AA PetrolWatch spokesman Mark Stockdale told NZPA the weaker exchange rate was partly to blame for the price rise.

Petrol was “hitting an uncomfortable price point” and motorists would be feeling nervous after prices passed $1.80, he said.

Until the rises of last week retail fuel prices had remained unchanged since January 19, when they fell 3c a litre across the board.

Crude oil and refined petrol prices rose between 4 and 6 per cent during February, with refined diesel up 10 per cent – reducing oil company importers’ margins.

In June 2008 there was a record fuel price jump of 12c per litre in just 48 hours. By the end of the month, petrol was selling at $2.11 per litre.

I don’t expect prices to go above $2 a litre any time particularly soon. The February 2010 “OilWatch Monthly” indicates that the amount of oil being produced is still well down on its mid 2008 peak, meaning that global demand for oil still has not hit uncomfortable heights of 87-88 million barrels a day, instead settling around 85-86 million, as shown in the graph below: In particular, the second graph shows that OPEC production is significantly less than it was in 2008. As a result, OPEC has some significant spare capacity that they can turn on to ease price issues should they so please, so there’s no real worry of a sharp spike for now.

However, the question in my mind is what happens when demand starts to jump above that 88 million barrels a day that was the max output during July 2008 when prices went completely nuts? That’s when I think things could get interesting again, with the result probably being that either prices will go incredibly high again (maybe even higher than July 2008) and stay there, or that the high prices will kick off another financial crisis like what happened in 2008, and prices will crash as a result.

I do wonder what petrol price would make Steven Joyce start to worry about the sense of spending $11 billion over the next decade on motorways. $2.50 a litre maybe? Or $3?

However, perhaps what it even more important than implementation of the actual integrated ticketing system is the design of an integrated fare system for Auckland. What’s the difference between the two? Well the fare system will establish what kind of fares are available, whether we continue to have a “stage-based” system or shift to a “zone-based” system like there is in cities such as Melbourne and London, whether we have fare capping, what kinds of unlimited travel passes will be available and so forth. All the integrated ticketing part of this is getting the right software and hardware in place to implement the fare system.

I’m quite curious to explore what an integrated fare system would look like in Auckland. I have outlined my thoughts on this matter a few times in the past, as well as the matters what will need to be considered when putting together the fare system. It might be worthwhile stepping back from the end-point of coming up with various different types of tickets that should be available to answer some more fundamental questions, and then to examine possible options that would help achieve what the fundamental goals are. So let’s have a look first at what I think should/would be the aims of any integrated fare system in Auckland:

1. Complete multi-modal and multi-operator integration (same ticket can be used on any bus, train or ferry in the Auckland region.
2. The fare system should be designed to increase patronage and encourage more people to use public transport.
3. The fare system should, in particular, make it easier for people to transfer between one service and another.
4. The fare system should be generally revenue neutral compared to the current system, or if possible generate even more revenue.
5. The fare system should seek to maximise the efficiency of the public transport resource.
6. The fare system should ensure riders get ‘the best deal’.

Let’s look at each of these matters in turn in more detail:

Multi-modal, multi-operator integration:

To me this aspect is fundamental to creating an integrated ticketing system. Unless you can use your particular ticket on any bus, train or ferry then you don’t have an integrated ticketing system. However, in a way I don’t think it’s enough to simply say that there must be a ticketing option that works on all possible transport options, as we actually already have that in the form of the Discovery Pass (just that nobody uses it because it’s really expensive and incredibly poorly marketed). The point is that whether I buy a multi-journey pass, a monthly pass, a weekly pass or use a stored value system it needs to be valid on all buses, trains and ferries in the Auckland region.

I have a worry that what we could end up with is having an integrated stored value system, but any other ticketing options will remain in the disjointed mess they currently are. This would be similar to the situation where you can call a Telecom cellphone from a Vodafone one, but many of the special deals apply to the people you’re calling being with the same company as you. I wouldn’t want to see NZ Bus offering their own ticketing passes alongside a citywide integrated fare system as that would be incredibly confusing and not much better than where we are at the moment.

Increasing patronage:

Increasing patronage levels and encouraging more people to use public transport is, of course, the ultimate goal of any improvements made, and it will be a complex process to achieve this outcome. However, there are a few things that I think would encourage more people to use public transport, but perhaps even more specifically, to encourage those who do use public transport to use it more often. To get those who catch the bus or train to work during the week also catching them to shopping malls on the weekend. Or to get school kids using public transport to visit their friends after school and so forth.

There are a few ways I think a fare system could help achieve this goal. The first is to get as many people as possible purchasing “unlimited travel” weekly and monthly passes. Customers who purchase these passes are precious, in the same way as subscribers are precious to those who publish magazines and newspapers – because they are your core base. These people will want to get the best value for money out of their pass so they will want to use them as often as possible. This means that they might use public transport more at the weekends or in the evenings than they would otherwise, because they’ve effectively already paid for the trip. At the moment in Auckland it’s only really worthwhile purchasing a monthly pass if you live three stages or more from your destination, as otherwise the numbers stack up. If we had more options for unlimited travel passes then I think more people would use them (unlimited travel within a particular number of zones if we’re using a zone system for example.

Another way of boosting patronage is through time-based rather than trip-based fares. This links in with the point below about making transfers easier, because if one ticket effectively bought you two hours of travel, rather than one entry onto a bus or train, then the public transport system would become that much more useful to you as connecting services would effectively act as simple the second part to your trip, rather than another trip entirely. As I explained a few weeks back, this brings the network effect into play, which potentially hugely improves the attractiveness of public transport. Which leads to higher patronage.

Making transfers easier:

As noted above, one of the most important tasks of a new fare system will be to make the process of transfering easier. ARTA’s long term plans for public transport in Auckland do rely upon transfering between trunk and feeder services a lot more than we see at the moment, which is definitely the right approach so that resources can be used far more efficiently. However, as Paul Mees has said: “…from the passenger’s point of view, transferring between services is an inconvenience: requiring an extra fare for the disservice is like adding insult to injury”.

Having time-based ticketing, based around a zone system where the city is divided into chunks and passengers pay according to how many zones their trip passes through in a 2 hour, daily or whatever time period regardless of how many times they get on or off a bus or train is absolutely critical here. Unless our future fares system makes transfering dramatically easier then it will be a failure, no doubt about that.

Revenue neutral or better:

While ideally we would all like a new ticketing system to make our trips cheaper, I think it has to be recognised that ARTA does not have a huge pile of funding available to make up for any loss of revenue, so therefore the changes will have to be revenue neutral at worst.

Now this does not necessarily mean that fares have to go up. Mobile phone companies do not need to raise the per-minute rates for calling in order to make more money – what they do is try to offer options that will get people calling more often or using their phone for more stuff that is valuable enough to the user for them to be charged. The same sort of thinking should apply to public transport I think, in that there is a need to think cleverly about ways to increase revenue. For example, if you have 30 people willing to pay $5 for a particular trip, but 50 people would take the trip if it cost $4, then you’re actually pretty stupid to keep charging $5 for the trip as you’re effectively giving away $50 in revenue. I’m no expert of the price elasticity of public transport patronage in Auckland, but I expect that in the outer areas in particular big rises or falls in fares could make a big difference to possible patronage more than outweighing any benefit gained from increasing fares.

Another aspect to look at is what I hinted at earlier, in getting more people to buy weekly and monthly passes. Most people in Auckland at the moment who use public transport seem to use multi-journey passes or stored value passes, often because weekly or monthly passes don’t make sense. Many of these people will simply not bother using public transport at the slightest provocation (a bit of rain etc.) because they realise they can simply use that trip next time around. With more people using weekly or monthly passes they will feel as though they ought to catch the bus or train each and every day to make the most of their pass. This means that you’re getting full-time revenue out of that user rather than just occasional trips.

Maximise efficiency:

Just like all transportation resources, the demand for public transport is hugely higher at two points of the day than it is at any other times – namely the morning and evening peak hour. This is an incredibly inefficient use of resources in two senses. Firstly, it means that during peak times you need a lot of rolling stock, and in the case of trains you may need a lot of track capacity. If you’re running peak hour services at close to capacity and you attract another 100 people to use the service, then you’re going to need to buy two new buses to serve those people – even though you’re not going to need to use those buses at any other time of the day. The second way the peak spikes are inefficient is that during off-peak hours most of the stock rolls around fairly empty, meaning that fares really struggle to cover the costs of operating that service – leading to expensive subsidies being required.

The solution is to somehow spread those peaks a bit. Of course many people simply have to be at work by 9am, or at school or at university by a certain hour of the day. But a certain number of people probably would travel off-peak if there were incentives for them to do so. Unfortunately, at the moment on most routes the only time a decent frequency service is offered is during the peak hour so even those who don’t have to travel then are encouraged to do so, making the peak even more extreme. In terms of service provision, one can try to spread the peak by offering higher frequencies during the “shoulder-peak” periods of just before and just after peak hour, rather than buying another bus to operate at peak time. From a ticketing point of view, the solution in my opinion is to make a distinction between fares charged during peak hour and fares charged outside of peak hours. Perhaps fares between 7am and 9am, and 4pm and 6pm go up by 10%, while those outside those times are decreased by 20% (as more people travel during peak times the revenue might balance).

This would enable a far more efficient use of existing transport resources such as buses and trains.

Ensuring riders get the best deal:

There’s nothing more annoying that taking a few trips on public transport throughout a day and then discovering you would have been better off getting a day-pass. Or buying a day pass but then working out you would have been better off simply paying separate fares for each trip. Somehow you feel ripped off.

The solution to this is called “fare capping”, where you pay as you got up to a certain daily rate, and then you stop being charged for further trips. This is used on London’s Oyster Cards and is a fantastic idea that must form a part of Auckland’s future integrated fare system.

I’m keen for some feedback on these “overarching principles” for what our integrated fare system should look like. Perhaps in a future post or two I will try to put this into action and come up with something of a proposal for how ARTA should implement the future system.

I think it’s worthwhile doing a bit of a comparison between how the rail problems faced by Auckland and Wellington in recent weeks have been dealt with. Let’s start with Wellington, where a couple of weeks ago there were some serious problems relating to electric wires  that were not properly fixed during overnight maintenance, causing huge problems. KiwiRail got blasted in the Dominion Post Editorial, which had this to say:

On Tuesday 369 people were stuck on a train to Upper Hutt for two hours after a power failure halted all trains in and out of the capital. “No one told us anything,” complained a passenger. “We were locked up and were going nowhere. We were not allowed outside.”

The previous day 2000 commuters were delayed for up to two hours when another power fault brought services to a standstill. Some passengers waited more than an hour for replacement buses to show up. Others walked to work along the lines.

This week’s breakdowns are just the latest in a string of problems that have infuriated passengers over the past 12 months as historic under-investment in the commuter network and a $600 million upgrade have coincided to create what KiwiRail project manager David Gordon calls a “perfect storm”.

Passengers have been delayed by power faults, equipment failures, slips and contractor errors and, last winter, were left to shiver in carriages without working heaters.

Faced with such a difficult operating environment, KiwiRail might have been expected to do its utmost to retain customer loyalty by informing passengers of the cause and likely length of delays and having alternative forms of transport on hand to minimise inconvenience.

Instead it has operated as if its customers have no choice but to put up with its erratic services.

In response, KiwiRail actually did something. There was a free day’s travel as compensation for the problems and a real commitment to sort things out it would seem. Rail is taken seriously in Wellington and the trains are expected to work, so when something goes wrong because there’s only one agency involved (KiwiRail) things can be sorted out.

Meanwhile, back in Auckland, it’s arguable that we suffer (on a smaller scale, but far more frequently) significantly more problems with our rail network. As I have mentioned in previous posts, there were 406 signal or points failures on the Auckland rail network in the last year alone, and in January only 36% of Western Line trains reached the destination less than 5 minutes late, while 10% didn’t even reach their destination at all. And yet what have we heard from ARTA or KiwiRail about these horrific problems in Auckland?

Zilch.

Instead, we get bombarded with media releases about fun, nice to have, events and promotions that ARTA’s running. Like tomorrow’s Walk2Work promotion, which I’m sure is a good idea, but how about we sort those trains out? Or a “one-stop-shop” calendar for finding out about sustainable travel events, or some promotion with the Blues rugby team, or the refurbishment of the Maxx Website (without actually updating the horrifically outdated mapping system behind the scenes) or the bizarre “Make a Change” campaign. These are all “nice”, but once again please can we get the basics right first? Can we get more than two out of five trains running on time on the Western Line, can we ensure that 10% of trains don’t fail to make it to their destination? Can we get some progress updates on how integrated ticketing is coming along? Can we start implementing a paper-based integrated fare system like was promised “within a few months” back in 2008?

Now I imagine ARTA will throw their hands up in the air at all of this and say “but it’s not our fault, it’s KiwiRail/Veolia/ARC/City Councils/NZTA’s fault….” Which is probably true, but in a nutshell is the problem.

And having a massive Transport CCO is only going to make things worse, as they’ll be even less accountable while we’ll still have the dis-integration between KiwiRail, Veolia and the new Transport Agency. This isn’t throwing the baby out with the bathwater, it’s throwing the baby out but keeping the damn bathwater.

If I were to ask Rodney Hide or Steven Joyce one question about this set up, it would be: “who do I complain to when my train’s late for the 10th time in a row?” The elected councillor who can do nothing about it or the unelected CCO staff member who doesn’t need to give a damn about my problems?

First, there was Friday’s editorial, which included (among other comment) this:

The way it is shaping up, the single mayor and council will be a puppet show, purely for democratic appearances, while the real decisions are made by people the public has not elected and will never see. It cannot stand.

Now it seems that there’s a whole campaign within the Herald to expose exactly how unaccountable this new transport agency will be. In today’s paper there was a whole number of different articles on CCOs. Splashed across the front page of today’s newspaper were the words “The Lockout of Auckland“, and while the main article focused on the Waterfront Development Agency (transport will have its big article tomorrow), there is still mention of transport matters:

Aucklanders are to be locked out of decisions affecting their greatest jewels – including the waterfront – as well as important transport issues, including road congestion.

The two heavyweight contenders to be the first mayor of the Super City, John Banks and Len Brown, and an increasing number of other politicians and community leaders are aghast at a plan to set up agencies which will be virtually unanswerable to the public.

Auckland Chamber of Commerce chief executive Michael Barnett said the Government risked handing Aucklanders a lemon with its vaguely drafted plans for seven “council-controlled organisations” (CCOs).

The proposed organisations – run by directors appointed by the Government with no input from local leaders – will be responsible for at least 75 per cent of services in the new Super City.

There are particular concerns about the CCOs being set up to look after transport and a huge swathe of the waterfront.

Columnist Brian Rudman did an excellent piece (save the first few paragraphs which were not much more than a nasty swipe at ARC chairman Mike Lee) on the CCOs as well, making these comments on Auckland Transport:

As critics argue, the big issue is lack of accountability.

The British colonists in America in the mid-18th century coined the catchcry “no taxation without representation” to protest at their lack of representation in the British Parliament that levied taxes over them, and this is one of the major objections to the new governance structure. As Mr Lee told the local government parliamentary select committee, “The transport agency will be spending over 50 per cent of the Auckland Council’s rates revenue, $1.3 billion of Aucklanders’ money, yet the arrangements proposed do not make it accountable to the public for the expenditure of that money, and nor do they make it accountable to the Auckland Council.”

Another critic claims more than 75 per cent of council services will be in the hands of these arms-length entities. Which raises the question, what will be left for the mayor and councillors – and the 19 community boards and their members – to do.

I have a sneaking suspicion that about halfway through the Super City process, central government got very very worried about the power of the agency they were creating, and have been trying to dampen things down ever since, with the CCOs being the primary way of doing this.

Another article briefly outlines Auckland Transport, in none-too-complimentary fashion:

This mega-CCO will be responsible, but not directly accountable, to ratepayers for spending more than half of their rates – about $650 million – on everything from major roading projects to public transport services to fixing broken footpaths. It will not handle state highways or railways.

Transport Minister Steven Joyce pushed the idea through the Cabinet against the advice of Treasury and other Government departments. Mayors, councillors and community boards say transport is too much part of political life in Auckland to leave to a handful of business types.

If one wonders why Steven Joyce would ignore so many government departments to create Auckland Transport, I don’t think you need to look too much further than the debates between the government and the ARC over Auckland transport priorities throughout last year. This was Joyce’s ultimate revenge on the ARC in my opinion.

A fourth article (yes that’s right, fourth!) has this to say about CCOs in general:

CCOs are not transparent and accountable to ratepayers in the way councils are. They do not have to release agendas or minutes of their meetings, which take place behind closed doors. They are, however, subject to the Official Information Act.

Until the Super City came along, councils decided what services would by run by CCOs following public consultation.

The Government has unilaterally decided on three CCOs for the Super City – transport, water and waterfront development. Four others have been proposed – council investments; economic development, tourism and events; major regional facilities and property holdings.

With the promise of more articles tomorrow, taking a particular focus on Auckland Transport, it will be interesting to see if there is any response from the government. I do think that surely some steps will be taken to respond to these criticisms – and to me the question really is whether the Auckland Transport CCO can be fixed or whether it needs to be done away with altogether, with transport matters being subsumed back into the Auckland Council.

This is outlined in the table below: I have highlighted the figures that I find particularly interesting. Figures in brackets indicate a funding cut compared to the ten year plan, while figures without brackets indicate a funding boost compared to what was previously anticipated. What initially stands out to me is that the walking and cycling improvements budget (which was already dramatically reduced by the 10 year plan) has been cut further, from around $1.5 million a year to just over $1 million a year. That’s a pretty pathetically low amount in my opinion.

Other places where money has been “saved” in order to spend it on the World Cup improvements include footpath renewals, road maintenance, wharf developments in the Gulf Islands and – perhaps most horrifically – safety around schools. One wonder how many children will die as a result of this funding cut?

Many of the funding changes are explained in the notes outlined below. In some ways what these notes detail is even more worrying, as once again it shows the effects of the Government Policy Statement changes starting to have an impact – less money for maintaining roads, less money for school safety. There’s lots of “talk” in the Draft Annual Plan about improving sustainability and improving transport choices. However, one look at the nitty gritty funding indicates that it’s all pretty much hot air.

Transport infrastructure and the policy behind it have been the main factors influencing the shape and form of Auckland since its inception. Auckland was originally founded as a port town on the strength of the deep all-weather anchorages available in the Waitemata Harbour. All the capital, goods, resources and colonists of the young settlement flowed in and out of this harbour. As the town grew outward from the activity at the docks at the foot of Queen St development was clustered in a tight band around the Queen St valley within walking distance of the waterfront. This was neither really choice nor accident as walking was the only form of transport available to the vast majority of early Aucklanders.

As the region prospered and the population swelled the town soon outgrew the amount of land available in the small walkable central area. While this did create demand for taller buildings in the Queen St valley, they primary solution to growth was the construction of transport infrastructure to access land further out. Some of the earliest suburbs of Auckland were waterside settlements connected to the Queen St valley by ferries crossing the sheltered harbour. At this time roads were unpaved and the going was tough on foot and cartwheel alike. Tram rails set in the roadway provided an answer to land based expansion, allowing speedy comfortable access along the main roads radiating out from the town centre. Wide ribbons of residential and commercial development sprung up along the tram routes which eventually extended their way right across the Auckland Isthmus.

Throughout the same period railways were extended south and north-west from the town of Auckland to provide reliable connections to the rest of the country, yet this infrastructure also allowed the development of satellite suburbs within the Auckland region. The characteristic shape of Auckland focused on the central isthmus and stretching to the south and northwest was founded by these early rail based transport
arteries.

As Auckland matured into a thriving city it was very much a product of its public transport links. The dense walkable core stretched out along the tramways covering the isthmus, while outer suburbs and towns were dotted along the railways and ferry wharves. This was the case for the first part of the twentieth century, however as the century progressed there was a pronounced shift away from rail transport as policy decisions began to favour automobile and road based transport. The private car was seen as the means to provide mobility and freedom to the masses, and as the car shifted from being a rich-man’s plaything to a consumer product transport policy shifted to an almost exclusive road focus. Starting in the 1930s plans were progressed for a series of motorways covering the region to provide fast and convenient access to all corners of Auckland. Around the same time Auckland’s central railway station was shifted from the Queen St waterfront to a more isolated location on the edge of the CBD.

Various plans were drawn to revitalise the railways through line extensions and tunnels under the CBD, however these were consistently passed over  in favour of accelerating motorway construction through the central city. The motorways were seen as a killing two birds with one stone, not only could they provide great capacity for private cars and trucks they could also support public transport through a system of express buses. Soon enough the growth of car ownership and the ongoing expansion of road infrastructure was severely affecting rail patronage. Following World War II the tramways of the isthmus were progressively removed. Faced with a huge backlog of deferred wartime track maintenance, old unreliable trams and discontent among the growing ranks of car drivers, it was decided to replace the ageing tram system with a fleet of new buses sharing the streets with cars.

By the 1960s the removal of the tram system was complete, while railways and ferries had been reduced to a small niche role. The transport and land use pattern of the next four decades was thus firmly established by choices in transport policy: Auckland’s transport system was to be based almost exclusively on private cars and trucks running on an expanded system of roads and motorways, while a limited bus service would be maintained to service peak commuters to the CBD and to provide a basic welfare service for anyone unable to have access to a car. The central government provided tax funds for ongoing road and highway expansions, maintained a low price of imported fuel and and removed tarrifs on importing new cars and quality restrictions on second hand cars from abroad. Meanwhile the crippled and neglected bus system was privatised, private companies were offered a windfall of commercial profits on a few highly patronised city commuter routes while given subsidies to stop the rest of the network from disappearing completely.

In the latter half of the twentieth century the shape and form of Auckland followed the accessibility provided by the new automobility. Land within and around the old tram and railway suburbs was filled in with low density housing as people were no longer limited to living within walking distance of a rail station or tram stop. For the same reasons industry shifted from a ring around the inner city and along the rail corridors to diverse locations further out, and the relative importance of the Queen St valley declined as commerce and retailing were no long restricted to downtown. Later the fringes of the urban area began to be rapidly expanded, as new housing subdivisions and industrial estates were built on huge tracts of previously inaccessible land. With the horrors of urban living during industrial revolution a not so distant memory, strict zoning regulations were impacted to limit density and provide a strict separation between homes, factories and other urban activates.

For a while it seemed Auckland had got it right, but soon enough the pitfalls of mass auto mobility became apparent. With almost one car per adult in the city and limited alternatives to driving, traffic congestion became rife as the act of travelling became synonymous with driving a car. Projects were continually progressed to widen roads and extend motorways, yet for all their increasing expense they could barely keep pace with congestion let alone decrease it. Providing sufficient parking became a constant problem, initially downtown then through out the city. Roadside parking vied for room with driving lanes, while in town centres vast open lots and multi-story parking buildings occupied valuable real-estate. High parking fees were charged to pay for this land and structures, and steep fines issued to prevent their misuse. Walking and cycling as means of transport had become virtually extinct. The focus on the automobile had made roadways dangerous and inaccessible outside of a car while suburban expansion meant that most places of interest were far too far way even if one did brave the roads by foot or pedal.

Many new suburbs were built without even a simple footpath up the side of the street, as no one was expected to walk anywhere and there was nothing to walk to anyway. Smog and air pollution had become an issue, however this was mercifully kept in check by the strong ocean breezes clearing the isthmus. There was no such natural mitigation of the fuel price issue however, as the total reliance on imported fuel left the city’s transport system at the mercy of international geo-politics. As congestion and fuel cost increased and journey times continued to expand, the simple act of getting to ones workplace each day was consuming an increasing amount of the region’s time and wealth.

By the end of the twentieth century Auckland had achieved exactly what it had been planning and building for the previous fifty years: a transport system of near-universal automobility at the expense of any other mode. A city where people generally had no choice but to drive anytime they wanted to travel anywhere for any reason. A city where being economically productive and having quality of life meant getting a drivers licence and having access to a car, or if that was not possible having someone else drive one where they needed to go. A city where traffic congestion, parking problems and high travel costs were an unavoidable fact of life.

At the cusp of the twenty-first century voices within the government and populace of Auckland had begun to question this policy, arguing that investment in rehabilitation the railways and expanding other public transport infrastructure would be an efficient and cost effective way to reduce congestion and meet further travel growth in the growing metropolis. It was argued that with near universal automobility in the congested city, any attempt to supply new road infrastructure would be rapidly swamped by the huge demand for car travel that already existed. Therefore the only real choice would be a transport policy focused on providing alternatives to private road transport. This view was naturally rejected by the establishment, as it went against half a century of establish policy and practice. The public, politicians and industry alike were so invested in private road transport that it was almost inconceivable to do anything else.

The very structure of transport politics and economics revolved around buying cars and building roads, successfully running buses, trains and ferries and building the city around them was a long lost memory. Many suggestions were made why public transport could never work again in Auckland: the land was the wrong shape, the city too spread, that the people were somehow involved in a ‘love affair’ with cars and the costs and congestion that came with them. Yet small gains have been made: Auckland’s station was moved back to the CBD, trains and tracks were refurbished, ferries upgraded and bus infrastructure built. Indeed wherever improvements in alternatives to driving were made, people flocked to the alternative.

Yet many reasons continue to be put forward as to why Auckland is necessarily so car focused, yet few seemed willing to acknowledge the only real reason: Policy. Auckland was once a public transport city, and it actively decided to become a private transport city. For fifty years its leaders pursued that agenda, and they have shown little sign of moving away from it. Auckland is at the crossroads, recent investment has show public transport to be not only viable but highly effective and the city now has a critical choice to make. The question is now how exactly should Auckland spend the huge amounts of money it sets aside each year for transport? Should it maintain the seemingly failed policy of the last half century or should it radically revolutionise the transport agenda in Auckland?

It seems to me that there are ultimately three issues:

1. KiwiRail still seem to be doing a terrible job at avoiding points and signalling failures. There were 406 such failures on the Auckland Rail Network alone within the last year. I realise that it’s tricky to avoid such events with crappy outdated infrastructure, but a lot of the problems seem to happen in areas that have been more recently upgraded – like Britomart and Newmarket.
2. The structural separation between the various agencies involved in running the train system means that nobody takes ownership of the problems. This is particularly evident when comparing things to Wellington, where recent problems there led to big public apologies from KiwiRail. Where’s our public apology for the 36% on-time performance on the Western Line for January?
3. The trains themselves seem particularly unreliable of late. Discussion on the Campaign for Better Transport Forum, with input from staff working in the system, suggests that an unusually high number of trains aren’t even operating because of mechanical problems.

I have discussed the first two issues at length previously, so for now let’s focus on the third matter – increased mechanical failures. While the main reason for these problems is the fact that the newest engines driving our trains around Auckland are almost 30 years old, and naturally these will become more unreliable over time, it would seem as though one reason for increased mechanical problems would be if the amount of maintenance being undertaken had been cut back.

Now I don’t know if there has been a cutback on maintenance, but what does become obvious if you have a good dig through ARTA’s financial statements is that there has definitely been a funding squeeze put on them in recent times. Let’s have a look at their “income statement” for January 2010: I have highlighted what I consider to be particularly interesting parts of it: Looking at the income side of things first, it is clear that ARTA’s budget has been revised from an original, with the result being a cut back of about $15 million. Most of this cut back was from reduced NZTA funding – most probably the result of the roads-obssessed Government Policy Statement, which revised down the amount of money NZTA were allowed to spend on public transport. The ARC also seems to have reduced its funding of ARTA from what was previously anticipated.

Unsurprisingly, a $15 million reduction in income is likely to result in some pretty significant consequences. And this comes through most drastically in the “Rail Contract” part of ARTA’s budget expenditure, where $11 million has been cut back from the original budget. Now I don’t know what that $11 million cut has actually meant in real terms – but it seems as though some of the money “saved” has come from a reduced amount of maintenance on the trains , hence the current problems. I also suspect that if we hadn’t had this $11 million cut we might be seeing more weekend and evening trains.

When I moaned about the Government Policy Statement back in May last year, this was the kind of thing that I was worried about.

One interesting things to come out of the expo is a pile of additional information, that is available to view in this document. It covers everything from the planning process to noise minimisation to tunnelling techniques. From a planning perspective, it’s interesting to hear that the notice of requirement is likely to be lodged around the middle of this year – so if you’re planning to make a submission on the Waterview Connection then it would pay to start thinking about what you’re going to say now.

The diagram below shows the construction techniques that will be used for the project (which now also includes some of the work to State Highway 16): Looking at the State Highway 16 widening part of this project (which seems to have been lumped in together with the Waterview Connection project itself), one of my biggest criticisms of this motorway widening is that it will simply induce traffic – meaning that before particularly long the motorway will be just as congested as it is now. The information in the diagram below tends to confirm my suspicions: The graph immediately above shows that widening state highway 16 will result in many more vehicles using it than would have done so otherwise, had the project not been constructed. What I find particularly interesting is that traffic on Te Atatu Road and Rosebank Road is also higher in the “2026 with project” scenario than it is in the “2026 no project scenario”. So not only is the project inducing traffic on the motorway itself, it’s also inducing traffic on the surrounding roads. NZTA claim that, in general, the motorway widening will divert traffic from local and arterial roads onto the motorway, although I’m not sure how much I really believe that as it seems NZTA do not believe in the concept of induced demand.

It’s a bit of a different story for the Waterview Connection part of the project, with some of the traffic benefits here will actually be quite real, as the new route means that local and arterial routes will no longer have to serve the functions of of a connection between SH16 and SH20. So roads like Carrington Road and Blockhouse Bay road will have long term benefits. I do still question whether this is really the most essential way to spend billions of dollars on transport in the Auckland region, but I guess at least with the Waterview Connection part of the project I think there will be long-term benefits with cars drawn off existing local roads. With the State Highway 16 widening I really can’t see any long-term benefits.

Apparently there was some talk about how the Avondale-Southdown rail corridor will be protected, and construction of that corridor “made easier” by the Waterview Connection project. That is certainly a good thing, and something I will look to find out more about when I visit next Saturday.

Let’s look at the bigger picture for a minute, before I get into what I think the problem is here. The National Infrastructure Plan certainly says that most investment in the rail network should be focused on lines that are the most commercially viable – which makes logical sense. What’s said in the tract I quote below actually sounds fairly promising in some respects:

The Government wants to set KiwiRail on a path towards commercial independence and long-term viability. For that reason, any financial support for it will focus on helping it catch up on deferred capital expenditure in those parts of the rail network where rail offers the greatest comparative advantage to other transport modes, based on undistorted price signals. This is likely to be in the transport of bulk goods, and imports and exports to and from major ports, where rail offers a vitally important alternative to road transport. This will relieve congestion and provide a greener and more cost-effective transport solution for some users.

In terms of future capital expenditure, it’s a little more mixed:

Subject to policy decisions about the size of the rail network and level of service the Government wishes to support, it is possible that KiwiRail will undertake further capital expenditure. For example, the current locomotive and wagon fleet is old (average age is 30 years for locomotives and 25 years for wagons) and prone to structural failure, and thus allows little or no room for revenue growth. In addition, a new interisland rail ferry is likely to be needed by 2016 to replace the ageing vessel Arahura. This may cost up to $250 million to purchase, or long-term leasing arrangements will need to be put in place.

There’s something a bit strange here though. We don’t generally say things like “subject to policy decisions about the size of the state highway network….”, or “it is possible that NZTA will undertake further capital expenditure on the state highway network…”, so why are we saying this about the rail network? After all, the rail network and the state highway network are both critical pieces of infrastructure that I think deserve to be treated in similar ways.

Yes, there are very very few inter-city passenger trains meaning that the rail network (outside urban areas) is almost exclusively used for freight purposes, but that doesn’t mean things have to be that way, or that they will always be that way. For all we know, in a decade’s time petrol could be $8 a litre, we will be electrifying inter-city railway lines around the country and thinking about catching electric trains to cities around New Zealand when we want to visit them. Just as we have a critical network of power lines, roads, telecommunications and so forth, the rail network is simply that: infrastructure. In the longer term I would imagine a whole pile of different companies operating freight services on the rail network, competing against each other for business potentially and so forth. The government would, and should, still own the rail network and all the organisation that goes on behind the scenes – but in terms of the actual trains that run along it who knows what the future ownership structure might be.

The problem that we have at the moment is that the infrastructure side of KiwiRail is bundled up with what is essentially “just another freight company”. Because of this, KiwiRail has the completely unreasonable task of being asked to use the money it makes from its freight business to both pay for the delivery of that freight business but also to maintain and develop the core infrastructure of the rail network. The first part is fair enough, and as far as I know KiwiRail do a pretty damn good job of ensuring that their income covers the job of delivering their business. The problem is that they are also required to spend huge amounts of money on looking after the railway network. That would be like asking the trucking industry to build and fund the road network – completely unreasonable and impossible!

When KiwiRail was bought back by the government in 2008, ONTRACK (which was the trading name for the government’s ownership of the tracks and associated infrastructure) was effectively subsumed into the freight business that had previously been Toll and was now KiwiRail. In hindsight I think that was a mistake, and (here’s for a fairly controversial thought) I think that ONTRACK and NZTA should have been brought together into one agency – perhaps known as “Transport New Zealand” or something like that. By putting ONTRACK into the same agency as NZTA there would have been proper recognition of the railway network as part of the transport network, not just the rights-of-way used by a particular freight company (in this case KiwiRail).

There are a number of other advantages that would arise from having ONTRACK merged with NZTA. The most obvious one to me is that we’d finally have an agency capable of planning, funding and constructing critical urban rail projects such as the CBD Rail Tunnel, rail to the airport and so forth. In our cities railways act very similarly to motorways, so it seems crazy that we have a very capable agency (NZTA) doing excellent long-term planning, designations when necessary, construction and so forth of motorways – but when it comes to ever doing anything about urban railways you need to get about 20 different agencies together, develop funding systems that we’ve never seen before and so forth. Having one agency responsible for delivering both the state highway network and the railway network would also mean that motorway projects would effectively compete against railway projects for funding – we could assess whether the CBD Rail Tunnel or the Holiday Highway is a better use of that $1.4 billion. This is how you end up with the best decisions being made, when all types of projects have “equal access” to funding and are chosen on merit.

Another advantage would be that the railways would no longer be expected to “make a profit”, just as the state highways aren’t expected to do so. There would be recognition that together, the railways and the state highways form a critical part of New Zealand’s infrastructure. In the meanwhile, KiwiRail would be able to get on with the job of actually trying to make a profit without being lumped with the unfair cost of having to fix 20 years of neglect of the rail system while trying to run a competitive freight business.

I have heard some public transport advocates worry that if rail was part of NZTA it would be ignored and sidelined. I don’t actually think that’s the case. I really think that NZTA wants to do public transport – I mean heck they are keen on extending the northern busway to Orewa even though it’s probably about priority number 3257948728529 on the list of needed public transport projects in Auckland. Why are they wanting to do this? Because it’s the only public transport project that they can actually do. NZTA are pretty damn good at weighing up which projects are most necessary (when they are left to do it by the politicians), and I think that it’s pretty clear important railway projects in Auckland – for example – would rise to the top of their list.

Oh, and NZTA have money. No other transport agency in the country seems to have any money but NZTA have buckets and buckets of it. So we might actually be able to improve the rail network if ONTRACK was a part of NZTA instead of KiwiRail.