The Campaign For Better Transport

Last week’s opinion piece by Transport Minister Steven Joyce started out well enough.

“Having the right transport infrastructure in place is an important part of the export job,” he stated. “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,” the Minister continued, “paid for by our petrol taxes and road user charges, strategically to deal with the biggest issues in our land transport network.”

So far so good. After all, a record $2.5 billion dollars in the year to June 2010 was sourced from fuel excise duties and road user charges. With petrol currently at $1.84 a litre, excise tax accounts for 48c of this. So this means that for every $100 spent at the pump, $26 goes to the New Zealand Transport Agency to spend on transport. So it is good the Minister has his eye on this money being well spent.

Then the very next sentence read “That’s why the government developed the Roads of National Significance.”

At this point the Minister’s argument falls apart. Minister Joyce does not attempt to explain the reasoning why the Roads of National Significance strategically deal with big transport issues. Nor does he explain why roads such as the Puhoi to Wellsford toll road should be built even though, as Rod Oram points out, the standard benefit-cost formula reveals that less than half of the nearly $2 billion dollar construction cost will be returned in economic benefits.

However, even that benefit-cost ratio of a 40c return for every dollar invested may be out of date, with the recent announcement that the new highway will be a toll road.

The fact that the road will be tolled (for an amount as yet unspecified) will have a dramatic negative effect on the number of people willing to use it. A study for the Waterview connection in Auckland, for example, concluded that if that new $1.6bn motorway is tolled at $2, then just 50% of motorists would consider it economically worthwhile to use.

Without any statistical evidence, the Minister maintains that these projects are “crucially important to our country’s economic future.” Yet in 2008 another report commissioned by the NZTA on the Puhoi – Wellsford motorway concluded that, “the economy of Northland is relatively weak” and that “regional economic issues are unlikely to make a significant contribution to the viability for implementing the strategy.”

That roads are self-financing is another erroneous ministerial argument. Just because $26 out of every $100 goes to the NZTA does not mean this money is well spent.

Furthermore, a report commissioned by the New Zealand Transport Agency (October 2009) found a shortfall of $1.5 billion per year between what is collected from the state highway network and what is being spent on it. Local roads require another $1 billion per year of ratepayer funding.

There is no reason why petrol excise tax should not be spent on public transport projects, provided, of course, that the costs and benefits stack up, in particular for motorists. The Northern Busway in Auckland is a good example where NZTA funds have been successfully applied – motorists have benefitted greatly from 1.8 million passenger trips now being made annually, largely at peak times, and the Harbour Bridge now carries more people than ever before.

The CBD rail tunnel will provide extremely positive economic returns as identified in the recent $5m independent business case. Depending on the discount rate applied, the benefit cost ratio lies somewhere between 3.5 and 6.6. In practical terms, for example, the journey from Morningside to Mid-town Auckland will take a mere 8 minutes.

The Minister is found of repeating the statistic that 84% of people in Auckland use a car to get to work. What he doesn’t say is that for trips to the CBD at peak times, less than half of all commuters use a car, according to a recent survey by the ARC. And the Minister’s implication that future transport funding should be in proportion to how people currently travel is a rejection of the huge growth currently occurring in Auckland rail – with over 9 million trips now being made annually, a figure which has quadrupled in recent years.

So far in his term as Minister of Transport, Steven Joyce is yet to commit any new funding to passenger rail capital projects in Auckland. All spending to date on Auckland’s rail network has been from budgets established years ago now. New electric rolling stock is to be purchased via a loan at commercial interest rates from the Government.

The Minister questions why “some people get so wound up about investing in roading projects”. The answer to this is that “some people”, including expert transport advisers and economists, can see that some roading projects are simply uneconomic. Some projects are economic, of course. The Victoria Park tunnel has a good benefit cost ratio, and as such has a good economic basis to be funded. However, over the next 2009 – 2012 funding period alone, some $3 billion dollars will be spent on new state highway infrastructure. Minister Joyce owes it to the economy, as well as motorists and ratepayers, that this money is well spent.

Writing in the Rodney Times, Warkworth resident Bob Scott has this to say on the Holiday Highway toll road:

Your story on the front page of the Rodney Times of the Still family who are destined to have their dreams shattered by the motorway extension only tells a small part of a tragic story.

The NZ Transport Agency is admitting that 29 homes will be bulldozed, and in a rural community that is a huge number of families whose lives will be devastated. Many people will have some of their land taken, which will impact hugely on their lifestyles. As well as this, there are a huge number of families (mine included) whose lives will be changed forever by being robbed of their views and tranquility, the very reason that we moved to the area.

We have already been told that we will have no prospect of any compensation as the transport agency is on the defensive and hiding behind the Public Works Act to fend off any questions in this direction.

In addition, those of us who live on one of the motorway construction sites will have to endure six years of disruption from heavy construction traffic. All this, in the words of project director Brett Gliddon, to “shave five to seven minutes off trips between Auckland and Warkworth”.

Is it really worth it, just to save five to seven minutes?

Surely a better solution would be to spend some of this money on upgrading the existing SH1 to make it save lives. The Warkworth bypass, safety improvements in the Dome Valley and improvements further north spring to mind.

Spend the rest on other projects to help the development of Northland, such as high-speed internet links, development of the rail link to Marsden Point, encouragement of low value goods such as logs onto rail and barges and new forestry, horticultural and agricultural initiatives to take advantage of the unique topography and climate.

At a cost of $980m to the taxpayer and a huge amount of misery for those of us affected, surely someone out there can see sense.

Or is the motorway extension really just an excuse to benefit the property developers, shopping mall companies and road building companies in Auckland and not for the benefit of this region at all?

It is even more sobering to think that none of the hardship described above is factored into the already dismal benefit cost analysis for this project.

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 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 transportblog.co.nz

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:

Discussion last week focussed on Len Brown apparently thowing away a valuable point of negotiation in the fight for rail funding, little has been said on the comments of PM John Key.

John Key is being disingenuous when he claims the Puhoi to Wellsford motorway “was something National campaigned on”.

 National clearly did not campaign on the construction of a new $1.6bn toll road between Puhoi and Wellsford, just as it did not campaign on diverting up to $340m of public transport funding and $150m of local road funding to the Roads of National Significance.

The phrase “Roads of National Significance” was not even invented until well after the election.

The Government needs to come clean and tell people how much the toll will be for users of the new Puhoi to Wellsford motorway, and what safety upgrades are planned for the existing State Highway One.

Outgoing ARC Transport Chair Christine Rose sent a thank you letter for our presentation on a cost effective alternative to the proposed toll road between Puhoi and Wellsford.

Enclosed with her letter was a the response from Transport Minister Steven Joyce. He makes the startling claim that:

While upgrading an existing road would appear to be the cheaper option, this is not actually the case.  The initial investigations… show that upgrading the existing road to a four lane motorway standard would actually be the same or more expensive than constructing a new, purpose-built road.

As Christine points out, no information has been released to substiate the statement.  Minister Joyce goes on to emphasise the freight aspect of the toll road:

The Puhoi to Wellsford RoNS has additional benefits as it caters for the movement of both passengers and freight – a key priority for the Government. As you may be aware, the National Freight Demands Study 2008 forecast that freight volumes between Auckland and Northland will double over the next 10 years.

No mention of the state owned railway line that also runs north.  No mention of how much the toll will be from Puhoi to Wellsford. He also says that

The NZTA informs me that the cost of constructing a new road for the Puhoi to Wellsford RoNS is comparable with completing the Auckland CBD inner rail loop (without the significant upkeep costs). The number of users is also greater than an estimated 22,000 users per day for the Auckland rail network and 25,000 per day for the Puhoi to Warkworth section.

This is interesting as it indicates that the Minister apparently knows the patronage of the Auckland rail network after the CBD inner rail loop is finished (we’ve yet to see the business case) and the number of vehicles (users?) using the toll road.  Presumably to figure this out he needs to know the toll that will be charged as well.

A copy of the letter is here.

Christine says the ARC understands that NZTA are planning consultation on more detailed proposals for the route before the end of the calendar year. Hopefully we get much more detailed information than has been provided so far.

Media Release from The Campaign for Better Transport

The Campaign for Better Transport has proposed alternative options for a $1.7bn toll road between Puhoi and Wellsford to the Auckland Regional Council.

“The options we have put forward are far more cost effective, will save lives, and can be implemented far sooner than the current New Zealand Transport Agency proposal,” said Cameron Pitches, Convenor of the Campaign for Better Transport.

Based on work already done by the NZTA, alternative upgrade options have been costed at $160m – $320m.  Both options include a bypass for Warkworth and significant safety upgrades for notorious accident black spots.

Between 2000 and 2009, 41 people have died on SH1 between Puhoi and Wellsford, most in head on collisions.

“Given that sections of the toll road won’t be completed until 2019 and 2022, the risk is the current poor safety record will continue, costing as many as 50 more lives based on current trends.

“And for those that won’t be able to afford the toll road, we are concerned that the existing parallel highway will remain as dangerous as it currently is,” said Mr Pitches.

The Campaign for Better Transport also noted that NZTA’s own economic assessment highlighted the poor cost effectiveness of the current $1.7bn proposal.

“At best 80c will be returned in economic benefits for every dollar invested.  We estimate that the alternatives we have put forward will generate at least $2.50 for every dollar.  From an economic and safety point of view, the current proposal does not stack up. It makes no sense to invest such a huge amount of money if the benefits aren’t there,” said Mr Pitches.

The Auckland Regional Council Transport and Urban Development Committee endorsed the alternatives at its meeting on Wednesday. That committee has requested that officers undertake further work on the options presented, and the ARC will be writing to the NZTA and the Minister of Transport suggesting the alternatives be given strong consideration.

[ends]

Notes:

Puhoi – Wellsford Highway to be tolled:
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10665246

Full presentation and report available here:
http://transportblog.co.nz/2010/08/11/operation-lifesaver-a-better-solution-for-puhoi-wellsford/#comments

Yesterday the Campaign for Better Transport presented to the ARC our alternative options for the current “holiday highway” motorway proposal:

• Based on current trends, up to 50 more people could die on this dangerous stretch of road by the time the $1.5+bn motorway is completed
• The current motorway proposal will run parallel to the SH1, as a tolled route.  SH1 will remain as is, without any modifications to it.
• For a fraction of the cost we can implement significant safety and traffic improvements. The current proposal does not stack up economically.

Josh Arbury has blogged more on this here.  The ARC has just issued a press release in support of our proposal here. Hopefully some sanity will prevail on how we best spend our transport dollars.