National Infrastructure Plan

The government has today released its second National Infrastructure Plan, outlining its expenditure (and the principles behind it) on infrastructure such as transport, electricity, telcommunications, water and social infrastructure over the next four years. In terms of transport, as far as I can see there’s absolutely nothing new in the plan – but it provides an interesting and useful collation of information. It also provides a helpful insight into the vision and goal of future infrastructure investment, as well as an analysis of the strengths and weaknesses of existing infrastructure and the framework around its development.

Overall, putting aside the contradictions between what the plan says and what many of the government’s actual decisions about investment are, I think the plan is pretty good – at least in how it relates to transport. For example, the challenges of infrastructure investment are well highlighted (even if I don’t necessarily agree with all of them):

1. Infrastructure investment is well analysed at the project level but there is insufficient consideration of how assets function as a
   network or address potential changes in demand.
2. New Zealand’s infrastructure is vulnerable to outages, including through natural hazards, and we have insufficient knowledge of network resilience at a national level.
3. The volatile nature of infrastructure funding creates a lack of certainty and continuity for infrastructure providers. There is insufficient use of the tools available to generate revenue and manage demand.
4. The performance of infrastructure assets is not transparent. It is not always clear who is accountable for decisions.
5. The regulatory environment does not support long term infrastructure development and contributes to unnecessary costs and uncertainty.
6. Poor coordination between different infrastructure providers leads to suboptimal outcomes. Decisions over land use and
   infrastructure investment could be better integrated.

I would have also added to this list the difficulties of not knowing what the price of oil will be in 10-20 years time, or knowing exactly what the impacts of climate change will be – but one can’t have too high expectations of this particular government I suppose.

One useful thing that is highlighted very strongly is the overwhelmingly dominant role that Auckland plays in the country’s population growth over the next 30 years: I know it may be wishful thinking (especially when you consider the government’s attitude towards Auckland in recent times), but I am hopeful they may realise Auckland requires some fundamentally different thinking to the rest of the country when it comes to infrastructure provision. With 60% of the country’s population growth over the next 30 years Auckland probably does need a step-change in its infrastructure provision – it simply won’t be possible to fit 60% more cars on our roads, for example.

Digging into the real meat of the plan, there are a series of “Guiding Principles” for the provision of infrastructure. These are investment analysis, resiliency, funding mechanisms, accountability and performance, regulation and coordination. For each, the plan provides an analysis of the existing situation and a desired future direction. Here’s what’s said about investment analysis – the process of working out whether a particular piece of infrastructure is “worth it”:

I generally agree with what’s said above, that we need to do better when it comes to assessing which projects make best economic sense. It’s interesting that the plan suggests erring on the side of over-investment rather than under-investment, that seems to me as a fairly risky strategy of potentially spending a lot of money on something that’s not actually necessary. Maybe this is the “RoNS clause”?

Another of the guiding principles that I’m glad has been included is the need for better coordination, in particular better interaction between transport decisions and land-use planning. Though I do worry that when the government says this, what they really mean is “we need to open up land for urban sprawl to support our motorways”: I like the idea of regional infrastructure plans. I guess Auckland’s spatial plan will be something of the sorts – although once again it remains to be seen how different the government’s spatial plan vision is to Auckland’s.

If we look at transport infrastructure in a bit more detail, some of the contradictions between the vision and principles of the Plan, compared to what the government’s doing on the ground, start to become a bit more obvious. That is, despite a desire to ensure investment thinks long-term, provides value-for-money and is resilient to change, we see the vast bulk of new transport funding going into building new motorways – a very narrow part of the transport portfolio. A case study included in the plan, regarding transport demand, perhaps unintentionally provides a useful insight into the reason behind this bizarre contradiction: So despite the fact that traffic levels have been pretty constant for the past few years, there’s an expectation they will rise consistently over the next 20 years. And then we don’t see a ‘lower growth path’ option to show what might happen if petrol prices continue to rise, just a higher growth path. One does wonder what assumptions these projections are based upon, and how the Ministry of Transport can explain traffic trends in the past few years.

The document also says some fairly ‘stock standard’ stuff about Auckland:

The government is supporting Auckland in the development of a spatial plan because it recognises the potential of the
plan to address some of the coordination issues in Auckland’s transport sector and to provide greater coordination of land
use decisions with transport investment.

To facilitate economic growth, Auckland will need large scale investment in key projects. The government will work with the region to analyse and evaluate future large projects to ensure that appropriate investment decisions are made and that the infrastructure is built at the best time to achieve optimum uptake and value. Currently the Auckland CBD Rail loop and an additional harbour crossing are topical, however, as the spatial plan is developed other projects may become apparent. Projects such as these will also need to be considered in the context of other infrastructure priorities for the region and the period over which they will be required.

And it sees an unusually (for this government) important role for public transport:

Increased public transport reliability and patronage will be supported through investment in public transport in major urban areas, where analysis suggests it is most needed. Specific examples are bus ways, park and ride facilities, bus lanes, bus priority information systems and integrated ticketing systems.

To ensure that the strategies for the Auckland and Wellington metrorail networks are well-aligned with other regional priorities, the government has clarified governance arrangements and is pursuing a metrorail operating model, whereby regions have greater autonomy and responsibility over these operations. The model is predicated on regions taking responsibility for the standard of service they wish metrorail to deliver. The government will then signal the role that it expects metrorail to play in the overall network’s ability to move people efficiently and will support local government in its decision making.

It is interesting that a couple of years ago the government was keen on basically taking over urban rail operations, but now it has pulled back significantly.

Response to the Infrastructure Plan from opposition parties is unsurprisingly critical – although not necessarily saying that it’s a poor plan, but rather saying that it simply re-announces projects already announced (which is a fair point) or that it has good goals, but they’re contradicted by many of the government’s actions. Which is essentially what I think of the Plan. It’d be fine (with a few amendments), if only the government actually listened to it themselves when making big transport funding decisions.

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