Last night was the Transport Election Debate and so this is a recap of what happened. Unfortunately it wasn’t filmed so we can’t put up a video for you all to watch. If I miss anything important please add it in the comments.
I want to say thank you to the candidates that turned up. There was Denis O’Rourke from NZ First, Julie Anne Genter from the Greens, Phil Twyford from Labour, David Seymour from ACT, Damian Light from United Future and surprisingly as a late addition current Transport Minister Gerry Brownlee.
All up there were probably about 150 people that filled the room to hear the candidates speak. This photo was taken before the start and we ended up needing to get more chairs out.
The evening started with Patrick giving an overview and recap of the Congestion Free Network. After that it was the candidates’ turn to have 8 minutes each to talk about their parties’ transport policy. The order of speakers was drawn at random.
First up was Denis O’Rourke from NZ First and he was perhaps one of the surprises on the night. The party’s transport policy is fairly good but to me it’s one thing to have a good policy, it’s another to actually understand it and know the reasons why it’s needed and Denis did well on that part. He spoke about the need for a more balanced transport system and the benefits it can provide to mobility, the economy and the environment. He talked about the need to address how we fund transport over the long term and said the party would support a long term shift away from Fuel Excise Duty and Road User Charges towards implementing road pricing on motorways and major arterials. He said that NZ First support the CRL starting immediately and would contribute 70% as they see the project as a vital investment for New Zealand. He also talked about their policy of having Railways of National Importance which did go against some of his earlier comments about not picking winners. Overall it was a fairly good speech.
Following Denis was Phil Tywford from Labour. Much of what Phil talked about was related to the announcement on the weekend that they would support the CFN. We were hoping Phil might start a bidding war on how much to contribute towards the CFN however unfortunately he ruled that out. He also commented about how the major upgrades to the rail network (DART and Electrification) were both budgeted for and signed off under the previous government so Gerry can’t use the claim that the government have funded $1.7b for rail in Auckland (to which Gerry said he would say it anyway). The other important thing Phil talked about was the need to both develop and enhance our rapid transit networks to cope with the sprawl that is expected to happen. He cited the massive developments planned for the Northwest as needing a Northwest Busway while in the South rail electrification and new stations would be needed. Related to that he talked about the need for more intensification/development around stations. Lastly on the CRL he said if Labour won, he would be down in the CBD the day next day with his shovel ready to start digging.
It was now David Seymour from the ACT party who was getting a turn to speak. The focus of his talk was about road pricing and how we need to use it to get more out of our existing road network. He referred to the Remuera Rd
Bus Transit Lane as effectively being tolled but then said he wants the cost lowered so that more people can use the lane (which would hold up buses). He said he thinks vehicle trends will go back to pre-2013 levels of unlimited growth across the network. He said he’s “a fan of market driven technological solutions “all of which involve rubber tyres”. He also said he thought a focus on PT would harm housing affordability and home ownership as in his view we all need to be sprawling out.
Following David was Damian Light from United Future who said he was working in the transport industry. He said he thought we should build rail the airport before the CRL as that is something that would be used by travellers while also saying the CRL wasn’t a priority as he “lives on the Shore and so it’s no use to him”. Basically the impression I got was a whole lot uninformed of backyard BBQ type rants that had no basis in reality.
Gerry Brownlee finally got to have his say. He talked for some time about how the government could easily have cancelled electrification but didn’t as some sort of achievement, about how he thinks the government have been generous with their CRL targets and how he thinks the government are doing the right thing with transport investment. He said he thought Auckland Transport had been doing an excellent job and wants to replicate the concept to other regions throughout the country. I was hoping he might drop some hints to an earlier start for the CRL but unfortunately he didn’t. However, about the Additional Waitemata Harbour Crossing, he said it was his view that there would be three tubes and that rail would be included as part of that. Later on he was asked what new initiatives the government have undertaken for PT since they’ve been in office and the answer was the PT Operation Model. He also said he was not pessimistic on climate change and that he thinks we’re on the verge of some massive changes in travel to which he highlighted having been in a driverless car.
Last to speak was Julie Anne Genter and as I expected she was solid, explaining why we need to change our investments to get better, more resilient and more economically successful cities. She also spoke a lot about the CFN and providing choices to people
Overall it was a good night and lots of people came which was great to see as it shows just how much interest there is in how we develop our city for the future.
Gerry Brownlee and the Congestion Free Network
Update: Alex Burgess captured some of the comments on video
Gerry Brownlee’s media release yesterday trumpeted up traffic levels in 2013 surpassing those in 2012 – apparently this is a sign of New Zealand’s economic recovery that we’re driving a bit more.
Transport Minister Gerry Brownlee says increases in vehicle travel and vehicle registrations reflect New Zealand’s economic recovery and growing population.
“Total travel [measured in kilometres travelled] was flat between 2005 and 2012, but growth returned in 2013 with a 1.6 per cent increase in total travel nationwide, and more recent data suggests larger increases are on the way,” Mr Brownlee says.
“Data collected by the New Zealand Transport Agency (NZTA) on State Highway usage from the first six months of 2014 suggests we will continue to see increases in travel demand.
“The highway data shows a 3.6 per cent increase in Northland and Auckland, and a 5.4 per cent increase in Canterbury in the six months to May 2014, compared with the same period a year before.
Setting aside the question of whether it makes any sense whatsoever to celebrate people driving more, further details in the release tell a more interesting story of what’s happened over the past few years:
As you can see, the total level of vehicle fleet travel (known as “vehicle kilometres travelled or VKT) in 2013 finally made it back to 2007 levels after a sustained period below 40 billion kilometres.
Of course New Zealand’s population has grown quite significantly since 2007, which means that VKT per capita is well below the levels in early years – despite a slight uptick in 2013:
It will be interesting to see the 2013 figures specifically for Auckland, as generally Auckland has seen a faster drop in per capita VKT over the past few years than other parts of New Zealand.
Gerry Brownlee offered to resign as Transport Minster today after getting caught out skipping security at Christchurch airport.
Prime Minister John Key says he was “really disappointed” after Gerry Brownlee bypassed airport security this morning, but he has been quick to back him.
Mr Brownlee and two of his staff deliberately bypassed airport security at Christchurch airport this morning. He offered his resignation as Transport Minister, but that was swiftly rejected by the PM.
“Running late for a plane this morning, I took a door that is normally used for an exit at Christchurch airport onto the forecourt … and you’re supposed to go through airport security,” Mr Brownlee told reporters this afternoon.
He said he did not give it any thought, but has now apologised unreservedly for the action.
Mr Brownlee only offered his resignation after he was contacted by Aviation Security.
In defending him John Key has said
“He’s offered his resignation and I’ve decided, on balance, not to accept his resignation. In making that decision, I considered the whole matter very seriously.
“But I had to weigh up all of the tremendous things he’s done in the six years he’s served as a minister.
So let’s have a quick poll, do you think the Prime Minister should have accepted his resignation over this? One thing to think about is if he had of, who would have replaced him and for that the most likely candidate would be his predecessor – Steven Joyce.
Note: I think this one could end up a very lopsided poll.
On Friday transport minister Gerry Brownlee spoke to the Road Transport Forum (RTF) on the government’s key transport priorities. Over the years the RTF have been a generous donor (not just to National) and have certainly received a transport policy very much tailored to their needs. There was nothing new in the speech in terms of project announcements and I guess this was perhaps not the audience to talk about the cancelling the Northern Busway extension, for example.
However, there were a few paragraphs that pick up on traffic trends in recent years – with the Minister making some rather weird connections between these trends and the success of the RoNS programme:
Between 2005 and 2012 total road travel – in terms of kilometres travelled – was almost unchanged.
There are likely to have been a number of contributing factors, including the Global Financial Crisis, population changes, and technology changes affecting the way people meet and communicate.
Heavy vehicle traffic was affected more than light traffic, dropping by over 4 per cent in 2009 – clearly an impact of the GFC.
But now we are seeing that vehicle kilometres travelled are beginning to increase again.
Heavy vehicle traffic on all roads increased 2.1 per cent in 2013, while light vehicle traffic grew 1.4 per cent.
NZ Transport Agency traffic counts for State highways shows a 4.1 per cent growth in heavy vehicle travel in the year to May 2014.
New Zealand’s vehicle fleet is also growing.
Average vehicle ownership growth has increased more than twice the speed of population growth, and recently released data shows new car purchases at their highest level since 1981.
These increases are not only because of population increases and the improving economy, but also because of the choices people make about their preferred modes of transport, and this is in the face of the biggest investment in public transport seen in decades.
So the case for investing in strategic State highways through the Roads of National Significance programme has been proved correct.
Gerry seems to be mixing up a few stats here as vehicle kilometres travelled is quite different from individual traffic counts and they aren’t always going to move in unison – but it’s the strange logic of the final paragraph that is difficult to understand. There are a few options below for what he could be trying to say:
- The case for spending $11 billion on the RoNS is to make people drive more.
- With per capita VKT declining a lot in recent years, it makes a lot of sense to spend $11b on a few motorways to try (unsuccessfully) and reverse this trend
- Construction of the RoNS projects themselves generate heaps of truck trips to move earth around, which is the point of the projects and therefore they are a success
Just as a reminder here’s a comparison of per capita VKT and per capita public transport use in recent years:
What’s your interpretation of what Gerry means?
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.
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.
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.
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.
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.
Minister of Transport Gerry Brownlee, along with Economic Development Minister Steven Joyce, issued a press release on Wednesday stating there is little evidence to support the reinstatement of the Gisborne – Napier railway line:
Transport Minister Gerry Brownlee and Economic Development Minister Steven Joyce today released a study of the East Coast region’s economic potential over the next 30 years.
The East Coast Regional Economic Potential Study assesses the region’s economic performance and barriers to development, and models five economic growth scenarios along with their implications for transport infrastructure and the skills needed.
Mr Brownlee says the study shows the economic importance of maintaining and boosting the road network in the East Coast, particularly in Gisborne.
“There will be an increase in logging freight over the next decade and improved roading will be vital to support that and other industries,” Mr Brownlee says.
“The study illustrates the need to develop further capacity for heavy vehicles on State Highway 35 north of Gisborne and to maintain the quality of State Highway 2 between Gisborne and Napier, and northwest of Gisborne to the Bay of Plenty.
“I will be asking the New Zealand Transport Agency to review its plans for these highways in light of this study.”
The report also concludes there is little evidence to support the case for reinstatement of the damaged rail line from Gisborne to Napier.
“When operational, rail only accounted for 2 to 3 per cent of freight from the region and the report finds no clear evidence of a significant economic impact following its closure,” Mr Brownlee says.
To provide context, a map of the area shows the distances involved in the region:
Hawke’s Bay and Gisborne
It is a distance of 214 km from Napier to Gisborne, and it takes about 2 hrs 40 minutes to drive according to Google maps. Tolaga Bay to Gisborne is 55 km.
The study referred to in the press release comes in two parts. The first is a desk-based review of available research and analysis of economic data, which runs to 197 pages. The second is a relatively lightweight 141 page document called “Economic forecasting and transport and skills implications“. The Transport and freight section of the second document on page 33 contains an analysis of heavy commercial vehicle (HCV) use, and also talks about proposed plans to use Tolaga Bay as an inland port for Gisborne’s Eastland Port. Bear in mind that traffic counts on the state highways in the area are low, with around 3,000 veh/day or less away from the main urban areas of Gisborne and Wairoa.
Storage space at both Napier and Gisborne is an issue for logs, but it isn’t clear from the report why Tolaga Bay has been chosen as the inland port for Eastland Port, who made the decision, or why the Government has effectively chosen to subsidise Eastland port by upgrading the road to HPMV (“big truck”) standards. The last sentence looks like consultant-speak for “upgrading SH2 between Gisborne and Napier to support heavy trucks will be bloody expensive and will have ongoing high maintenance costs”.
The report states that logs currently make up 97% of export traffic through Eastland Port. There are very few imports.
The Port of Napier exports a slightly less volume of logs and timber than Eastland Port – 1.4m tonnes vs 1.9m tonnes annually. However Port of Napier imports a significant amount of fertiliser, lime and cement.
The report sets out rail freight flows between Gisborne and Napier, before the line was mothballed in 2012:
Note that 2011 rail freight volumes were less than half of the 2005.
The report goes on to make assumptions about future economic growth over the next 20 years, including oil and gas production encouraging between $11bn and $85bn worth of investment. The report does not analyse how likely either of these scenarios are.
Page 75 of the report looks at the role of the railway between Napier and Gisborne:
The report’s conclusion on rail is:
We also emphasise that, even if rail services are reinstated, the majority of freight traffic and surface passenger transport will continue to travel by road. The possible resumption of rail services does not detract from the need to improve the road network to ensure the resilience and reliability necessary for providing attractive linkages in the region and minimising the effects of distance from the neighbouring cities and the rest of the country.
Not everyone shares KiwiRail’s pessimism about the viability of the line, however. A report by BERL in December 2012 called KiwiRail’s analysis “very conservative”, and there are fundamental flaws with the way KiwiRail have determined profitable freight volumes. That report states that the cash flow neutral tonnage is only 226,000 tonnes per year. The same report also states:
The spending on the Napier to Gisborne road in the last ten years has totalled $102 million. In the last four years it averaged $14.8 million per year. If the number of trucks, and heavy trucks at that, increased by 33% to 38% because the rail line is not available for wood freight, the annual spend on the road can be expected to increase at least proportionately, namely by $4.9 million to $5.6 million per year. This indicates that it would likely be in the national interest to make the capital expenditure required on the rail rather than having to increase spending on the road, and suffer the negative externalities on the road.
In their Draft Annual Plan, the Hawke’s Bay Regional Council is proposing to invest $4.5m in the Napier Gisborne Rail Establishment Group, which estimates that $10.7 million will be needed to finance capital and operating budgets, including $5.3 million to buy rolling stock, $2.4 million for working capital and a $3 million disaster contingency reserve.
A 51 per cent shareholding from the regional council is proposed, with a contribution of about $5.46 million through to the 2018-2019 year, with investors from Hawke’s Bay and the Gisborne region holding the remaining 49 per cent interest in a holding company, which would be formed especially for the purpose.
Submissions on the HBRC Annual Plan close on Monday 12th May. You can find out more and make your own submission here.
The NZ Herald reports:
This afternoon Transport Minister Gerry Brownlee is expected to announce funding for two transformational roading projects. A $4 billion four lane motorway between Cambridge and Taupo, extending the Waikato Expressway a further 100 kilometres to the south and an $8 billion 50km motorway from Cambridge to Tauranga which includes a 14km road tunnel. Both projects were hinted at in the 2012 Government Policy Statement for Land Transport Funding. He will announce the projects at a ceremony to celebrate the extension of rail electrification into Britomart station.
“These are critical projects for improving freight efficiency in the North Island,” says Mr Brownlee in a leaked copy of his speech. “While we realise a near $12 billion investment in two roads that each carries fewer vehicles than the Kopu Bridge did when it was still one lane may appear to some as slight overkill, we think that those opposing the project just oppose progress and want us to return to dirt tracks and horse carts.”
NZ Transport Agency Regional Director Harry Wilson said his office was in celebration mode over the Minister’s announcements. “Once the Waikato Expressway project is finished in a few years’ time, we really didn’t know what we’d do with ourselves as we’ve lived and breathed that project for the past decade or more. We’re so pleased to see the government commit to the future of the Southern Waikato and Bay of Plenty regions – even though combined they’re not really growing – which will keep us in work for many years to come!”
Mr Wilson also noted that his organisation had been instrumental in pushing for the inclusion of the two projects in the 2012 Government Policy Statement and were “enthused” the project had been given funding approval. “We’ve learned a lot from our Wellington office in the past few years about the tactics of getting unnecessary projects in parts of New Zealand that aren’t growing over the line. We’re just so proud to have come up with the two biggest and most expensive projects ever imagined in New Zealand and now have funding approval for it!” Mr Wilson added.
Minister Brownlee noted in his speech that “Much like other Roads of National Significance, the Cambridge to Taupo and Tauranga motorways will duplicate an existing route where upgrades to that road could achieve most of the benefits for a fraction of the cost, but frankly upgrading what we’ve got is just boring – I want more motorways!”
Traffic counts between Tokoroa and Taupo on State Highway 1 show a slight increase in daily vehicle volumes from 6500 in 2009 to 6700 in 2013. Mr Wilson noted that “our traffic modelling suggests traffic volumes will increase to 60,000 cars a day in the next 5 years – almost all of which will be trucks!”
On State Highway 29 over the Kaimai Ranges traffic had also slightly increased, growing from 9200 vehicles per day in 2009 to 9300 in 2013. In the next five years this route is expected to increase to over 80,000 vehicles per day. The high number of trucks is said to be a key part of the decision to construct a tunnel under the Kaimai Ranges which was first investigated by the NZTA in 2010.
Local politicians unanimously supported the project when spoken to.
South Waikato District’s mayor Neil Sinclair said the projects would boost the economic productivity of his region significantly and wasn’t worried about the impact of the new motorway bypassing Tokoroa. “Look at Pokeno, it recovered a mere 15 years after being bypassed by the Waikato Expressway,” stated Mr Sinclair.
Taupo District Council’s mayor David Trewavas also stated his strong support for the project. “We’re about an hour and a half south of the thriving metropolis of Hamilton. This motorway will cut that time by at least a minute or two, which will be transformational to our economy. A local resident walking past added that they “didn’t care what was built, as long as it meant the money couldn’t be spent in Auckland.”
New Zealand Road Transport Forum chief executive Ken Shirley said the two roads were great news and would allow trucks to even compete better with Kiwirail, especially on the Tauranga to Auckland route. “Everyone knows that the wider population and other road users subsidising trucking is a great investment and these two projects will be great for that” he said.
Details of the project’s exact route, the timing of construction and how it will be funded have yet to be determined but when questioned, Mr Brownlee said he was optimistic the money could be found for such important additions to state highway infrastructure in the Upper North Island. “Hey we could always push that silly rail loop under Auckland’s city centre back a few more years,” Mr Brownlee shouted at reporters while leaving the airport for Britomart station in a Crown limousine.
A business case for the motorway projects is expected to be presented to Cabinet for funding approval next Monday.
Following on from the Greens walking and cycling to school policy last week, Julie Anne Genter was again asking about it in Parliament yesterday and the answers from Gerry Brownlee were quite insightful to the governments thinking while some were also quite comical.
You can read the transcript here.
To me there were three interesting parts in the exchange. Firstly the primary question which is based off this written question.
JULIE ANNE GENTER (Green) to the Minister of Transport: Can he confirm that by the end of this fiscal year the Government will have spent $1.5 billion on work classified as having a “low” benefit to cost ratio under its Roads of National Significance programme?
Hon GERRY BROWNLEE (Minister of Transport) :The analysis the questioner relies on is provided by the New Zealand Transport Agency. The Government makes its own decisions, though, about value-for-money expenditure. It is not a slave to bureaucratic formula and therefore considers other matters in making its decisions. The Government considers the roads of national significance to be excellent expenditure.
Julie Anne Genter: I raise a point of order, Mr Speaker. This was a question on notice and it was a yes or no question, and I did not hear a yes or a no in the Minister’s answer.
Mr SPEAKER: Order! Again, the Standing Orders are quite clear that no member can demand a yes or no answer. Again, I can understand why the member does not feel that it was adequately addressed, and I accept that. On this occasion, the question, in my opinion, has been addressed, but I will allow the member an additional supplementary question to try to tease it out to the member’s satisfaction.
Julie Anne Genter: For clarity, has he spent $1.5 billion on low-value work under the roads of national significance programme, as stated in his answer to written question No. 813, and is he now trying to justify that waste by calling it strategic?
Hon GERRY BROWNLEE: The question the member asked me to respond to indicates the benefit-cost ratio on both the 6 percent and 8 percent discount rate for a number of roads. The roads that she is most likely to be focusing on are the Waikato Expressway, the Tauranga Eastern Link road, and the Wellington Northern Corridor. The Government considers those to be very important. They are strategic, and we most certainly do not agree with the Green Party that it is inappropriate or low-value expenditure
Basically Gerry just confirms what we’ve been saying for a long time, that the government is building what are in some cases very stupid roads because they want to. Now while I don’t agree with that being how we should build motorways, in itself it isn’t necessarily wrong. However it is quite different to how the government have portrayed their road building programme, which is that the RoNS are good for the economy.
Following that was this exchange related to freight movements.
Julie Anne Genter: Given that none of the spending on the roads of national significance has been high value and that nearly half the spending on walking and cycling in the last year was high value, would it not be a better use of taxpayer money to prioritise high-value walking and cycling projects?
Hon GERRY BROWNLEE: One of the problems the member would leave unanswered is what you would do with the volumes of freight that have to get moved around New Zealand if you required them to be moved by bicycle or pushcart.
Julie Anne Genter: In light of the National Freight Demands Study released last week, which shows that road freight has fallen since 2006 and that the expected rate of growth is less than was forecast when his Government began this roads of national significance programme, is now not an appropriate time to reconsider whether spending billions of dollars on projects that his own Government considers low value is the best use of taxpayer money?
Hon GERRY BROWNLEE: The first point is that I dispute the analysis that the freight volumes have fallen. What I would say is that vehicle kilometres travelled have fallen, and that is largely due to a more efficient roading network, which has an excellent outcome for greenhouse gas emissions.
This relates to the freight study released last week, the outcome of which said that while the amount of freight being moved by all modes had increase, the tonne-kms (distance) had been dropped. There are a number of factors at play causing this however one of them is not due to the roading network being more efficient which implies road building to reduce distances (i.e. removing curves) like Brownlee suggests. Note: This is different from using the existing roads more efficiently through changes like allowing heavier trucks which is something that need motorways to happen.
Julie Anne Genter: Does the Minister understand that duplicating motorways to the Kāpiti coast or Wellsford does nothing to alleviate serious congestion in our city centres—in fact, according to the New Zealand Transport Agency, they make congestion worse—whereas investing in smart projects like walking and cycling to school take cars off the road, eases congestion, and improves public health?
Hon GERRY BROWNLEE: It also very seriously inconveniences the people who pay for those roads, and their commitment to these projects will be seen at the ballot box.
So we can’t have more walking and cycling infrastructure as it might slow down car drivers by a few seconds, even if that infrastructure takes people off the road and helps to free it from congestion. Also as mentioned this morning, people simply don’t vote on transport at a National level when there are so many other important issues being discussed. If people did vote based on transport policy then I suspect we would be getting very different outcomes.
As I discussed yesterday the debate on big urban issues of housing and transport far too frequently descends into left/right debates and today I’m looking at transport.
One of the reasons this has come up is that we’ve had some interesting conversations on Twitter in the last few days with a couple of Nationals MPs, which apart from highlighting a scary lack of understanding about transport, inevitably touched on the issue about whether the transport policy that we generally advocate on this blog fits into the traditional “left-right” political spectrum. Here’s what the fairly new National MP Paul Foster-Bell said on Twitter:
We have a fairly diverse range of bloggers on this site: a couple of economists, a transport planner, an urban designer, an architectural photographer, a planning student etc and of course myself who most recently working in banking and from our discussions I think we have some reasonably broad political viewpoints.
Furthermore, many of the key changes to transport and planning policy that we have advocated for strongest over the past few years hardly align with any traditional definition of a “left worldview”. Let’s take a look a few of our most common arguments:
- Cut back or cancel some of the Roads of National Significance that do not provide value for money. This seems to me like basic fiscal conservatism – as some of the RoNS projects are simply a huge amount of money being spent on a problem that really doesn’t warrant such high investment. Puhoi-Wellsford could be replaced by Operation Lifesaver, Transmission Gully is just overkill for a city that’s hardly growing in population, the Kapiti Expressway has a cost-benefit ratio of 0.2, the Hamilton bypass will carry fewer vehicles in 20 years time than the Kopu bridge did when it was a single lane… and so on. This seems like cutting wasteful spending, something that those on the right of the political spectrum say they want to do?
- Built the Congestion Free Network instead of the Integrated Transport Programme. Ultimately the CFN proposal is at least $10 billion cheaper than the current transport programme for Auckland. It probably has a much higher chance of achieving the many targets that Auckland has set for its future transport outcomes than the ITP is able to meet (although that’s not hard as the ITP failed to achieve just about any of its targets). Similarly to above, this is achieved through chopping out an enormous amount of wasteful spending on unnecessary projects (both road and rail) – yet again, something that those on the right of the political spectrum say they support?
- Built complete Streets. Democracy equality and choice are meant to be good things aren’t they? Most of our roads focus solely on the task of moving as many vehicles as possible and give scant regard for anyone not in a car. Building complete streets that treat each user equally and allow people to have a real choice in how they get around is the ultimate form of transport democracy.
- Improve walkability. We’ve seen both locally and internationally that when there is a focus on improving the walkability and the pedestrian environment (that includes wheeled pedestrians) a couple of significant things happen. One is that people shop more boosting local retail, perhaps the best example of this is the upgrade of Fort St to a shared space which has seen the hospitality retailers revenue increase by a staggering 400%. The second thing is that people walking (and cycling) more is good for them, improving health and therefore reducing long term costs to the health system. This is further enhanced as often these improvements also see a reduction in traffic crashes. So once again we see a case where we can lower costs while also increasing revenue and therefore tax at the same time.
- Get rid of Minimum Parking Requirements. This key proposal is to get rid of a current regulation that causes more harm than good, that adds significant cost onto developers (thereby discouraging development and growth) and often just adds regulatory churn cost for no gain (as it seems most applications for parking waivers appear to be granted). I would have thought this aligns quite well with a “right of centre” political ideology where reducing regulation (especially regulation that harms economic activity and growth) is a very very good thing.
- Relax Planning Rules to give people more Housing Choice. This was covered yesterday but worth repeating again. Most planning rules limit development potential in existing urban areas: whether that’s through height limits, yard setbacks, density controls, parking requirements, minimum unit sizes or whatever. Through the Unitary Plan process we have advocated for (and will continue to do so) the relaxation of planning controls – particularly in areas where it makes good sense to allow high density developments to make best use of existing infrastructure. Similarly to parking controls, this is a relaxation of current regulation that significantly limits development potential and the prospects of economic growth through making better use of inner parts of the city. The relaxation/elimination of economically damaging regulation should be music to a right-wingers ears you’d think.
There are probably many more examples than above, but they give a good overview of why transport policy (and land-use policy) really doesn’t fit well into a traditional “left-right” ideological spectrum. We could easily point out how bizarre it is that our current supposedly centre-right government has significantly increased petrol taxes to spend on a series of very dubious mega-projects in the form of the RoNS. That seems rather more “tax and spend” than fiscal conservatism.
Furthermore, if you look internationally there are many examples of centre-right political parties taking public transport seriously. In Britain, the current Conservative government is making a big contribution to the £15.9 billion Crossrail project in London and is also likely to spend even more money on the High Speed 2 rail project. That government seems to understand the economic importance of having good rail infrastructure. For example, Crossrail massively increases the residential catchment of the Canary Wharf employment area – somewhat similar to how the CRL vastly increases the residential catchment of the city centre. London Mayor Boris Johnson is a big champion of not only Crossrail but also getting more people to ride a bike and is planning to invest huge amounts of money in cycle infrastructure. In Australia, the centre-right New South Wales government is championing and making a massive funding contribution to the North West Rail Link project. Even in Auckland we have business groups who politically are considered “right of centre” supporting projects like the City Rail Link and improved cycling infrastructure.
It’s interesting to try to understand this political divide through other lenses than a traditional “left-right” spectrum. Pro-urban and suburban/anti-urban is perhaps a better lens in my opinion – particularly because it seems to explain better why some right-wing parties (like the Republicans in the USA, the current Liberal Government in Australia and the National government here in NZ) appear to be sceptical at best about public transport, while others (e.g. NSW government and UK government) seem to really understand the importance of public transport.
Perhaps this “pro-urban” and “suburban/anti-urban” divide even exists within the current National Party. It was interesting that John Key (an Aucklander who has lived in big overseas cities for much of his life) was the person who changed the government’s position on City Rail Link while Steven Joyce (grew up in New Plymouth and now lives on a lifestyle block in Auckland) and Gerry Brownlee (from Christchurch) were apparently the biggest opponents of that change. Or how we get current Associate Transport Minister Michael Woodhouse saying this on auto-dependency:
From Dunedin, in case you were wondering.
Interesting to see yesterday the government make a decision on the Clifford Bay ferry terminal. I say interesting because the more you look at the details the more it shows just how much transport policy is being driven by political agendas rather than based on facts. First up here is Gerry Brownlee’s press release
The outcome of a study into the commercial viability of a ferry terminal at Clifford Bay in Marlborough has concluded Picton should remain as the southern terminal for the inter-island ferries, Transport Minister Gerry Brownlee announced today.
Over the past year a Ministry of Transport-led expert team has been testing whether Clifford Bay could be delivered as a fully privately funded project.
“We have been delivered a thorough and robust report which clearly shows Clifford Bay is not commercially viable as a fully privately funded project, and the level of investment required at Picton over the next decade to extend its life would be substantially less than previously estimated,” Mr Brownlee says.
The project team estimated a ferry terminal at Clifford Bay could be delivered by 2022, at a cost of $525 million. This left a gap the Government would have been required to fill to induce private sector investment in the construction and operation of the terminal.
Meanwhile, the investigation found Picton’s facilities are not expected to fail or become constrained due to asset age or condition, or growth in freight volumes, over the next 30 years. It also found the level of investment required at Picton by its owner Port Marlborough over the next decade to extend its life and adapt its facilities is approximately half the cost estimated in 2012.
Mr Brownlee says it was concluded a number of significant financial risks would exist in the development and early operating phase of a ferry terminal at Clifford Bay.
“While it was expected these would be manageable, mitigation and management cost would have fallen to the Government.
“In the end, the government cost, remaining risks, and the lack of a compelling constraint at Picton have led us to decide the Clifford Bay option should be set aside at this time,” Mr Brownlee says.
“I hope this announcement will provide some planning certainty for Marlborough communities.”
To read the report, Clifford Bay Investigation 2013, and the paper Mr Brownlee took to Cabinet, visit www.transport.govt.nz
For those that aren’t familiar with the proposal, the idea is to create a new ferry terminal further south of Picton as shown in this image from the Ministry report.
It would be a substantial project though with the report stating there would need to be
- the construction of a breakwater 1.8km into Clifford Bay with a single-pier dual-berth facility for the two ferry operators
- associated shore-side facilities for the marshalling of passengers, vehicles and rail wagons
- the upgrade to Marfells Beach Rd to SH1
- a rail link to the main trunk line
None of that is going to come cheap and the report costs the terminal at $525 million – although positively Kiwirail already own most of the land needed so land acquisition wouldn’t be as high. The problem comes that the berthing fees for ferry companies simply wouldn’t be able to cover the costs of building the terminal and so the project isn’t viable from a commercial perspective. But what about the economic benefits of the project?
There are a couple of massive benefits for the project first of all it’s a shorter route (~15km) as well as one that also has no speed restrictions on it which means faster journey times. In addition as most people and freight are travelling south it would also provide some substantial travel time savings for both roads and rail due to being further south and not having to deal with the climb out of Picton and the Dashwood Pass north of Clifford Bay. For rail that journey incurs not just a time penalty but an additional operational one too as either an extra locomotive is needed or trains need to be shorter. The time savings are listed below. Compare those savings with something like Puhoi to Wellsford which would save 10 minutes if we’re lucky.
So while the costs are high at $525 million, the overall economic benefits are substantial enough to outweigh them with the report stating that the project has a Benefit Cost Ratio of 1.3. Unfortunately we can’t see all of the details relating to the benefits as most of that has been blacked out. However interestingly the report does state that the BCR of 1.3 doesn’t include the wider economic benefits (WEBs) that might occur (which have been assessed) and also uses an 8% discount rate and 30 year evaluation period.
This in itself is interesting as the NZTA recently changed their economic evaluation manual to assess projects with a 6% discount rate and 40 year evaluation period. The report states that an assessment with a 6% discount rate was done but the result is blacked out. I think it’s pretty safe to say the result would have been much higher if all of those bits were included. Why this is particularly interesting is that the government/NZTA have long been talking about the BCRs of the RoNS projects like Transmissions Gully using the new assessment criteria as well as included the WEBs figures too.
The project even scores highly on the NZTAs new assessment criteria which asks about Strategic/Policy Fit as the crossing is considered a key part in both the national road and rail networks.
Now let me be clear, I have no problem with the government saying they that they won’t support the project - despite being economically viable – due to it not being commercially viable. Sure there might be a positive benefit to the economy but if we can’t afford to build the project then that is fine. But I do have a problem when the same approach isn’t being taken when it comes to other areas of transport policy like what is happening with the RoNS. Projects like the Kapati Expressway have a BCR of 0.2 and Transmission Gully isn’t much better yet the government are pushing them ahead as fast as possible.
What all of this means is that the government are clearly picking and choosing which types of projects they want to support regardless of the facts. There would be no issue with this if they just said we’re building roads because we like them better but they don’t, instead they pretend they are building stuff that will really help the economy.