Steven Joyce Defends Roads Of National Significance


Last week SST columnist Rod Oram wrote an excellent piece on the economic folly of the Government’s Roads of National Significance. It was well researched and argued, and supported by a number of statistics.

Today, Minister of Transport Steven Joyce has responded. In contrast this opinion piece is completely devoid of any meaningful research, but it does reveal more behind his thinking:

Having the right transport infrastructure in place is an important part of the export job. We need to get our goods to market more effectively and efficiently, we need to cater for more tourists (who bring money here), and we need to make it easier to get around our largest cities (so our people can get to work).

Therefore we need to invest our roading funds, paid for by our petrol taxes and road user charges, strategically to deal with the biggest issues in our land transport network.

That’s why the government developed the Roads of National Significance. They are the seven strategic projects most necessary to reduce congestion, improve journey times and improve safety across New Zealand’s highway network.

The problem for Minister Joyce here is he presents no linkage between the need to deal with the “biggest issues in our land transport network” and “that’s why the government developed the Roads of National Signficance.  He goes on:

These projects are not plucked out of thin air. They are crucially important to our country’s economic future. They are the most urgent large roading projects New Zealand has. And, like it or not, our roads carry about 70% of our freight.

Well, the Puhoi to Wellsford toll road did not feature on transport plans at all until the Minister came to power. And Rod Oram’s analysis exposes the lie that they are crucially important to the country’s economic future. So did the Minister respond in kind with statistics to support his argument?

And for Rod Oram’s benefit; they are not cooked up as part of a grand political conspiracy about cost benefit analyses. The two reports he spent so much newsprint on reading ulterior motives into last week were simply the result of the progressions of business cases as the knowledge of each project improved; and they were completely devoid of political input. That’s a factual reality that he was informed of before going to print.

So he doesn’t deny the really poor cost benefit for the RoNS, but instead attempts to personally attack Rod Oram, who is a trained economist.

So why do some people get so wound up about investing in roading projects?

The reason, Minister, is that they represent poor value for money. The Puhoi to Wellsford toll road will most likely lose money.  And without telling us how much the toll will be it is hard to see how a meaningful cost benefit analysis for this road has been conducted.

There’s a limit of course – it’s called our international debt levels, as I said at the outset. So local body wish lists for $2.3b CBD rail tunnels on top of all this need to be fully tested; and someone else besides taxpayers (and international moneylenders) will have to put their hands in their pockets if they want to bump those sort of projects up the queue. We also should be wary about putting too much faith in a mode of transport that currently carries less than 2% of Auckland’s commuters to and from work each day, even after some quite spectacular growth.

Just as well the $5m study into the CBD tunnel has confirmed economic returns of between $3 and $6 for every dollar invested then. And why shouldn’t the petrol excise tax contribute toward the cost? Surely petrol taxes should fund the projects that give the best value for motorists?  The CBD rail tunnel falls into this category.  Why should the NZTA have all the say on where it should be spent?

Some people believe the way our cities have grown is wrong. They think the quarter acre section is a fool’s paradise. People should live more in apartment buildings and less with a backyard, or heaven forbid, in a small town outside of the city.

Straw man argument. Who are these “some people”?  Who said a quarter acre section is a fool’s paradise?

It’s a philosophy that argues that urban planners should have much more say about how we live our lives; and it’s an agenda that the old ARC had in Auckland for a long time: have a cast-iron metropolitan urban limit, force up the price of sections, increase the density of our suburbs, have people live in high-rise apartments, don’t let people get off the highway at Puhoi. And so on. If you follow that logic too far, the Auckland Harbour Bridge would never have been built, and the North Shore would still be a couple of seaside villages.

Now he’s getting really silly.  What’s the linkage betwen the MUL and ”forcing up the price of sections”?  Any statistical causal evidence?  It’s the NZTA that don’t want to let people of at Puhoi… what on earth is he on about here? Besides, its not his job to decide urban planning – its the role of the new Auckland Council.

But we also have to understand that people like to live where they want to live, and provide cost-effective transport options (roads even!) for those people too. Amusingly, Auckland has increased in density in recent times. But largely not where the central planners said it would, (along the transport corridors) and instead in the beach-side suburbs. Fancy that.

Oh, how amusing! Got any statistics to back up what you are saying, Minister? There is far more apartment construction going on in the CBD than in Murray’s Bay, from what I observe.

In my view, it reflects poorly on Oram for buying into a political agenda, complete with unfounded conspiracy theories, and calling it a business column. We need less of that sort of “business” thinking, and more sound practical ways where governments can support New Zealand’s trading firms to grow faster. Providing value-for-money transport corridors they actually use is one way of doing that.

Yeah, get another dig in at Rod Oram, because you can’t refute his statistics. Conclude with baseless drivel. Good luck in the next election, because believe it or not Minister, value-for-money transport corridors are what everyone wants.  In Auckland, though, these corridors don’t look like toll roads.

CBD Tunnel “Compelling Case”

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Stuff reports :

Auckland Mayor Len Brown says a report on a proposed $2 billion rail tunnel through central Auckland shows the business case for it is “compelling”.

The tunnel, which would link Britomart with Mt Eden station and create an inner-city rail loop, was one of Mr Brown’s primary election campaigning points and the business case was released today.

The report says that the standard benefit-cost ratio (BCR) for the project is equal or higher than that of two of the Government’s Roads of National Significance.

It goes on to say:

The standard BCR of 1.1, worked out on the 8 percent discount rate, is higher than the 0.8 BCR for the proposed Puhoi-Wellsford motorway and equal to that for the Wellington northern corridor, which includes Transmission Gully.

I thought Transmission Gully was less than one also, but anyway:

With wider economic transformation benefits, such as improved land use, urban regeneration and transformation and economic development, the BCR at the 8 percent rate is 3.5. It is 4.7 at the 6 percent discount rate and 6.6 at the 4 percent discount rate.

Rod Oram Exposes Economic Fallacy of Puford Toll Road

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In the Sunday Star Times today, Rod Oram exposes the extreme lengths that the Government is prepared to go to to bolster the case for the hugely uneconomic Puhoi to Wellsford toll road.

THE GOVERNMENT told owners of 55 properties last week that their homes or other buildings could be bulldozed to make way for its $1.65 billion Puhoi to Wellsford motorway. It was a tragedy for the owners.

But what if the motorway was also a tragedy for 1.4 million Aucklanders?

It could well be. The motorway will significantly distort development patterns, thereby blighting the region. It will help push urban development out to 85km north of Auckland’s CBD over coming decades.

This will exacerbate Auckland’s weakness as a sprawling city, with dire economic consequences. Worldwide evidence shows lower density means higher infrastructure costs, favouring private over public transport and a weaker network effect. People living and working closely together generate greater wealth than those spread out.

In fact, the government knew last year the motorway was uneconomic, according to the cost/benefit analysis done for it. Likewise, the Waikato Expressway and Wellington to Levin motorway were uneconomic under conventional analysis.

That was very embarrassing for the government. After all, the three projects account for almost half of its $11b, 10-year Roads of National Significance programme. And the analysis showed speeding up the projects, which the government promises, would reduce the benefits.

I urge you to read it.

The Onion: Obama to Replace High Speed Rail With High Speed Bus

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Surely the Onion has to be right up there as one of the best satirical news channels there is:

Obama Replaces Costly High-Speed Rail Plan With High-Speed Bus Plan

“Indicative” Alignment for Holiday Highway Announced

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The NZTA has announced an indicative alignment for the Puhoi to Warkworth section of the holiday highway:

The proposed highway is part of the Puhoi to Wellsford road of national significance which will provide better access and route security on State Highway 1 between Auckland and Northland. The indicative Puhoi to Warkworth route is 18 kilometres long, running west of the existing State Highway 1 to just north of Warkworth near Kaipara Flats Road.

The NZTA’s Regional Director for Auckland and Northland, Stephen Town, says while work can now be advanced between Puhoi and Warkworth, there are a number of geological challenges with unstable ground around the Dome Valley and Wellsford that require further investigation.

“This entire route remains our focus, and we want to develop it as quickly as possible,” says Mr Town. “We are in a position to begin consultation from Puhoi to Warkworth, and more detailed investigations will be carried out before a solution is produced for the section of the proposed highway further north to Wellsford.”

Mr Town said the NZTA was looking forward to hearing the community’s views on the proposed route from Puhoi to Warkworth.

Consultation began yesterday (16 November) with NZTA staff hand-delivering information on the proposal to property owners impacted by the indicative route.

So nothing in there on the cost of paving over the “geographical challenges”, or if this is going to be a toll road, or how much the cost will be or whether safety improvements on the existing State highway one will go ahead.

More on this over at

The Campaign for Better Transport’s “Operation Lifesaver” got a mention in Parliament today, with Labour’s Darren Hughes reminding Parliament that this is a project with a lot of cost without substantial benefits to match:

“Cyclone” Auckland Rail System

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Josh Arbury has done a post on Len Brown’s rail plans.  It includes a picture of the underground rail loop and it got me thinking about the optimal way to utilise the new tunnel for the Western, Southern and Eastern Lines.

Imagine a Southern line commuter getting on at Greenlane wanting to go to the new K’ Rd station. Will all Southern line services go via Britomart, forcing our commuter to an extra long journey?  We could make all services take advantage of the tunnel, so that the sequence of stops goes Newmarket, Grafton, Symonds, K’Rd, Wellesley, Britomart.  But what if the same commuter wanted to go to Britomart? That’s four extra stations to endure.

We could get our example commuter to transfer at Newmarket on to another service, but what service would that be? It’s a similar problem for other rail commuters on the Western and Eastern lines as well.  Because each of the three main lines forks as it enters the CBD loop, there is no right answer here. We may be pretty much forced to make users transfer if they don’t want to take the default fork in the line.

But I think that there may be a way around this conundrum. Enter the “cyclone” rail system:

The Cyclone Auckland Rail Service

The Cyclone Auckland Rail Service

In this strategy, there are three lines – green, red and yellow, corresponding to the Western, Eastern and Southern lines.  Throughout the day, each service alternates between the left and right fork as it approaches the inner city rail loop. In the map above, for instance, a Green C train would enter the loop going clockwise, going via Symonds, K’Rd, Wellesley, Britomart, Parnell, Newmarket, Grafton and Mt Eden, before returning out west.  The next inbound train would be the Green A(nti-clockwise) train, and would visit the same stations, but in reverse.  Same goes for the Yellow and Red lines.  The service then continues around the loop, and back out the way it came in.  I imagine at peak the A and C trains would only be 5 minutes apart.

Some good outcomes of this arrangement are:

  • Its easy to understand. Kind of like the Link bus service is now
  • If you get on the wrong A or C train, you are still going to end up at an inner city station you intended to alight at, it will just take you a bit longer
  • Transfers to other lines are very easy, as you should be able to transfer at any station on the inner city loop to the line of your choice
  • Travelling around the inner city becomes very easy, you just need to know the fastest direction to your intended destination, and make sure you take a colour that isn’t about to pull out of the “cyclone’. e.g. if you are at Britomart wanting to get to Newmarket, take a Green or Yellow “A” train
  • Trains can be branded as they will always run on the same lines.  For instance, all yellow line trains could actually be yellow
  • It is scalable to include the Northern line train when it enters service. The “C” train would take you to Britomart, while the “A” train will take you to Wellesley.

What are your thoughts? I’ve posted this as an idea on our ideas forum so you can vote and add comments there.

Letter of the Week

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The Weekend Herald’s letter of the week is from Frank Hoffmann, and it sums up the current situation on transport funding:

Transport Minister Steven Joyce should remember his Government has usurped Auckland’s planned method of funding transport.

A surcharge on motor fuel was designed to make the road-user contribute a fair share towards the cost of public transport, which would ease pressure on roads.

After he deprived Auckland of its source of revenue, it is therefore ironic and audacious to demand that it pay an even greater share towards the overdue development of its transport needs. How?

Auckland has at last shown a willingness to break out of its hitherto timid approach with a bold plan. But a crafty ploy passed control into Government hands and forces Auckland to approach Wellington with a begging bowl.

Every detail is subject to scrutiny by people miles away, and approved if it does not conflict with the minister’s love of road building.

This outdated bias is based on a blind faith that building more roads will fix problems created by building more roads.

Love the last bit.

Auckland Rail “Funding Gap”

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There have been a couple of stories this week in the Herald. The first one talks about Transport Minister Steven Joyce claiming there is a “funding gap” for rail operational costs. The second is a response from Auckland Councillor Mike Lee claiming Steven Joyce is trying to stymie Mayor Brown’s vision. It’s all a bit confusing, but fortunately Josh Arbury over at  has got to the nub of the matter in this post here.

It is appropriate that the Auckland region pays a fair value for track access. It has been doing so since 2003, paying an average $5m per annum.

But now Transport Minister Steven Joyce wants to unilaterally increase this fee to $16m annually. Included in this are loan repayments at commercial rates of interest for the purchase of $500m worth of new electric trains for Auckland. The new trains were originally to be funded through a regional fuel tax of 2c per litre until the Government decided against this in March 2009.

Instead now it is obvious that central Government has decided to stick ratepayers with the bill for the new electric trains. It is disingenuous of the Minister not to mention this and to present this as a fait accompli to the new Mayor.

The Minister also needs to explain to Auckland ratepayers why Wellington’s new electric trains are 90% funded from central Government, and what “track access fees” Wellington ratepayers are expected to pay.

UPDATE: A well placed source tells me that in fact Steven Joyce is still considering how Auckland trains should be funded and what the funding split should be between Auckland and central Government.  Funding of trains is not included in the higher track access fee. It makes the decision to increase the track access fee from $5m to $16m even more confusing.  We will have to wait and see.

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