A great op-ed by Mt Albert Labour MP David Shearer in the NZ Herald today – talking about the Puhoi-Wellsford “holiday highway”. Here’s a couple of particularly good extracts:

… I just can’t agree with Transport Minister Mr Joyce’s recent announcement to start preparatory work on a new Puhoi to Wellsford motorway.

Nor can I agree that this road is needed above all other priorities where the Government could – and should – be spending money.

Dubbed the Holiday Highway, the project is a colossal waste of $1.69 billion (possibly rising to $2.04 billion) of taxpayer money.

With that sort of money we could transform New Zealand’s economy with research and development, provide real backing to our most innovative companies, increase skills, run a train to Auckland airport, build an underground rail link into Auckland’s CBD – you name it.

Instead, Mr Joyce is proposing to build a new motorway to run alongside State Highway 1.

Here is what $1.69 billion buys you: motorists will save seven minutes’ travel time to Warkworth and eight minutes on to Wellsford...

Shearer goes on to talk about the economics of the road just simply not stacking up particularly well:

Does a new motorway make economic sense? It’s very marginal.

According to the cost-benefit calculation used by the NZ Transport Agency we get less value back in dollars than what we spend on the motorway.

If the “wider economic benefit” to the region is factored in, one dollar spent will bring $1.10 in return.

That makes it financially viable, but barely. And any economist will tell you that estimating the wider economic benefit is notoriously difficult.

That’s why I oppose this road. The economic case simply doesn’t stack up.

There is also a broader question whether building more motorways is a good idea. Last year the OECD released a report called “Infrastructure Investment” that studied New Zealand’s transport system in comparison with other countries.

It concluded that there is no measurable economic benefit from new motorway construction in New Zealand whereas investment into other types of roading and rail infrastructure does generate growth.

In other words, there are much better ways to spend infrastructure money. This Government should take a look at it.

Ah yes, that would be this study, that I commented on in a recent post. The relationship between transport investment and economic growth is outlined in the graph below: The maths are fairly complicated I think, but in a nutshell this study shows that for New Zealand, investment in non-motorway roads and railways is seen to have an economic benefit, whereas investment in motorway standard roads is shown to not.

As David’s opinion piece goes on to say, this doesn’t mean that we shouldn’t do anything to upgrade the Puhoi-Wellsford stretch of State Highway 1, but rather that we need to be a bit more sensible about it. Would a bypass of Warkworth and $150 million of safety upgrades solve 90% of the problem for 10% of the cost? If the answer is even maybe, then surely that’s what we should be doing?

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  1. “Dubbed the Holiday Highway”

    The term shows an Auckland-centric view of transport, as does promotion of the CBD rail tunnel and an Auckland Airport rail link as alternatives to an inter-regional road. The purpose of the motorway extension isn’t to allow Aucklanders to get to holiday destinations quicker, or to provide any other benefits to Aucklanders, but to link Northland to the rest of the country. If Shearer doesn’t understand that then he is missing the main point. Which might explain why all the Northland seats and Rodney are held by National, and Te Tai Tokerau is also held by the Government.

    There is similar confusion in Wellington, where some city residents think that Transmission Gully’s main purpose is to allow residents of Kapiti to commute with fewer delays. While the actual purpose of the proposed road is to link Wellington to the rest of the country and vice versa without 50km/hr single-lane-each-way suburban bottlenecks, traffic lights, and a dangerous 1940 vintage coastal road.

    I’m also surprised that Shearer is anti-motorway. His Mt Albert predecessor was quite happy to extend SH20 including the Mt Roskill extension, the new Mangere Bridge, and a Waterview extension containing a tunnel that must have driven down the benefit to cost ratio. Labour had 9 years to approve the CBD rail tunnel and an airport line, and didn’t. Are Labour in favour of motorways while they’re in government, but anti-motorways when they’re not? When did they announce the change?

    (None of which deals with the merits of the P2W motorway. I haven’t looked at it too closely, but even I see that Shearer is taking a local view of a national project.)

  2. Obi, it is a project within the Auckland Region, and much of the justification for the project is to relieve the congestion which happens along the route during the holiday periods. If an upgrade of SH1 all the way to Whangarei was being proposed then I might be a bit more convinced that this project was being designed to benefit Northlanders. So far it really just seems to be proposed to allow people to get to their holiday homes quicker.

    Northland is already linked with the rest of the country by a fairly high quality road that does not get congested 99% of the time. I certainly agree there are safety problems, but if one was to spend $150-200 million on safety upgrades I imagine you could achieve quite a lot.

    (My family does have a holiday home at Mangawhai Heads, which this road would be really useful for by the way!)

  3. I think there are plenty of Labour MPs who are still pro-motorway, like those that received some of the $45,000 the RTF gave to the party at the last election…

    But Shearer isn’t, hard to fault a guy for what an MP did before he was even in Parliament isn’t it..?

  4. “If an upgrade of SH1 all the way to Whangarei was being proposed then I might be a bit more convinced”

    We’ve never been a country for grand projects of that scale. We sort of inch along in stages. When I was a boy, the motorway terminated well south of Albany. Tristram Ave, perhaps? Now it must run another 30km to the north.

    Some upgrades to existing roads make sense. But I think we have a tendency to waste a lot of money while trying to save it. We tend to widen narrow roads to dual carriageways while leaving at-grade junctions, people’s driveways, roadside shops, and traffic lights in place. They look cheap and nasty and are death traps that don’t offer anywhere near the benefits of building a road on a new alignment. They’re a short term alternative to doing the job properly.

  5. Obi, I would agree except for the fact that the new road costs over $1.5 billion. That is a HUGE amount of money, the barely presents a business case. Personally I’d like to see a business case for a Warkworth bypass + safety upgrades. I am betting the cost-benefit analysis would be vastly higher.

    I think any moves Labour make to get away from their past obsession with motorways is a good thing. They’re very much a party that’s sitting on the fence at the moment when it comes to transport policies. They’re getting there though…

  6. Obi, I’d point out that Northland is already linked with the rest of the country but Josh has already done so.

    As someone with family living in Mangawhai I use that road a fair bit myself. I know one person involved in a serious crash on that corner heading up to Windy Ridge (between Puhoi and Warkworth). Thankfully he survived.

    I agree 100% with David Shearer – this road needs safety improvements, but not a full motorway.

    Even on holiday trips simple timing intelligence or route alterations avoid the congestion that only happens for a few hours on those few days, and only in one direction at a time.

    Congestion is a fact of life on a road. Can you name a primary road of any kind (two-lane, four-lane, expressway, motorway) between two important cities and regions that never gets congested?

    If you want a congestion-free route, advocate for a high-speed railway between Auckland and Northland instead. Or airport improvements.

  7. Obi – I think you completely miss the point of the article. He is not saying we shouldn’t upgrade the road but that the cost of building a new motorway is more than the economic benefits it will bring, this make it not worth the money. What he is saying is that there are other projects that will provide a better benefit for country and that we should focus on them first, he does suggest some infrastructure projects but also alternatives like putting the money into R&D.

  8. I think a large part of the issue here is that of how funding of large infrastructure projects is derived. I have no problem in paying for a CBD rail tunnel or ‘Holiday Highway’ in some way that reflects how much I use the infrastructure. This seems to be fair to me. After all if you go to a restaurant and order a salad and a glass of water you will not be charged as much as someone who orders a steak with a bottle champagne. I often feel that the reason we expect roads to be free forever is because no one figured out an efficient way of charging for use before the idea of free roads got entrenched in our minds. I am not a big fan of privatisation I just think that when a user pays system is well targeted at a project it can be a better funding option than being added to the tax burden of the whole state (I imagine people outside Auckland/Northland probably have their own ideas about how 1.5 to 2 billion dollars could be spent). I also think that to some degree both projects could be funded partially or completely with a user pays system.
    Please note that I am assuming that both projects are fighting for the same pool of taxpayer money as I have not seen any contrary information.

  9. They aren’t and that is part of the problem… The HH would be funded by the fund paid into via RUC and fuel taxes (via LTNZ I believe) while the CBD tunnel would need to be funded via a government grant to Ontrack/Kiwirail…

  10. Yes if only rail had equal access to transport funds then life would be much better. People will argue that the transport funds come from the roads, so therefore should be spent on the roads, but having an effective rail system actually benefits those very same road users – through taking people off the roads and reducing congestion.

    The transport fund is used to subsidise rail operating costs, but for some reason not rail capital costs. I can’t quite get my head around the logic behind that.

  11. Hey, motorists already pay through the nose for using the roads..taxes on petrol are
    historically pretty high…the enemy here are the truckers, as they are in direct competition with the rail…and don’t pay taxes equivalent to the damage done. Secondly
    another hidden “subsidy” for the truckers is that improvements in the road “hide” what an annoyance a big truck at 80 can be on a two laned road. When you see major improvements eg passing lanes.. the biggest benefit are to the truckers who no longer have to feel like such a pain.
    But back on topic…the original jist of the article is pretty clear…bad cost to benefit ratio….The could be far better uses of that money.

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