Funding the Basin Flyover Fight

Yesterday the Architectural Centre in Wellington have launched a fund raising campaign to fight NZTA’s continued waste of our money on expensive lawyers for their hopelessly unimaginative and retrogressively conceived Basin flyover project. Here’s the Give-A-Little site with a recap of the situation.

Basin Appeal

 

Accelerated Project Costs

The government aren’t the only one discussing budgets today as the Auckland Council are holding a session of their budget committee. It will see the council discuss the recently approved Accelerated Transport Programme which has been brought about by the introduction of a $99 levy per residential property to pay for transport. I’m not sure if the councillors who have since written to Len Brown asking to discuss the levy again will be able to do so or not. As we know the Transport Levy allows for around $170 million a year worth of extra investment in Auckland for three years. We already have a rough idea of where the money will be spent, this is shown below.

interim-programme

We also had a decent idea of what projects will be funded and it looks pretty good – although for most of it we didn’t know just how much money had been assigned to individual projects. One part of the agenda for today’s meeting finally gives us that detail. The most interesting parts are in Attachment A & B.

The first attachment lists each project in the council’s overall Auckland Plan Transport Network (APTN). Three separate columns list how much the was budgeted for the project over the next ten years based on the APTN, the do not much Basic Transport Network (BTN) and a third column what will the outcome is under the levy funded Accelerated Budget.

The tables show there has been quite a bit of change among some projects, presumably reflecting additional thinking that has gone one since the LTP analysis was done. As an example some projects have been re-scoped which has resulted in increases or decreases in costs or changes in timing has brought funding forward that was previously outside the 10 year horizon of the LTP. An example of some of the changes are below.

LTP Accelerated Plan project changes example

However changes over the 10 year plan are in some ways a bit meaningless as there will be another LTP in three years that will likely rehash the priorities and also have to deal with changes in funding that will likely result from the proposed Transport Accord. As such it’s only really worth focusing on the next three years and the tables below show just how much funding is proposed for each project over that time. Unfortunately it’s not the highest quality but if needed click through to the PDF linked earlier to get a slightly better version.

LTP Accelerated Plan Budget

LTP Accelerated Plan Budget 2

By the time you read this the council will likely have already discussed this item so feel free to add to the comments if any changes happen.

Building on Government Land

The Government are announcing their budget today and one of the surprises in it slipped out yesterday. The government plan to open up to 430 hectares of of publicly owned land in Auckland to be developed.

3 News can reveal a major part of tomorrow’s Budget will be a plan to develop housing on parcels of Crown land in Auckland.

A work tender mistakenly placed on a government website today details how the programme aims to deliver housing developments “at pace”.

Finance Minister Bill English and Prime Minister John Key are keeping quiet on tomorrow’s Budget.

The problem is one of the big secrets is out, bizarrely, with a tender advertised on the Ministry of Business, Innovation and Employment website for development of housing on Crown land, including residential land parcels and government land parcels.

It’s looking to: “Identify suitably qualified parties or consortia with the capability and capacity to deliver housing developments at pace in Auckland.”

After 3 News saw the advertisement, the Government gave over a document (see below) admitting more details. The Government will open up 430 hectares of public land in Auckland for affordable housing – that’s more than 50 rugby fields of land.

Housing Minister Nick Smith said he expected “thousands” of houses would be built on the land by private companies.

Dr Smith said money from the Budget would be provided for the Government to buy some of the land off universities.

Dr Smith said the private companies that built houses would not have to pay for the houses upfront, instead paying the Government once the houses were sold.

That is likely to be controversial, as it will be seen as the Government giving a leg up to private companies.

So the Government wants to start building houses and put them on public land, like that owned by the University of Auckland on its Tamaki campus.

“I’m having a pretty close and hard look at where there are land holdings that will help deal with the challenges over housing that we have in Auckland,” says Dr Smith.

Dr Smith is talking about land owned by universities, schools, tertiary institutions, health boards, defence, Housing New Zealand, the New Zealand Transport Agency and Department of Conservation reserves.

“You’d be quite astounded by some areas of reserves, and when you say the word reserve you assume that’s a park or land that is effectively vacant or being under-utilised,” says Dr Smith.

Making better use of the land we already have within the urban area is of course a far better strategy than carte blanche opening up of land of land on the edge of town. We’ve even talked before of places where we could do that, such as the Grafton Gully Multiway Boulevard idea which would improve transport and open up development opportunities on a decent chunk of government owned land.

Grafton Gully Blvd - Development

We don’t have full details yet however overall I think the idea from the government is the right one – although I’m not sure about the part where developers only have to pay once a house is built and sold.

To give an idea of just how much land the government are talking about, 430 hectares is about the same size as the land within Auckland’s Motorway collar.

Auckland CBD area

Of course that area will be spread throughout the city across many different sites. That leaves the question of just where the government has land. The answer is in a surprisingly large number of places. The map below is a couple of years old but shows all land owned by Housing NZ or listed as owned directly by the Crown. That still excludes a lot of land such as that owned by the NZTA but it does give a sense of of just how much there is out there.

Govt Land in Auckland

 

 

As you can see there’s a lot of government land around, especially Housing NZ land in clusters around Tamaki, Otara, Mangere and Mt Roskill. There are also some large individual chunks although they are unlikely to be involved as some include the likes of Paremoremo and Wiri Prisons, scenic reserves and schools. What all this means is the 430 Hectares are likely to come from freeing lots and lots of smaller sections for higher density developments. That’s not a bad thing at all although the reaction from locals to changes in Tamaki shows it might not be a straightforward change. Below is a closer look at the Tamaki area showing just how much government land there is there.

Govt Land in Auckland - Tamaki

Council/Government battle heating up

It seems the fight between the council and the government is turning into an all-out war. The first front was on housing where Building and Housing Minister Nick Smith threatened to override the council who are refusing to approve three SHA’s in rural Kumeu because of a lack of supporting infrastructure. The second front was opened up by Transport Minister Simon Bridges on Saturday who attacked the council’s transport plans saying they don’t have the right mix of projects to deal with congestion well enough in 20-30 years-time. When pressed the only project he could think of as a project that he didn’t agree with was rail to the airport. I’ve already covered off how the refinements that AT have been making to their plans appear to be making them more effective.

Yesterday Prime Minister John Key joined in the battle.

The jump in rates is due to the council’s decision to implement a flat levy on households to fund the city’s future transport needs. Households will fork out an extra $114 a year over the next three years for cycle and bus lanes, regardless of the value of their home.

The Government has ruled out giving the council the power to implement a fuel tax.

“I just think their priorities are wrong,” Prime Minister John Key said on TV3’s Paul Henry programme this morning. “They’ve got to turn around and say, what is the most important issue? The most important issue has to be, in our view, provide roading solutions in the very short-term for where people live. Only 15 percent of people live in the CBD.”

The Government has also called on the council to rethink plans to build from the airport to the CBD.

“If they want more tools for funding, I think they have to demonstrate to everyone they have the right strategy,” says Mr Key.

“When the strategy they’ve got is focusing on 15 percent of where people live – not the 85 percent of where they live, or on the fact that we need to build more houses and build those houses we need infrastructure – I think the council does need to sit down with the Government and say okay, because we have a lot of experts. They are going to do that I think, because in the end, if they don’t, then their options will be limited to basically their rates, and there’s only so far rates can go.”

Firstly I’m not aware of many houses that don’t have access to a road. By talking about people needing roads to where they live it seems as if he’s trying to bring in some reference to the special housing areas issue. If so then he’s quite off the mark as people aren’t living in those places (yet). It also seems he’s getting his housing and employment figures for the CBD mixed up however some of that kind of be excused, he was talking in the heat of the moment. The things that concerned me the most are:

The short term thinking – we’ve spent decade after decade doing the quick, easy and cheap options for building suburbs and it’s left the city a mess with poor public transport, walking and cycling options. One of the key reasons given at the time for having a single council was to break through the short term thinking and why the government required a 30 year spatial plan which is meant to provide a more strategic approach to how the city develops. By just quickly throwing in roads it’s likely we’ll have to go back in 5, 10, 20 years and retrofit everything to fix up the mistakes that will inevitably be made.

The ‘We know Best’ attitude – Auckland is no small rural town, in creating a single council the government set up an organisations with access to a lot of expertise and resources. When it comes to transport expertise I suspect AT is on par with staff from the NZTA and the two work very closely together. In fact they are so close the CEO from the NZTA sits on AT’s board and the NZTA have their logo on AT’s plans. Given all this it’s hard to fathom how exactly government staff conducting any rational investigation would be able to come up with any radically different solution.

The lack of an alternative plan – So far it seems the government just want to sit on the side-lines throwing rocks Auckland without actually presenting any alternative vision for the future. As mentioned just above it’s hard to see how the government could suddenly find a massively different solution to Auckland’s needs. Perhaps the timing and state of some projects such as rail to the airport might not be right but the project is 10-20 years away which is plenty of time to make adjustments if they are needed. It seems that the real reason behind the governments stance is simply for some political power game.

It’s not just about the CBD – The government and the media have talked a lot about how the councils plans are very CBD centric however it’s clearly untrue. One of the key purposes of the New Network and integrated fares is to make it easier to travel across town and transfer between services. It significantly boosts frequency all across the urban area and is shown best in the maps from yesterday showing the difference in frequent services from now to 2018. Yes there are projects in the CBD however they’re also projects that have regional scale impacts.

RPTP Proposed 2015-2018

If the government is playing some form of power game it would help if they got their numbers right. Yesterday Radio NZ’s Todd Niall published this excellent piece about the figures both Bridges and Nick Smith were brandishing around in public. In essence both have been caught out using wrong or misleading figures to push their arguments.

Another good piece on the issue has come from Tim Watkin over on Pundit.

If Key holds this line and refuses Auckland the power to act, he’s very much at risk of getting on the wrong side of the politics heading into 2017. The biggest bit of feedback from the recent council submissions was “get on with it”. Aucklanders may have run out of patience with Brown, but they (especially those under 40) will quickly run out of patience with a government that’s stopping the building of better public transport.

And as we all know, lose Auckland and you lose elections.

But worse, you can forget flags and surpluses. If National doesn’t let Auckland get on with it, Key’s government will have a legacy (like National governments of the 1950s and 1970s) of stopping Aucklanders getting the transport networks – and therefore quality of life – that the country’s biggest and only international city needs.

At this stage it’s very much looking like we’re heading down the road of another government leaving a nasty transport legacy in Auckland and if the previous ones are anything to go by, future residents will not be impressed.

John Key and Simon Bridges, show us your plan.

TV3’s The Nation on Transport in Auckland

This morning TV3’s The Nation devoted most of its programme to the issue of Transport in Auckland.  It featured a segment looking at transport including comment from Patrick and an interview with Minister of Transport Simon Bridges which was discussed with their panel. I also happened to be on their twitter panel. Here are the videos and some of my thoughts.

First up the piece on transport which I thought covered off most of the issues fairly well.

TV3 The Nation May 15 Transport

I was quite pleased they talked to Christine Fletcher, I think she’s been a hero for Auckland and much of the improvements we are seeing today wouldn’t have been possible if she hadn’t pushed so hard to get Britomart built. And of course Britomart has been wildly successful. The graph below shows how many people are using the station compared to was expected in the business case

Daily Britomart Passengers - Actual vs Projected

Next up was the interview with Simon Bridges.

 

TV3 The Nation May 15 Simon Bridges

He started out by arguing that the council has cut funding from transport. That’s actually correct if you compare things to what was expected in the previous long term plan however not particularly relevant for a discussion about what we build in the future. When it comes to that future Bridges was far less clear with his position effectively being “let’s have more talk about what the solutions are”. While I agree that some of the projects in the later decades are a bit less clear as to their priority or impact e.g. an Additional Waitemata Harbour Crossing. That doesn’t apply as much to the projects over the coming decade or so though and it would be stupid to not fund improvements now because of one or two potential projects in the plan 20 -30 years away. It’s also quite likely that if those projects don’t go ahead there will be others more important to take their place and also need funding.

Perhaps Bridges also needs to be reminded what projects it is that Aucklanders have said they want the focus to be on.

2015 LTP Final Changes in transport Investment

He probably also needs to read my post from yesterday about the impact of AT’s current programme.

Most importantly, if the government want to continue to talk and not act then I think it’s critical that they have this discussion in the public, not locked away behind closed doors. Right not it seems that they want to dictate what Auckland should do and will override the council on it.

Lastly was the panel discussion. I thought our friend Sudhvir did very well while Matthew Hooton was suggesting that people want sprawl and we should encourage people to commute from Hamilton.

TV3 The Nation May 15 Panel

A Transport Levy for a more balanced Transport Plan?

Yesterday the Mayor Len Brown presented his amended proposal for the council’s Long Term Plan (LTP) which follows on from the public submissions and surveys. The most significant change from the draft that was consulted on is in the area of transport. Len seems to have heard the message that the government isn’t about to agree to tolling or regional fuel taxes to pay for the council’s massive transport wish list and that if it is going to happen, it will need a lot more discussion and work between the two parties.

As an interim step he’s proposed a three year targeted transport levy of $99 for residential properties and $159 for business properties – that’s roughly $2 & $3 per week respectively. That levy is said to be enough to fund just over $170 million worth of extra investment a year or about $500 million over three years.

As a comparison the LTP documents that talked about either motorway tolling or a combo of regional fuel taxes and rates was to raise enough money to cover around $300 million in extra investment a year. As such Len’s proposal represents just over the half of that.

We frequently criticised the council for its build all plan that would have required all that extra funding and called for a middle ground to be found that prioritised the projects that Aucklanders have repeatedly said they want more focus on – public transport and cycling. And of course we weren’t alone in this suggestion with Generation Zero creating the Essential Transport Budget (ETB) that explained this idea in more detail. Both the AA and the NZ Council for Infrastructure Development  (NZCID) also called for a middle ground to be found although they didn’t specify what projects should be included. The table below shows the transport area’s submissions to the LTP said should have more or less focus.

2015 LTP Final Changes in transport Investment

I think that aiming for enough money to fund $170 million and doing so through a targeted levy is probably a good outcome. It means there should be enough money to build the good projects we need while retaining some pressure to ensure the council and Auckland Transport focus on high value projects that will actually deliver good outcomes. I think one area there could be some contention with the transport levy is in the fact it’s the same flat rate for all residential/business ratepayers. That means there’s no differentiation based on property capital value like there is with rates and as such is likely to hit lower income households more than higher income ones.

The council haven’t released the full details about what extra projects will go ahead however Len did mention these ones specifically were included. All figures are over the next three year period

  • Busways to the North and Northwest
  • Increase walking and cycling funding from $14 million to $124 million (including $75 million from the Government and NZTA).
  • Increase the network wide safety programme from $28 million to $111 million
  • Bringing forward some PT interchange projects
  • Electrification to Pukehoke
  • Park & Rides at Papakura, Westgate and Silverdale
  • Tamaki Dr and Ngapipi Rd safety and amenity improvements
  • Improvements to Lake Rd
  • Road sealing budget in Rodney to increase from $3 million to $10 million

That seems like quite a good list but as mentioned we will really need to see the full details first before commenting further. Some of these – such as busways to the North West – don’t seem practical to be built in the next three years so any funding is likely to be around the planning work needed.

Now that some of the council meetings are also being recorded and published online you can now see the debate if you’re interested. The two video’s below include Len presenting his proposal however you can also see the councillors questions in the other video’s available here (Governing Body – Item 11). The transport part is in the first video and as part of it Len also confirms the government is open to working on a transport accord.

The second video above is also interesting as it contains the comments from Councillor Cameron Brewer. I say interesting as Brewer has a history of being quite hostile towards Len and his priorities however he now appears to be quite supportive and even called on Bill English to add a line into the governments upcoming budget for their 50% share of the City Rail Link (from about 17 minutes). He also put out this press release on his support for Len’s rates proposal and the transport levy.

As mentioned earlier the transport levy have given the council three years to work on getting the government over the line. It seems to me that once ratepayers have adjusted to the extra money on their rates bill that the levy is something we could see stay much longer than three years as an easier alternative to implementing other funding mechanisms such as tolls. This wouldn’t necessarily be a completely negative thing either as the reduced funding compared to the tolling/regional fuel tax options would hopefully help AT remain focused on high value projects that will improve accessibility by all modes.

Not everyone is happy though, Michael Barnett from the Auckland Chamber of Commerce has called the levy a lazy way to raise money.

“I would hope that the capital raised will go to fast-track the big inter-generational Auckland projects that will make a measurable difference to reducing congestion.”

“The last thing Auckland needs from this proposal is for the ‘interim levy’ – really a targeted rate – to become a permanent fixture in Council’s revenue provisions,” said Mr Barnett.

Auckland still needs to see serious action by Auckland Council to seek new revenue sources other than ratepayers, make smarter innovative use of its $40 billion-plus asset base and achieve efficiency savings by focusing spending on core activities.

“The use of ratepayers this way – while an interim measure – is outmoded and will be seen as unfair to the many property owners who make little use of the transport system or are retired and asset rich but have little spare cash.

It also seems that Transport Minister Simon Bridges isn’t happy with the mix of projects the council has planned based on his responses in Parliament yesterday. He repeated variations of the text below a few times, just which projects he thinks should be prioritised is unknown though.

What I certainly can say is that we are always interested in ways to reduce congestion in Auckland and ways to improve public transport. In fact, what we have seen so far in terms of Mayor Brown’s preferred plan in Auckland does not do that sufficiently in the 2030s and 2040s. We want to work with him, with the council, and with Auckland to make a better, more optimal plan that does deal better with congestion and public transport.

There are also some more comments by Bridges in this article.

Overall the Mayor’s announcement yesterday is a good outcome however as mentioned we really need to see a list of just what projects are in and which aren’t.

Council Transport Survey Results

As part of the Long Term Plan the council received thousands of submissions however on the topic of transport, to ensure they also had a representative sample of the views of all Aucklanders – not just those interested enough to make a submission they conducted a phone survey. The survey canvassed the views of 5,022 people and was carried out by Colmar Brunton with the entire process was peer reviewed by the University of Auckland. Yesterday they released the results of that research. Overall they are interesting but I think they have some major flaws.

The survey had three main aims, to measure:

  1. Aucklanders’ support for increased investment in the Auckland Plan transport network (APTN)
  2. Which of the two proposed funding options Aucklanders prefer
  3. How perceptions differ by travel behaviour, local board, and key demographic groups

Overall results for the preferred transport plan and how to fund it are below.

Just over half of people preferred the Auckland Plan Transport Network which is about building everything regardless of whether it helps improve the transport situation or not. As you can also see support for that plan increases with income so those who earn the most want the most spent.

2015 LTP Colmar Brunton Preferred Transport Option

Now it’s not surprising that this is the result when the council only presented such binary options to people. Below is what the participants were asked.

“Auckland’s population growth means Auckland’s transport issues will get worse over time. There are two options to address this: a basic transport network and a more comprehensive transport network. I’ll explain each and then ask which one you support.

The basic transport network covers the completion of current projects, some priority new projects such as the City Rail Link, and also spending to maintain current roads and the current public transport network.

The more comprehensive transport network also includes the City Rail Link and everything else in the basic network, with many projects being completed earlier, plus a range of new projects. These include new roads, rail, ferries, busways, ‘park and rides’, and cycleways, as well as school and community travel plans and safety programmes.

Over the next 10 years, the comprehensive network will cost around $300 million more than the basic network each year. The additional funding needed each year would either come from a motorway user charge, or from higher fuel tax and annual rates increases.

So, in summary, the basic network will result in greater traffic congestion than the more comprehensive network, but will cost less. On the other hand, the more comprehensive network will result in less traffic congestion than the basic network, more public transport options, and greater economic benefits, but it will cost more.

Do you support the basic transport network or the more comprehensive transport network?”

While I don’t expect the council to consult on the likes of Generation Zero’s Essential Transport Budget, there’s no indication that effectively the council are only presenting the extreme ends of the spectrum. I think it’s inevitable that a more balanced middle ground will have to be found and as we learnt recently, it’s not just us that think that with both the AA and the NZCID also saying the same thing (although without specifying what exact projects they prefer).

When it comes to funding a similar percentage of respondents preferred the extra funding needed to come from motorway tolls and as you’d expect the more people used the motorway the less keen on this option they were.

2015 LTP Colmar Brunton Preferred Transport Funding

The issue I have with the funding option is that I suspect most people vote for it thinking that they’ll be able to minimise their costs either though shifting their travel time (a good thing) or more likely finding alternative routes which will inevitably mean clogging up local roads and hampering any effort to make them better for active modes, PT and local connections.

The report breaks each of these results down by a number of measures and while there are some differences in the numbers across the different measures the overall trend is similar to the results above.

The final decision on what transport plan will be chosen and how the council would prefer to fund it won’t be decided by councillors till next month. However if they do go for an option that requires more funding they will have to go to the government who have so far not been keen on the idea. Today Transport Minister Simon Bridges is reaffirming that scepticism. He too seems to share the belief that the plans presented aren’t effective enough – something he’s said to us too.

Mr Bridges said, the question of funding tools did not arise until there was an effective transport programme.

Perhaps it’s time the council presented a middle ground version that delivers the benefits in the area’s Aucklanders say they want focus on i.e. PT and Active modes.

Simon Bridges speaks to Infratil

Last week Infratil – the owner of NZ Bus among other things – held their annual investor day and one of the speakers was Simon Bridges whose ministerial portfolio’s of Transport, Energy and Resources as well as being the Associate Minister of Climate Change cover a lot of Infratil’s businesses.

The video of his talk is online and there are a number of quite interesting things he’s said in relation to transport which I’ll cover below.

Simon Bridges Infratil

In the first part of his talk he talks about what he sees as two key themes running through his portfolio’s, they are:

  • Climate change – for which his two portfolio’s account for about 50% of NZ’s emissions.
  • Disruptive Technology – where he cites changes such as electric vehicles and autonomous vehicles – which he says he wants companies to be testing them in NZ.

For those that want to watch the video the actual discussion on transport starts at 8:45 however I’ve transcribed the relevant parts below.

In a sense it’s a period of continuity, the goals of this government in transport have been the same throughout our time in office. There’ve been productivity and growth and supporting that through our transport network. There’ve been safety and there’ve been getting greater value for money from the NZTA – primarily I should say from the NZTA.

I wouldn’t be doing my job as transport minister if I wasn’t in a sense adding my values and overlay on to that so I’ve got four or five personal priorities that I want to drive quite hard. One of them is results. I want to make sure I’m getting results primarily from the New Zealand Transport Agency and that they’re delivering the things we’ve said we would like the Roads of National Significance, like the urban cycleways, like an accelerated roading package in Auckland and a regional package throughout the regions. Significant money involved in that and I expect them to deliver those projects on time on budget or if they can much better than that so that will be a real first tier priority.

There’ll be a slight change of emphasis relevant to New Zealand Bus. In a sense if you think about what we’ve done, we’re caricatured as the roading guys and girls because the roads of national significance have been such a strong branding exercise. Actually there’s a lot more to it, we’ve spent 2 billion dollars on metropolitan rail in Auckland and Wellington, about $1.7 billion in Auckland and about half a billion in Wellington. And I want to work harder as a matter of emphasis on us emphasising what we are doing on public transport and other modes whether it’s cycling whether it’s metropolitan rail or the like because we’re spending significant sums. Those that follow these things will have seen the government policy statement which informs where the money goes. I’ve upped the money in some of these areas and we will be doing more in that regard.

The suggestion that the RoNS are just a successful branding exercise is something Simon mentioned to us when we met him recently however it’s clearly much more than that. As we’ve talked about and shown many times before the RoNS have been prioritised above and sucked funding out of other projects, many of which performed better economically. It’s also been a strong branding exercise by the government to suggest they’ve spent $1.7 billion on rail in Auckland when much of it money spent or committed by the previous government or a loan that Auckland has to pay back.

Auckland will be a real priority, effectively I want to make sure we’re getting the best value for money and the right projects out of Auckland for the money we spend. That is probably going to involve Central Government having more formal engagement with than we have in the past with Auckland City the Council, with Auckland Transport, a more hands on role because as I say we want to see an effective value for money long term plan for that city because it’s so crucial to New Zealand’s Growth.

I’ve mentioned technology and my itchy – in a sense faith in it. I want to really see us using technology in transport. I’ve mentioned EV’s, autonomous vehicles and so on but there’s many examples where we get efficiencies, more productivity and enhance New Zealanders lifestyles in that.

The comments about Auckland are particularly interesting. There has been increased talk recently about the government and the council agreeing on a transport accord. While an agreement does sound good in theory it all comes down to just what’s inside the agreement and there’s always a risk the either party will force a number of unpalatable projects on the region for political reasons. More useful would be if it focused on how to get better and more coordinated planning, funding and prioritisation of projects. One possible way would be having AT also be responsible for state highways and the local rail network.

And some questions and answers of the Minister

Question (16:15): As you know in the last few years private motoring has got cheaper thanks to the cheaper price of petrol but catching the bus has got more expensive because the regional councils are pumping dough into the trains as you mentioned. Is that something that you’re worried about?

Simon Bridges: In relation to rail vs buses – I mean that’s a bit blunt but if we sort of put it like that – yeah I do, I don’t want to say worry about that, but I do think we have to tread somewhat wearily and make sure we’re in a sense platform neutral across these things. There is a lot more life in buses and I’m not kind of just saying that because I’m here in a room full of investors where you’re a company with buses I genuinely think that.

So you and I have talked for example, privately but I’m happy to open about this idea of light rail/trams in Auckland. It seems to me that’s a strange idea when you take into account that, look in London buses are the hottest things there. They have more passengers going by bus than they do by the underground and that’s because it’s seen as a premium offering. It’s got the wireless, it’s a better offering and so I think as we see more double decker buses there’s a lot more life in busing in New Zealand. It has a very strong capacity to bring the public transport and congestion benefits that yep you can also get for rail but I think often times you get from rail at a higher price.

I would agree that there is a large role in the future for buses in NZ and that still the majority of PT trips will occur on them however it’s also important to remember they are part of an overall network. When the changes that Auckland Transport are making are finally rolled out we will do away with modes that compete with each other and instead they will complement and enhance each other. It’s also a reality that on some parts of the network the capacity that buses provide simply isn’t enough and in those places rail is likely to be the best option – just like in London and any major city.

Question (18:50): Two questions related to transport, do you see a role for the private sector in some of those projects because at the moment they seem to be a central and local government initiative but we’ve seen the role PPPs can play in accelerating infrastructure. The other question around light rail for example, is it in some New Zealand projects more of an affordability issue or a timing issue.

Simon Bridges: So on your first one without going over the top on it. I think what we can say is a couple of generalisations that one, let’s just talk about Auckland for a second. It’s so fundamentally important because it’s going to see 60% of New Zealand’s population growth for the next 20 years, three quarters of a million population growth over the next 30 years so that’s Waikato/Bay of Plenty put together, that’s all of Canterbury put together, maybe a bit more so it’s important right.

What we can also say about big cities is that I think I’m very safe ground to say as they get big their transportation problems do become more complex and the projects they require become bigger and more complex alright. So even if you take my, what I’ve just said about light rail vs buses. Yep we are going to do the City Rail Link, to answer your question directly, yep there may be a place for light rail there might not be but over time we’ll work that out but there will be bigger and more complex projects is what I’m saying to you.

Where they meet the sort of tests we have I think there’s a good chance they will they’ll be by PPPs. We will need large corporate and international expertise on these things. So my hunch, more than a hunch, my view is that we will see more PPPs in New Zealand over time. We’ll pick up pace on that and that’s in the large roading projects but also in those significant public transport ones. I mean we already know we’ve got City Rail Link coming, no decisions been made on that but that foreseeably will be a PPP. We’ve got the Waitemata Harbour Crossing coming sometime in the mid to late 2020s. That will be the biggest infrastructure project New Zealand’s ever seen, it’s a $5-$7 billion project that chances are will be a PPP. Puhoi to Wellsford etcetera so already there you’ve got potentially three, four, five PPPs.

Of course based on what AT have been saying we could probably add Light Rail to that potential PPP list. I also think that depending on how they’re structured the public transport PPPs have the potential to be some of the more attractive ones as they could allow the private sector to also really integrate and leverage land use around stations. While that’s also possible if the council funds it directly.

Overall some interesting comments by Bridges and they are certainly more open towards Auckland that we heard from his predecessor. We await with interest to really see what stamp he will put on the portfolio.

Northland, Politics, Transport, and Pork

On March 28 the (normally safe) National-held electorate of Northland heads for a bye-election. The outcome of the bye-election will be fascinating for several reasons.

The first reason is that it’s politically important. If Winston Peters wins then it will be more difficult for National to pass controversial legislation, because they will need the votes of not just one but two support parties.

Legislation like the Sky City casino-for-convention-centre deal and RMA reforms suddenly become pawns in a three-way game of arbitrage between parties with somewhat different support bases and philosophies. Amusingly, National could end up leading a government not too dissimilar to what they warned the opposition would have been like, had the latter prevailed at the last election.

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The second reason the bye-election is so interesting is that transport has, somewhat unexpectedly, become a major campaign issue.

Early in the campaign, the Minister of Transport (Simon Bridges) suddenly found $69 million in previously stretched transport budgets for two-laning a number of bridges in Northland. This funding announcement was apparently made without any information or advice being sought, or received, from transport officials. This is an announcement that Winston himself would be proud of, indeed he’s pulled similar stunts in the past.

The reality for National, however, is that few people seem to have been impressed by the transport funding announcement. Instead, it has received considerable attention for delving so blatantly into pork-barrel politics.

Northland-morepork

Questions have also been raised about the effectiveness of the spend. For many of the locals interviewed by Campbell Live, two-waying bridges seem to be far from the top of the priorities list.

National have also apparently linked funding for the Puhoi-Wellsford highway to the outcome of the bye-election. Amazing how an apparently essential piece of transport infrastructure can so suddenly becomes not so important when there is a bye-election.

I’ve personally found it interesting watching National’s transport pork-barrel approach in Northland, especially in light of recent political happenings in Australia, where I am currently based.

In Victoria, Dennis Nathpine’s Liberal Government tied their political fortunes to the eye-wateringly expensive $18 billion “East-West Link”. It was a bad pick, with polls showing the East-West link had levels of support that were half of comparable metro rail projects. Napthine was subsequently kicked out of office.

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Meanwhile, in Queensland, Campbell-Newman built a reputation for delivering large, expensive, and largely unnecessary motorway tunnels. His Government’s promises of more roading pork were spectacularly dismissed after only one term in office after a 12% swing back to Labour.

And at the Federal level Tony Abbott’s unwillingness to fund passenger transport improvements in Australia’s rapidly growing cities is receiving growing criticism. This is in stark contrast to the former (and possible future) Liberal leader Malcolm Turnbull, who supports passenger transport.

As an economist, I think there’s a key message for National in all of these events. It’s not just that roading pork hasn’t been sufficient to save political bacon, but also that there is often a large gap between stated and revealed preferences.

Why is this important? Well, I suspect what all of these conservative parties have done, including National, is held focus groups where they’ve asked people whether they support more investment in roads. In response, many of these people have said “yes”. Something like these guys.

 

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The problem with stated preference surveys is the trade-offs are usually not made explicit. More specifically, when you invest more in roads, you often find that you don’t get much bang for your buck.

So while people say they want more investment in roads, after a couple of years of fluffing about with largely ineffective road investments, they suddenly realise that they’re not actually much better off. Political strategies based on stated preferences may therefore work in the short run, but they are likely to run out of gas in the long run.

The lesson for National in all this, I think, is that they increasingly run the risk that people will catch onto the fact that their transport pork is failing to return much value. Every new road that opens which fails to meet forecasts, every new business case that is shown to be baloney, eventually creates the case for your opponents to shred your credibility. It won’t happen overnight, but it probably will happen.

This is especially true when you’re foolish enough to do what National have done, i.e. hang your dirty transport laundry out to dry in the blazing heat of a Northland bye-election.

This seems to be a timely and early lesson for Simon Bridges: Emulating the pork-barrel approach employed by Joyce and Brownlee will not necessarily bring you enduring political success. Just ask Nathpine, Campbell-Newman, and Abbott if you want to see the proof in that political pudding.

Additional Harbour Crossing back on agenda

The government has announced it is restarting the process to protect the route for an a third harbour crossing that raises a huge number of questions.

New Waitemata Harbour crossing future proofed

Minister of Transport, Simon Bridges, has taken steps to future-proof the route for an additional Waitemata Harbour crossing in view of the rapid growth Auckland is set to undergo in the next 20 years.

“I have asked the NZ Transport Agency to recommence work on what will be a critical transport link for Auckland and the upper North Island.

“The preferred route for the additional crossing is a tunnel east of the Auckland Harbour Bridge between the Esmonde Road interchange on the North Shore, and Victoria Park Tunnel and Central Motorway Junction in central Auckland.

“Advisors are preparing for the designation process and are putting together a business case focusing on the timing of construction and potential funding options,” Mr Bridges says.

In 2013 the Government announced its support for a tunnel in preference to a bridge.

“With increasing demands on Auckland’s transport network, the Government will continue to work closely with its local government partners to provide a resilient network and wider transport choices,” Mr Bridges says.

The NZ Transport Agency says an additional crossing is likely to cost between $4 billion and $6 billion, and is likely to be needed between 2025 and 2030. A construction start date will depend on a number of factors, including the rate of freight and traffic growth.

Mr Bridges says that the additional Waitemata Harbour crossing will work in conjunction with the existing Auckland Harbour Bridge.

The business case will look at a range of public transport options, including heavy rail. The NZ Transport Agency and Auckland Transport will be working together on this part of the project, including any necessary route protection for public transport.

“The Government knows that investment in all modes of transport will ease congestion and bring lasting benefits for Auckland and for New Zealand as a whole,” Mr Bridges says.

The NZTA last studied an additional crossing five years ago and the reports from that study are available here. The questions I have are in no particular order.

With construction depending on factors such as traffic growth, will the new business case take into account the actual traffic volumes from the last 8+ years. After almost 50 years on constant increases, traffic volumes fell after 2006 and have been so stubbornly flat that they are still less than they were in 2003. Not only did the previous business case – produced in 2010 – predict growth that hasn’t materialised but they also used a model to predict the volume for the starting year of their prediction (2008) which was well above the observed actual volumes.

AHB Volumes

Related, what will be the employment and traffic volume targets the project must achieve. After all if the City Rail Link is going to have bogus targets foist upon it then why shouldn’t the single most expensive project we’ve ever considered.

With the project costing between $4 and $6 billion how will we pay for it. To put things in perspective we currently spend about $3.4 billion on transport per year for the entire nation and that includes costs for state highways, NZTA contributions towards local roads, road policing, and of course NZTA contributions towards public transport. Within that budget we spend $1 to $1.4 billion on state highway improvements. In short an AWHC would suck up massive amounts of cash and that would impact on a huge numbers of projects from all around the country. Even if built as a PPP the ongoing payments would likely cripple our transport budgets for decades. As an example Transmission Gully which is costing around $850 million will have repayments once it opens of about $125 million a year. AWHC would be significantly more than that.

Will the business case achieve a Benefit Cost Ratio of greater than the 0.3 it did last time (Answer: presumably it will because of the changes since then to the NZTA’s Economic Evaluation Model allowing for a longer assessment period and reduced discount rate – still won’t be above 1 though)

AWHC 2010 BCR

It’s all very well talking about a horrifically expensive tunnel under the harbour but what constantly seems to be ignored is what happens on either end of the tunnel. Studies prior to the 2010 one have talked about how any new crossing would also require major expansions to the Northern Motorway to cope with the increased capacity thrown at. How much is it going to cost to duplicate SH1 to Albany and beyond? If not then we just get this situation.

WestConnex

What impact will the $4 billion we’ve been spending to create the Western Ring Route have on traffic and travel behaviour. At the very least we should probably be waiting till after that work is completed and traffic volumes have settled down before we do any analysis of traffic demand over the harbour.

WRR project location

Regardless of how much it costs or what the benefits are one fact that can’t be ignored is that this project will have major impacts on the environment it passes through. It effectively creates a new motorway out in Shoal Bay with all the red hatched parts in the images below being reclamation and the blue parts being viaducts. I wonder what the likes of the Herald’s John Roughan will say about – note:  I still don’t think he’s admitted he was wrong about the Northern Busway.

AWHC north of Onewa AWHC Sulhur Beach

Further if some of the residents of Northcote got so upset about the idea of Skypath, I wonder what they’ll think of having a mini spaghetti junction on their doorstep. Even more so when they realise that the two square boxes on the image above where the new lanes change from tan to purple colour (to the right of the 1 symbol) are 35m high (~10 storey) ventilation stacks for the exhaust fumes inside the tunnel. There is also one on the city side next to the current Air NZ building (below).

AWHC Westhaven

One mini positive is that the government are at least saying the business case will consider a rail crossing however in my mind the NZTA also need to assess options that involve building a PT only crossing first. A dedicated PT crossing along with Skypath are the real missing modes across the harbour. This is especially important given the huge growth we’re seeing in bus passengers from the shore and in the morning we’re seeing up to 30-40% of people crossing on a bus – up from 18% in 2001. This growth in PT is likely to continue for some time yet, especially once the new network eventually makes PT much more useful to a wider variety of people. One risk is I suspect there are quite a few people behind the scenes that will think an acceptable solution to PT across the harbour is just to leave it on the existing bridge.

Car and Bus trips across AHB

The 2010 and 2011 car results seem like they could be incorrect but I can’t confirm it

 

Overall route protection itself isn’t a bad thing but any suggestion that this is project is needed any time soon is fanciful thinking. There are far greater priorities in Auckland such as the CRL and significant upgrades to PT in many other areas. The government should be focusing on getting those projects consented and underway first.