Follow us on Twitter

Should we charge tourists extra for driving on NZ roads?

There have been a few suggestions recently that international tourists should be paying more to drive in New Zealand, or have to pass a driving test, or things along those lines. Winston Aldworth, the Travel Editor at the Herald, wrote a column last week suggesting that we should charge a fee for tourists who want to drive on our roads, along the lines of a new scheme in Germany (which was also described in the Herald last week, although the article doesn’t seem to be online).

Would this scheme be fair in New Zealand?

Winston writes: “many tourists on these shores rely on (and clog up) the roads from Cape Reinga to Bluff. It seems fair they should chip in for maintenance and improvements”. It does indeed seem fair, but tourists already do pay for these things. It’s built into the cost of the petrol they use, or the Road User Charges if they hire a diesel vehicle. That money goes straight to the National Land Transport Fund, where it pays for all state highway costs and around half of local road costs (the rest comes from rates). So I don’t think it’s reasonable to suggest that international tourists aren’t paying their way.

Based on data from the Retail Trade Survey and Tourism Satellite Account, it seems that international tourists account for around 5-6% of sales in petrol stations. Clearly, most of the long-distance trips around the country are being done by Kiwis, not overseas visitors. It’s also likely that most of the trips taken by international tourists are on roads which aren’t particularly congested, and not really in need of upgrades. Most of these visitors don’t make it up to Cape Reinga or down to Bluff. International tourist spending is fairly heavily concentrated in just a few parts of the country, including Auckland, Queenstown, Rotorua and so on.

How much would this scheme raise?

Winston suggests that international visitors buy a $50 permit, which lets them drive for up to a year. “The money raised could go into a protected fund, ring-fenced from other spending… [and used] to kickstart funding on our most important roads”.

2.8 million visitors arrive in New Zealand each year, and when you take out those who won’t be driving and those who visit several times in the same year, you might be left with around half that number (just a guess). So, 1.4 million visitors times $50 gives $70 million – and I think I’m being generous with the figure, with not taking GST out of it, and not allowing for administration and compliance costs. Even so, it’s a drop in the bucket in terms of transport funding.

The Cook Islands

Winston points out that, for many years, the Cook Islands charged tourists $20 for a driver’s license, although they have recently gotten rid of the system. The situation in the Cooks is a bit different from NZ. They’ve got an economy which is almost entirely dependent on tourism. Their system was a way to get that little bit extra out of the tourists and into state coffers, and encourage tourists to visit the Avarua town centre (the police station is centrally located, and visitors will hopefully spend some money in the shops while they’re at it). It also gives the tourists a nice souvenir, which was a big part of not making them grumpy about the charge. Although, it seems, plenty got grumpy anyway – especially when they had a long wait for the license – and this seems to have been a big reason for dropping the system.

SAM_2433 smaller

The other interesting thing about the Cook Islands is that it clearly doesn’t raise enough tax revenue to maintain its roads, or its other infrastructure for that matter. It relies on international aid to make up the difference. But every time a New Zealander drives around Rarotonga, they’re being subsidised courtesy of that system.

Now, if we’re really wanting to earn more money from overseas visitors, we can either invest in our tourism offering (and we do), or ramp up our marketing (and we’re doing that too), or we can raise money for the government in a cheap-to-administer scheme like a departure tax or similar. But let’s not stick the poor buggers with some kind of overpriced driving permit.

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.

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.

The hypocrisy of the GPS

If there’s one thing – more than anything else – that annoys me about the government’s approach to transport, it’s the double standard they apply between state highway projects (particularly RoNS projects) and public transport investment. Getting any public transport funding requires analysis after analysis, proof that the timing of the project is optimal, proof that it’s definitely the most viable and cost-effective option, links with triggers around the level of use or growth in the area the project is located – the list goes on. This would not be a problem if the approach was applied consistently, after all transport projects are expensive and we should be careful when it comes to the use of public funds.

Yet the same level of analysis is never applied to state highway projects, and even less analysis when it comes to the Roads of National Significance (RoNS). Despite major concerns around the cost-effectiveness of many of these projects and a complete lack of analysis when it comes to triggers for timing, the assessment of alternatives or even basic cost-benefit ratios the projects plough on ahead.

This double-standard is carried on through to the latest version of the Government Policy Statement (GPS), which was released recently. The justification for an $11b spend on state highways is fairly general:

Following more than a decade of increasing concern about under-investment in roading infrastructure, in 2009 the Government began a significant improvement programme. With an intention to invest nearly $11 billion in New Zealand’s State highways over the 10 years to 2019, the Government focused on enabling economic growth rather than simply responding to it, providing high quality connections between key areas of production, processing and export.

Continued funding under GPS 2015 (draft) for State highway improvements will bring benefits for national economic growth and productivity, particularly given that State highways carry most freight and link major ports, airports and urban areas.

This clearly leads to a number of questions that could be reasonably asked to check whether this is the best way of spending $11,000,000,000 of public money:

  • What proof is there of recent under-investment in roading infrastructure – what’s the major problem the investment is trying to solve?
  • To what extent does investing in state highway infrastructure actually boost economic growth – where are the international examples of state highways being a better investment than other transport, or investing in education, or just letting people keep that money and deciding what to do with it themselves?
  • How will success of the investment in state highways be measured?
  • How do we know we wouldn’t have achieved the same outcomes (or nearly the same) with a much smaller spend?
  • What other options for this level of investment were considered and how did they perform on a relative basis?
  • Has the investment been working (and how might we measure that), has it achieved its local goals (like reducing congestion) and has achievement of those local goals (if it’s even happened) contributed to greater economic performance to the extent we would hope from an $11b investment?

In some shape or form, these questions have all been asked of public transport investment (either recent or proposed) by government over the past few years – but surprisingly we don’t seem to have seen the same questioned asked of the state highway programme. You’ll also notice the comment about the investment enabling economic growth rather than responding to it. The only vague reference to the impact of billions spent on state highways in recent years comes in the section on Auckland:

Since 2009, the Government has undertaken a major programme of investment in Auckland’s transport infrastructure. By 2017, Auckland will have a completed motorway network and an upgraded and electrified metro rail network. This investment programme is delivering significant results, helping to hold congestion steady despite population growth.

But if we back up a bit, we see the GPS noting that VKT hasn’t grown in recent years:

vkt-change

It seems like the GPS is saying “despite flat traffic volumes and massive investment in state highways, we haven’t managed to reduce congestion at all“. That seems to be a pretty massive elephant in the room signal that the current approach isn’t working. Yet despite some pretty obvious questions about whether we’ve got any value at all from the billions in recent state highway projects, the GPS doesn’t question ploughing billions more into future state highway spending.

Contrast that with the much more cautious approach to spending on public transport improvements:

Considerable investment has been made in the public transport network to build patronage. Much of this investment has been ahead of patronage demand, particularly in metro-rail services. A period of consolidation is needed where the focus is on securing the patronage gains anticipated from measures such as integrated ticketing, reconfigured bus networks, and metro rail investments.

No “period of consolidation” to see whether the gains from state highway improvements are realised though? No checking whether the billions spent on state highways in the past decade has led to improvements in economic performance or even reduced congestion – as per their stated goal? If we were to compare the per capita use of public transport against the per capita use of the roading network in recent years, we find quite a compelling story:

VKT-vs-PT-Trips-per-Captia-2I’m kind of struggling to see how one can interpret the above graph as “we’re not sure whether the PT investment is working but clearly we need to keep spending billions on roads”.

Which is what the GPS does, showing its hypocrisy.

We can (and must) afford both CRL & new network infrastructure

Former ARC Councillor Joel Cayford has recently criticised the City Rail Link as being unaffordable in the near future – largely it seems because of the need to invest in a number of pieces of bus infrastructure to support the new PT network that’s being rolled out over the next few years. Here’s his key point:

However, the CRL is a massive project that improves just one of Auckland’s transport networks – the rail network. It will have a huge impact on Auckland CBD during construction because of the cut and cover sections through Queen Elizabeth Square and up Lower Albert Street. It will offer major opportunities for land development – including the Downtown Precinct which abuts Queen Elizabeth Square. And it comes at enormous cost.

So it needs to be right. It is more important that it’s planned right, than that construction gets started in 2016. And it is critically important that its construction takes its place in the queue with other important public transport network improvements.

newnetwork

This Auckland Transport map depicts the proposed Frequent Network which would/could have services running at least every 15 minutes 7am to 7pm 7 days a week. What it amounts to is a strategic re-organisation of Auckland bus routes in particular. It has largely been agreed after detailed consultation. Parts of the South Auckland network have already been improved.

The transport objective underpinning this plan is the establishment of frequent services right across Auckland. Not just on Rail and the Northern Busway (which you can see in black) NB: The proposed CRL is not shown on this map, but its route is more or less from Britomart, via K’Road to Mt Eden station (shown as the purple star).

Given the affordability of the CRL, the low hanging fruit public transport priority needs to be to deliver the frequency and promise that can be obtained from the new frequent bus sections of the network, which require modest investments in key sections (bus priority lanes, other priority measures such as priority signalling, some network interchange stations, extended lanes, corridor widening, and additional bus stops and shelters).

I understand that all of these bus network corridor improvements have been planned and await funding in a package of works that will cost about $200 million, but that this package is being stalled because of the perceived priority of the CRL. Under the mayor’s current direction, the CRL project is becoming a black hole. All consuming. Surely it’s a priority for South Aucklanders to benefit from the promised frequent bus service.

The political problem that I see is that the pressure to “start CRL in 2016″ (especially in a substantial way) threatens a tight public transport budget. And threatens to delay the rollout to wider Auckland region of frequent bus services that might not be “world class”, but they will be a lot more reliable and attractive alternatives to car than the bus services available now. And the packages of work required a whole lot more affordable for Auckland Council than trying to get the CRL off the ground all by itself.

We know from page 96-99 of Regional Public Transport Plan that various pieces of infrastructure are required in the near future to ensure that the new network can launch successfully in 2016. Items identified as essential include:

  • Integrated ticketing (completed)
  • Electric trains rollout (already funded)
  • Integrated fares (funded in 2014/15 Annual Plan)
  • City Rail Link (for the 2022 networks rather than the 2016)
  • Bus stop and shelter programme ($30m programme completed by 2015/16)
  • Otahuhu interchange (funded in 2014/15 Annual Plan)
  • Te Atatu bus interchange (proposed for funding in 2016/17 year)
  • Westgate bus interchange (proposed for funding in 2016/17 year)
  • Wynyard bus interchange (proposed for funding in 2015/16 year)
  • Other city centre bus infrastructure (funded over three years up to 2016/17 year)

There are others but either they’re desirable rather than essential or they’re fairly small. Joel says all up this comes to about $200 million and that might be roughly in the ballpark from what’s in the RPTP. We really do need to do these projects – and a bunch of bus lanes – to make sure the new PT network is implemented in a successful fashion. Its connected design relies upon good quality interchanges and a much larger bus lane network to ensure services run quickly and reliably. So I am in full agreement with Joel that we can’t let funding CRL (or AMETI, East-West Link, Penlink, Mill Road or any of the other big projects sitting in Auckland Transport’s future work programme) get in the way of funding these other projects.

But where I disagree with Joel is the extent to which the “new network infrastructure” outlined above really conflicts with funding CRL. Timing-wise, it seems that most of what’s listed above will be completed by 2016 or 2017. Almost by definition the projects have to be done by then in order to roll out the network successfully. No Otahuhu interchange means no new southern network, no Te Atatu bus interchange means no Western network rollout. These projects are top of the current priority list – with many funded in the 2014/15 Annual Plan (see page 198 of this document). Further there has been mention of the need for this investment in the draft Government Policy Statement.

GPS 2015 (draft) will enable:

  • completion of improvements to metro-rail services, integrated ticketing and public transport network changes intended to increase patronage, including transfer and interchange facilities
  • provision for targeted infrastructure improvements that improve transfer facilities across the network and address emerging bus capacity constraints in central Auckland, Wellington and Christchurch

In contrast, we know that even if construction of the City Rail Link begins in 2016, the serious investment in its construction will be after 2017 once the main tunnelling and construction of the three new stations gets underway in earnest. Early construction – particularly for the section under Britomart and the Downtown Shopping Centre, is around $250m, leaving plenty of available funding for the new network infrastructure, given that Auckland Transport plan to spend $825 million on transport projects in the 2014/15 year by way of example.

Therefore it seems that there’s little conflict between successfully implementing the new bus network and building the CRL. Put simply, they’re two different things happening in different timeframes – bus stuff in the next 2-3 years and then CRL’s serious investment after that. I wish Joel would spent more of his time criticising the bigger risks for improving public transport in Auckland – like the limited PT funding available in the Government Policy Statement, the refusal by treasury to fund the Northern Busway extension to Albany as part of the Northern Corridor package, NZTA’s willful disregard of the need for a Northwest Busway, government blowing billions on unneeded state highways, the potentially over-sized East West Link project, the expensive and unnecessary Penlink project and many more.

CFN and budget transport announcements

In the May budget the Government announced they would fastrack yet another $800 million of motorway projects, partially financed by a $375 million loan. These were projects that had been identified in the Prime Minister’s Auckland speech in 2013. There were 3 main projects as outlined below.

Budget-2014-Auckland-Transport-package

 

Two of these projects have major potential to impact on 2 key elements of the Congestion Free Network.

The first is the State Highway 20A upgrade, which involves extending the motorway about 2 extra kilometres towards the airport.

Airport Access Map

 

NZTA says the main features are:

Grade separation of SH20A and Kirkbride Rd intersection

Upgrading of SH20A to motorway standards: two lanes in each direction plus dedicated bus priority lanes

Reprioritisation of Ascot Rd / Kirkbride Rd intersection

Installation of truck priority lanes and ramp signalling

Relocation and integration of cycle lanes in local road network

Note there is no mention at all of rail to the airport, which would follow the motorway corridor from Onehunga most of the way to the airport. It is of upmost importance that a rail corridor is reserved by NZTA when they are planning and building the project. They have done this on the SH20 extensions through Mt Roskill, however there was a designation already in place so the situation is somewhat different. Auckland Transport has been investigating rapid transit along this route since 2011. Initially they said the route protection was to begin in late 2011, however 3 years later we have learned little. The latest we have is an April 2014 update which suggests that a preferred alignment will be identified in 2014. While the Airport’s Masterplan may be causing issues at the southern end of the route, work should still be moving ahead in the northern area. It is essential that NZTA and AT work together to speed up alignment identification in this area, something which has been highlighted by the Campaign for Better Transport. If the upgrade is built without an alignment for the rail corridor it will add huge extra cost to the airport rail project. For one thing all the new overbridges would have to be rebuilt, which would be a huge waste of money. Auckland Council need to send a strong message to the government that this would be unacceptable, and ensure the rail corridor is allowed for in the design.

 

The second project is the suite of Northern Corridor projects, which largely revolve around the State Highway 1 to State Highway 18 grade-separation and associated widening. In December 2013 NZTA claimed there were 5 main components to the Northern Corridor projects.

Northern Corridor Improvements

Component 1 is already under construction (costing $19.5 million). Component 2 seems to be the smart low-cost improvements. The announcement above seems to refer to Components 1 to 4, totally leaving out the much needed Northern Busway extension to Albany. Currently the Northern Express speeds the 15km from Britomart to Constellation Station in just over 20 minutes. However the last 4km to Albany can take 15 minutes as there is no bus priority. This busway extension is another project that NZTA and AT have been working on for years, and seems have got bogged down somehow. In 2011 NZTA were saying that the route needed to be designated soon due to the development taking place. Last year we found out a little more about the route investigations, which suggested it would cost $249 million.

package3-sh18

planned SH1/SH18 motorway upgrade

The planned motorway interchange upgrade is quoted as costing an astonishing $450 million. For that cost the project is totally unnecessary for something that just replaces a few at grade intersections with ramps. The focus should be much more on cost-effective targeted upgrades, then we could have the busway extension to Albany and plenty of spare change. The result would be lots more people using the busway, and reduced traffic congestion along the entire Northern Motorway and CBD.

The third set of projects around the Southern Motorway don’t have any components of the Congestion Free Network linked with them. However the upgrades should be a good chance to make Great South Road better for pedestrians, cyclists and buses. The one positive of this project is this means the current expensive plans to turn Mill Road into a 4 lane highway should disappear, and be replaced by a much cheaper safety upgrade. This would be a great way to free up over $200 million to help with Auckland Transport’s stretched budget.

AA’s Auckland infrastructure issues newsletter

In May the AA created the first issue of a newsletter highlighting infrastructure issues in Auckland (5.5 MB). The AA say they have 1.4 million members nationwide of which 900,000 are personal members and of those 285,000 are in Auckland. Between November 2013 and February 2014 the AA conducted two different research projects to obtain the views of many of their members through two research projects on issues like infrastructure priorities and how to fund it.

The AA say:

Auckland Members want better infrastructure for all transport modes, and they want it sooner rather than later. They believe their city has been held back by an infrastructure deficit, and are excited to see new projects brought into the frame that could ease congestion, provide transport alternatives, and energise the city.

However they also say that while most members have heard of a one or two of transport projects in the current ITP, most don’t fully understand them. This line also gives a good clue as to why people support large scale projects even if they don’t stack up economically.

There is a tendency on the part of Members to assess large-scale projects not on the basis of economic costs and benefits, but rather of civic pride and the potential to raise Auckland’s international profile.

I suspect the RoNS are also affected by this sentiment, some people think they must be a good idea even though many of them don’t stack up.

While people were generally supportive of building everything – like Len Brown is – and thought tolls were the best option to raise additional revenues to pay for projects, perceptions changed when more detailed discussions about funding actually happen.

Also, 60% of Auckland Members would rather scale back the infrastructure programme than help to fully fund it. On average, those Members say that one quarter of the $200 million per year infrastructure funding shortfall should be met by programme cut-backs (though no specific projects were identified). Members who are less financially secure say one third of the shortfall should be met in this way.

May Newsletter - Bridging the funding gap

This is similar to some of the thinking we went through when coming up with the Congestion Free Network. We asked ourselves what could we do if we didn’t/couldn’t raise any extra funding and what the best projects we thought would be to give the biggest impact overall to transport in Auckland.

To raise money tolls were the most favoured option however the AA say that’s also because their members think there should be a free alternative route. They also seemed to agree with tolls on the motorways simply because they think they can avoid them, presumably by using local roads and clogging those up even more. This is of course perhaps the key issue with the suggestions of road pricing that only covers some routes. In my mind if there is ever to be a road pricing scheme it will have to be more than just tolling motorway on/off ramps and that will likely mean a much more expensive scheme. I also believe that it’s critical we have some decent alternatives to any road pricing which would mean at least the current suite of PT projects, the CRL and a decent number of walking and cycling projects. On PT and active modes the AA say:

Though there is no question about the status of the private car as the default transport mode, Auckland Members strongly favour increased investment in Auckland’s public transport (particularly rail) and active modes.

There is a tendency to see public transport as symbolic of the shortcomings of the network, but also of the network’s potential.

Due to concerns about personal safety or the level of convenience, however, actual usage remains low. Interestingly, there is no evidence among Auckland Members of status-based attitudes standing in the way of greater use of public transport or active modes

I do think that Aucklanders are increasingly aware of the urgent need to get the ‘missing modes’ improved. Yes lots of people drive and lots will continue to do so even if we built the CFN however I think many more will change if the options are there and we’ve been seeing that change happening with the investments that have occurred over the last decade or so. The great thing is also that rather than being standalone improvements, each investments currently happening generally multiply top of each other to deliver a vastly better result. As an example the new network and integrated fares are both great projects that will help to boost patronage however together they work to fundamentally change the PT experience in Auckland. It’s also pleasing to see that the last sentence that there is no evidence of status-based attitudes. That’s certainly the impression I get even today when catching a bus or train and seeing the wide variety of people who are doing the same.

Lastly the AA has provided some “high level recommendations for officials”. These are summarised as:

  1. Auckland is ready for the conversation
  2. Expect a tough road ahead
  3. Be prepared to have the hard conversation
  4. Heed the warning signs
  5. Keep it flexible

All up it seems a very balanced newsletter from the AA and I think it’s useful addition to the discussion and it will be interesting to see what they come up with next.

 

Funding local transport projects

On Wednesday the Council’s Infrastructure committee meet again and there are a couple interesting papers on the agenda. One is about transport trends which I’ll write about in a separate post the other is about funding assistance rates (FARs). They are probably a fairly boring topic for many people but they can have huge implications on councils as they determine how much money the councils get to help pay for transport projects. A brief explanation as to how transport is funded in New Zealand.

  • Money from fuel excise duty, road user charges, vehicle registration and a few other sources all go into the National Land Transport Fund (NLTF)
  • The NLTF is used to pay for transport projects and other associated activities (like road policing)
  • State highways are funding 100% from the NLTF
  • Local roads only get a proportion of their costs paid for from the NLTF, the rest comes from rates. It varies from project to project but averages out at about 50%. This covers not just new projects but maintenance too.

This infographic from the NZTA shows breakdown of funding in more detail

NLTF 2013

The NZTA have been reviewing the FARs over the last 18 months to see if the way they’ve been doing things is the best for going forward. The current way of setting FARs has been in place for over 30 years while the overall concept has been in place since the 1920′s. One of the issues with the current method is that it varies from project to project. In some cases the NZTA will contribute more than 50% and in others less. One of the outcomes of the review is that the NZTA will be setting FARs at a council level so that all qualifying projects within a council area get the same level of funding. The benefit of that is it should allow councils to better plan how much funding assistance they will be able to get.

The paper says that the over the entire country the NZTA will fund an average of 53% of local programmes and most councils will get a FAR of 52%. It has been proposed that Auckland will get a 50% FAR initially which suggests that for most activities this will represent a drop in funding.

FAR Review Auckland Impact

Metro services refers to the mount of funding assistance provided to the rail network which is reducing over a longer period of time as was decided a few years ago. It’s also possible that the current state is higher that it normally would be due to the NZTA being bailed out by the Auckland Council a few years ago and are meant to be getting higher FARs at the moment as a result.

Over time the paper says Auckland should move to a 52% FAR however that is likely to take a few years and potentially result in a funding shortfall.

  • It is probable that the FAR for Auckland Transport would transition from 50% to 52% over the 2015-2018 period. The effects of these changes need to be calculated in relation to the transport programme being developed for 2015-2018 and discussed with the NZTA. Auckland Transport calculated that a FAR of 52% would be at a similar overall level to the FARs that applied to the 2012/2013 transport programme. It is possible that Auckland Council could suffer a funding shortfall in the years transitioning to a 52% FAR.
  • The NZTA Board indicated that FARs should be set at a FAR in the transition which avoids a substantial drop. It is important that the transitional FAR for Auckland Transport is as close to 52% as possible in order to achieve this. The NZTA may need to adjust the starting point FAR for Auckland Transport.
  • In the longer term, a single FAR would bring neutrality to investment decisions in relation to the percentage funding contribution from the NZTA. The increase in FAR in relation to maintenance and renewals provides a greater level of certainty regarding the ongoing ability to maintain the condition of transport assets. The proposed reduction in the FAR in relation to public transport activities would place a greater strain on rates funding in order to achieve the transformational shift to outstanding public transport sought in the Auckland Plan.

Any form of funding shortfall is going to mean that Auckland Transport and the council will likely need to make some tougher decisions about which projects they are able to deliver. That means better prioritisation, in some cases getting creative with projects to find cheaper ways to get the majority of the benefits and particularly in the case of streetscape improvements perhaps some JSK style temporary improvements will be what is needed.

It’s also worth noting that Auckland Transport is getting funding pressure from the council too. AT the council’s annual plan debate a month ago the decision was made to reduce capital spending by$50 million however Chris Darby managed to get this very useful amendment in.

That the Budget Committee:

agree that the $5.1 million transport opex increase is dedicated to public transport and the $50 million reduction in transport capex will not be applied to public transport.

That might have been the first time in many decades where PT ended up with a better result than roads.

More on the Budget

This is a more comprehensive post looking at the outcome of yesterday’s budget.

As mentioned briefly yesterday, when it comes to transport the big news of the budget was that government providing $375 million in an interest free loan towards $800 million of additional motorway projects that they had announced last year. The $800 million is made up of the projects below.

Budget 2014 - Auckland Transport package

The decision to do this along with the way it’s been done raises a lot of questions that I will try to work though below.

The projects will address congestion in our largest city, capitalise on the benefits of major roading projects already under way, such as the Western Ring Route, and improve access to Auckland International Airport.

“No Government has invested so heavily in transport infrastructure across all transport modes,” Mr Brownlee says.

“But with freight demand forecast to grow by around 50 per cent across the country in the next 30 years, and by almost 80 per cent in Auckland, and with a growing population, we’ve decided to bring a number of important projects forward.”

First of all since when have any projects like these ever ended up solving congestion for more than a couple of years at best. All they will do is encourage people to drive more either by taking additional trips, shifting trips closer to the peak or potentially even replacing trips currently made using public transport. As for the freight demand, while it is predicted to grow it’s not yet clear that it will actually happen. The recent Freight Demand Study released by the Ministry of Transport shows that freight volumes have been flat since 2006/07.

“Some of these projects were up to a decade from starting, but we’ve decided they simply must begin sooner to give Auckland the best opportunity of moving people and goods around the region,” Mr Brownlee says.

The comment saying that they’ve decided to bring the projects forward combined with the statement above show that despite what the government like to claim, they are really just picking projects they want to build. Alternatively they could just as easily have provided money to help kick start the CRL or build the infrastructure needed to make sure the new bus network can really hit the ground running. As for paying for it:

The $375 million will be transferred to NZTA as an interest-free loan, to be repaid to the Crown by funding currently allocated to these projects in the National Land Transport Fund up to 2026/27.

The Government is also announcing today $32.7 million of new operating funding over the next four years to cover the debt financing cost to the Crown of the interest-free loan.

I think the decision to use debt to pay for these projects raises a lot of questions.

Why is the loan interest free. The closest comparison we have is with the funding package to buy the Auckland’s new electric trains. In that the government have provided the council with an interest only loan and the council pay the interest payments but don’t actually get to pay down the capital value till the loan term expires in 35 years. By comparison this loan is interest free and will be paid off using funds from the NLTF. That will inevitably have an impact on what else can be funded through the NLTF and it’s likely to mean other projects elsewhere won’t be able to be funded as a result. This is a similar situation to what is planned to happen with the PPP being let for Transmission Gully and being proposed for Puhoi to Warkworth. Speaking of PPPs, it once again raises the question of why even bother using them instead of using a facility like being proposed for these Auckland Projects. If we’re going to be using debt to fund something then we might as well use government debt rather than pay the commercial rates of private consortium.

On top of that $800 million the government also confirmed some small amounts of money for the local road projects they were supporting.

  • Further investigations to determine the preferred scope of the East-West Link over 2014/15 ($10 million).
  • Progression of the Panmure to Pakuranga phase of the Auckland Manukau Eastern Transport Initiative (AMETI) over 2014/15 ($5 million).

The AMETI part mentioned will likely be to help fund the Notice of Requirement which AT are planning on lodging later this year however it’s the East-West Link that’s interesting. Why are we still trying to determine the scope of the project. That is work that was said to have been done already or is the government re-litigating it after complaints from business owners who want a full scale motorway?

All up with the motorway based spend up I get the feeling that this cartoon I posted the other day is only getting more and more relevant.

More Roads

The second big announcement was an additional $198 million for Kiwirail towards it’s turnaround plan. It will be used for

  • Infrastructure renewals and upgrades.
  • New wagons and refurbishment of existing wagons and locomotives.
  • IT systems.
  • Earthquake remediation projects and other safety works.

This is quite a positive sign as it puts the government’s investment well above what they said they would do a few years ago when the turnaround plan was launched. It suggests that perhaps the government are getting more confident about the future of Kiwirail which is good news.

Looking at the more detailed budget documents for the transport section shows a few other key points, here’s the overview.

Road

The largest element of the Vote is the funding for roading ($3,873 million or 86% of the total Vote).

This is primarily the funding for the National Land Transport Programme which is funded from road tax revenue collected by the Crown ($2,850 million or 63% of the Vote).

$1,012 million of the balance (22%) relates to loans from the Crown:

  • $750 million for cash flow management. This appropriation does not take account of any repayments made and the facility may not exceed $250 million at any one time
  • $107 million to advance the construction of the Tauranga Eastern Link
  • $100 million to rebuild earthquake damaged roads in Christchurch
  • $55 million for projects in the Auckland Transport Package.
Rail

Funding for Rail makes up 11% of the Vote – $511 million, mainly:

  • $198 million for the KiwiRail Turnaround Plan, the aim of which is put the freight business on a commercially viable footing
  • $192 million for a loan to the Auckland Council to assist with the funding of the Electric Multiple Unit package
  • $90 million for a grant to the Auckland Council to assist with the funding of the Electric Multiple Unit package
  • $16 million for metro rail projects in Wellington.
Crown Entity and Other Funding

The balance of the Vote ($135 million) is mainly split between:

  • $33 million for the Ministry of Transport as departmental funding
  • $25 million for Crown entities for outputs. The transport Crown entities receive most of their funding from third party fees and charges
  • $26 million for SuperGold card public transport concessions
  • $19 million for weather forecasting services from the Meteorological Service of New Zealand
  • $18 million for road user charges and fuel excise duty activities which are funded from fees and road tax revenue.

One question that springs to mind is why is the Tauranga Eastern Link need an additional $107 million. Surely that would have been part of the final contracts.

I think it’s really disappointing that the government still refuse to even consider helping fund the CRL, especially the cut and cover section from Britomart to Aotea that Len suggested earlier in the year. I think that section is going to end up being crucial to a whole raft of transport and urban improvement projects in Auckland.

All up for transport there wasn’t anything particularly surprising as it really just more of the same, which also means more roads.

No more buses in the City Centre? Is light rail an answer?

An idea that crops up quite often is whether we can get rid of all the buses in the city centre. This idea is normally backed up with the suggestion that buses are dirty, smelly, noise loathesome things that have no place in a civilised city.

Now right up front I don’t agree with that suggestion. Modern buses are actually pretty clean and quiet, especially new hybrid and battery electric models. If we design our bus routes and infrastructure properly they can be very low impact and contribute nicely to the urban environment, but where we treat them like poor cousins or try and “paint the bus routes on afterwards” they can be horrendous.

But let’s ignore that reality for now and run with the premise: what would it take to get rid of buses from the city centre. I can see four general options:

  1. Stop all buses at the edge of town and make everyone walk in. I think this is a non starter, Auckland Central is just too big for this to work. Some people would be happy to walk a kilometre or two to get where they are going, but most want to get a lot closer than that. This idea also kills off any chance of connecting between buses to get across town.
  2. Stop all buses at the edge of town and transfer everyone to a light rail shuttle, tram loop or monorail circulator, etc. This I think is also a non starter. It overcomes the walk issue above but simply trades it for the inconvenience of a forced transfer on every trip. That’s not just unnecessarily inconvenient, it also requires some pretty massive terminus infrastructure to turn around hundreds of buses an hour at various points on the city fringe and get everyone over to some sort of shuttle thing. It also makes transfers across town awkward, although not impossible.
  3. Feed all buses into rail or busway tunnels and only have underground train/bus stations in the city. This is feasible, but would be very expensive. Given the current and projected bus patronage we would require two or three city rail links, or bus equivalents, to move the numbers. It also means you lose the easy street level access for more local trips, and would need to divert lots of local isthmus buses quite out of the way to link to connecting stations or bus tunnel portals. So without building something comprehensive, and expensive, like an underground metro network it’s hard to see how this could work, and indeed all the cities with the busiest metros still have masses of buses and trams running at street level.
  4. Convert all city bus routes to light rail, and only have light rail trams on city streets. This is the question I want to explore today, is it feasible to reinstall the Auckland isthmus tram system and only have light rail vehicles running on city streets?

Having only light rail on the streets is an appealing idea, people seem very fond of trams and the idea of an extensive tram network has little push back from architects and urban designers who are concerned with the look, feel and experience of the city. It’s hard to argue that trams aren’t nice to ride on, or that they don’t look cool. If done properly it would mean dedicated lanes for every transit route reaching the city, nice station style stops and permanent and legible ‘proper transit’ for a proper big city.

Light rail on street would have a few unique advantages too. One is that the corridors can be quite narrow given that the vehicles are stuck to their rails. The trams they use in Adelaide and Madrid, for example, are only 2.4m wide. This means a double tramway can fit in only 5m of road width, between stops at least. That could be very useful for our fairly narrow arterial roads, streets like Dominion Rd or Mt Eden Rd which are only 20m wide in total and where even basic bus lanes are difficult. Putting narrow trams in the middle might buy us enough space for cycle lanes, or a row of parking.

Skinny but capacious tram from Madrid.

So if we put aside the fact you can actually do much the same with buses, if you give them the same level of investment and attention, why wouldn’t we want this?

Well the simple answer is that it would cost a lot of money, money that might be better spent improving frequencies and adding new services rather than changing the existing ones from rubber tyres to steel wheels. So the question is how much would it actually cost, so let’s see. To work out this cost, I have taken the bus network published in the Regional Public Transport Plan and identified all of the routes that end in or pass through the city centre. I then grouped those together into bunches that run on the same corridor in town, giving six groups:

  1. Quay St: Tamaki Dr to Jervois Rd/Pt Chevalier, plus the Inner Link loop
  2. Symonds St: routes from Remuera Rd, Great South Rd and Manukau Rd
  3. Queen St: Mt Eden Rd, Dominion Rd, Sandringham Rd, New North Rd
  4. Albert St: Great North Rd, and Richmond Rd
  5. The Northwestern Motorway
  6. The Northern Busway

 

Indicative light rail corridors and groupings.

Indicative light rail corridors and groupings.

One thing to note here, I tried to be conservative with the track and make stuff as small as possible. To that end I’ve not replace some of the smaller bus routes that enter the city at all, I guess the idea is they would terminate at somewhere like Newmarket, Ponsonby or Parnell and people would have to swap to the trams.  This might not be the best way to run things for the network, but it seems to be a simple way to do it.

Adding these corridors up, we arrive at the following figures for the total track required (the total route length is longer because the routes share tracks near the City Centre).

Estimated cost of converting all routes reaching the Auckland City Centre to light rail.

Estimated cost of converting all routes reaching the Auckland City Centre to light rail.

For the city routes I’ve applied a cost of $12m per kilometre for track, power and roadway reconstruction. That’s a mid range estimate taken from review of recent light rail projects in Australia. I’ve also allowed for one pair of platform style stops for every 500m of track, costed at $500k each. On the Northern and Northwestern routes I’ve allowed for the addition of tracks to busway and motorway shoulders, and in the case of the Northwestern, some new stations at $10m each. This does assume that we can simply run light rail tracks on the busway, motorway shoulders and over the general lanes of the harbour bridge, probably in mixed traffic. Again that might not be the best way to do it, but it’s the cheapest. In addition, we’d need a maintenance depot and some stabling yards, total of $100m allowed there.

Finally, I worked out what would be required for a peak frequency of one tram every five minutes on each street level route (giving better frequency where they overlap), while I allowed for one every three minutes on the Northern and Northwestern corridors. Overall that requires 94 light rail vehicles, each costed at $5m.

All together that adds up to 152 route-kilometres operating on 119.7 kilometres of double track electrified tramway, with 119 stations served by 94 vehicles running every five minutes at peak times. That would leave Auckland in a sort of Melbourne like position. Heavy rail for the main trunk routes from most of the region, light rail filling in some other radial corridors, the inner suburbs covered in street level tram lines and buses relegated to feeder and crosstown routes well away from the City Centre.

So, what is the magic number to get rid of buses by building a light rail network covering all routes entering the City Centre? Add it all up and we get an estimate of $2.36 billion dollars (I actually think that is a bit light, not for the street level stuff but I fear the Northern and Northwestern motorway based ones could in practice get very expensive indeed).

The question is, is it worth it? Could we do better with that money?

Well at a service level it’s really no better than what we will have with the New Network buses, at least in terms of frequency and accessibility. Spending that money would buy us a lot of reliability, assuming that the tram tracks would be closed to traffic for the most part and the trams could run without interference at any time of day. However we could do the same with an aggressive programme of bus lanes for a lot cheaper. Likewise with the new station style stops, the corresponding street upgrades, the modern cool looking and comfortable vehicles. We’d get all that, but the question remains could we not do the same with our bus stops and save a whole lot of money in the process. Another point is this would deliver a multi-billion dollar transit boost to the isthmus and the North Shore… which are, excluding the CBD and parts of Glen Innes, precisely those areas that see the least allowance for development in the Unitary Plan.

I’d love it if some minister turned up with two and half billion for such a project, and I do believe Auckland would be an amazing place if this were done. But is it really something to aim for, or can we do better with our money?

Curiously the cost of an isthmus tram network is about the same as the CRL, so should we do that instead? I’m not sure if that’s a good idea, the CRL would need to come first, or at least at the same time, before we look at anything like this. I can see two reasons for that stance.
Firstly a light rail system wouldn’t actually add that much capacity, because it is simply replacing the buses we already have. There would probably be some boost to speed, capacity and reliability, but not that much if it is a case of just changing vehicles and guideway on the same corridors. By most estimates the CRL gives us the ability to run about 48 trains an hour in total, or an extra 28 over current capacity. Twenty-eight full size EMUs is equivalent to about eighty-four light rail trams an hour, or 420 buses!… and that’s new capacity.
The second point is that the CRL really supercharges the regional rail network, which focuses on the suburbs outside the isthmus more than anything. As noted above it’s the rail served suburbs of the west and south that really have the potential to grow under the unitary plan, not the isthmus, so we should build the transport they need first.

Let us know what you think, I hope to see lots of juicy debate on this one!