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$212 million in spending on roads with few benefits

A couple of days ago I received a bunch of documents from an OIA request to the NZTA on the $212 million in regional road spending announced recently. I haven’t been able to look at them yet seeing as I’m away however it looks like I’m not going to have to go through them immediately as Rob Salmond is already on the case following a similar (but not exactly the same) request to the Ministers office.

Salmond devotes a bit too much time to partisan point-scoring, as he’s an advisor to the Labour Party, but his analysis unearths some worrying facts about the economic analysis of the projects. His analysis is definitely worth reading.

As a reminder, the majority of the $212 million in new road spending was to come from the Future Investment Fund – i.e. the proceeds from recent asset sales. According to the press release, five of the fourteen “critically important regional projects” are going to be progressed immediately at a cost of $80m, they are:

  • Kawarau Falls Bridge, in Otago
  • Mingha Bluff to Rough Creek realignment, in Canterbury
  • Akerama Curves Realignment and Passing Lane, in Northland
  • State Highway 35 Slow Vehicle Bays, in Gisborne
  • Normanby Overbridge Realignment, in Taranaki.

In spite of their critical importance, Salmond finds that the projects almost all performed badly on NZTA’s cost-benefit analysis:

Five of the roading projects receive the worst kind of assessment from the officials at NZTA, an estimated benefit cost ratio of “0 to 2.” (see page 32) This means the officials cannot discount the possibility of these roads having no benefits at all, despite costing the taxpayer millions. More on this later. All the projects have a benefit cost ratio quoted as a range, partly to fudge against the public knowing the exact numbers.

Why would they want to do that? More on that later, too.

Officials estimate that up to $130 million of the highways money mooted in these projects and investigations would be wasted on roads with likely no net benefit. If some of those roads are not ultimately funded, that will represent less money wasted on roads, but more money wasted on unnecessary investigations to tell us what we already know – these projects are dogs.

NZTA considers a benefit cost ratio of 1 as an absolute minimum, as anything below that involves the country actually losing money by doing the project. Usually, of course, benefit cost ratios have to be much higher than that to attract funding, because there are so many possible good things a government can do with its limited money.

Salmond goes on to take a closer look at the analysis of one particular project, the widening of the Kawerau Falls bridge:

…the official cost / benefit ratio for the Kawerau Falls bridge was 1.1 (page 10). Officials said they have tried to recalculate this a number of times, and always come out around 1.1. So what range of benefit cost ratio appearedin the final package for Ministers to consider and promote. It looks like an obvious candidate for a “0 to 2” classification, right? 1.1 is pretty much rightin the middle of that range, yes?

No, no. Officials have instead been pressured into calling this a “1 to 3” benefit project in the summary documents (page 32). That is risible.

If a robust 1.1 becomes “1 to 3” in the sales pitch document, just imagine how dreadful the benefit cost ratios on the “0 to 2” projects really are.

There’s much more in the OIA documents that deserves careful examination and I’m keen to see what I’ve got from my requests, but it certainly looks as though many of the projects don’t add up. From the response I received it does highlight that some of the projects including the Normanby Rd Overbridge Realignment have had and Motu Bridge replacement have had no reports on them in the last 5 years.

It’s interesting to contrast this approach to roads spending with the Government’s decision to axe an extension of the highly successful Northern Busway that would have cost about the same amount.

Environmental effects of an Additional Waitemata Harbour Crossing

The additional Waitemata Harbour crossing is a crazy project for a variety of reasons. The blog has noted before that the project is both completely unaffordable and totally unnecessary because of the lack of the actual benefits when you look at the detail. One thing that hasn’t been noted before however is the huge environmental impacts this project will have the coastline, both and the northern and southern end.

In 2010 an extensive study was carried out, which outlined the major options, looking at both bridge and tunnel options. This was the study that finally put an end to the even more ridiculous bridge idea. Usefully the study for the first time provided some detailed plans of what each option would look like on the ground. The issues is not so much the tunnel itself, but the complex arrangements required to allow for traffic merging between the different routes at the north end south ends. To recap the existing bridge will be used only for city bound traffic, and the new tunnel will be directed straight to the congestion at spaghetti junction.

AWHC north of Onewa

 

The plan above shows the motorway between Akoranga Drive (left), and Onewa Road (just out of picture to the right). The northernmost line is the railway line, however would be sure to take up much less space just built as a rail corridor, and would have a much higher capacity. The red hatched area is all of the land that would be reclaimed, while green is new viaducts or bridges. This would result in the corridor taking up twice as much space as it does now. As for what this would mean, this is the current view in the area. The large area of coastline to the right would be reclaimed.

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Looking north from public footbridge accessible from east end of Exmouth Road.

This next plan shows the area in the vicinity of the Onewa Road interchange, as well as the tunnel portals of both rail (left) and road (right). Again a huge amount of reclamation occurs.

AWHC Sulhur Beach

However what is hidden beneath the plans is the total destruction of Sulphur Beach and the marina located there.

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Looking towards the city from public path alongside motorway. Accessible from Sulphur Beach and Tennyson St beside police station.

Currently this beautiful area is not well known. However in a few years this will very likely change. With Skypath to go ahead within the next few years, this will be the route of Seapath, which would give a great easy link through to Takapuna. Once that happens people will appreciate this area much more, and won’t like to see it disappear under 6 lanes of motorway.

This area will also become a large construction yard, potentially for about 5 years. This will have major effects on areas of Northcote Point, with a large number of houses looking straight into the area. Their seaviews may well be replaced with views of more motorway lanes and flyovers. People on the Bayswater side of the harbour would also have their views affected negatively.

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View from Beach Road on Northcote Point towards area of sea to be reclaimed

On the south side of the harbour things aren’t much better. Around Westhaven marina there is yet more reclamation. The yet to open Westhaven Promenade will have to be completely rebuilt, with part of the marina needing to be reclaimed as even more width is required to account for the sweeping motorway curves. The extra width required is highlighted by the need to extend the Jacobs Ladder footbridge by about 50% so people can still cross the motorway corridor. A number of marine related businesses along Westhaven Drive will also disappear, as the road needs to be pushed north to give the corridor the space it requires.

AWHC Westhaven

The Landscape and Visual report prepared for NZTA summarises the issues that will arise:

The landscape of Shoal Bay and the northern sector will be significantly affected by the scale and magnitude of roading and reclamation. Effects are: changes to landforms and natural features including increased separation of the bay from; loss of beaches, reefs, and open spaces; impacts on cliffs (including diminution of scale and loss of vegetation); loss of natural vegetation and potential change due to weed infestation; diminished/decreased experience and appreciation of natural landscape for travellers. In addition structures such as flyovers, bridges, tunnel portals, buildings and vent stacks are all expected to have adverse effects on existing landscape character and alter the balance between the natural and manmade landscape. The cultural and heritage of the existing landscape will also be affected by changes in the southern sector, particularly in and around Victoria Park. Such changes will include loss of buildings and trees but could also include positive effects due to the removal of the existing flyover.

Unfortunately it makes no attempts to actually visualize what the effects would be, including the vent stack, which would be a very dominant feature. Note 35 metres is about 10 stories high!

” Vent building estimated to be 70m long by 30m wide by 20m high and stacks 35m high”

The stack was rather contentious during the Waterview proposal due to the fumes of a high volume of traffic all begin released in a concentrated area. They will be located at the tunnel portals. One will be in the vicinity of Sulphur Beach, near where the second photo above was taken from the walkway.

Vent Building north

The southern vent stack will be between Beaumont St and Westhave Drive, where the Crombie and Lockwood building is (opposite Air New Zealand).

Vent Building

While an additional rail crossing will require some small reclamation, it will be a large magnitude less than what is required for the road crossings. This is because 2 tracks take the same space as 2 motorway lanes, and there will be no need for complex ramps and mixing of lanes, and of course there will be no need for huge vent stacks.

Hopefully this post will highlight a number of the major effects this project will have on the environment and landscape. Surely this will make some North Shore, St Mary’s Bay and inner city residents think twice about the need for this project, considering the effect on their backyard and harbour. This should also awaken reporters, including one John Roughan who was horrified at the sight of a comparatively tiny reclamation for the busway in 2007.

Holiday Highway approved

Yesterday the Board of Inquiry announced their draft decision for the Puhoi – Warkworth motorway. Disappointingly they approved the Notices of Requirements and other related consents. This of course was in sharp contrast to the decision of another Board of Enquiry to reject the Basin Reserve flyover, which was announced earlier in the week.

Many serious concerns were raised about the proposal during the hearings stage. Cameron Pitches from the Campaign for Better Transport raised a number of concerns about the traffic modelling, alternatives and economic analysis of the projects. These were covered in series of posts back in April and May

Generation Zero (who I submitted for) also raised similar concerns about economics and alternatives.

Unfortunately all these serious concerns were dismissed by the Board of Inquiry. These are excerpts from the draft decision which can be found on the EPA website here.

379. The application documents filed by NZTA are comprehensive. Consultation with interested and affected groups has been extensive, spanning in some cases several years. Section 7 “alternatives” in the AEE sets out in detail the process whereby NZTA considered the various options and alternatives open to it. The Board is satisfied that the consideration of alternatives to the proposed route and designations by NZTA was conscientious and comprehensive. Many evaluation criteria were deployed, including a “value for money” criterion. Seven broad corridor options were evaluated. Inside the various sectors of the proposed motorway short-listed route options were considered and assessed.

385. The ‘do nothing’ option and alternatives proposed by some submitters of upgrading the current SH1 also merits a brief comment. The benefits (assuming appropriate mitigation) of the proposed motorway over the current SH1 route are compelling in terms of road safety, travel times and more efficient fuel consumption. Schedewys Hill features large. The effect of slow heavy vehicles travelling north up this hill on speed, travel time and fuel consumption of other traffic is considerable. The cost of converting the current SH1 alignment on the hill to three or four lanes would be significant, requiring cantilevering over the edge of the hill feature, quite apart from considerations of gradient.

Both of these comments are frustrating.  On the first point, the NZTA provided no rationale for the four lane RoNS standard.  No reason was stated for the requirement that the road should be tollable, thus ruling out an upgrade of the existing alignment.

On the second point, the Board claims the benefits of the toll road are compelling, however NZTA never quantified the benefits of the toll road in the form of a Cost Benefit Analysis that complies with their own economic evaluation manual.  Similarly a Cost Benefit Analysis was not performed on any alternative.

Another part of decision is interesting in that it highlights the need for submitters to bring along experts to ensure their points can be accessed. This of course usually requires substantial sums of money to be raised by these groups, which can be very difficult unless there are wealthy local residents who are locally affected. This was the case with the Kapiti Expressway and Basin Reserve, but not the case with the Puhoi – Warkworth highway. It is also extremely difficult to find an expert willing to go up against the NZTA.

One of the difficulties with which these submissions posed the Board is that no expert evidence was called to challenge the economic and cost- benefit assumptions on which NZTA’s applications were based.

The Board does have the power to appoint their own experts, however they chose not to.  The proposed highway would also have substantial negative environmental effects from earthworks, sedimentation of streams and harbours. These effects were said to be covered by the conditions, most of which were written by NZTA and presented to the board. However some stricter conditions on sedimentation and monitoring were put in place.

Especially contentious during the hearing was the removal of several stands of native bush, including a 0.44ha grove of kauri trees. However the BOI found they were unable to require the designation to be shifted away from the kauri trees!

362. As discussed in Chapter 8.3, the Board considered whether it had the power to shift the designation further east to avoid the kauri stand, in response to submissions received and their own concerns. The Board considered that it did not have the power to modify the designation boundary to an extent sufficient to achieve that outcome.

The news to grant the decision was obviously welcomed by the Government and NZTA, who both are determined to push on with the highway. However the consent of course does not mean that the highway has to go ahead. The claimed $760 million cost (nowhere in the application documents is the cost stated, this is the most recent figure from 2012)  is totally out of proportion to the benefits that result, and the Campaign for Better Transport alternative would ensure that the safety blackspots are fixed. The NZTA release noted that the highway won’t be finished until 2019 at the earliest. That means that no progress would have been made of fixing existing safety issues for over a decade. A focus on safety could have eliminated these blackspots already.

Of course there is sure to be excitement from Northland leaders who have been seduced by the highway. However this highway will cost about twice as much as the NZTA have spent on both existing and new state highways in Northland over the last decade! Northland leaders should really think again about the link between Roads of National Significance and the cuts to regional and rural roading budgets.

Few seem to realise that the new toll road will be just 700m shorter than the existing route, shaving just three minutes from current travel times outside of the holiday period. Reaction from Warkworth locals suggests that they have no idea that they won’t actually benefit from the toll road.  Because the northern junction lies two km north of Hill Street, any Warkworth resident using the toll road will travel about four km further for trips south than if they just use SH1.

Here is a simple proposal highlighting what could be done for the same amount of money.

  • $240 million – Operation Lifesaver including Warkworth bypass and safety upgrades
  • $350 million – One third of the government contribution to the City Rail Link
  • $160 million – Special boost for funding of Northland transport infrastructure. Could cover safety upgrades needed on the Brynderwyns (which has been closed for the last week) and other key routes, as well as major upgrades to the rail network which could carry substantially more freight. This would double the amount of funding spent in Norhtland over the next decade.

Splitting the the funding along these lines would deliver much greater benefits to Aucklanders, Northland and users of the existing road. The funding of the road will be the next step of the project. Given the current stress of the transport budget, and the hundreds of millions in loans required for Auckland projects hard to see how the National Land Transport Fund can cover this. Their have been rumors of a Public-Private Partnership approach for this, but of course that would mean this would be an even bigger drain on the budget, just spread out over several decades instead.

“Hideously inefficient” road spending in Australia

For an interesting Friday afternoon read, here‘s an article from Australia which may ring true for New Zealand as well – especially given the possibility that National is considering an absolutely daft idea, creating a second road-only Waitemata Harbour crossing. From The Age:

More than $20 billion a year of national road funding is being spent in a “hideously inefficient” manner, according to a leaked assessment by Australia’s independent infrastructure umpire.

The Infrastructure Australia report, obtained by Fairfax Media, has also delivered a scathing critique of “monopoly” state-run road entities such as VicRoads, claiming a culture of resisting reform has led to a situation  in which political leaders are held “captive” to demands for more funding.

I don’t know about New Zealand’s current political leaders being held captive… unless perhaps it’s a case of Stockholm Syndrome?
The report was titled “Spend more, waste more, Australia’s roads in 2014: moving beyond gambling”, which seems like a fairly provocative title for a report. It seems fairly likely that someone will get a clip round the ear and a more mundane title (and report) released later this year. Reading on:

“The unhealthy focus of road agencies appears set on ‘getting, controlling and spending’ more taxpayer money, rather than questioning efficiency or value to the motorist and governments,” the report says.

The report, which claimed Australia has a “gambler’s addiction to roads”, said national road spending is now outstripping revenue raised through road-related taxes and charges, warning “Australia’s thirst for roads” would come at the expense of other services as the gap continues to widen. In the four years to June 30, 2012, road spending outstripped road revenue by $4.5 billion.

Of course, we’re in a similar position in New Zealand, with National now reaching beyond the NLTF to pay for its spending on roads.

It suggested there was little consideration of whether Australia’s demands for new roads should be satisfied, and argued that rail funding had missed out as a result.

“The current Australian system assumes that roads are an answer to most transport problems and seeks more and more funding to that end, with little consideration of alternatives that most other developed parts of the world enjoy, such as significant heavy intercontinental rail networks and dominant heavy mass transit systems.”

“[Road proposals seen by Infrastructure Australia] were almost universally poor, in that they lacked any cost-benefit rigour whatsoever,” it said. “The real problem is that road agencies and other road project proponents in industry and the community spend next to no effort examining what problems their projects and plans are trying to solve, other than the perceived problem that they do not have enough road funding.”

Overall, a fairly damning indictment of Australian transportation policy, and we’ll be eagerly waiting for the final (or at least, public) version of the report.

Gerry Brownlee offers to resign

Gerry Brownlee offered to resign as Transport Minster today after getting caught out skipping security at Christchurch airport.

Prime Minister John Key says he was “really disappointed” after Gerry Brownlee bypassed airport security this morning, but he has been quick to back him.

Mr Brownlee and two of his staff deliberately bypassed airport security at Christchurch airport this morning. He offered his resignation as Transport Minister, but that was swiftly rejected by the PM.

“Running late for a plane this morning, I took a door that is normally used for an exit at Christchurch airport onto the forecourt … and you’re supposed to go through airport security,” Mr Brownlee told reporters this afternoon.

He said he did not give it any thought, but has now apologised unreservedly for the action.

Mr Brownlee only offered his resignation after he was contacted by Aviation Security.

In defending him John Key has said

“He’s offered his resignation and I’ve decided, on balance, not to accept his resignation. In making that decision, I considered the whole matter very seriously.

“But I had to weigh up all of the tremendous things he’s done in the six years he’s served as a minister.

So let’s have a quick poll, do you think the Prime Minister should have accepted his resignation over this? One thing to think about is if he had of, who would have replaced him and for that the most likely candidate would be his predecessor – Steven Joyce.

Should John Key have accepted Gerry Brownlee's Resignation

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Note: I think this one could end up a very lopsided poll.

Taskforce to Tackle Loopy Rules

The National Party have announced that if they’re re-elected they’ll form a taskforce to tackle loopy rules and regulations.

Local Government Minister Paula Bennett today announced the establishment of a new Taskforce to rid New Zealand of loopy rules and regulations.

“The Rules Reduction Taskforce in partnership with local government will work closely with the public to weed out pedantic and unnecessary rules that frustrate property owners and councils alike.

“We’ve seen rules and regulations brought in over decades that were well intentioned but end up being confusing, onerous and costly while failing to deliver any real benefit for the property owner or the wider public,” says Mrs Bennett.

The Taskforce will be up and running in October. As well as central and local government experts, it will include specialists from the building and trades sector.

“Anyone doing building work knows just how frustrating and costly the bureaucracy can get. We want to hear from property owners, builders, tradespeople and businesses on rules and regulations that are crying out for sensible change.

“There will be a website where people can send us examples of loopy rules and the Taskforce will hear submissions from the public on areas ripe for change.

“We have rules dictating all sorts of weird and wonderful things from signage over cake stalls to where your shower curtains need to be positioned.

“In another example, a property owner trying to replace a 130 year old fence discovered some of it was on a scenic reserve and they faced having to buy or lease the land.

“While there’s always a degree of rationale behind these rules, the Taskforce will be charged with identifying what should stay and what should go so people can get on with the job of building, renovating or event planning without have to wade through a morass of unnecessary rules,” says Mrs Bennett.

Fantastic, how about they start with some that will have the most impact. That would mean starting with

  • Minimum Parking Requirements
  • Minimum Lot Sizes
  • Minimum Dwelling Sizes
  • Minimum Bedroom sizes
  • Minimum Setbacks
  • Restrictive Height Limits
  • Blanket heritage protection for everything old
  • Minimum Rear Yard Sizes
  • Minimum numbers and size of tress per site

Of course during the debate on the Unitary Plan National Party MPs and aligned councillors fought hard to not only keep these loopy rules and regulations but in many cases to make t hem worse.

Poll shows people want more spent on PT

Stuff have released the results of a poll they’ve conducted asking about transport funding.

Auckland has sent a clear message to the Government over its transport priorities: Give us better public transport rather than better roads.

The latest Stuff.co.nz-Ipsos poll found that nationally people wanted a government focus on better public transport over roads by a margin of 30 per cent to 24 per cent.

Another 40 per cent wanted a focus on both.

In Auckland there was much stronger backing for public transport spending, which got the nod by a four to one margin over roads among those who had a preference.

Almost 43 per cent said the focus should be on both.

For Auckland in particular the results suggest a strong support for more being spent on PT with some quick calculations suggesting 46% of respondents wanted more PT spending, followed by 43% who wanted both with just 11% wanting more spent on roads alone. Understandably the support for PT isn’t quite as strong outside of Auckland but still saw a significant number of people supporting the call for more spending on PT. I’ve put together these graphs based on the results highlight the result

Stuff Poll - Govt Focus

Additionally when asked if the government was doing enough to address congestion once again Aucklanders voted differently to the rest of the country with the majority saying no – although to be fair I’m not sure if Aucklanders will ever think enough is being done.

There was a similar, but less pronounced, division between Auckland and the rest of the country when it came to traffic congestion.

Across the nation 57 per cent felt the Government was doing enough to ease traffic jams in their region.

Even in urban areas there was still a majority at 51 per cent backing the Government’s efforts with 42 per cent saying it was not doing enough.

But in Auckland a clear majority – 54 per cent – said the Government was falling short against 43 per cent who thought it was doing enough.

Perhaps unsurprisingly Brownlee has shrugged off the results suggesting that respondents are confused

But Transport Minister Gerry Brownlee called the result a “confused” message, saying Aucklanders did not use public transport to an extent that made it truly economic.

His response shows two things:

  • That he fails to grasp the difference between peoples aspirations and the reality they live in – we know that many people will only catch PT if it is rational for them to do. You could have a bus stop outside your front door but it isn’t likely to used if the buses that stop there take long convoluted and slow routes. My guess is most people probably want more investment in PT so that it becomes viable for them to use rather than the only realistic option being to drive.
  • That he is confused about the economic and financial viability of transport systems. Both roads and PT provide economic benefits to the country by allowing for the movement of people and goods. Neither roads nor PT are currently financially viable and both require subsidies. PT subsidies are well known and often pointed out by those opposing investing in it however roads also require subsidies. About $1 billion a year is invested in them by local councils – which comes primarily from property rates – and the government themselves are spending additional money from outside of the transport budget on many of their flagship roading projects like the recently announced Accelerated Regional Roads Package.

As the Stuff article says

The poll will be a blow to the Government’s transport policy which has emphasised road building, and in particular its flagship Roads of National Significance, and has rebuffed calls from Auckland Mayor Len Brown for an early start to the city rail link.

National also made its roading policy the centrepiece of Prime Minister John Key’s speech to National’s annual conference, with a promise to spend $212 million from the sale of state-owned assets to upgrade 14 roads across the country.

“Team Key has always been very focused on roads,” Key said at the time.

Cut projects or Increase Funding

The issue of how we fund transport projects has been in the news a lot recently with discussions of the council’s Long Term Plan (LTP). The Herald have been running a campaign basically suggesting the council finances are perilous and almost saying are bankrupt and trying to shift a lot of the blame on to the City Rail Link. The part about the council’s finances being in trouble was well debunked the other day by David Shand who was a member of the Royal Commission on Auckland Governance and chaired the 2007 Independent Commission of Inquiry into Local Government Rates.

Aucklanders should have an informed debate about the state of the city finances, given the $1.4 billion of rates collected annually and the total assets of some $40 billion managed by the council. However, the debate has not been well served by Herald articles which blithely use terms such as “spending spree”, “spending beyond its means” and “crisis point”.

This has led to the usual spate of letters from aggrieved ratepayers who are only too willing to believe that the council’s finances are in a “mess” and that we may be facing “bankruptcy”. There is no “crisis” in the city’s finances at the moment but there are major issues to be addressed.

He goes on to discuss 6 key points about the council’s finances and the heralds coverage and afterwards he notes:

While there has been no spending spree, the city’s finances are not in a mess and we are not presently at risk of bankruptcy, there are some big financial issues to be addressed.

The Herald has referred in the past to the “infrastructure deficit” Auckland faces over the next 30 years based both on coping with future expansion and addressing the past neglect of infrastructure expenditure.

 

The real problem is the sheer amount of projects the council has on the books from legacy councils. Many of the projects are good and critically needed – like the City Rail Link – while others like Penlink are at the other end of the spectrum. As a result there are two separate but combined issues at play when it comes to the next LTP. We need to:

  1. Make sure we’re building the right stuff – that means we need to review every project to see if it’s actually worthwhile building as what we don’t build can be just as important as what we do.
  2. If there is an funding deficit we need to work out how we address that which will likely mean new funding sources need to be found.

Ultimately the solution is likely to be a bit of a combination of the two however unfortunately in ways similar to the density debate with the Unitary Plan talk only seems to coalesce around one option. Len Brown falls in to the second camp of wanting to find new funding sources but not wanting to make some hard decisions about what should be funded and he reiterated that again yesterday when speaking at the annual conference of the Road Transport Forum.

Auckland needs to work “shoulder-to-shoulder” with the Government if it’s to find a way out of a massive budget deficit and fund its much needed transport plans, Mayor Len Brown says.

The city was gearing up for “one of the most important funding debates Auckland has ever seen, and maybe even the nation”, he said today.

It needed to find $300 million-$400 million a year to fill a $12 billion funding gap, which would mean the difference “between steady-as-you-go typical Auckland or whether or not we’re going to seriously invest in infrastructure to deal with the shortfall and to deal with the growth coming at us to build this city as a real economic powerhouse”.

And

“Bluntly, we need to decide do we want a transport package based on current funding sources, which is not at all appealing and won’t deliver the city that we’re aspiring to and we know we need. Or do we find new sources of funding and deliver the transport programme Aucklanders asked for through the Auckland plan and in successive elections.

“Current funding sources would deliver us a transport system that’s half-way there. We need to be bold, innovative.”

funding-gap-analysis

Funding Gap from Keep Auckland Moving

A similar story was told by the Head of the New Zealand Council for Infrastructure Development (NZCID) which is a lobby group for the construction and infrastructure financing industry’s.

Note: we’ve also pointed out in the past the odd situation where the Council are a paid up member of a group who exists to lobby the council to spend more. Also the councils outgoing CFO happens to be on the board.

Head of the New Zealand Council for Infrastructure Development, Stephen Selwood, said the investment plans for Auckland’s public transport and roads are not great and the city must move quickly to avoid massive congestion within 30 years.

He believes a motorway charging regime is the best option for raising money to cover the $300-400 million annual cost of developing Auckland’s roads and public transport. He said users should pay about $3 a trip.

Mr Selwood told the Road Transport Forum’s annual conference on Thursday that he favours motorway tolls rather than the ring road option used in London.

He said a toll would also help clear congested roads by encouraging some commuters onto public transport while others would car pool.

But Mr Sellwood warned that authorities need to move in the next two to three years or Auckland will face much bigger congestion problems by 2040.

Stephen Selwood has been pushing this idea for some time now. Personally I’m  not opposed to using road pricing, in fact quite the opposite in that if done right it could be quite useful for managing demand however there are a number of problems with what Selwood keeps pushing.

  • Tolling only the motorways is likely to push a lot of trips that currently use the motorway on to local roads which aren’t tolled likely putting a lot more pressure on them. It’s also those local roads that carry the bulk of our bus services so there could be quite a substantial impact to PT reliability.
  • Would our PT system be able to cope with such an increase in demand. Even with the new network and new electric trains there isn’t likely to be enough spare capacity to be able to cope if significant numbers of people suddenly change modes. If we decide to go down the path of road pricing then we really need a concerted effort to get our PT improvements rolled through faster to help in giving us that capacity.
  • Perhaps most importantly is impact road pricing might have on travel demand. The likely result is that traffic volumes (on motorways at least) are likely to fall as people shift to PT or reducing the amount of travel they do. This could be significant as reducing traffic also reduces/removes the justification for many of the roading projects currently on the plans. With those roading upgrades no longer needed it reduces the overall amount we have to spend upgrading our roads and there reduces the funding deficit. There’s a bit of an irony about an infrastructure lobby group pushing a solution that will end up reducing the amount of infrastructure we need – not that they’re probably thinking that far ahead.

I think all three problems have solutions or provide us with good opportunities. Rolling out the new bus network supported by a large network of bus lanes could keep local roads flowing and as well as providing more attractive services.  Before introducing such a charging scheme effort can be made to increase the size of the bus fleet and get started on projects like the City Rail Link while the changes in travel behaviour as a result of tolls can help us work out exactly what projects are needed.

Looking back at the existing LTP

Yesterday it emerged that the council is taking a knife to its next Long Term Plan and potentially start cutting projects completely in a bid to keep rates down. One comment that came through clearly yesterday was that the council will have to be careful what projects they cut because if they cut the wrong ones, like many of the PT and walking/cycling projects they should also cut the worlds most liveable city slogan too. Below is a press release from the council on the subject, the key point being that the public won’t get to hear what’s planned till late August.

The next phase in Auckland Council’s Long-term Plan (LTP) process is underway as elected representatives and officials meet to consider what the council should do during the next 10 years and how to fund it.

In March, Mayor Len Brown set the direction for a full review of the budgets and work plans of Auckland Council and its CCOs, and today’s workshop provides an overview of the sorts of things to be considered as Auckland plans for significant growth over the next decade.

“We need to make some tough choices to find the right balance between progress and affordability. Today we begin the conversation about how much we spend, when we spend it and what we spend it on to ensure Auckland’s communities and economy continue to prosper and the city remains a great place to live for all Aucklanders,” says Len Brown.

“In the months ahead, we’ll be asking Aucklanders about which major investments are the most important and affordable over the next decade to deliver Auckland’s vision to become the world’s most liveable city.”

The LTP is reviewed every three years. The next 11 months will see an extensive consultation process involving the council, its CCOs and the people of Auckland. The revised LTP 2015-2025 is due for adoption June 2015.

“Aucklanders want progress, especially on affordable housing and transport, but we know there is no appetite for large increases in debt and rates, so the next phase we begin today challenges us to find the trade-offs over the coming months to ensure increases are sustainable while still delivering on our promises – we can’t afford to do it all.”

Auckland’s first LTP in 2012 was based on the new council’s objectives but was still working with numbers carried over through amalgamation from the legacy councils.

This LTP provides the united Auckland Council with its first opportunity to realign those budgets and develop a 10-year programme of work based on a single plan and vision for Auckland.

Auckland Council Chief Executive Stephen Town says:

“The current LTP contains carry over numbers from the legacy councils and projects an average rates rise of 4.9% for each of the remaining years until 2022. To limit rate rises to between 2.5% to 3.5%, we need to be innovative and bold in looking at alternative revenue sources, reprioritising spending and finding cost savings to achieve our financial targets and take the pressure off households.”

“Auckland’s AA credit rating is testament to the careful and responsible approach we have applied to financial management. But we don’t have a blank cheque book to fund Auckland’s growth, and so we need to be clear about the priorities in the Auckland Plan.”

The LTP covers everything we do and how we pay for it – from collecting rubbish, building cycleways, delivering community services to investing in technology and innovation to ensure Auckland is a competitive global city for investment.

Detailed workshops will be held throughout July and August to help inform the Mayor’s Proposal for what activities should be prioritised, how to reduce total spend to keep rates low and alternative sources of funding for the 2015-2025 plan.

The Mayor’s Proposal will be presented in late August, and will then go out for public consultation so Aucklanders can have their say on shaping Auckland’s future.

The Long Term Plans is a 10 year budget but it gets reviewed every three years. In this post I’m just going to highlight what transport spending is planned in the current LTP which covers the period from 2012 to 2022. In particular I’m going to focus on the 2015 – 2022 parts as that’s what the council will likely be making substantial changes too.

When it comes to transport the current LTP is split into three sections:

  • Public transport and travel demand management
  • Roads and footpaths
  • Parking and enforcement

They can be summarised below (note: these are just the costs and ignore revenues and and money from other sources e.g. the NZTA or government)

LTP 2012-22 All headlines 3

 

 

Delving deeper each section can be broken down as below

Public transport and travel demand management

The one thing that stands out the most is that rail OPEX is expected to jump substantially which is primarily related to running more services, post electrification and then from 2020 for the CRL. We do know that the new electric trains cost about half as much in maintenance and fuel costs as the current trains and that Auckland Transport is about to go out to tender for a new rail contract from 2016 onwards. Those two things will hopefully combine to reduce those costs.

Rail costs feature strongly on the CAPEX side too which is comprised mostly of the costs for electrification and the City Rail Link. One thing not covered is the bus infrastructure that will be needed to support the new network which hadn’t been created – at least not publicly.

LTP 2012-22 - PT

Roads and footpaths

On the CAPEX side there are a couple of really large projects in the form of AMETI, Penlink and the Mill Rd corridor however most of the ones on the list are arterial upgrades that are/were expected to cost around $30 million each.

LTP 2012-22 - Roads and Footpaths 2

 

 

Parking and Enforcement

LTP 2012-22 - Parking and Enforcement

Note: you can see a list of all the projects that were included in the figures above in this old post.

I suspect that until plans are released in August that there will end up being a lot of rumours flying around about just what projects are going to be funded and which ones won’t. The herald yesterday suggested some projects that might be cut include:

  • Electrification to Pukekohe which will be essential to the proposed greenfield development in the area.
  • Penlink
  • A 20% cut in the already meagre cycling budget
  • A North Western Busway – something the NZTA should really be building as part of the Western Ring Route project and that is going to be needed to support the greenfield growth in the North West.

To me this also process is also going to highlight one of the glaring inconsistencies in how we fund transport. Local projects have to go through years of debate and cuts to get them to starting line but when it comes to state highways we have the government who can just come in and build stuff even if it isn’t what the city wants or needs. I imagine our funding priorities would be quite different if the city was able to choose how to spend the money we’re pouring into state highways.

Council pulling out the knife

The council today are starting to get serious about the next Long Term Plan (LTP) which will shape the councils spending for the next decade. We’ve long criticised them for blindly holding on to legacy projects from before we had a single council and it appears a key feature of this LTP is that they will finally start making some difficult decisions over which projects to keep. I’ve had it suggested that this will see blood on the floor as they wield the knife cutting out projects.

Just what projects and services get cut is being discussed today in a closed session of councillors.

Aucklanders will be given clear choices, including tolls and congestion charges, to pay for big transport projects in a black budget being partly unveiled today.

The Herald understands the new 10-year budget will slash up to $2.8 billion of new spending at Auckland Council to put the brakes on soaring debt and rates.

Nothing will be spared from a review of council services, even the $2.86 billion city rail link, which has no funding certainty.

Budgets for services like new libraries, swimming pools and playing fields are under the microscope.

Councillors, local board members, council agency staff and directors, and members of the Maori Statutory Board will be taken through the first draft of the new 10-year budget today.

They will be told the post-Super City spending spree is over, replaced by a new era of “prudent financial management” and “affordability”.

It will be interesting to see just what projects get cut. I suspect the CRL will still go ahead but perhaps with the K Rd and Newton stations delayed along with some of the other aspects like extra trains. Either way it’s something we will keep a close eye on.