MoT acknowledge changing trends and future funding issues

Last week the Briefings to government ministers (BIM) were published. I’ve already looked at what the Ministry of Transport (MoT) and NZTA have said about transport in Auckland and so in this post I’m going to look at some of the other points mentioned in the documents. In particular what they say about long term trends and funding issues.

Perhaps the most significant aspect in the BIM from the MoT is that they are finally starting to acknowledge the transport world is changing. That demographics are shifting and people are starting to think and use transport differently to the trends that have persisted for around 60 years. Of course these are the same issues we regularly talk about and previously the ministry seem to have taken “it’s a blip” approach the the real world results. As such it was a pleasant surprise to finally see such an acknowledgement from them.

The MoT have split the changes into three areas:

  • A growing and ageing population
  • Uncertain demand for personal travel
  • New technologies driving improvements in safety, efficiency, and environmental outcomes

A growing and ageing population

Along with the talking about the huge population growth expected in Auckland the briefing notes this important point about the biggest demographic group in most western countries.

By 2036, the number of people in New Zealand aged 65 and over is forecast to double to 1.2 million. The ageing population is more pronounced outside of the major urban areas and international data suggests that individuals halve their vehicle kilometres travelled when they retire. This is likely to radically change transport demands in the regions and reduce the revenue base available to maintain the transport network and meet social expectations for levels of service.

Our large older generations halving their car travel would have a massive impact on the demand for new roads in particular. As that happens the demand for Super Gold cards is going to soar. The next section almost had me falling of my seat when I first read it.

 Uncertain demand for personal travel

Around 96 percent of personal travel in New Zealand occurs in private vehicles. Historically, the total distance travelled by private vehicles has increased consistently over time. This consistent growth has been driven by an increase in population and the number of vehicles in the fleet, and an increase in the distance travelled on a per capita basis. However, as shown in figure 2 below, this growth has stalled in recent years.

The average distance travelled per-person in light passenger vehicles has fallen by around 8 percent, from a peak of about 7,600km in 2004, to around 7,000km in 2013. The total distance travelled over the same period has increased marginally (from 39.3 billion kilometres in 2004 to 40.4 billion kilometres in 2013) as a result of population growth. This trend is not unique to New Zealand – it has been observed in a number of developed countries.

2014 Briefing to the Incoming Minister - Travel Demand

There is some debate as to whether this trend is the result of economic factors or a more structural shift in attitudes towards personal transportation. The fact that this trend emerged before the onset of the global financial crisis gives cause to believe that social, behavioural and lifestyle factors (such as the proliferation of smart phones, social media, online shopping and video conferencing) may also be having an influence. A related trend is a reduction in the number of driver licences being issued. In particular, fewer young people are choosing to drive. This suggests that in some groups, the perceived merit of car ownership and use may be declining.

Strong population growth means that overall demand for transport across all modes will continue to increase. Motor vehicles are and will continue to be the predominant mode of transportation in New Zealand for the foreseeable future. However, the rate of growth in motor vehicle travel seen in the twentieth century is unlikely to continue. An ageing population, rising fuel prices, increasing urbanisation, improved mobility and accessibility options, growing health and environmental concerns, and changing consumer preferences all appear to be contributing to reduced per-capita travel in motor vehicles and an increase in demand for alternative transport options

To me this is a huge admission from the MoT and I guess they could only go on so long ignoring the data that was in front of them. I really hope this means we can start to have a more rational discussion about our transport future along with an acknowledgement that we can also shape that future, especially in our urban areas. The last section touches on this future a little however it once again shows the ministry (and we’ve seen it repeated by the Minister) seem to think driverless cars are going to magically change everything.

New technologies driving improvements in safety, efficiency, and environmental outcomes

Technology is everywhere, and it is changing the way we live our lives. It is changing how and when we communicate with each other, whether we travel to purchase goods or have the goods come to us, and where we work. It is changing the demands that we, as a society, place on the transport system and our need for it.

Modern transport systems are becoming increasingly reliant on technology, with increasing levels of automation delivering improvements in safety and efficiency. In the long-term, the use of fully autonomous or driverless vehicles has the potential to revolutionise the transport system. In the more immediate term, the increased availability and reducing cost of information technology will offer improvements in efficiency, safety, and social experience. Technology will play an increasingly important role in helping to improve service levels while managing costs.

Moving on, the long term future of the current funding model is raised and it’s clear the MoT is concerned about the future funding stream for transport. Here are some high level predictions for what the MoT say we may see.

In the next ten years:

  • The historic link between the rate of economic growth and the level of demand for transport will continue to weaken. We will achieve economic growth without an equivalent increase in transport demand.
  • As our population becomes more concentrated in urban areas, local councils with stagnating or declining populations and low growth prospects will find it increasingly difficult to meet the cost of maintaining their existing networks.

In 20-30 years:

  • Gradual improvements in the fuel efficiency of cars will slowly erode the effectiveness and fairness of Fuel Excise Duty as a means of collecting revenue from transport users.
  • Solutions to congestion in cities are likely to become increasingly expensive. This could increase the tension between cities’ and regions under a national funding system.
  • Greater demand for public transport and active modes could put pressure on the National Land Transport Fund, which is collected from motorists.

The first point about the weakening link economic growth and transport demand is something we’ve highlighted a long time ago. This is quite important as the Roads of National Significance are largely based on the idea they will improve the economy. The last point is also an odd one as we know that investing in PT infrastructure can really help bring down operating costs while also boosting revenue due to more customers using the services.

The briefing says impacts of changing trends could have these impacts on the government.

  • We will need to answer difficult questions around the amount that should be collected from transport users, what it can (or can’t) be used for, and how it should be distributed around the country.
  • As expenditure rises and the amount collected from motorists at the pump decreases, regular increases in fuel taxes will be required. This could prompt changes to the way we collect revenue from transport users.
  • Measures to contain costs and transition towards a more sustainable expenditure path will be challenging, particularly for transport providers that are accustomed to continuous improvements to network standards.
  • The government should expect increasing pressure for more funding from both larger cities (especially Auckland), which are struggling to pay for the investments required as a result of population growth; and smaller regional centres, which are facing rising costs with fewer rate-payers to fund them.

There are some serious issues in there and it seems the third one could be aimed at large infrastructure builders hoping for continuous large projects like currently seems to be happening. The current set of projects are already putting large pressure on the National Land Transport Fund (NLTF) and this is highlighted in this graphic below where expenditure is greater than the revenue being generated.

2014 Briefing to the Incoming Minister - NLTF

Lastly it’s interesting to see the current transport spend in the context of New Zealand’s history. It’s currently at 1.3% of GDP which is the highest level it’s been for decades and well above the OECD average of around 1%.

2014 Briefing to the Incoming Minister - Historical Spend

Overall it’s good to finally see some sense starting to come through from the Ministry but the question is, will the government listen?

MoT and NZTA on Transport in Auckland

Yesterday the government released all of the Briefings to Incoming Ministers. These are briefings from the various government agencies that give an overview of what they do, what they’re working on and of course key issues related to the portfolio. They are developed prior to the election and are intended for which ever political party takes office. Of interest to us are the briefings from the Ministry of Transport (MoT) and the NZTA.

The first thing I noticed about the briefings was just how much more effort agencies are putting in to the design of the briefings themselves. Even compared to just 3 years ago they’ve gone from being fairly simple documents to much more elaborate presentations which perhaps reflects the fact these are starting to be viewed by the public much more. There is a heap of interesting information On to the content itself. Due to the amount of material for this post I’ll just stick to the parts about Auckland.

Both agencies dedicate significant portions of their briefings to Auckland and the challenges the city faces however positively they both make some significant comments and suggestions.

Perhaps the most interesting part of the briefings comes from the NZTA in relation to the City Rail Link (CRL). The NZTA have broken down their briefing into two main sections, the first is about who they are and what they do while the second is about the agency’s area of focus. That second section has been further broken down to The next 3-6 Months and The Next 1-3 Years. In the next 3-6 months section they dedicate one part to the CRL. They say.

Auckland Council and Auckland Transport are continuing to plan, design and acquire property for the City Rail Link. The City Rail Link is now being delivered in two distinct parts.

Phase One is the enabling works to build two rail tunnels between Britomart under Queen Street and the Downtown Shopping Centre, and a ‘cut and cover’ tunnel under Albert Street as far as Wyndham Street. The enabling works are planned for 2016 to 2017 to coincide with the planned redevelopment of the Downtown Shopping Centre by Precinct Properties Ltd. Auckland Council is budgeting between $240 million and $250 million for these works. The aim is to complete the enabling works before the World Masters Games in April 2017. We think this is a sensible sequencing of enabling works which will minimise disruption of critical intersections in the CBD, and enable compliance with the planning conditions that only one intersection can be out of action at any one time. A more compact construction schedule at a later time would prove too disruptive.

Phase Two is the tunnel boring machine and station building stages of the project. This phase could start as early as 2018 and be completed by 2022 at a cost of around $2 billion. Design and procurement decisions for this phase could be taken progressively from 2015/16 onwards, but are dependent on future funding decisions and commitments.

The Crown is not currently an active partner in the City Rail Link project implementation. The government has signalled it will only consider being a funding partner to enable a construction start in 2020, or possibly earlier if certain patronage or other targets are achieved. The risk of not being involved in these early stages is that the key elements of the project get determined in the meantime. If the Crown is to be a future funding partner it needs a mechanism to identify options and risks around planning, design, procurement and financing.

We have experience in complex infrastructure projects of the scale of the City Rail Link. One mechanism to help manage Crown risk could be for the Transport Agency to become a technical partner with Auckland Transport in developing the City Rail Link. This would be consistent with the one transport system arrangements that have been forged with Auckland Transport and Auckland Council over the last 3-4 years.

There’s a couple of very clear points the NZTA are making. Firstly they agree on the timing for the early works which will see the tunnel built from Britomart to Wyndham St and secondly they clearly want to be more involved in the project. I think this would be a big positive because as they mention they have a lot of experience in building large infrastructure projects and that is likely to be very useful to the teams designing and building the project.

The suggestion of the larger Phase Two starting in 2018 is an interesting one. I’ve heard suggestions that even if the government agreed to fund the project tomorrow there’s so much work ahead with all of the design that still needs to happen that any construction is still years away. 2018 is also conveniently between the date that the council/AT want and what the government want. A compromise solution of 2018 seems like a fairly realistic trade off and with the early enabling works already complete would see the project opened only 1-2 years after the council has planned for.

Overall it’s fantastic the NZTA have taken this position and it’s in quite stark contrast to the briefing from the MoT which hardly mentions the project.

The NZTA in a separate section about Auckland go on to say: (emphasis mine).

Auckland city centre faces growth challenges and changing travel patterns unlike any other New Zealand location. Even with the City Rail Link (irrespective of its timing), providing for and managing growth will require a step-change in bus infrastructure and operations. We are working with Auckland Transport to guide and review the business cases for proposed investments to meet these challenges.

The Auckland Plan sets out the direction for land use and transport planning over the next 30 years. The strategic direction for transport in the Auckland Plan is to “create better connections and accessibility within Auckland, across New Zealand and to the world.” The direction of transport strategy in the Auckland Plan could be generally described as an increasing focus on public transport and active modes from the past, but also includes significant investment in new roads, particularly in the large areas of greenfield land to be urbanised. This proposed strategy has been criticised by some as it acknowledges that despite the proposed sixty billion dollar transport investment congestion is still as bad in 30 years’ time. However this fails to recognise the significant growth over this period and that a network free of congestion is not an appropriate goal. While severe congestion is undesirable, the focus needs to be on supporting economic growth and productivity through provision of better access to markets, employment and business areas.

Transport investment in the short to medium term is focused on increasing the capacity of the road network, completing key links as well as improved management of the network to maximise capacity and efficiency for the movement of people and freight. Increasingly as Auckland continues to grow, and in line with international experience in large cities, a greater emphasis and investment is needed on public transport, active modes and demand management.

The Transport Agency considers the strategic direction for transport outlined in the Auckland Plan is basically sound and that the focus needs to be on sustained delivery while continuing to refine the strategy over time

Over to the MoT and there are a few things I noticed strongly in the MoTs discussions on Auckland. One is that they are quite concerned about the implication funding projects in Auckland will have on the rest of the nation. They are very concerned that by funding projects in Auckland that people in other regions will demand more investment too. In addition they still like to try and belittle both the city centre and the impact that PT has on travel.

2014 Briefing to the Incoming Minister - Auckland Future

2014 Briefing to the Incoming Minister - Auckland Future 2

 

 

There is one glimmer of hope though.

Different regions have different transport demands. This can create tensions under a national funding system. For example:

  • Auckland has at times suffered from relatively low per-capita investment in transport infrastructure and will face increasing congestion in the future as a result of strong population growth. The ‘golden triangle’ region of Auckland, Hamilton and Tauranga is expected to experience significant growth over the next 30 years, and there is a strong argument that good transport links in this part of the country will deliver the best returns for New Zealand overall.
  • Many small regional centres have stagnating or declining economies, with some experiencing population decline. Some of these regions are already struggling to maintain their transport services and infrastructure with increasing maintenance costs and fewer rate-payers to fund them. However, it is often argued that transport can stimulate regional economic growth, and that stronger regions will help to alleviate pressure on our major cities.

The high cost of addressing congestion in cities, increasing demand for public transport alternatives, and a perception that big cities are taking more than their fair share will result in escalating pressure on the national funding allocation system. In addition, we have a large investment in transport infrastructure (the roading network) that can be underutilised for much of the day. Building the network to meet ‘peak’ demand is neither sensible or feasible.

So in the same document we have the NZTA saying they want to be involved in the CRL longer term and that greater emphasis on PT is needed while in the other document we have the MoT saying that building a network just for the peak isn’t sensible or feasible. Next they’ll be telling us that people are travelling less (that’s tomorrow instalment).

Aucklanders are driving less

We’ve talked quite a bit about how trends in New Zealand are changing and one that regularly talk about is Vehicle Kilometres Travelled which is the distance that vehicles in New Zealand drive. The results come collating the distance travelled from vehicle odometers which is something checked each time someone gets a Warrant of Fitness. The distance we travel on a per capita basis has been dropping for some time.

Last week at the transport debate Gerry Brownlee said new data would show the trend of declining VKT was reversing as the economy recovered. His suggestion being that just around the corner we’re going to need roads like Puhoi to Warkworth to deal with the extra driving that we’re all supposedly meant to be doing. But are we actually driving more? Well new data from the Ministry of Transport suggests that on a per capita in Auckland basis we each are still driving less than we did decade ago.

Auckland VKT - 2013

Other regions show an assortment of outcomes with some results up and others down.

NZ VKT per capita table 1

In Auckland we’re driving less but of course we also know for the last decade or so the big story in transport has been the resurgence of PT use which has been growing strongly. This is growth is off the back of investments like Britomart, the Northern Busway and the bus lanes on the isthmus  e.g. Dominion Rd.

14 - July AK Annual Patronage

So how does this growth in PT trips compare to the changes shown above for VKT? The graph below shows the two and there’s quite a difference as to where the growth is occurring.

VKT vs PT Trips per Captia 4

Of course the number of PT trips is coming off a low base however a 30% increase in use is nothing to sneeze at. At the end of June 14 each Aucklander took approximately 47 trips a year on PT. That’s fairly low by international standards or even compared to what’s achieved in Wellington however with all that’s going on with PT right now we could see the result rise considerably in the next few years.

Census 2013: Auckland Travel Patterns

The Ministry of Transport has released a detailed and interesting look into some of the results coming out of the 2013 Census Journey to Work question. Both the executive summary and the full report are worth a read. As we’ve noted before, the 2013 census results confirm a shift in the way Aucklanders are travelling, with much stronger growth in public transport than in driving (especially in percentage terms). Interestingly, even within people travelling to work via private vehicle, there is a big difference between those who drove themselves (which increased and roughly maintained its modeshare) and those who were passengers (which declined fairly dramatically). This is shown in the graph below:

modeshare-change-percent

I’m struggling a bit to explain why private vehicle passengers has declined to significantly – perhaps they are the ones who are shifting mode to public transport to a greater extent than drivers?

The report compares Auckland’s mode-splits with a number of Australian cities, highlighting quite an interesting trend that although our public transport use is generally lower than those cities, our active transport modeshare is often higher:

australian-modeshare-comparisonsQuite a lot of the report is analysis of different parts of Auckland, comparing travel patterns and modes for the CBD, CBD fringe area (called other central), inner urban (isthmus and lower North Shore), outer urban and rural areas. The graph below is a fairly nifty way of representing the overall share of Auckland’s trips that start and end in these different areas:

origin-destination-graphThe Outer Urban area is reasonably “self-contained” in its trips, with a very large share of trips originating in Outer Urban areas also being destined for those areas. The CBD is a strong destination for Inner Urban areas, along with employment in other parts of those Inner Urban locations.

Looking closer at the CBD, the report analyses where people who work there are coming from, showing a strong focus on the isthmus and the lower North Shore – the “Inner Urban” areas highlighted above:

cbd-bound-modeshareIt is worth noting the difference between the west and the south in the map above – both areas reasonably equidistant from the city centre, but with the south having much more local employment and therefore much less of an employment connection with the CBD. One would expect, post City Rail Link, for the west to be even more strongly connected and also for the south to begin to benefit from improved city centre access and the employment opportunities that will provide.

Another interesting part of the report is the comparison between different local board areas, which unsurprisingly show some pretty dramatically different modal splits:

local-board-modeshare

Waitemata Local Board obviously stands out from the rest, with a private vehicle modeshare of below 50% and a very high proportion of people walking or cycling to work. Clearly Waitemata benefits from having so many jobs located within the local board area, as well as the increasing number of people who live in the city centre unsurprisingly having a very high ‘walk to work’ share. Another point of interest is how work from home varies by Local Board – higher in rural and richer areas and very low in parts of South Auckland. I guess this reflects most ‘work from home’ jobs being either rural in nature or well-paid professional work.

One of the clearest patterns highlighted in the report is the relationship between residential location and trip length, with journeys to work getting longer and longer as you live further away from the city centre – even though only a relatively small proportion of Auckland’s jobs are actually located in the city centre:

trip-length-by-originThis finding is unsurprising and a core part of why urban sprawl concerns us so much, because people living in far flung parts of Auckland need to travel a very long way to work – which is both expensive and places a lot of pressure on the transport network. It’s also clear that West Aucklanders are stuck with long commutes more so than most other parts of the city – highlighting once again the huge benefit City Rail Link will bring to the west as well as the need to increase the level of employment available in that part of Auckland.

Flipping the above map around, to instead focus on length of journey by destination reveals a much less clear pattern and some interesting anomalies – people who work at the airport have to travel a very long way to get there (rail to the airport will be very useful for them!) while people who work in the Howick/Botany area seem to have very short commutes, maybe highlighting the extent to which that area is disconnected and isolated from the rest of Auckland (only people who live in the area are prepared to work there):

trip-length-by-destination

Looking at private vehicle modeshare by point of origin highlights clearly the more and less car dependent parts of Auckland. The inner areas are doing pretty well here while the northwest and the southeast (in particular) are the most car dependent parts of Auckland. Hopefully the AMETI and Northwest busways will change this in the future:

car-modeshare-by-origin

Bus modeshare is highest on the North Shore and the Central Isthmus – reflecting locations where high quality bus service and infrastructure is available:

bus-modeshare-by-originFor rail, a key analysis relates to the question of “for trips heading to the CBD from a particular area, what proportion of those trips are carried by train”. The south does pretty well in this respect, reflecting that it’s a pretty long car journey from Papakura or Pukekohe right through into town:

rail-to-cbd-modeshareLooking at the above map it’s quite telling to see how along the inner parts of the Western Line, rail is capturing a pretty low proportion of CBD-bound trips – I imagine due to the very long an convoluted path the train takes via Newmarket. With the City Rail Link in place there’s some huge growth potential in these areas for much higher levels of train use as there’s a pretty huge untapped market at the moment.

Looking at overall public transport modeshare, the dominance of the isthmus is quite clear. This is a large reason why we were so frustrated to see intensification on the isthmus watered down in the Unitary Plan to such a great extent last year.

overall-pt-modeshareThere are a myriad of other fascinating maps and graphs within the report, but they can wait for a future post. Perhaps commenters might have a think about what they think might be behind a few of the results above – particularly:

  • Why might private vehicle passenger trips have decreased so significantly compared to all other modes of getting to work?
  • What impact might CRL, Airport Rail, AMETI and other major projects have on these patterns over the coming decades?
  • What’s up with Stonefields? – its travel patterns are much more like an ex-urban piece of sprawl than a fairly dense inner-urban suburb.

The hypocrisy of the GPS

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

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

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

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

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

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

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

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

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

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

vkt-change

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

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

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

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

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

Which is what the GPS does, showing its hypocrisy.

Government announce regional road spend up

The Government yesterday announced it plans to spend over $200 million on a series of regional roading projects. This is clearly a result of trying to keep the regions happy from a potential backlash after they announced a motorway splurge in Auckland last year. Like the Auckland package these projects are being funding outside of the National Land Transport Fund and in this case the money is meant to be coming from their asset sales fund.

Prime Minister John Key has this morning announced $212 million from the Future Investment Fund for a package of 14 regionally important State highway projects.

Transport Minister Gerry Brownlee says the government is committing up to $80 million from the package to accelerate five critically important regional projects, with work beginning next year.

These five projects are:

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

“These projects are fully investigated and designed, and address current safety, resilience or productivity issues, but construction wasn’t due to begin until late this decade or after 2020,” Mr Brownlee says.

“Following today’s announcement construction on these projects could begin in 2014/15, and be completed by 2016/17.

“The government is committed to fund the next six projects with an additional $115 million and subject to the usual investigations, construction would be expected to begin within three years on each of these projects.

The six projects are:

  • Whirokino Trestle Bridge replacement, in Manawatu/Wanganui
  • Motu Bridge replacement, in Gisborne
  • Opawa and Wairau Bridge replacements, in Marlborough
  • Taramakau Road/Rail Bridge, on the West Coast
  • Loop road north to Smeatons Hill safety improvements, in Northland
  • Mt Messenger and Awakino Gorge Corridor, in Taranaki.

“A further $12 million will be available to accelerate investigation and design of three large projects in Hawke’s Bay, Nelson and the Bay of Plenty,” Mr Brownlee says.

These projects are:

  • Port of Napier access package, in Hawke’s Bay
  • Nelson Southern Link, in Nelson
  • Rotorua Eastern Arterial, in Bay of Plenty.

“Each project could then be considered for funding under the proposed Regional Improvements activity class in the next Government Policy Statement on land transport.

“By directly funding some of the most crucial State highway improvements, the government is freeing up more funding in the Regional Improvements activity class for other priority projects.

“This funding package also strongly complements the government’s Roads of National Significance programme, ensuring people and freight reach their destinations quickly and safety,” Mr Brownlee says.

Here is a map of roughly where they’re each located.

Govt Accelerated Rural Road Package

I imagine that some of the projects on this list actually make sense and were probably only so far away from being fund through normal procedures due to the Roads of National Significance sucking up all the new State Highway spending . The Ministry of Transport go further by saying that all of the projects in the first group have a BCR of greater than one and in some cases it’s more than four. That would put them better than some of the RoNS like the 0.2 for the Kapiti Expressway. The MoT say the next six projects are still being investigated and are expected to “also be high quality projects” however this document from 2013 shows the Whirokino Trestle Bridge replacement to have a BCR of 0.5 or 0.6 depending on what option is chosen.

What seems to be a common theme amongst many of the projects is that they are replacing bridges that aren’t able to carry the new super heavy trucks the government allowed a few years ago.

Perhaps the most worrying thing about this announcement isn’t so much the projects themselves but that the government is getting more and more involved in picking projects rather than leaving it up to the NZTA to decide on spending based on merit. It started with the RoNS and last year we got the Auckland package.

Even for the projects in the top 5 which are said to be ready to go there is very little information available. The only two I could find are the Karawau Falls Bridge and the Mingha Bluff to Rough Creek realignment.

The Karawau Falls Bridge is expected to cost $20-25 million and will replace the current 88 year old single lane bridge which they say could be renovated to provide a walking and cycling connection.

Kawarau Falls Bridge Artist Impression 2

Mingha Bluff to Rough Creek realignment is roughly a 5km realignment of SH3 south of Arthurs Pass

SH73 Arthurs Pass (Mingha Bluff realignment)

Lastly here are some tweets from John Key’s twitter account when announcing this further road spend up.

It’s completely disingenuous to say that good roads are good for public transport. None of the roading projects pushed by the government over the last 6 years have had any benefit to public transport and many (like those in Wellington) will actually work against the PT system. What all of the projects have primarily been about is moving bigger and heavier trucks.

The Draft 2015-2025 Government Policy Statement

Yesterday the government released the draft Government Policy Statement (GPS) for 2015-2025 and it continues the 1960’s thinking that we’ve been stuck with for years. As things are currently set up the GPS perhaps the most important document in determining what is invested in. The Ministry of Transport describe it:

The draft GPS 2015 sets out the priorities, objectives and funding levels for land transport, establishing funding ranges for land transport activity classes and identifying the results expected from this investment.

How the GPS is linked to other transport plans is in the image below.

2015 GPS - Document heirachy

Overall the GPS doesn’t seem dramatically different from the 2012-2022 one that it will replace so there are definitely no surprises in it, although it does provide a little bit more detail in some areas. Overall there are three high level strategic areas that are meant to be being focused on.

  • economic growth and productivity
  • road safety
  • value for money

The sections on Existing Demand and Travel Forecasts are perhaps some of the most interesting and are something that didn’t exist in the previous GPS. However they seem to be an attempt by the MoT to continue trying to justify spending the XX% of the transport budget on massive new motorways. They do seem to be finally acknowledging that traffic volumes haven’t grown but then push the argument that everything is just a blip and will recover again soon.

30. GPS 2015 (draft) has been prepared following a period of modest increases in freight demand and flat demand in light vehicle travel, measured in vehicle kilometres travelled (VKT). This is illustrated in Figure 2.

31. Demand grew strongly through the early 2000s, easing back through the middle of the decade. Following the global financial crisis in 2008, demand returned to close to 2005/6 levels and remained at these levels through to the end of 2013. A similar period of flat demand occurred in the aftermath of the fuel crisis in the early 1970s. In that case, demand remained soft for more than 10 years.

2015 GPS - Travel Demand & Fuel

The problem with this is that overall the economy has already recovered and improved yet we are still to see any upward change in VKT or fuel consumption. The difference in the graph above where fuel consumption started increasing again is likely tied to fuel prices getting cheaper and there’s no sign that’s about to happen again anytime soon. In fact there’s not even a single mention in the document of what might happen to fuel prices in the future which in my opinion is a massive omission. Fuel prices can clearly have a massive impact on driving demand and without increased demand the already shonky economic cases for the massive roading spend up will be even worse.

Another of the new additions to the GPS is to more specifically talk about congestion, particularly in relation to Auckland and Christchurch. For Auckland we do get one brief admission which I’ve bolded below however they also talk about the need for further capacity increases.

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

In this GPS quite a large section is devoted to objectives and results with them being much more explicit than in the previous GPS. Of the things that caught my attention.

  • The Roads of National Significance continue to remain a key objective which is unsurprising however in the 2012 GPS the government also named four additional routes they said may be considered for future RoNS. They were Hamilton to Tauranga, Cambridge to Taupo, Napier to Hastings, State Highway 1 north and south of the current Christchurch motorway projects. The good thing is there is no mention of them in this GPS and the Q&A paper says it is due to the government wanting to concentrate on the ones still under construction. That will be because of the pressure they’re putting on funding sources which is being driven in large part by traffic volumes not increasing like expected.
  • For Auckland they talk about the need for liveable and connected cities being critical to economic and social prosperity however as we know a comparatively small amount is being spent to improve connectivity for anything but one mode.
  • On Public Transport they claim considerable amounts have been spent investing ahead of demand referring specifically to integrated ticketing, reconfigured bus networks and rail improvements. They say that a period of consolidation is needed where the focus is on securing the gains of that investment. In short that means they aren’t investing in any significant PT infrastructure. This of course ignores that since 2009 patronage in Auckland alone has risen by about 12 million trips or 20%.
  • On cycling the wording suggests a greater acceptance of the role that cycling has to play. It points to the positive results of the model communities initiatives as well as pointing out that in many places existing dedicated cycle facilities are often fragmented. It also notes that there are health benefits to having more people cycling but then seems to writes them off by basically saying cycling is dangerous. The real kicker with cycling is that the results talk about extending and improving cycle networks but only where it “can be achieved at reasonable cost, including impact on general traffic capacity”. This is a massive cop out and of course on the cost aspect the complete opposite of the approach taken with the RoNS where no expense is spared to get the best outcome. This is also at odds with the strategic focus the GPS says it puts on road safety.

The really key part of the GPS however is the funding section which puts in place funding ranges for each transport activity. This time the MoT has decided to make a few changes to the funding activity classes, joining some together. To me this is actually a fairly logical thing and should allow more flexibility. As an example in the 2012 GPS public transport services and public transport infrastructure were two different things and funding from one couldn’t be used for the other. The change should mean that within the funding class what delivers the best outcomes could be built regardless of whether it was a service or infrastructure improvement.

One new funding class has been added to specifically pay for regional infrastructure projects. Probably a way to try and combat the perception that Auckland gets all the funding.

Here are the draft funding ranges. The actual amounts to spent in each category won’t be known until the NZTA releases its National Land Transport Plan.

2015 GPS - Funding Ranges

To see how they compare to what was in the 2012 GPS I’ve taken the midpoint of the results and compared them to the midpoint of the 2012 GPS. The midpoint isn’t exactly the same as what the NLTP suggested but is useful for an indication. I’ve coloured the numbers green if they’ve gone up or red if they’ve gone down for the parts that overlap. Interesting that there’s actually a slight decrease in State Highway spending after 2018 from what was previously planned.

2015 GPS - Funding Ranges 2012 vs 2015 2

 

 

 

So using these midpoint figures I’ve also grouped the spending into high level categories

2015 GPS - Spending graph

All up this plan is very much a continuation of what we’ve had for the last 5-6 years which is hardly a surprise. A heavy focus on rural motorways with very little attention being paid to any other mode. It’s blinkered thinking that comes straight from the 1960’s.

The impact of rail disruption in Wellington

Mother Nature gave the Wellington rail system a quite of a battering last year through multiple earthquakes and major storms. The major storm that hit on the night of 20 June was the one that did the most damage when it washed out the sea wall protecting the rail line that serves the Hutt Valley and the Wairarapa between Ngauranga and Petone leaving tracks dangling in the air. Kiwirail said the damage was unprecedented. The impact of the outage was felt throughout the Wellington transport system as people who usually caught the train needed to look to other methods of transport. It took almost a week to get the rail line restored with services resuming on the morning of 27 June.

Wellington Rail Washout

Photo credit: David Morgan

If there was one positive to come from it, its that it gives a chance to study what the impacts of the outage and that’s exactly what the Ministry of Transport have done in a report released late last year.

Extreme events and disruptions to our every-day lives give us a chance to probe how we react in different circumstances, and consider how we can better react in the case of similar future events.

The storm on the night of Thursday 20 June 2013 severely affected Wellington’s transport network, with both immediate and flow-on effects for commuters in the region. Of particular significance was
the damage done to the Hutt Valley rail line, and the consequent disruption to passenger rail services for the six days following the storm.

This project surveyed 1,072 Wellington commuters to assess several impacts on Friday 21 June, Monday 24 June and Wednesday 26 June, including:

  • the extent to which disruptions to the transport network (in particular the Hutt Valley rail line services) affected the time it took commuters to get to their destination
  • how commuters changed their travel behaviour to respond to the network disruptions
  • the extent to which communications by transport agencies (including radio, email and text messaging) may have influenced the behaviour of commuters.

And here’s a summary of what the study found.

  • The closure of the Hutt Valley rail line put significant pressure on the road network. Delays for commuters were most severe on the Monday following the storm. Traffic on State Highway 2 was severely congested, with morning peak hour conditions lasting two hours longer than usual
    • 80 percent of Wellington commuters from the Hutt Valley and Wairarapa experienced a longer than usual trip
    • 32 percent of them experienced delays of over an hour
  • the severity of commuter delays lessened over the week, with the number of commuters from the Hutt Valley and Wairarapa experiencing delays of over an hour halving by Wednesday 26 June
  • traffic delays were slightly less severe on Friday 21 June. This may have been due to 27 percent of commuters (surveyed across the region) not travelling to work on the Friday. By Monday 24 June this figure dropped to just 4 percent
  • on Monday 24 and Wednesday 26 June, roughly 45 percent of the typical Hutt Valley train commuters opted to drive themselves or be driven to work in a private car, and roughly 45 percent chose the train and bus replacements
  • communications by transport agencies were effective, with 75 percent of people surveyed aware of transport delays before they headed to work on Friday, and over half of these people altering their travel plans to respond to conditions.

Research undertaken as part of this project estimated that the economic impacts of transport disruption resulting from the storm was between $12 million and $43 million. This included $5.3 million in cost to local and central government agencies who responded to disruptions and damage on the transport network, $5.3 million loss in value of travel time and between $2 million and $32 million reduction in outputs.

There’s a few interesting points in here. The first is day of the outage (red) compared to same day the week before and after.

Wellington Hutt Valley closure - road impact

The severe congestion probably helped to ensure that those who were previously using trains went back to doing so once the rail line was up and running again. This is the patronage from the Hutt Valley line surrounding the outage and you can see it bounced back to normal the following week.

Wellington Hutt Valley closure - rail impact

Probably the most interesting part is the assessment of the economic impacts of between $12 million and $43 million depending on how it’s calculated. Some of those costs – like the $5.3 million in repair works – are unique to the outage however the same amount again is simply due to the travel delays caused by the mode shift and ensuring congestion. This might not sound like much but consider that it is just for four working days so equates to about $1.3 million per day. That helps to give us an idea as to just how much impact the rail network in Wellington is having on congestion relief.

My understanding is that the Hutt Valley line carry’s roughly half of the patronage on the Wellington rail network while the rail network itself only accounts for about 6% of all journey to work trips. Imagining for second that someone decided to close the all of rail lines in Wellington we can probably assume that similar travel delays would occur throughout other parts of the road network. Even just using the figure of $1.3 million per work day extrapolated over a typical year (~250 working days) would see travel time delays add up to over $320 million per year.  By comparison the entire system only costs something like $80 million to run and that’s before passenger fares are taken into account.

Of course there would be a lot of other things that would need to be taken into consideration and the costs above are just very quick calculations but it does go to show that while the rail network might only play a small part overall, it does play a significant one.

Are diesel drivers paying their share?

In NZ, we don’t have many diesel cars. They make up around 8.4% of the “light passenger vehicle” fleet,1 similar to Japan (where most of our cars come from) and the US, but much lower than most European countries. Diesel engines are more common for “light commercial vehicles”, i.e. small goods vans and trucks. They account for 68.9% of these vehicles. Overall, across the entire light fleet – defined as all vehicles under 3.5 tonnes – diesels make up 16.2% of vehicles.

Diesel light vehicles pay Road User Charges of $53 per 1,000 km including GST, or $46.08 excluding GST. This charge goes straight to the National Land Transport Fund, paying for road maintenance and construction (and a token amount to public transport and other things).

Petrol vehicles don’t pay Road User Charges. Instead, they pay an excise on petrol, which currently equates to 53.524 cents per litre, excluding GST.

As I’ve written previously, the Ministry of Transport estimates that petrol light vehicles have an average on-road fuel efficiency of around 10.1 litres per 100 km. So, to travel 1,000 km, petrol cars use around 110 litres, and pay $54.06 into the National Land Transport Fund. That’s quite a bit more than the diesels – 17% more per kilometre.

That’s not really fair, especially considering that diesel light vehicles tend to be heavier than petrol ones (since many of them are vans, light trucks, big SUVs etc), and so they do more “wear and tear” on the roads. Plus, the diesel vehicles travel further on average – 14,580 km a year vs. 10,850 for petrol vehicles.

Overall, a light diesel vehicle, travelling 14,580 km a year, will pay $672 into the NLTF. An average petrol car doing the same distance would pay $796 – even though it does less damage to the roads it’s driven on. The difference is a bit over $100, which may not sound like a lot – but it adds up over hundreds of thousands of vehicles.

The government could level the playing field by lowering the excise for the many petrol cars by a tiny bit, or by raising Road User Charges for the fewer diesel vehicles by quite a bit. Given that there’s currently a bit of a funding issue for the National Land Transport Fund – thanks, Roads of National Significance! – there’s a strong argument for picking the latter option.

I emailed the Ministry of Transport to check the figures I’ve used above, and they provided the following additional context:

Until 1 July 2008, light diesel vehicles contributed more to the National Land Transport Fund (NLTF) per 1,000km than petrol vehicles, because a large portion of petrol excise duty was being directed into the Crown consolidated fund, while all road user charges revenue went into the NLTF.  When the Government fully hypothecated petrol excise duty to the NLTF from 1 July 2008, this resulted in petrol vehicles contributing considerably more to the NLTF per 1,000km than diesel vehicles.

I would note here that, even pre-2008 when diesel vehicles were paying more into the NLTF than petrol vehicles, the petrol vehicles still paid more overall per kilometre – it’s just that some of those funds were diverted for other purposes. In 2008, the Labour government shifted transport funding towards more of a user-pays system (still not entirely user-pays), changes which I think makes sense, and which National also supported.

The Ministry of Transport also mentioned in their email:

The rates of petrol excise duty and light road user charges are slowly being brought together.  However, this is a gradual process, as recent Government decisions have capped the maximum increase in any road user charges rate at around 10 percent for a given year.  For example, on 1 July 2013, the rate of petrol excise duty increased by 3 cents per litre, or 5.9 percent.  The rate of road user charges for light vehicles increased by $5, or 10.4 percent.

As such, it seems the government is well aware of the issue, but at the current rate, it will still take several more years before this long-standing imbalance is fixed entirely.

There are other equity issues around the excise vs. Road User Charges system – for example, with petrol cars, there’s a greater incentive to choose more fuel-efficient models – and I’ll look at those another time. These kinds of issues will become clearer if we ever end up moving to a universal Road User Charges system – which is quite possible, although unlikely to happen for a few years.

Sources:

1 “2012 New Zealand Vehicle Fleet Annual Spreadsheet”, tab 8.1a,b,c, Ministry of Transport

2 My calculations using “2012 New Zealand Vehicle Fleet Annual Spreadsheet”, tab 3.1,3.2,3.4,8.3, Ministry of Transport

Chief Science Advisor for Transport?

One of the impressions I have of many of the government ministries is that they act on “you say jump, I ask how high” kind of arrangement. We seem to see this particularly strongly in the Ministry of Transport where staff appear to have gone to almost extraordinary lengths in the past to paint projects like the City Rail Link in a bad light while giving uneconomic RoNS projects a free pass, all of which is strongly in line with the positions taken by government ministers. (Note: MoT staff we know you read the blog so if you want to refute this feel free to provide information to the contrary)

So it’s interesting to see this article about a report by the Prime Ministers Chief Science Advisor suggesting a similar thing and recommending there be a similar position to his be created in a number of agencies including in the Ministry of Transport.

In a report on the role of evidence in policy formation and implementation, Gluckman reports a highly variable approach to the use of scientifically rigorous evidence in recommending, implementing and assessing the impacts of new public policy.

In some cases, senior public servants seemed to prefer “to work from their own beliefs or rely on their own experience.”

“At its extreme, I find this deficiency to be unacceptable,” he said, noting concern also about departments that rely “primarily on internal research of questionable quality and/or commissioning external advice that was not scientifically peer-reviewed.”

While there was excellent practice in some parts of the public service, but “some policy practitioners held the view that their primary role was to fulfil ministerial directives, rather than to provide an evidence-informed range of policy options on which Ministers could develop a position.”

“Surprisingly, this was held in some departments that most need to use objective evidence in their day-to-day operation,” Gluckman says.

Without naming names, he recommends the appointment of chief science advisors to the Ministries of Health, Education, Business, Innovation and Employment, Transport, and the Department of Internal Affairs.

It would be interesting to see what Gluckman – or someone in a position to push for evidence based policy – would say about current plans like the RoNS being built despite falling or flat lining vehicle ownership, kilometres travelled, licenses issued and even in many cases daily traffic volumes.

Vehicle ownership

Equally it would be interesting to hear what they have to say about the impacts of current/proposed policies have on other areas like health, the environment or a number of other areas.

Of course this doesn’t mean the government’s policies would change but it would hopefully mean is much better information out in the public domain about the true impacts of the decisions that are made.