our proposal. We have said before that we think there is still a need for some roading projects during the same time period, and that we think there will be plenty of budget (over and above what we are spending on the CFN) to allow for the best parts of the roading network to be built. However, with this post, I want to take this further and see just what we could pare the roading aspects back to.

Our financial analysis of the Congestion Free Network notes that the CFN will cost about $10b to construct between now and 2030. However, that’s actually slightly less than 40% of the $34 billion that the Integrated Transport Programme proposes to spend on new transport projects over that same time period. Here are the projects and associated costs outlined in the ITP:

The colour coding is also important, because the ITP looks out to 2040 whereas the CFN only relates to what happens up to 2030 (for now).

We have worked through the project list outlined above to suggest what changes could be made to this package of projects to better align with the CFN. At this stage, our analysis is just at a very preliminary level for many projects. However, for a number of key projects, our analysis is based on many of the posts made on this blog in recent months and years, which have commented on the merits of different transport projects. As noted in what we’ve said previously about the CFN, our intention is to suggest a realistic alternative to what’s in the ITP, and also to ensure that we optimise all kinds of projects to ensure that they deliver value for money. For example, we’ve made some big savings from doing rapid transit to the airport differently to what’s in the ITP.

What becomes quite clear from this process is that there are extremely few occasions where we have completely removed a project from what’s in the ITP. Instead, we have often decreased the amount of money we think should be spent on that particular project – because what has been suggested is ‘overkill’ for the problem actually faced. Doing Operation Lifesaver instead of Puhoi-Wellsford is perhaps the best, but certainly not the only, example of this.

A few other important things to consider are:

  • The ITP numbers appear to have made a couple of pretty massive numerical errors – in relation to the costing of AMETI and the Albany Highway upgrade. We have noted these and would love Auckland Transport to provide us with the correct figures – we’ve taken a bit of a ‘stab in the dark’ in the absence of this information.
  • For “Auckland wide” projects, we’ve had to think about the extent of what’s in the ITP that would be spent before 2030. Our feeling is that a fairly large chunk of the greenfields expenditure would be post 2030 and a reasonable proportion of the “other urban arterials” would as well. For greenfield areas, this is based on the assumption that the Auckland Plan did not expect much growth in these areas until after 2020 (as there are areas like Flat Bush & Hobsonville to develop in the meanwhile and planning completely new areas does take time), plus our general belief that changing demographics and trends may mean less demand for living on the urban periphery than has been anticipated. For other urban arterials, we note that many arterial upgrades are specifically identified in the project list, so the “general” fund appear likely to come as a next phase of projects. Nevertheless, to be conservative, we’ve suggested that 65% of region-wide project expenditure will occur by 2030.

So let’s start with the roading projects:

ITP - CFN roading projects 1

The headline figure is that we’re able to get expenditure on roading projects down from $21.7 billion to $7 billion – a pretty massive decrease. But perhaps what surprised us the most in doing this exercise was just how easy it was. Often we really don’t even think we’re being harsh in many ways – for example:

  • We still do Penlink, although only two lanes and not four lanes;
  • We still do AMETI as currently planned;
  • We do an even more significant version of the Lake Road upgrade (to enable high quality bus provision);
  • We still do the key parts of the SH1 upgrade south of Manukau;
  • We still do many of the smaller arterial road upgrade projects as planned (e.g. Pukekohe Eastern arterial, Tiverton-Wolverton, Albany Highway and many others).

The main areas where we’ve saved money come from a variety of locations, where we really think that we’re cutting out the poor value aspects of many projects yet still doing what makes sense:

  • Only grade separating the SH20A Kirkbride Road interchange, and not widening all of SH20A. With a railway line to the Airport we certainly won’t need to widen the motorway – plus the Airport’s own roads seem like the choke point here. Almost $200m saved here.
  • Not four-laning from the Airport to Manukau via SH20B. As per above, if we build rapid transit (we suggest a busway, costs in the PT section to come) along this route then we don’t need to widen the existing road. This saves $235m.
  • Pulling the ‘East West Link’ back to being a more sensible project, rather than the community-destroying monstrosity options being looked at right now. Truck lanes on Neilson Street and a few clever tweaks to motorway access for around $150m are likely to deliver most of the benefits of a much more expensive project. This saves close to half a billion dollars.
  • Doing Operation Lifesaver instead of Puhoi-Wellsford. This saves about $1.4b.
  • Building rail to the North Shore instead of the stupid road crossing. This saves nearly $2b.
  • Suggesting some significantly cheaper options for upgrades to Great South Road. Goodness knows why we supposedly need to spend nearly a billion dollars on three sections of this road between Penrose and Manukau. This saves nearly $800m.
  • Significant savings from greenfield areas and other arterials – as described above for greenfield areas, and also because we think that based on the huge numbers for Great South Road projects the other arterial costs are also likely to be overblown.

So clearly we’ve saved a lot of money out of the future roading budget. But how much of that do we shift across to public transport and how much is just “not necessary” – and therefore can go towards closing the supposed ‘funding gap‘?

ITP - CFN PT projects 1

At a high level, the CFN proposes to spend just over $1 billion more on public transport before 2030 than what is proposed in the ITP. It’s just a little more on things like a SH16 busway, and a little less due to changes like a busway instead of rail between Manukau and the Airport.

Now let’s put these all together for a comparison:

ITP - CFN Totals 1

So, overall, the CFN is nearly $14 billion cheaper than what’s outlined in the ITP over the same time period – and this is with North Shore Rail included. If you were to push North Shore rail out to beyond 2030, (which we’re reluctant to do but agree it’s one of the latest parts of the CFN built) then the CFN is $17 billion cheaper than what’s in the ITP. Which means the funding gap is gone.

The CFN also has more of a balance between funding public transport and roading – with a 42% roads, 58% PT funding split. This compares to the ITP proposing to spend 72% of its capital on roads and only 28% on public transport. I guess the key point is that we can actually afford a high quality PT system and it can be done without having to drastically cut against road building. Instead, the roading programme would focus on smaller network tweaks, rather than road projects which are massive in scale. It’s also worth noting that this is just one suggested approach to dealing with the problem; some of you might have different ideas and would like to see certain projects at the expense of others.

48 comments to How to fund the CFN and save $14 billion

  • Chris

    There’s a few things I’m confused about in the CFN plan:
    1. Electrification to Pukekohe as well as a Drury Station. Not so sure about the need for a Paerata Station by 2020 and definitely no Karaka South Station.
    2. Two bus lanes between Auckland Airport and Manukau are a better idea than making it into a four lane highway, but I don’t think that there will be congestion on this road by then to require either of the two.It sure does looks nice on the CFN map but I don’t think it’s necessary. Currently no buses go directly from the Airport to Puhinui Station, so I would make that a priority now as well as further improving the Puhinui Station in the near future and if the finances are there, straightening Puhinui Rd and then removing Bridge St.

  • This makes it obvious that the CFN plan is workable, logical and fiscally responsible.

    I am confident therefore that it will be ignored by our current Wellington regime, especially our highly qualified and competent Minister of Transport.

  • Funding gap gone…now we’re talking!

    I’m interested to hear your thoughts on the questions I posed to you last evening at the Better Transport Debate…speech published on my blog

  • Steve F (GEN X) Civil.

    Agree with your findings and recommendation 100%. Although think we can perhaps make even bigger savings and turn this thing around very fast indeed if we do a Network Repriorisation with implementing a 2030 strategy with 30% available buses and roadmarking the space needed accordingly.Maybe also pole delineators as well as symbols in areas for fast/quick separation from the car lanes on the motorways for a shared bus/truck lane. The fact is the over investment in car mode has given already the space required, we don’t need to tack on in 95% of the network.

  • PBY

    Great work spelling out how affordable the high quality PT option is and how we can get rid of the funding Gap!

    A couple of imporvements…. Botany to Manukau is about 10km long and will need to include some type of structure to get get past SH1. Costings for high quality busways are closer to $20 million per km so I would push that estimate up to around $200 million. I also think the ITP underestimates the Real time information and integrated ticketing costs.

  • Steve F (GEN X) Civil.

    I’m suggesting a 3 night roadmarking / pole delineators where appropriate (Dec 11,12,15 ) ideally night operation to change the proportion of the existing road space. Getting a rapid network and a multi-transfer network ready to go live-lined up in the background as best as planned. Ideally the first month free to trial this network out. Corner turned once and for all. Now continue with your above financial plan ” no concern” with 30% on public transport heading upwards and congestion smashed from here on in.

  • Steve F (GEN X) Civil.

    The mayor last night mentioned we are sitting on about 8 to 9% and 20% do-able. With what I’m suggesting I think 30% straight away is achievable if done “Full Network wide” and all motorways left lane shared bus/truck pole delineated from the car lanes as much as practicable. Can it be done fast…yes it can. Will disruption will big..no it won’t and xmas timing is perfect and gives until Jan 20 to be tested at max again. Also adding the 100 contingency (to the 30% nominal on the rapid -2030 network) buses to help with holiday escape north and south and advertised that way. Or this approach to assist when rail gets phased in line by line.

  • Steve F (GEN X) Civil.

    Whilst I respect the Mayor for fighting the cause so far against the status quo.We in 95% of the network do not need to invest in square metres of additional asphalt and he is now being misled or doesn’t think he has the numbers to fight it?. The over investment so far can be utilised by changing symbols and ideally adding in unrestrictive seperation measures real fast and getting PT ready to hit the ground running which it won’t be used to or Auckland apart from the northern busway.Public Transport like a vacuum cleaner will remove cars off the grid. Just by receiving one lane everywhere where possible. Time to start the Hoover and suck the congestion up.

  • Steve F (GEN X) Civil.

    Now the public transport teams we need to get something up fast prior to stations and electrification. We just need the bus on-road to have priority now and fast and maximise the rapid system be it rail, bus or ferry as best we can. I’m confident we can do this and get 30% patronage with a roadmarking/signal optimisation model but it has to be network wide not phased in. One lane everywhere motorways and arterials and sharing with trucks. Time to just mark it and do it…and ideally fixing other modes like cycling,freight around focus walking areas.

  • Steve F (GEN X) Civil.

    The roading design criteria is in a vicious cycle to create wide footprints and needs to hit with a hammer on the head. How can PT grow and reduce vehicle numbers if you don’t put it in to start with? Why model existing why not model 30% mode share by this xmas and 50% by Dec 2014 if it can be done with paint and dividing up up the pie/road we already have?

  • Steve F (GEN X) Civil.

    I’m requesting one lane to paint new markings on.That is all for a chance of 50% patronage. Do not let the Road Network be the limiting factor which it is currently and stifling growth, and increasing emisssions it just isn’t right! Also cycle lanes why are there still gaps again this isn’t right and you are opening up negligence claims. Time to remark the whole lot and get it sorted!!!!!

  • Steve F (GEN X) Civil.

    In fact the next cycling accident I volunteer my services for free to explain that with paint you can have a cycle lane.Why wasn’t it marked?

  • Ari

    Steve, I think your suggestions are pretty naive and only serve as a distraction. You can’t solve our complex mode share issues with a bit of paint.

    • Starnius

      I don’t think Steve’s suggestions are necessarily naive – you can change a lot of mode share (and potentially quite quickly) with paint. What’s naive is to believe that such suggestions will be more likely to be implemented the more often he posts comments on here, despite the many vested interests, regulations, bureaucratic inertia and political opposition that will prevent such a scheme.

      To achieve real change, on has to find the balance between visionary and realistic, and then find the correct allies and/or the appropriate time when things are at a cusp. The CFN does pretty well there.

      • Liz

        Agreed. We are not going to get out there ourselves with paint and change the roads overnight. Its an interesting idea but I don’t see how useful it is unless work is actually been done at a higher level to implement it. Constantly commenting on here (and often on posts that have little to do with what he is talking about) will only serve to annoy the other blog readers. And of course it distracts from the rest of the blog and the CFN discussions.

    • kris_b

      Certainly it’s a hell of a distraction having to wade through a dozen+ comments repeating the same thing on every single post.

  • grantb

    I like it. Addressing only the PT side left a gaping hole that many people would pick up on as unworkable, but combining the two makes the savings really pop out.

    When you are talking about *billions* saved and probably better outcomes, then it is eyeopening, Most frustrating is the $1.4b on the holiday highway – if nothing else, just swapping that for PT investment would be a huge win.

    Raises an immediate question. How do I make the CFN version happen rather than the Integrated Transport Programme?

  • Liz

    Steve: Why don’t you write up all your suggestions into a concise and coherent article, and ask for it to be posted as a guest post? Then people can discuss it on that post. At the moment your constant and repetitive comments are unfortunately starting to annoy the other readers/commenters, which is a shame because some of your ideas are quite interesting – and I’m sure that in skipping over your comments we are probably missing anything new.

  • Meanwhile in over-built motorway news: http://www.bloomberg.com/news/2013-09-11/california-toll-road-risks-biggest-default-since-detroit.html

    “Bonds for three highways linking inland suburbs to coastal business parks are rated one step above junk and traded last month at their lowest price this year.”

    • conan

      Add just about any Australian PPP motorway project. Which is why the PPPs being proposed here don’t have any operational risk for the providers of the funding.

      • But this Government doesnt care. Its decisions are made based on ideology not evidence or results. PPPs fit with a neoliberal agenda and therefore they will pursue the projects and, even if they fail, they will blame it on some external factor that was nothing to do with the actual project. Probably Socialists – i.e. anyone who doesnt believe that private enterprise and “the market” can solve every economic and social problem.

        • conan

          They should care. There is nothing wrong with PPPs if the risk of the project is properly shared or taken on by the private bit of the Ps and they are allowed to fail as many of the Australian projects have, with the investors losing some or all of their money. That is all part of the ‘neoliberal agenda’.

          The government here is proposing taking all the risk and essentially using them as a way of keeping debt off the books by using PPPs as an expensive funding method and that is just stupid. So the projects here won’t ‘fail’ because there is no risk falling on the private part of the Ps.

          And I have real issue with the concept that opposing projects that offer poor outcomes, or outcomes better served by cheaper alternatives is a ‘socialist’ behaviour. The ‘market’ would never build projects that don’t offer at least a reasonable chance of return of capital along with a risk adjusted return, and they would certainly not spend a dollar more than needed for the desired outcome. You’d hope the government would be as careful with the tax dollars they are entrusted with managing.

          • Yes I agree that it is not so bad if the projects fail and the investor is left high and dry with no come back against the taxpayer.

            However, it often still usually means that a roading project has been favoured over a PT project and has failed because of a lack of demand. It is an inefficient and non-productive economic exercise that has diverted money and energy from more economically efficient infrastructure.

            Yes agree with you completely on the “socialist” point. Unfortunately it seems to be a perception that acting in a neoliberal way has its own rewards regardless of the outcome – like a religious observance.

  • Frank E

    A couple of points
    1) Are you proposing a full on busway on SH20B. To me that seems a bit over the top there aren’t that many buses running along the road. In my eyes a four lane road would be better though I would just have some passing lanes.
    2) If it’s only $50m more expensive I struggle to see why Penlink can’t be 4-laned. It will reduce congestion a fair bit and be safer.

    • Bryce P

      $50M is still a lot of money. How much cycle infrastructure could be built for $50M? Bucket loads. After, there will be a 4 lane road out to Silverdale still. That’s 6 lanes in total. Surely enough for many years to come. Alternatively, the 4 lane bridge and road could be built with 2 lanes being dedicated bus lanes and buses from Whangaparoa connecting to an interchange on the Northern Busway at the same point as the Penlink connection. Now that’s balanced spending.

    • Maybe there are not many buses because taking the bus is no better than driving as they are caught in the traffic. How many more buses now run on the North Shore because of the Northern Busway? Chcken and the egg.

      Adding more lanes to relieve congestion, brilliant! Why have we never thought of that before? Oh wait…

  • KLK

    A couple of things:

    This post needs it’s own full page ad in the Herald. We need some wealthy benefactors ;-). That page should have at the bottom prompts/questions for ratepayers to ask their Local representatives. Really heap the pressure on them – get them educated, make them accountable.

    Secondly, I think the time has (almost) come to stop basing your numbers/savings on the cancellation of P2W in it’s current format, in favor of Operation Lifesaver. Sadly, i think that horse has bolted. There may even be some brownie points in relenting on that, if only not to be seen as “anti-roads”, which of course you are not.

  • Bruce S

    It would be great if the non-aucklanders around NZ that have balked at the amount of money being spent in the IPT would get behind the CFN just from a fiscal point of view. Publicising this to audiences not normally aligned with ATB or ecologically driven, could result in more political and popular support for the CFN.
    I think it would be better to end the post with a comparison between the CFN and the updated costs of the ITP, rather than the original one with the errors in it (albany hwy upgrade 665$m down to 70$m). That way you are comparing apples with apples, not apples with old apples.
    Having larger numbers is convincing rhetoric but I think its better to be comprehensive and accurate, giving opponents less ammunition and making PT proponents more credible.
    Good work at poking holes in this flimsy pro-road debate.

  • Adam W

    This is a great post which shows with the high cost of transport in Auckland it comes down to opportunity cost.
    Simply what do we what to spend our money on.

  • mb

    I agree with other posters that the bus lane from manukau to the airport is not worth it. Normal buses dont really go to the airport as they are not equiped to take luggage.. only coaches, and the coaches go to the city because thats where the demand is. It seemd like a lot of money wasted on a bus lane that will have hardly any or perhaps no buses on it at all.

    • Sailor Boy

      You’re forgetting that 100,000 people are meant to be working in that area by 2030.

      • I’ve caught the 380 previously to get out of the airport to the south and it works well. But dedicated bus lanes would be excellent. Highlighting the already excellent link would bring more riders. I think that the route is or will be changed to loop up to Onehunga. Make the service BRT style with limited stopping and high frequency service and watch the patronage increase. As has been show with the Northern busway and the various link services, when you do put in the frequency, people use it.

  • mb

    I disagree. Even if there are plenty of workers around there , it doesnt really make sense to send any high quality public transport to the airport unless it has the ability to pick up passengers with luggage.
    To me thay stretch would have to be rail or nothing. Rail that connects to the south and also manukau station.

    • Nick R

      “Rail or Nothing” sounds like a very good way to end up with nothing 90% of the time.

      I can assume you’ve never been backpacking or travelled outside NZ? I’ve been to scores of places overseas where people routinely take luggage onto local buses just fine… And if that is a stretch, then why not buses with luggage racks? We already have plenty of those on the streets of Auckland.

    • Sailor Boy

      Many of the gold coast buses have luggage racks as well as serving the local population. Why not a bus that connects to Manukau and to the south?

  • Noel

    It looks like the roading part of the CFN was not summed up correctly. Adding up all the road projects gives $6,774,000,000, but the total used in summing up the CFN cost is $6,970,000,000, an extra 200 million.

  • mb

    Well no. I have travelled quite extensively. Im actually writing this from south korea where i live. ive never seen a basic bus going to the airport of any place ive been, theyve all been coaches , but ill take your word for it.
    And i dont agree that its the case that we will get nothing if we focus on rail in this corridor. Iirc the council has already investigated possible routes and modes to the airport and the report suggested that the full rail loop was the preferred option.
    Also, when i said stretch, i meant that stretch of road, not its a stretch.

  • Gavin Buchanan

    mb I’ll start you off with a few examples of places where normal buses go to the airport and it works well. Glasgow, Edinburgh, Manchester, Heathrow, Gatwick, Amsterdam, Prague, Berlin Tegel…….there are probably about 50 more I’ve been to that I could name but it would get boring

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