Barnett: Do more of what we’ve done and see if we get a different result

A few days ago the Herald published an op-ed from Michael Barnett, the CEO of the Auckland Chamber of Commerce. I found it an odd article as it was never quite clear about what Barnett’s key point was, seemingly jumping between two of them with liberal amounts of anecdata, logic leaps and outright incorrect data sprinkled in. So I thought I’d take a look at some of these.

After kicking things off with a “some people say their traffic is getting worse” statement, he dived headfirst into his first false fact and what first had me groaning internally at how bad the rest of the article might be.

the 400,000-plus North Shore residents are not getting back a fair share of the rates and taxes they pay towards fixing Auckland’s big transport issues.

Population figures are often able to be easily gerrymandered but even with some creative massaging it’s hard to see how he gets this figure. A look at Statistics NZ latest population estimates suggests that even including the Hibiscus Coast and the eastern half of Rodney all the way up past Wellsford only yields 336k people, well short of the 400k+ claimed.

As for the share of transport spending, we have a system with multiple parties involved. Auckland’s transport challenges are such that some areas need high levels of council spending (e.g. AMETI) while other areas the majority of funding will be from the NZTA due to projects more centred on upgrades to state highways. Even so, Auckland Transport have just completed a $40 million upgrade to the northern end of Albany Highway and looking forward, within the next few years the NZTA will be starting a $500 million-plus upgrade of SH18 and SH1 which also includes the extension of the Northern Busway to Albany.

Northern Corridor - June-16 Design

 

All this is before even considering that if the Additional Waitemata Harbour Crossing is ever built, it would be the largest single transport project in NZ history by a significant margin. Speaking of harbour crossings, he says:

About 200,000 vehicles cross the Harbour Bridge each day, and the commute for many is up to two hours – well above the city average of 30 minutes.

I’m not sure if Barnett is aware of how averages work but by their very nature mean some results will be higher and others lower than what most people experience. Generally if you live a long way from where you work or study you’ll have a longer commute and if driving, have a greater chance of being a part of congestion.

As for the 200k vehicles across the bridge, I’ll let that one slide. The NZTA’s published information suggests about 168k per day but daily data they once provided us shows that on weekdays that can be around 200k. Of course as users of the bridge will know, despite being one of the busiest stretches of road in the country, it’s not the bridge that’s the bottleneck.

He then finally kicks in with I think may have been his main point, that he wants Penlink built. It is also where he makes the first part of his biggest leap of logic. Traffic he says, is backed up down the peninsula every morning and so Penlink will free up give an easier journey to the motorway freeing up local roads. That is followed by this statement.

The only excuse officials seem to have is that building Penlink would shift the congestion from Silverdale and the Peninsula on to State Highway 1. That’s unacceptable.

Unless he’s claiming that the northern motorway is free flowing at peak times, it’s not going to matter if they use Penlink or go through Silverdale, they’re still going to be sitting in traffic on their trip down the North Shore. There may be some net gain from using Penlink, but not likely a lot.

But it’s the next part of the piece, and the part that’s referenced in the headline, that helps to confuse the article and complete that large leap of logic.

Imagine the uproar then, and implications for the state highway north of the Harbour Bridge, if any serious effort was made to relocate the Ports of Auckland vehicle import trade to NorthPort near Whangarei.

Currently Auckland imports around 21,000 vehicles every month, or 252,000 a year. Eighty percent of the imported vehicles are for customers in South Auckland.

The car-carrying trucks on average take about eight vehicles. The industry advises that over a 24-hour cycle there would be a heavy truck on the road to and from Auckland-Northport every 2-3 minutes.

The pressure on the bridge and state highway between Northland and South Auckland wouldn’t cope. The freight sector is already under notice that trucks will be restricted to centre lanes of the Harbour Bridge from around 2020 due to stress on the clip-on lanes.

Having a state highway clogged with freight trucks would be untenable for Northland tourism, those who live along the State Highway and other traffic through Spaghetti Junction or the Waterview Tunnels.

First let’s just do a little bit of basic maths. There are 252,000 vehicles delivered a year (the ports themselves say 244k but close enough) and 80% of them are going to South Auckland, although I’ll ignore that part for now. That’s 690 vehicles arriving per day and if a car carrying truck can carry an average of 8 vehicles, that’s 86 return trips that are needed. With operations 24 hours a day it equates to 1,440 minutes. Dividing 1,440 minutes by 86 trips tells us there’d be a vehicle carrying truck in each direction every 17 minutes. That’s a lot but nowhere near the truck every 2-3 minutes.

Next, the trucks are heading to South Auckland so if they’re coming from the north they’d be bypassing the city centre. Isn’t that kind of trip exactly the reason we’ve been spending billions on building the Western Ring Route? And if the motorway can’t cope with this traffic, how is dealing with the traffic from Penlink?

Let’s not forget, one of the core reasons the government has pushed their RoNS projects like Puhoi to Wellsford is that they call them ‘lead infrastructure’, because they think building a bigger road will magically create economic growth. In short, the government want more trucks on the road to Northland.

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From the NZTA

Other options for moving vehicles, such as by rail, which based on his figures would only require 11 return trips per day, are claimed not to work because first a gold plated, $1.5 billion solution would be needed. I don’t disagree that upgrades are probably needed but whether they’re needed to that extent and before any changes is debatable. I also imagine the amount of land freed up from not needing so much space for parking would probably exceed that figure.

Of course all of that assumes imported cars would go to Northland, although according to Barnett, apparently the same issues apply to Tauranga. Yet the rail line to Tauranga is already the busiest rail freight route in New Zealand. Its capacity was recently doubled to four trains an hour (two each direction) by spending only around $15 million on additional passing loops. The cost of more of more of them to further increase capacity and the completion of the third main in Auckland would cost less than the average motorway interchange and have other benefits, especially in Auckland.

The Chamber’s suggestion to all of this is to build a large multi-storey carpark on the waterfront to store the cars but knowing such a building wouldn’t be possible, suggest putting a ‘green space’ on the roof will somehow hide it.

And with one last jarring lurch the piece ends on this:

Meanwhile, let’s get real. Fixing the acute “here and now” roading issues on the North Shore should be our shared priority. The Penlink Project is “ready to go”. There are no excuses or credible reasons for the new Council not giving the project the green light immediately.

With the project expected to exceed $350 million, I can think of quite a few reasons why it shouldn’t get an immediate green light. For many years, business groups like the Chamber and local politicians have claimed there are private investors lined up and ready to go with funding this project. If the Chamber wants it to happen now, perhaps it’s time they convinced these investors to start opening their wallets and get building.

Until that happens, it’s probably best we focus our limited transport investment in the areas that will have the most overall impact, which was the exact purpose of the Auckland Transport Alignment Project that suggested Penlink wasn’t needed any time soon.

atap-major-transport-projects-by-decade-map

Northland, Politics, Transport, and Pork

On March 28 the (normally safe) National-held electorate of Northland heads for a bye-election. The outcome of the bye-election will be fascinating for several reasons.

The first reason is that it’s politically important. If Winston Peters wins then it will be more difficult for National to pass controversial legislation, because they will need the votes of not just one but two support parties.

Legislation like the Sky City casino-for-convention-centre deal and RMA reforms suddenly become pawns in a three-way game of arbitrage between parties with somewhat different support bases and philosophies. Amusingly, National could end up leading a government not too dissimilar to what they warned the opposition would have been like, had the latter prevailed at the last election.

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The second reason the bye-election is so interesting is that transport has, somewhat unexpectedly, become a major campaign issue.

Early in the campaign, the Minister of Transport (Simon Bridges) suddenly found $69 million in previously stretched transport budgets for two-laning a number of bridges in Northland. This funding announcement was apparently made without any information or advice being sought, or received, from transport officials. This is an announcement that Winston himself would be proud of, indeed he’s pulled similar stunts in the past.

The reality for National, however, is that few people seem to have been impressed by the transport funding announcement. Instead, it has received considerable attention for delving so blatantly into pork-barrel politics.

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Questions have also been raised about the effectiveness of the spend. For many of the locals interviewed by Campbell Live, two-waying bridges seem to be far from the top of the priorities list.

National have also apparently linked funding for the Puhoi-Wellsford highway to the outcome of the bye-election. Amazing how an apparently essential piece of transport infrastructure can so suddenly becomes not so important when there is a bye-election.

I’ve personally found it interesting watching National’s transport pork-barrel approach in Northland, especially in light of recent political happenings in Australia, where I am currently based.

In Victoria, Dennis Nathpine’s Liberal Government tied their political fortunes to the eye-wateringly expensive $18 billion “East-West Link”. It was a bad pick, with polls showing the East-West link had levels of support that were half of comparable metro rail projects. Napthine was subsequently kicked out of office.

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Meanwhile, in Queensland, Campbell-Newman built a reputation for delivering large, expensive, and largely unnecessary motorway tunnels. His Government’s promises of more roading pork were spectacularly dismissed after only one term in office after a 12% swing back to Labour.

And at the Federal level Tony Abbott’s unwillingness to fund passenger transport improvements in Australia’s rapidly growing cities is receiving growing criticism. This is in stark contrast to the former (and possible future) Liberal leader Malcolm Turnbull, who supports passenger transport.

As an economist, I think there’s a key message for National in all of these events. It’s not just that roading pork hasn’t been sufficient to save political bacon, but also that there is often a large gap between stated and revealed preferences.

Why is this important? Well, I suspect what all of these conservative parties have done, including National, is held focus groups where they’ve asked people whether they support more investment in roads. In response, many of these people have said “yes”. Something like these guys.

 

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The problem with stated preference surveys is the trade-offs are usually not made explicit. More specifically, when you invest more in roads, you often find that you don’t get much bang for your buck.

So while people say they want more investment in roads, after a couple of years of fluffing about with largely ineffective road investments, they suddenly realise that they’re not actually much better off. Political strategies based on stated preferences may therefore work in the short run, but they are likely to run out of gas in the long run.

The lesson for National in all this, I think, is that they increasingly run the risk that people will catch onto the fact that their transport pork is failing to return much value. Every new road that opens which fails to meet forecasts, every new business case that is shown to be baloney, eventually creates the case for your opponents to shred your credibility. It won’t happen overnight, but it probably will happen.

This is especially true when you’re foolish enough to do what National have done, i.e. hang your dirty transport laundry out to dry in the blazing heat of a Northland bye-election.

This seems to be a timely and early lesson for Simon Bridges: Emulating the pork-barrel approach employed by Joyce and Brownlee will not necessarily bring you enduring political success. Just ask Nathpine, Campbell-Newman, and Abbott if you want to see the proof in that political pudding.

Roading in Northland

There’s been quite a bit of discussion in the last week about roads in Northland following storm damage that saw part of State Highway 1 closed due to large washout. The severity of the slip saw traffic diverted on lengthy detours on roads clearly not designed to handle more than a handful of cars per day. Another series of slips have happened in the last few days, this time closing SH1 over the Brynderwyn Hills.

Understandably it’s led to people in Northland saying that their roads simply aren’t up to the same quality as roads in other regions. Oddly though it also led to Labour’s Kelvin Davis saying he supported the the Puhoi to Wellsford Road of National Significance.

“They want a safe and solid highway that’s going to get our people and goods in and out and that’s not at the whim of Mother Nature.

“This weather event has shown how vulnerable and susceptible the North is and it’s really important that we have a road where emergency services and whatever can get through, but also we’ve got to have a road that’s going to be able to export our produce outside of Northland and one that’s not going to be washed away in the next storm or flood.”

If the statement above was to be a blanket statement and not referring to P2W then I would be in complete agreement however I say it’s odd for him to bring up P2W as doesn’t even leave Auckland and would not have done anything to help with the slips that have occurred. In fact in many ways P2W is actually likely to be working against Northland as it will suck up funding that could be being used for widespread upgrades to address issues that exist in the roading network.

All up P2W is said to cost ~$1.6 billion with the first section to Warkworth estimated at $760 million. If the goal is truly about helping the Northland economy as the government love to claim then we need to be asking what else we could do with the money. What if we spent ~$300m on operation lifesaver to address the key issues with the existing road. We could then spend about $500 million on actual roads in Northland while still leaving up to $800 million which could be used for other projects – like part of the governments share of the City Rail Link.

But how would $500 million compare to what’s currently spent in the region and is it a significant enough amount of money?

Data from the NZTA can help to answer that question. Unfortunately the 2013/14 data isn’t available yet but this is for the 10 years to 30 June 2013.

Transport Spending in Northland 2003/04 to 2012/13 NZTA Local Authorities Total
State Highways – New and Improved $163,617,783 $163,617,783
State Highways – Maintenance, Operations & Renewals $249,305,778 $249,305,778
Local Roads – New and Improved $174,917,159 $56,850,123 $231,767,282
Local Roads – Maintenance, Operations & Renewals $312,908,053 $226,434,207 $539,342,260
Public Transport $9,481,230 $8,440,738 $17,921,968
Walking & cycling $342,494 $90,300 $432,794
Other $24,816,399 $2,661,551 $27,477,950
Total $935,388,896 $294,476,919 $1,229,865,815

And here’s the new and improved road spending over that 10 year periodNorthland New and Improved Roads Spending

So spending $500 million (on top of what would normally be spent) would be more than all the money that was spent on new and improved state highways and local roads for over a decade.

That seems like it could deliver more game changing outcomes for transport in Northland than a motorway to Warkworth/Wellsford ever would. As an example of what might be able to be delivered, the governments Accelerated Regional Roading Package named two projects that would see road realignments happen. One was on State Highway 73 near Arthurs Pass and the other was just south where the large slip occurred the other week with the project known as the Akerama Curves Realignment and Passing Lane. The latter is a 3km section of road that will be upgraded and have an additional passing lane added for a cost of $10-13.5 million. Comparing the costs for each project it suggests that for $500 million we could probably get 100-150km of upgraded state highway which is a substantial amount.

I guess the big problem with this suggestion is that small scale projects like road realignment and passing lanes aren’t the types of projects that get politicians in the national media cutting turning a first sod or cutting a ribbon.