A couple of further documents relating to the Roads of National Stupidity Significance, prepared by NZTA, provide a bit more information on where each of the projects are at.
Ministerial Briefing – February 27th
Investment Outcomes – March 16th
There’s also a good Radio New Zealand piece on the documents, in which both Phil Twyford and Julie-Anne Genter (Labour and Greens transport spokespeople) highlight their fundamental concerns with the RoNS package, whether they’ll actually be able to be funded, whether they’re value for money and so on.
A few things stood out to me in the documents. Firstly, starting with the Ministerial Briefing it was interesting to see the “economic justification” for the RoNS package being put forward:
A few things stand out here that are worth commenting on:
- Having a cost-benefit ratio for the whole entire RoNS package is pretty pointless. We know that some of the projects stack up pretty well (Victoria Park Tunnel, Western Ring Route) whereas others are a complete waste of money (Puhoi-Wellsford and much of the Wellington Corridor). Having a BCR for the whole package completely hides the fact that many parts of it quite simply shouldn’t be built.
- It is interesting that NZTA are arguing for a lower discount rate for the RoNS projects, when the single project that would benefit most from the lower discount rate approach would be the City Rail Link, due to rail projects have extremely long-lasting benefits. Central government agencies might find themselves in the hilarious position soon of making the CRL project stack up really well if they align its discount rate with the RoNS projects – oh what a wonderful irony that would be!
- It is also interesting to learn that NZTA will be undertaking a complete review of the economic analysis of the RoNS programme over the next few months. I might have to start warming up my OIA requests for all that work pretty soon!
The hilariously depressing next part of note are the future RoNS the government added in through last year’s Government Policy Statement. The Cambridge to Taupo motorway idea must be the craziest transport idea ever seriously thought up – much of that section of State Highway 1 has traffic volumes much lower than pretty much every arterial road around Auckland. Furthermore, the addition of further RoNS undermines the government’s latest argument – that once the RoNS are complete they’ll get back to doing things like maintaining local roads properly. 
Finally, the report notes (and this was picked up on by the Radio NZ piece) that some of the RoNS projects will be pushed out to completion a few years after 2020. Looking at that list, it does make one wonder whether NZTA are holding out for a change of government so they can cancel the most stupid of the projects:
The second document provides relatively similar information. The one thing of interest that stood out to me related to the impact of the RoNS package on general state highway funding and the proportion of the state highways funding class which gets eaten up by the RoNS:
In “NZTA speak”, what this actually means is that a whole pile of more worthy, smaller projects, aren’t being funded because the RoNS are eating up the transport budget. And here is the construction timeframes for the various RoNS projects.
With a change of government in 2014 looking increasingly likely, it’ll be interesting to see how much of this pointless RoNS package actually gets built. It could be that if any of the projects are delayed by a few years, they could end up not happening at all – thankfully!
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Once again, if anyone needs some counter-propaganda to spread, it’s at the bottom of this blog post:
Upping the ante: Holiday highways to nowhere
Beautiful!
Almalgamation hides costs for companies but there is no logical or relevant reason for having one BCR for all the roads except for PR purposes instructed by the Government.
I’m quite new to this country (and I can’t vote yet) so I tend to see the things a bit from far away, or far out. To me it seems that the government is trying to build an expanding infrastructure in New Zealand using mostly Aucklanders money. Maybe they’re are trying to spread the population around without using “socialist” methods? It wouldn’t be capitalist enough to create something productive in Palmerston North to make people want to move there.
I can’t really see any reason why a government so close to money wants to spend so much in tarmac. Unless they’re friends of the guys that make tarmac.
Hi Gian,
I think National’s irrational attachment to highways arises from a complex mix of factors, some of which you touch on.
Yes there’s an element of National favouring transport projects in suburban and rural areas (over urban areas), as well as their tendency to spend money on projects that keep their mates busy. However, I don’t think this bias is deliberate – more just natural human tendency (weakness?) to value the opinion of their (tarmac building) buddies more than, say, most of NZ’s economists.
Other factors that I think come into play are:
1. National took office in 2008 as the GFC unfolded. Much of the initial discussion on the RONs was caged in terms of how the investment would create “jobs.” Now undoubtedly the RONs will generate jobs, although questions of “at what cost?” and “by what time?” remain unanswered. And of course, the fact that public transport tends to generate many more jobs was ignored.
2. National is dominated by rich old men who grew up at a time when cars were cool, mainly because they were the best/only way to score girls. Their juvenile fascination with cars continues to the present day and colours their objectivity. This comes through in the way they talk about NZers “love for cars” and “car culture.” Their rhetoric somehow makes it sound like you are not a real man or a real NZer if you don’t like to fang about town in a gas-guzzling SUV. Steven Joyce has never, for example, been on a bus.
3. National are engaged in political one upmanship. The last time National were in government they siphoned money out of the transport kitty and underinvested in the network. Then the last Labour Government came in and hypothecated fuel excise taxes and embarked on the largest motorway building spree NZ had ever seen – until now. National were stung by criticism of their historical underinvestment and, not wanting to be outdone by Labour again, embraced the RONs as a way of making Labour look bad.
Hope that helps? It is frustrating, but don’t worry – they won’t be in government for much longer.
Thanks for the reply, Stu.
Hopefully next election I’ll be able to make my part…
To be accurate, Steven Joyce claims to have used the Northern Express once.
NZTA seem to be doing quite well in the circumstances, given the rabidly pro-roads position that this government has taken. NZTA fight back with some fiscally imposed austerity of their own.
And that list of prioritised RONs looks about right doesn’t it? I’d suspect that the first four out of the seven in the list are actually reasonable projects (albeit not priorities), whereas the last three are the dregs.
I have some question marks over how the wider economic benefits (WEBs) are calculated; I thought that the last business case for Puhoi-Wellsford simply estimated WEBs as a percentage of the conventional benefits, which is wholly unacceptable. But I may be wrong …
I always thought P2W would have negative agglomeration benefits as it encourages dispersal.
Not necessarily – roads operate in both directions.
One of the interesting things about transport improvements on the urban periphery is that they tend to have divergent impacts depending on whether you are talking about residential or commercial activities. In terms of the latter, the larger urban area (i.e. Auckland) is more competitive, so P2W will see economic activity flee Wellsford and agglomerate in Auckland. On the other hand, residential development may well go the other way – i.e. disperse north to Wellsford.
Whether this change in the distribution of commercial/residential development is desirable I don’t know. But I suspect there’s already “too much” residential stuff up North and not enough jobs, so draining more employment into Auckland does not really make much sense to me. We’re just setting ourselves up to increase the distances that people need to travel to access jobs.
[That is what they do]. We had an economist go over the SAHA report and that’s what he reported them doing, even as they were warning against it http://savekapiti.co.nz/facts/saha-report/ (I seriously need to rewrite that page!)
EDIT: My bad read. They *added* the WEBs to the conventional benefits, whereas they should include the conventionals as part of the WEBs. At least I *think* that’s what they did. I think I’ll go lie down now…
Three guesses as to which electorates will benefit most from the biggest RoNS projects.
Marginal blue ones?
Labour has in the past supported Transmission Gully. So it would be interesting to see if their view on this project has changed given recent trends in transport. Chris fafoi also campaigned on this RONS project in the Mana electorate (that is entirely within the TG area).
Interesting to see the Wellington RONS labelled as Wellington to Foxton. Heard rumours about preliminary investigations being done as far as Foxton, presumably including Levin and Foxton bypasses.
Great to see some projects being pushed back a bit though, Puhoi Warkworth not starting until 2017, T Gully 2015, Wellington Tunnels 2018 and 2021. Was worried a whole heap of projects would have construction contracts signed in 2015, so new govt would be stuck wit them.
I don’t think you could really call Rodney a marginal blue electorate. But perhaps they are worried about a Conservative challenge from Colin Craig?
Anyways, the big things that stands out to me about this are that:
a) maybe we will never build Puhoi to Wellsford which is awesome. Possibly we will never finish the Wellington Northern Corridor either which would also be good (although, kind of worried that it’s the type of project where once you start it, you have to finish it because otherwise you’ll end up with major bottlenecks in certain places)
b) That graph at the bottom shows how NZTA thinks that revenue dipped substantially in 2011/12 but will magically just keep rising from then on at a fairly steep rate. I realize this dip in 2011/12 is partially connected to the delayed fuel tax but still, any evidence to think that will actually happen? Given that the working age population seems to be moving to Australia at a rate of knots, we may not be able to rely on population growth to drive fuel tax increases as we have done in the past.
That last graph (‘Funding available’) is just disastrous. Over 1.5b annually for most of the next decade, rising continually to 2.4b. Utterly insane, even under the most optimistic projections. A (high cost-estimate) city rail link, every year!
The way the RoNS have been packaged up to average out the BCR and make it more palatable reminds me of the way numerous debts were packaged up and onsold, back in the aughts….
Follow up RNZ piece from this morning with Labour and Greens casting doubt on the BCRs given NZTA is only now firming up costs for four of the RoNS, as referred to in the second document.
http://www.radionz.co.nz/national/programmes/morningreport/audio/2521622/doubt-cast-about-credibility-of-rons-cost-estimates
From maps I have seen regarding the Wellington RONS project, it goes as far as the Manawatu River. This is to enable enough room for the proposed bypass around Levin.
Why does Napier-Hastings need a RoNS? They just got their nice new expressway a few years ago, and it’s not exactly congested.
I dont’ know that ‘need’ factors much into the creation and evolution of the RoNS list.