This is a guest post from Donna Wynd who was part of the Independent Advisory Body tasked with looking into how to raise funding for transport in Auckland.
Myself and a range of others representing organisations from across the Auckland region have been working on a way to find the funds for Auckland’s so-called transport funding gap – in the order of $12 billion over 30 years (about $300 million per annum) – for close to two years now. The organisations represented included my organization, Child Poverty Action Group (representing the region’s ‘poor’, whatever that means), the AA (in the first phase), the business community (in various guises), tangata whenua, unions, and transport nerds Campaign for Better Transport, Cycle Action Auckland and Walk Auckland. I was the only woman on the group (a major blooper) and there was no Pacific representation which was also an oversight. While I held my ground reasonably well (I think), I cannot possibly claim to represent or speak for all the region’s women and low-income households.
Initially called the Consensus Building Group, we changed our title in the second phase that commenced in April this year to ‘Independent Advisory Body’. This was because we felt that when we got to the nuts and bolts of the funding decisions, it was unlikely that we would agree, much less arrive at a consensus.
Before getting to the group’s considerations, it is important to note that we were specifically precluded by our terms of reference from examining the merits or otherwise of the transport projects in the Auckland Plan that the Council is seeking to fund. Given the significant ideological differences within the group, this was probably a good thing. Also important is that the underlying driver of our future congestion is population growth. Two-thirds of that growth is internal (births and internal migration) and one-third is external migration. While we have some control over external migration, there is little we can do about the other two-thirds.
The final report of the group has recommended three possible ways forward for Auckland. The first is the low-cost ‘basic’ option. The other two were a package of either rates and fuel excise duty increases, or a motorway user charge. Unsurprisingly (for the readers of this blog, at least) the projects that would be dropped under the basic option are mostly public transport projects and arterial upgrades.
The decision to put forward the two funding mechanisms outlined in the report was made after a great deal of research into other options, including a cordon charge such as that operating in London. The point was not to maximize revenue, but to find a way to plug the $300 million per annum gap. Under the models used, both options generate the same revenue.
With respect to the rates and fuel tax pathway, it was considered that an additional general rate based on the value of the property was fairer than an annual general charge. Given the general distribution of the benefits of the additional investment in the transport network, it was also felt there was little justification for a geographically targeted rate. Under this option, businesses would pay less but be the major beneficiaries of the investment.
The motorway user charge option includes the option of a flat charge or a variable charge depending on when people travelled. Although our mandate did not include considering demand management, there is little doubt that building in a demand management component through variable pricing would provide the option to implement this at a later stage if desired.
So how much of an improvement to the performance of the network can Aucklanders expect for the additional $300 million per year? Not much, as it transpires. What the additional investment does is arrest the rate of deterioration in the performance of the network. The motorway user charge provides better performance as the charge will change people’s behaviour – there is no reason a rates increase will change anyone’s driving habits.
The graph below shows the percentage of time spent in severe congestion on the Strategic Freight Network (basically the motorway network) at the AM peak. Under all the options drivers are spending more time in traffic by 2036. ‘Flat Rate’ here refers to a flat rate motorway charge and ‘Peak Demand’ refers to the variable charge.
The flip side to this is passenger transport. We would expect to see PT use increase if a motorway user charge was introduced if it provided a cheaper, viable alternative (see graph below). The main reason PT boardings are lower under the low-cost option is that some PT projects will simply not go ahead. One of the key findings is that PT investment and investment in alternative modes such as the regional cycling network need to be brought forward to ensure that these alternatives are available. As a matter of equity, this is an absolute necessity; as a matter of politics none of this will work if the Auckland public does not see significant upgrades to the PT system.
My concern with much of this is that transport is about access and mobility for all, while most of the focus of the group’s work was on peak traffic congestion. Motorways do not improve travel options for much of the population whereas better PT does.
Back to the revenue: while the two options generate the same revenue, the incidence of the additional charges on households and individuals is very different. The average cost per household is about the same for both options. The key difference is the incidence on vulnerable (ie low-income, approx. $25,000 per year income) households. Strangely, the rates and fuel tax package affects a greater proportion of vulnerable households (12% as opposed to 7%). Equity considerations were given a great deal of deliberation throughout the process, and several options were rejected on equity grounds.
The single biggest problem in trying to think of a way around the uneven impact of the motorway user charge is linking an income with a number plate. While the research used by the group focused on household income, there are plenty of singles for whom this is an inappropriate measure. Given the existing complexity and fragmentation of New Zealand’s system of social assistance, there is no easy solution to this. Indeed some families interviewed as part of the background research commented that they would have to move out of Auckland if a motorway user charge was introduced given their current income.
At this point it seems fair to ask (as the group couldn’t) exactly what Aucklanders will be funding with their increased rates/petrol tax/motorway tolls? The central rail link is in, although the focus remains on roading. Aucklanders have been very clear that they want improved PT and cycling facilities and unfortunately some projects including rail to the airport are not within the ‘basic funding envelope’. With the Long Term Plan and its associated transport plan coming up for public consultation, this is the chance for Aucklanders to scrutinize where their money is going, and tell the Council what they would like it spent on if they are to be whacked with additional costs. And this is the chance to get in and plug the congestion-free network as an alternative model. It costs less and in these tough times that must make it an attractive option.
Lastly, I’d like to take the opportunity to thank all those who participated in the CBG and IAB. I think that for the most part members made a genuine effort to come up with a result most of us could agree on, and that would be of benefit to the region as a whole. This involved many of us putting aside our ideological differences, and I’d like to commend my fellow group members for managing that. I’d also like to thank the Council staff who provided technical and other support, and Peter Winder’s team for their assistance and hard work. Whether or not you agree with our conclusions is up to you, and I would encourage anyone who is interested to make your views known through the LTP process.
As part of the discussion on Alternative Transport Funding, which was launched yesterday, the Council also released a copy of Auckland Transport’s entire 30 year transport programme which includes the cost of projects and seemingly ranked according to some combination of criteria. The programme unfortunately does not include state highway projects, which makes it difficult to fully assess the merits of the overall transport packages outlined in yesterday’s announcements. However, it’s certainly clear what Auckland Transport projects can and cannot be afforded over the next 30 years under the two scenarios.
The document doesn’t explain the list in any detail, but it seems as though there are a number of projects on the first page which have some form of existing commitment or are ongoing requirements and therefore are not really considered “discretionary”. These are shown below:
The ‘committed’ projects include those that appear to have contracts in place (electric trains, Albany Highway, a few things around Westgate), renewing existing assets and the City Rail Link. I actually wonder if it would be helpful for CRL to be ranked against all the other projects – rather than be included in this “other” list – as almost certainly it would rank either right at the top or very near it.
Anyway, moving on to the top of the list the projects listed below are those that are in both the Basic Network and the Auckland Plan Network – as well as some fairly broad brush allocation of funding to support sprawl in some of the areas identified by the Unitary Plan:
It’s a pretty short list for the 30 year transport programme, as well as being strangely focused on the first decade. The other key thing to notice here is the yellow boxes, which appear to be wrapped up programmes of projects (e.g. walking and cycling) where the amount of funding allocated to the programme varies quite significantly, depending on whether it’s the Auckland Plan Transport Network or the Basic Transport Network.
Even taking a fairly harsh look at the list above, there doesn’t seem to be too many projects that don’t make sense doing at all over the next 30 years. For me the three most glaring ones that need to be questioned are:
- The Reeves Rd flyover at $141 million
- The widening of the almost $200 million and soon to be opened Te Horeta Rd for another $74 million
- Mill Road at $472 million which is something that we’ve highlighted could be looked at for a cheaper option, especially seeing as the government are now widening the southern motorway.
The rest of the projects are those which form part of the Auckland Plan Transport Network only. Essentially, these are the additional projects from Auckland Transport which the additional funding is being asked to pay for:
While there are a few really dumb projects on the list above (Mt Albert Park & Ride, what the heck?) there’s also a lot of pretty good stuff that is missing out under the Basic Transport Network. Furthermore, while there is some, it seems at first glance that there isn’t a huge amount of really expensive dumb stuff in the programme list of Auckland Transport’s projects. That contrasts with the package of state highway projects highlighted yesterday which doesn’t appear to have been questioned at all.
Over the next few days I’ll be starting to look into the detail at the overall balance of the packages, as well as assessing the extent to which they are similar to what we proposed in the Congestion Free Network.
The latest report on alternative transport funding for Auckland, prepared by the Independent Advisory Board (formerly the Consensus Building Group), has just been released. The report will form a critical part of the Council’s public consultation on the next Long Term Plan (the 10 year budget), essentially asking Aucklanders two key questions:
- Are you willing to pay more for a better transport network?
- If so, then should that extra money be from existing sources (rates, fuel taxes etc.) or from a “motorway user charge”?
We have been highly skeptical of past proposals that request more money to be spent on transport – in particular the first version of the Integrated Transport Programme as well as the initial report on alternative funding prepared last year by the Consensus Building Group. In fact, the Congestion Free Network came into being as a result of our frustration with the transport programme being a “build everything” and we felt a large part, if not all of the $12 billion funding gap could be resolved through removing poor value projects, rather than by requiring additional funding.
Overall, the new report is a clear step in the right direction and combined with the work being done as part of the next LTP and the next ITP it seems as though quite a lot of effort has gone into removing the more idiotic projects included in the original ITP, although there isn’t a huge amount of detail in the information that has been provided. There are, however, still many unanswered questions that the report doesn’t seem to address – plus its key recommendation of suggesting a “motorway user charge” is fraught with problems. But I’ll get onto that in a moment – first to summarise some key points from the report.
A comparison between what is in the two programmes – known as the “Basic Transport Network” (that which can be afforded under the 2.5-3.5% rates increase proposed in the LTP) and the “Auckland Plan Transport Network” (the preferred network, which requires additional funding) is shown in the series of tables below.
Firstly, for bus and ferry investment:
The main difference between the two networks seems to be in the scale of the bus lane programmes and the provision of additional busways in the second and third decades, supported by service frequency improvements. The proposed Botany to Manukau busway appears to be extended to the airport like we suggested as part of the CFN however more interesting is to see a new proposal for a “cross isthmus” bus RTN between New Lynn, Onehunga and Otahuhu. I wonder what route and form that would take.
Next for rail:
The difference between the two networks is fairly stark in the second and third decades, with no investment at all in rail over this period in the Basic Transport Network. I must say the complete lack of rail investment in the Basic Transport Network after 2025 is a bit surprising and raises some questions about the prioritisation process that determines what’s in and what’s out of the Basic Transport Network after 2025. Importantly, CRL is in the Basic Transport Network and therefore does not require alternative funding.
Next, for roads:
Looking at arterial roading projects first, it’s clear that even the Auckland Plan Transport Network is much smaller than what was proposed originally in the first version of the Integrated Transport Programme. In fact it seems like billions upon billions have been shaved off the previous ITP’s numbers, which included crazy things like nearly a billion dollars on upgrading Great South Road. We’ll take a more detailed look at this in a future post, but credit where it’s due to Auckland Transport who have responded to criticisms of the first ITP by ensuring the Auckland Plan Network has been significantly refined to deliver much better value for money.
Unfortunately the same cannot be said about the state highway programme, which doesn’t vary much between the two networks – aside from some rather optimistic “widening to reduce congestion” in the final decade (haven’t they heard of induced demand?) A whole bunch of very dodgy projects (Additional Harbour Crossing, SH16 Port Access, SH1 Warkworth to Wellsford etc.) have been included in the Basic Transport Network for some unknown reason, as well as of course being in the Auckland Plan Transport Network. This is important to keep in mind when considering the resulting “funding gap” – which of course could be a whole heap smaller if we stripped out the $5.5 billion Harbour Crossing and multiple billions on these other unnecessary projects.
Components of the walking, cycling and safety programmes for the two networks are shown in the table below:It’s not clear what the cost difference for walking and cycling is between the two networks, but it’s clear that only the Auckland Plan Transport Network goes anywhere close to delivering on the Auckland Plan vision for active transport.
Now for miscellaneous other stuff, like maintenance, renewals and supporting sprawl:
The shortfall in funding maintenance and renewals under the Basic Transport Network is a real concern, as the last thing we want to do is end up like the USA where infrastructure is falling to bits because politicians want to “cut ribbons” rather than look after what we already have. The lack of funding for developing the greenfield sprawl areas may not be such an issue as this could force the developers themselves to come to the party a bit more.
Overall, as I noted above it’s clear the Auckland Plan Transport Network is vastly improved from what was in the first ITP. A lot of the really poor investment in the arterial network appears to have disappeared, although there are still a few remaining remnants like Penlink and Mill Road, although even with these projects it seems like the bulk of spend has been pushed out into the future. However, the big remaining issue is that a similar exercise doesn’t seem to have occurred with the State Highway network and there are still billions upon billions of dollars in poor value for money projects – most particularly the Additional Harbour Crossing but also other duplicative projects like SH20B, Warkworth-Wellsford and others. NZTA have really dropped the ball on this one and unfortunately I suspect part of this comes about because the under the current situation motorway projects get full government funding while every other transport project has to beg for a slice of the funding pie. More than once I’ve heard council people say we should build certain projects simply because the government are paying for them.
Cut out what I estimate to be around $8 billion in very poor value for money state highway projects and we’re left with a $4 billion funding gap. If we push $8 billion of state highway projects out of both the Basic Transport Network and the Auckland Plan Network, it means we can afford $8 billion more of good projects before we have to turn to Alternative Funding and it means that we only need to find ways of raising an additional $4 billion. Over 30 years, that’s not a particularly huge issue to overcome.
So if we think back to the two questions at the top of the post, it seems as though the answer to the first one is there may well be value from paying a bit more to get a better transport network, but the actual requirement for additional funding might be around a third of what the report highlights. Now let’s turn to the second question of which would be the best way of raising this additional funding.
Essentially the two options proposed are:
- Increasing existing funding mechanisms like rates, fuel taxes, development contributions, central government grants etc.
- Introducing a charge for entering the motorway network
Some more detail on the “Rates and Fuel Tax” option are shown below:
I must say I was pretty surprised to see how low the additional rates and fuel tax increases would need to be in order to close the funding gap. A rates increase of between 3.4 and 4.4% is actually lower than what was assumed in the 2012 Long Term Plan (that had 4.9%) while a 1.2 cent per litre annual fuel tax hike would probably get lost as a rounding error in typical price fluctuations. It’s a credit to Auckland Transport’s project prioritisation that they’ve managed to develop a network that could be fully funded under the funding assumptions of the 2012 Long Term Plan, and it’s only the political decision to have a much lower rates increase that’s essentially “re-created” the funding gap.
Combine this with the above observation that the “funding gap” could be further reduced to around $4 billion instead of $12 billion and we could see the gap closed by rates increases only 0.3% higher than otherwise or fuel tax increases of a mere 0.4 centre per litre compared to what would otherwise occur. That’s starting to look like a pretty compelling option.
The other funding option is called a “Motorway User Charge” and is summarised below:
There’s a lot of discussion in the document around the relative costs and benefits of the two approaches – with the report seeming to express something of a preference for the motorway user charge scheme, based on its travel demand management effects of discouraging some trips and encouraging higher levels of public transport use. We’ll look at the details of this analysis in further posts, but note that this option does come with some fairly significant set up and operational costs (~$110 million set up with opex costs of 24c per trip) as well as potentially diverting quite a lot of traffic off the motorway network and onto local roads – which seems quite counter-productive.
To summarise, there’s quite a lot to like in the Independent Advisory Board’s report. It seems like some hard work has gone on by Auckland Transport (although sadly not NZTA) to optimise their desired transport network so it’s far more realistic than what was proposed in the first ITP. Take out a few of the dumber motorway projects and we’re left with a pretty damn good 30 year transport network that can almost be funded from existing sources (just requiring 0.3% higher rates increases and 0.4 cents per litre higher fuel tax increases) or from a very low motorway user charge. Or from other ways we might think up of to find $4 billion over 30 years.
Update: unsurprisingly the government has once again poured cold water on the idea of tolling or fuel taxes.
An article in last Friday’s NZ Herald provided an interesting insight into where the investigations into additional transport funding options are at. This is the second phase of the project to close the supposed $12 billion funding gap over the next 30 years. The article highlights that effort has been focusing on analysing different forms of road pricing and is perhaps leaning towards a motorway charging scheme:
Evaluating road tolls and fuel-tax rises and traditional funding methods such as rate rises and targeted rates is the job of the group due to report to the council next month.
The Herald understands that the independent alternative transport funding group is leaning towards motorway tolls. It will also provide options for targeted rates and extra rates rises.
On Wednesday, Transport Minister Gerry Brownlee reiterated the Government’s pre-election position that there would be no regional fuel taxes or tolling of existing state highways in Auckland.
Auckland Council cannot introduce motorway tolls or a regional fuel tax without government approval.
I think tolling motorways could have some benefits but it also could have considerable downsides and we’ve outlined some of these before. The main problem with them is the potential for traffic diversion from motorways onto local roads. What also can’t be ignored is that a fairly high proportion of money raised from schemes like these goes into the administration of the system itself, this means it’s a fund-raising system that’s likely to be quite a lot less efficient than fuel taxes and rates. Some of the strongest proponents of motorway tolling has been the NZ Council for Infrastructure Development (NZCID) and I suspect this is two fold,
- their members want to build, maintain and operate any tolling system
- their members want the additional funding that flows from the tolls to help build more infrastructure
One of the key problems with the alternative funding exercise right from the start has been the ignorance of whether we actually need to raise the additional funding for transport. The Integrated Transport Programme, which outlined the full transport programme over the next 30 years, included a huge number of incredibly costly and stupid projects included within its project list:
Knocking out $12 billion from the project list above is a pretty simple exercise – as we highlighted in our detailed analysis of the Congestion Free Network‘s financials. Therefore, based on the Integrated Transport Programme’s list of projects outlined above there is a very valid question about whether any form of additional funding is necessary. In addition even if a funding deficit still exists, if it was considerably smaller it might have allowed for some of the earlier dismissed funding options to be viable once again.
Another major flaw in many tolling proponents arguments that could have a significant impact on what projects get built is that any tolling or road pricing schemes are going to change demand substantially and as such it is likely to reduce or remove the need for many roading projects. Conversely it is likely to shift many PT projects up the priority ladder.
I guess the big question that we will all need to grapple with over the next few months, as the alternative funding group makes a recommendation to the Council, who then decides what they want to include in the draft Long Term Plan, is whether anything has changed since the ITP came out last year. It’s possible that two things have changed, which could mean a greater need for extra transport funding than we had previously expected.
- We know from the agendas for Auckland Transport closed board meetings that a lot of work has been going on to update the Integrated Transport Programme and the list of projects. Hopefully this means a lot of the crazier projects (like $665m on Albany Highway or around $900m on upgrading Great South Road) have been removed or the figures corrected.
- We know from the LTP Mayor’s Proposal that a lower level of rates increase means less money available overall for transport from normal funding sources compared to what’s in the current Long Term Plan. At first glance, it seems like most of the good projects can be funded over the next decade but there’s still no word on how much can be spent on things like walking and cycling, or the timing of various bus lanes and interchanges needed for the new network.
So given we know motorway tolling is an idea with many flaws and that the government isn’t going to approve new funding sources like this anyway, but there might be a need for a bit more money for transport, it seems sensible to be looking at other options. Which, returning to Friday’s Herald article, seems to be what’s happening:
Aucklanders could pay a new charge on top of rates to fund transport projects.
A “targeted rate” is one option being considered by an independent group looking at alternative funding measures to plug a $12 billion-plus transport funding gap over the next 30 years…
…Auckland Council cannot introduce motorway tolls or a regional fuel tax without government approval.
The National-led Government changed the law in 2009. Acting Mayor Penny Hulse said the $2.4 billion city rail link had been included in a new 10-year budget and did not need a targeted rate.
It will certainly be interesting to analyse the details of the transport budget as they emerge in the coming months, to see what can be afforded in the baseline transport programme and whether any additional money is required.
Over the past couple of weeks there has been a lot of renewed interest in the Congestion Free Network, as first the Greens and then Labour picked it up as the core of their Auckland transport policy. Given the growing support for the CFN, it’s useful for us to highlight in a bit more detail what it is, where it came from, why we think it will transform Auckland, and how we can pay for it. There’s a lot more detail on the CFN within its specific page and on the dedicated CFN website.
What is the Congestion Free Network?
The Congestion Free Network is a future system of bus rapid transit, railway lines and light-rail which come together to form the “top layer” of the public transport network – true rapid transit that is fast, frequent, reliable and most importantly free from congestion. Over the next 16 years we think that the Congestion Free Network can be rolled out across Auckland, providing people with an alternative to driving that’s faster, more reliable and more pleasant.
As Patrick outlined in his post which launched the CFN over a year ago, the key point is in the name – this is a network to get Aucklanders out of congestion, to avoid it, to opt out.
The other important point is that these routes represent the highest quality Public Transit corridors – “Class A routes”, as described here in this hierarchy of transit Right of Ways. They include a variety of modes: Train, Bus, Ferry, and maybe even Light Rail, chosen for each corridor on a case by case basis. The key point is that by growing this network Aucklanders will have the option to move across the whole city at speed, completely avoiding road traffic. By connecting the existing rail and busway to new high quality bus and rail routes, the usefulness of our current small and disjointed Rapid Transit Network can become a real option for millions of new trips each year. At the same time, we will take pressure off Auckland’s increasingly crowded roads by offering such an effective alternative to always driving, as well as providing a way around this problem.
The Congestion Free Network is both a solution to our overcrowded roads and a way of being able choose to avoid them altogether, for many more people, at many more times, and for many more journeys.
The CFN can be built in stages over the next 16 years, firstly starting with the City Rail Link and busway in the northwest and southeast, before extending rail to the Airport and then to the North Shore, light rail on the isthmus and other bus rapid transit improvements to fill in the gaps.
The CFN is supported by the vastly larger network of frequent public transport routes proposed as part of the “New Network” by Auckland Transport, as well as by enhanced walking and cycling facilities which boost access to the CFN by making it easy and safe to walk and cycle to your nearest rapid transit stop.
Where did the Congestion Free Network come from?
The Congestion Free Network came about for a number of reasons, including that we were frustrated with how politicians ramped up the costs of PT projects to make them seem unaffordable (e.g. in the 2010 mayoral election). We were frustrated with the project-centric focus of our transport plans, something which might be helpful for officials working out what they have to do but which doesn’t show the public any real vision. However by far the biggest source of our frustration was the Integrated Transport Programme (ITP), released by Auckland Transport last year and which modelled the transport investment the council included in the 30 year Auckland Plan. The ITP includes around $68 billion of transport expenditure in Auckland over the next 30 years, but quite incredibly – even with such a massive amount of money being spent – Auckland’s transport situation is predicted to still get a lot worse, with many of the Auckland Plan’s transport targets not being met.
Congestion is predicted to get worse:
Greenhouse gas emissions are predicted to go up, rather than down:
Modal shift is nowhere near what the Auckland Plan requires:
When we looked at the ITP in detail, we found the prime reason for such terrible results was the programme’s huge focus on expensive roading projects – over $22 billion worth of them over the next 30 years, compared to barely $8.5 billion on public transport!
With road pricing unlikely to be palatable to the general public in the near-term future, we figured that we would tackle both the inept performance and the huge price-tag of the ITP by coming up with something that stripped out the rubbish projects, still kept the ones that made sense, optimised the proposed public transport network and put a 2030 timeframe on completing the rapid transit network, rather than the 2040 end year proposed in the Auckland Plan. That became the Congestion Free Network.
How will the Congestion Free Network transform Auckland?
Auckland is a great city, but it could be the best city in the world if it improved in a few key areas – transport is undoubtedly one of those areas. Aucklanders know this, with transport being recognised as the city’s biggest issue, while we also agree that improving public transport is the best way to do something about our transport problems.
The problem with public transport in Auckland has always been that it’s just too slow, too infrequent, too unreliable and therefore just not attractive enough to get enough people out of their cars. Where high quality public transport infrastructure has been provided, Aucklanders have flocked to it in droves – the hugely popular Northern Busway and the quadrupling of rail patronage since 2003 are testament to this. Yet there is still so much potential for growth – as shown in other cities that have invested in rapid transit over the past 20-30 years:
The CFN supports the urban form outlined in the Auckland Plan by connecting all the major centres by rapid transit – combined with the frequent PT network that sits underneath the CFN, these major centres will become highly attractive and accessible locations, supporting them to flourish and Auckland to benefit from the success of these major employment areas. It provides true resilience to future oil shocks and has the potential to fundamentally lower the level of pollution that comes from all those cars stuck in traffic.
But perhaps most of all, the CFN simply provides Aucklanders with the choice to ‘opt out’ of the daily grind of congestion. It provides a way of travelling around the city that is reliable and doesn’t completely lock up at the first sign of rain or if there’s a slight incident on the motorway at peak times.
How can we pay for the Congestion Free Network?
A lot of our work on the CFN over the past year has been in relation to its financials – so that we have confidence it is affordable, value for money and achievable. One of our main justifications for developing the CFN was the extremely high cost of the ITP so we were keen to achieve all the following goals:
- Time and sequence CFN implementation in a way that balances affordability and speedy progress
- Ensure every additional dollar spent on CFN was saved from other projects in the programme
- Ensure value for money non-CFN projects could still be funded
- Come up with a programme that was significantly cheaper than the ITP and goes a long way to resolving the “funding gap” for transport
In this recent post we explained how we would fund the CFN – exactly which projects would happen and when, where savings would be made to reinvest in the CFN and how the overall balance of the transport programme would look. Interestingly the overall programme we suggest is actually far more balanced between road and public transport than the ITP was:
The financial details of the CFN can be analysed further in these spreadsheets.
The overall message we would like people to understand about the CFN is that it’s easier than they might think. Let’s put it this way: for significantly less investment than the current transport plans, we can implement the whole Congestion Free Network over the next 16 years. A vastly superior system for a much cheaper price – we think it’s a no-brainer and we’re not surprised it’s becoming increasingly adopted.
We were quite excited last week to see the Congestion Free Network essentially adopted by the Green Party as part of their Auckland transport policy for the upcoming election. The CFN was created with the express purpose of outlining a vision for Auckland’s transport future that was truly transformational, yet also more affordable than the oversize and ineffective Integrated Transport Programme prepared by Auckland Transport. We don’t think the CFN is aligned with any particular political ideology – after all we still include billions of roading improvements. Add to that one of the prime reasons for creating the CFN was because we thought the ITP was fiscally irresponsible by proposing to spend a huge amount of money and still let things get worse. Therefore we hope that, over time, it will be adopted and further developed by more and more political parties.
The non-ideological nature of the CFN was picked up by commentator Bob Dey on Monday, where he talked at length about the Green Party’s transport announcement and responses to it:
The alliance of alternative thinkers which has begun to lead debate on how people travel – the Congestion Free Network, a collaboration between the TransportBlog, Generation Zero and the Campaign for Better Transport – hasn’t just made an ideological proposal. They’ve said the country should apply the best means to the task, and that adding superhighways to fix congestion isn’t it.
They’ve said improving many other road connections would help, but the primary gains would come from increasing the off-road network. That includes providing off-road corridors for buses, and expanding the rail network in Auckland.
The minister’s response was that 97% of all passenger travel in the country is by road – and therefore road is best, not that that proportion might be better reduced.
Mr Brownlee said major roadworks around Auckland had reduced congestion, and completion of the western ring route would reduce it even more. Recent works, such as taking traffic off the Victoria Park viaduct by building the northbound tunnel, have given temporary respite, but congestion quickly resumed growing.
The Auckland peak traffic periods are longer than they’ve ever been because workers know they can’t make the job without leaving home in the dark, and the return is just as slow because all along the way there are exit bottlenecks.
What the transport network needs is considered – and transparent – evaluation, not ideological slagging.
As for ideology, you would have to wonder why travel needs to be ideologically based at all, but it is. Using the private car to drive to work equates to personal freedom. Providing mass transport that is comfortable & provides amenity (such as WiFi) could be even more personally uplifting, especially if it gets you to your destination more quickly & less harassed.
As we have said on numerous previous occasions, it is frustrating how politicised the transport debate can be at times and how good ideas can often be dismissed for spurious ideological reasons. This is one reason why we have gone out of our way to ensure the CFN focuses on delivering the right solutions in a value for money way. That is why so much of the plan is actually busway improvements and extensions, that’s why we’ve retained significant funding for roading projects we think are actually necessary, and that’s why we’ve highlighted the key role of the CFN in taking people out of congestion so they’re able to experience fast and reliable travel times.
Another key element of making CFN happen relates to its financials and how they show what appears at first glance to be a pretty unaffordable and expensive programme is actually much less expensive than our current transport plan. For those who want to scrutinise the financial details of the CFN, we welcome the analysis and today we make available the excel worksheets used to calculate the cost of the CFN and the remaining other major projects we think are worth funding between now and 2030. This information goes right down to our best guess about how much might need to be spent on each project in each particular year:
The overall level of investment in major transport projects over each of the next 16 years is also an important consideration here, especially in relation to making sure the CFN is affordable. We’ve worked hard in the timing and sequencing of different projects to keep the annual total expenditure to not much more than one billion in any particular year:
Of course we still need to fund smaller things like walking and cycling projects as well as operating costs and renewals, but given there’s around $3.5 billion a year available from the National Land Transport Fund, plus significant extra funding from Auckland Council to complete this network, we don’t think a total annual cost for new transport infrastructure of around this level is unrealistic. Furthermore, it’s significantly less than the Integrated Transport Programme would require.
Our spreadsheets also make a detailed comparison between the CFN and the ITP. Firstly, we cut around $12 billion away from unnecessary road spending proposed in the ITP over the next 16 years:
What’s interesting in the above are the roading projects that you’re still getting. The Western Ring Route is still completed, Mill Road is still built (though to a lower standard than the proposed semi-motorway), you still even get Penlink, although not until the mid 2020s and only as a two lane road. Most of the reductions come from fixing cost errors, removing a stupidly high proposed level of spend in greenfield areas, getting rid of the idiotic Additional Harbour Crossing Project and down-scaling a number of projects to a more reasonable level of cost.
When it comes to public transport, perhaps the surprising thing is that we’re only proposing to spend around $2.9 billion more on public transport over the next 16 years than what’s in the ITP – and all of that extra (plus a bit) relates to providing rail to the North Shore, something which could probably be delayed until after 2030 if there was a squeeze on funding:
Overall, the contrast between the cost of the CFN and the ITP are pretty significant – as is the difference in the balance of funding between the two:
So not only is the CFN a more balanced programme than the ITP, it’s actually around $10 billion cheaper and sequenced in such a way as to ensure it’s affordable in the long run over the next 16 years.
We hope to see the CFN become a key topic of conversation in this year’s election because transport is such a big issue for Auckland and because we are confident that the CFN represents an affordable, realistic vision for Auckland’s transport future.
Auckland Transport has definitely been improving some of their communications (not all) Late last year they released a new City Rail Link video which finally addressed many of the issues we had with how they were explaining the project in the past
And they did a good job with with the video for the new bus network.
The one downside with these two videos is that they do require someone to sit down and watch a few minutes of video – something not everyone will do, especially those with little interest in transport. So perhaps Auckland Transport could to do something similar to what has been done in Singapore to explain their new transport master plan and make a few quick and catchy images that explain what they are aiming to do. Note: they are also good for highlighting the diversity of the population in Singapore.
Of course they won’t get through to everyone – like this guy.
With AT reviewing their Integrated Transport Programme and it potentially being quite different to the current one then perhaps they could do something like this help explain it.
We know that Auckland’s transport plans are completely unaffordable, a more interesting question is “why?” Much of the answer to that questions comes from what I refer to as “overkill”. Essentially, a solution that’s vastly oversized compared to the problem it’s trying to solve. There are a large number of examples of “overkill” when it comes to transport projects currently being planned:
- The East West Link is perhaps the most obvious example, where somehow a bit of congestion around a couple of intersections at each end of Neilson Street somehow led to NZTA and AT proposing a gigantic and enormously destructive motorway through one of the most densely populated and deprived parts of Auckland. Yeah there are certainly some transport problems in the area but the jump to a huge motorway solution is a classic example of overkill.
- The proposed motorway to motorway connection between SH1 and SH18 at Constellation Drive. The problem here appears to be a pinch point northbound on SH1 between SH18 and Greville Road and constraints around the interchanges themselves. Yet again the solution is to jump to a gigantic motorway-to-motorway mini-spaghetti junction that likely to cost upwards of half a billion dollars. What about just adding another lane northbound, extending the Northern Busway to Albany and then seeing whether anything else is actually necessary?
- Puhoi-Wellsford is another classic example of overkill. Yes there are congestion problems around Warkworth, yes there are major safety issues in the Dome Valley and at specific points south of Warkworth, but it’s quite a jump to suggest the only solution to those problems is a massive new motorway that’ll cost close to $2 billion. Operation Lifesaver highlights how most of the benefits from the motorway can be achieved at a fraction of the cost by truly focusing on the problem at hand.
- The recently proposed Lincoln Road widening project once again responds to legitimate problems like a lack of priority for buses, localised congestion and safety issues. Yet the respond is again overblown – massively wide intersections, slip lanes everywhere, extra lanes all over the place etc. The outcome is not just an overly expensive project, but a corridor that gets wider and wider – further degrading the urban form around it.
- Penlink is a massive project to satisfy locals when the real problem is further north at Silverdale and can be solved with other smaller alternatives.
It seems like good transport planning should flush out what projects are overkill and what projects aren’t. An interesting comparison against the above projects is the process that the City Rail Link has gone through over the past few years – especially in the form of the City Centre Future Access Study, which looked in detail at a range of “smaller options” for resolving issues with access to the city centre – outlining which of these would be necessary anyway, which could occur prior to CRL being built but also the point at which the ‘small scale’ interventions need to become so significant you might as well do the job properly – in this case by building CRL.
Throughout the ITP there are a vast number of projects which are obviously “overkill”. Examples include $665m on Albany Highway (surely a typo?), around $800m on a section of Great South Road, a $150m motorway bypass of Kumeu, the $240m Mill Road corridor project and many others. Strip back these overkill projects so they really focus on the problems they’re designed to resolve and we’ve probably gone a long way towards solving our future funding shortfalls.
Before last week’s distractions, there was an NZ Herald article which discussed key issues with Len Brown over the coming three years. Perhaps the most interesting part of that article was the focus that Len put on looking again at the Council’s budget.
You said your first focus was next year’s budget and taking on board some messages from the campaign. What were they?
The community embraces the need to genuinely address … under- investment in infrastructure and particularly transport, but they want to balance that against the issues of affordability and within a budget that is sustainable. One of the key concerns was to keep a real close eye on debt levels and how much we borrow to achieve that. I have got that message.
You have forecast to borrow $2.8 billion in your first three budgets and a further $2 billion in the next three years. Is that wise?
It’s important for everyone to take stock. We have just received the community’s view in terms of the outcomes. The budget is an important part of it. I will be assessing that first budget and need to present that to council on November 17 … I will certainly be reflecting on that. Secondly, we are down against projections on [capital spending] on this year’s budget, let alone the 10-year budget which is a crystal ball-gazing exercise, quite frankly, and we will be assessing our debt levels and budgetary management every month of every year.
Somewhat strangely, he then goes off to discuss how we apparently need the completely idiotic $5 billion Additional Harbour Crossing project, but let’s leave that issue aside for just a minute or two.
During the first term as Mayor there was obviously a lot of pressure to ensure that rates didn’t increase very much – particularly as combining the rates system was always going to mean serious winners and losers (funny how we only ever hear about the losers). Yet there continued to be some big spending items: fixing up the electric trains deal after the government got rid of the regional fuel tax, getting started on AMETI and many other non-transport projects. It seems like the “out” in the equation for the first three years was for the Council to increase its debt levels – taking advantage I suppose of the greater financial muscle the new combined Council now has.
If there is an increased desire to limit the growth of Council’s debt during the next three years, some pretty tough calls will need to be made around what projects happen and what projects don’t (since it’s capital expenditure rather than operating expenditure that is funded from debt). While that applies to all types of Council spending, as we know transport is by far the largest area of Council capital expenditure.
This is where the Congestion Free Network comes in. We first created this network because we were horrified by how expensive the transport plan outlined in the Integrated Transport Programme is and by how badly it missed achieving the goals and targets set by the Auckland Plan. Remember that for $68 billion in the current plan you get:
A heap more transport greenhouse gas emissions (rather than the sought decline):
Basically no increase in the proportion of people catching public transport into the City Centre:
Nowhere near the PT, walking and cycling modeshare target set in the Auckland Plan:
I could go on but this is getting boring. The basic story the Integrated Transport Programme tells is that if you spend a lot of money on stupid projects, you don’t actually achieve what you want to achieve.
As we explained recently, the real beauty of the Congestion Free Network is that because you’ve provided a complete rapid transit network that is free of congestion, you can stop wasting money on unnecessary roading projects which aim for (but of course never deliver thanks to induced demand) reductions in congestion. This means you can build the Congestion Free Network and still save at least $10 billion from what’s in our current 30 year transport plans.
$10 billion of course sounds like a LOT of money. And it is. Surely ripping $10 billion out of a transport budget – even over 20 years – is going to hurt due to what can no longer be done? Well only if your transport budget isn’t full of excessive projects to begin with. The table below outlines our initial thoughts about how you can reduce the spend on new roading projects over the next 20 years from $21.6 billion to $7.0 billion:
To show the savings a bit clearer it’s quite useful to look at them in pie chart form:
As you can see the biggest chunk of the savings just comes from not doing a project that’s not only a waste of money but will actually make things worse. Then we shave money off big slush funds highlighted for motorways to sprawl that won’t be required (unless someone truly is planning to build the Karaka-Weymouth bridge) or widening arterial roads which don’t need to be widened (they probably just need a bus lane). Puhoi-Wellsford gets chopped back to Operation Lifesaver, AMETI’s cost gets fixed so it doesn’t double-count the East-West Link, we scrub out the unnecessary six laning of the Northern Motorway between Albany and Orewa (why would you six lane when you’ve just built a busway?) and many other projects which are generally not completely stupid ideas but where the solution proposed is vastly bigger than the problem that exists (e.g. East West Link). I suspect the only people who really want everything on that list built are the NZCID and their members who stand to benefit hugely from it all.
The scary thing about ripping nearly $15 billion out of the roading budget was just how easy it was. We barely felt mean at all with many of the cutbacks. We’re still proposing Penlink to happen some time before 2030, we still propose to spend money on widening the southern motorway south of Manukau, we’re still spending $1.3 billion on AMETI, we’re still completing the Western Ring Route, we’re still grade separating the Kirkbride Road/SH20A intersection, we’re still spending $800 million on upgrading arterial roads, $700 million on new arterial roads in greenfield areas, $350 million for rail grade separations – the list goes on.
Auckland Transport is supposed to be preparing a second version of the Integrated Transport Programme in the upcoming months – including consideration of the Congestion Free Network as one of the scenarios looked at in this process. We await with great interest to see whether the Mayor’s enhanced focus on the budget extends to chopping out some of the extraordinary waste of money proposed in the first version of the ITP.
On the topic of the Congestion Free Network, we frequently get asked what we would do about the roading network, and what projects we would change to go along with our proposal. We have said before that we think there is still a need for some roading projects during the same time period, and that we think there will be plenty of budget (over and above what we are spending on the CFN) to allow for the best parts of the roading network to be built. However, with this post, I want to take this further and see just what we could pare the roading aspects back to.
Our financial analysis of the Congestion Free Network notes that the CFN will cost about $10b to construct between now and 2030. However, that’s actually slightly less than 40% of the $34 billion that the Integrated Transport Programme proposes to spend on new transport projects over that same time period. Here are the projects and associated costs outlined in the ITP:
The colour coding is also important, because the ITP looks out to 2040 whereas the CFN only relates to what happens up to 2030 (for now).
We have worked through the project list outlined above to suggest what changes could be made to this package of projects to better align with the CFN. At this stage, our analysis is just at a very preliminary level for many projects. However, for a number of key projects, our analysis is based on many of the posts made on this blog in recent months and years, which have commented on the merits of different transport projects. As noted in what we’ve said previously about the CFN, our intention is to suggest a realistic alternative to what’s in the ITP, and also to ensure that we optimise all kinds of projects to ensure that they deliver value for money. For example, we’ve made some big savings from doing rapid transit to the airport differently to what’s in the ITP.
What becomes quite clear from this process is that there are extremely few occasions where we have completely removed a project from what’s in the ITP. Instead, we have often decreased the amount of money we think should be spent on that particular project – because what has been suggested is ‘overkill’ for the problem actually faced. Doing Operation Lifesaver instead of Puhoi-Wellsford is perhaps the best, but certainly not the only, example of this.
A few other important things to consider are:
- The ITP numbers appear to have made a couple of pretty massive numerical errors – in relation to the costing of AMETI and the Albany Highway upgrade. We have noted these and would love Auckland Transport to provide us with the correct figures – we’ve taken a bit of a ‘stab in the dark’ in the absence of this information.
- For “Auckland wide” projects, we’ve had to think about the extent of what’s in the ITP that would be spent before 2030. Our feeling is that a fairly large chunk of the greenfields expenditure would be post 2030 and a reasonable proportion of the “other urban arterials” would as well. For greenfield areas, this is based on the assumption that the Auckland Plan did not expect much growth in these areas until after 2020 (as there are areas like Flat Bush & Hobsonville to develop in the meanwhile and planning completely new areas does take time), plus our general belief that changing demographics and trends may mean less demand for living on the urban periphery than has been anticipated. For other urban arterials, we note that many arterial upgrades are specifically identified in the project list, so the “general” fund appear likely to come as a next phase of projects. Nevertheless, to be conservative, we’ve suggested that 65% of region-wide project expenditure will occur by 2030.
So let’s start with the roading projects:
The headline figure is that we’re able to get expenditure on roading projects down from $21.7 billion to $7 billion – a pretty massive decrease. But perhaps what surprised us the most in doing this exercise was just how easy it was. Often we really don’t even think we’re being harsh in many ways – for example:
- We still do Penlink, although only two lanes and not four lanes;
- We still do AMETI as currently planned;
- We do an even more significant version of the Lake Road upgrade (to enable high quality bus provision);
- We still do the key parts of the SH1 upgrade south of Manukau;
- We still do many of the smaller arterial road upgrade projects as planned (e.g. Pukekohe Eastern arterial, Tiverton-Wolverton, Albany Highway and many others).
The main areas where we’ve saved money come from a variety of locations, where we really think that we’re cutting out the poor value aspects of many projects yet still doing what makes sense:
- Only grade separating the SH20A Kirkbride Road interchange, and not widening all of SH20A. With a railway line to the Airport we certainly won’t need to widen the motorway – plus the Airport’s own roads seem like the choke point here. Almost $200m saved here.
- Not four-laning from the Airport to Manukau via SH20B. As per above, if we build rapid transit (we suggest a busway, costs in the PT section to come) along this route then we don’t need to widen the existing road. This saves $235m.
- Pulling the ‘East West Link’ back to being a more sensible project, rather than the community-destroying monstrosity options being looked at right now. Truck lanes on Neilson Street and a few clever tweaks to motorway access for around $150m are likely to deliver most of the benefits of a much more expensive project. This saves close to half a billion dollars.
- Doing Operation Lifesaver instead of Puhoi-Wellsford. This saves about $1.4b.
- Building rail to the North Shore instead of the stupid road crossing. This saves nearly $2b.
- Suggesting some significantly cheaper options for upgrades to Great South Road. Goodness knows why we supposedly need to spend nearly a billion dollars on three sections of this road between Penrose and Manukau. This saves nearly $800m.
- Significant savings from greenfield areas and other arterials – as described above for greenfield areas, and also because we think that based on the huge numbers for Great South Road projects the other arterial costs are also likely to be overblown.
So clearly we’ve saved a lot of money out of the future roading budget. But how much of that do we shift across to public transport and how much is just “not necessary” – and therefore can go towards closing the supposed ‘funding gap‘?
At a high level, the CFN proposes to spend just over $1 billion more on public transport before 2030 than what is proposed in the ITP. It’s just a little more on things like a SH16 busway, and a little less due to changes like a busway instead of rail between Manukau and the Airport.
Now let’s put these all together for a comparison:
So, overall, the CFN is nearly $14 billion cheaper than what’s outlined in the ITP over the same time period – and this is with North Shore Rail included. If you were to push North Shore rail out to beyond 2030, (which we’re reluctant to do but agree it’s one of the latest parts of the CFN built) then the CFN is $17 billion cheaper than what’s in the ITP. Which means the funding gap is gone.
The CFN also has more of a balance between funding public transport and roading – with a 42% roads, 58% PT funding split. This compares to the ITP proposing to spend 72% of its capital on roads and only 28% on public transport. I guess the key point is that we can actually afford a high quality PT system and it can be done without having to drastically cut against road building. Instead, the roading programme would focus on smaller network tweaks, rather than road projects which are massive in scale. It’s also worth noting that this is just one suggested approach to dealing with the problem; some of you might have different ideas and would like to see certain projects at the expense of others.