New Zealand spends a lot of money on transport. More than half our rates are spent on building and fixing roads and footpaths as well as funding buses, trains and ferries. Further to this, close to a third of what we pay at the petrol pump is tax, with the bulk of that money – around $3 billion a year – also being spent on transport, an ever increasing proportion going to State Highways.

With so much public money at stake, it’s no wonder there’s so much debate and discussion around whether this project or that project should be built, whether Auckland needs more roads or not, whether buses are better than trains, what role cycling can have, and so on.

In Auckland the transport debate has reached fever pitch in the last few years. Arguments over whether the City Rail Link should be built instead of the Puhoi-Wellsford motorway are never ending. Similar debates exist over issues such as whether the next harbour crossing should be in the form of a bridge or tunnel, whether an east-west link between Onehunga and East Tamaki is a priority and whether we need rail to the airport.

There’s one similarity between all of these discussion though – the projects’ cost rarely start at anything less than a billion dollars. With such big numbers, it’s important that we are a smart with prioritising projects, that we look to squeeze everything we can out of existing transport networks and that we build what is needed, when it’s needed.

We must also be mindful of recent trends and their future implications: traffic volumes on state highways across New Zealand haven’t grown from 2005 levels, but public transport patronage in Auckland has grown by a third in the past four years. If more people aren’t driving, then maybe we don’t need to build more roads and that money would best be spent elsewhere.

In December 2010 the former head of transport funding agency Transfund, Martin Gummer, wrote in the Herald that a critical distinction between the Puhoi-Wellsford project and the City Rail Link is that the Puhoi-Wellsford project can be done in stages, whereas the City Rail Link’s benefits only arise when the full tunnel is completed – opening up a second rail entrance to the city centre and eliminating the Britomart bottleneck.

Because Puhoi-Wellsford can be done in stages, we are able to avoid having to spend around $1.7 billion on it in the next decade. Just bypass Warkworth, add some passing lanes in and do some safety improvement in the Dome Valley – probably at a tenth the price – and we solve most of the problem, at least for a few decades. This “Operation Lifesaver” alternative was developed by the Campaign for Better Transport back in 2010 and gained pretty widespread support.

This staging process can happen to a lot of transport projects. Delaying two of the City Rail Link’s stations until they’re really needed could shave up to $600 million off the project’s initial price tag and might be the difference between it getting government support or not.

Similarly for the “East West Link” between Onehunga and East Tamaki, a project strongly promoted by Auckland Business Forum’s Michael Barnett in last week’s Herald. If freight congestion through Penrose and Onehunga is a problem, then why not paint in some truck only lanes, fix up a few intersections and maybe add an onramp here and there before we go and spend billions on yet another motorway?

Recent government transport policy does not make great reading, when we consider the principles above. Puhoi-Wellsford is just one example of the $11-14 billion that is planned to be spent on just seven new roads over the next decade. None of these projects appear to have gone through a process where someone asks “can we achieve most of this project’s benefits at a fraction of its cost?”

There is a lack of analysis for these projects that goes beyond the unexamined assertion that highway building always leads to increased economic performance. This is dubious at best, see here for an earlier discussion of the relationship between GDOP and transport spending.

Increased funding for State highway construction will bring benefits for national economic growth and productivity, particularly given that State highways carry most inter-regional freight and link major ports, airports and urban areas. [2012 GPS]

This is clearly a vast generalisation that does not stand up to much scrutiny; where a new transport project unlocks a blockage that currently prevents or restricts the growth of an industry by connecting it to a market this is likely to be true, but nowhere do the RoNS projects solve such problems. All of them duplicate roads that are not overburdened with traffic, and many follow the route of rail lines that also have plenty of space capacity. In fact it is hard to see this programme as anything other than a vast subsidy to the trucking industry; an expensive way to undermine the development of any alternative. Were these projects subject to the sort of scrutiny and scepticism that the City Rail Link has been and their economic worth was demonstrated the whole programme would be so much more credible.

Further to that, all these “Roads of National Significance” depend upon steadily increasing traffic volumes to justify their existence. This ignores the slowdown in traffic growth that is now occurring around the developed world as the population ages and younger generations are more interested in iPads and Smartphones than buying cars or even getting their licenses.

We need to be far more rational with our transport spending. Staging projects, doing small to avoid big and recognising that traffic volumes simply aren’t growing much anymore may free up billions of dollars as well as saving our towns and cities from more motorways, wider roads and more pollution. And not just selecting projects to invest in by mode but by effectiveness.

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  1. I agree that out of all public expenditure, transport spending in some areas potentially has the least robust benefit from what’s spent. A lot of this boils down to that issue of time savings benefits. Is there really a huge economic gain from getting our exports to a port 3 minutes faster, just so the goods can then sit there for two days before being loaded onto a boat?

    Sure it makes the trucking companies more profitable. But that hardly seems worth the billions of spending, unless you’re beholden to the trucking industry’s political donations.

  2. Unfortunately, the government don’t seem to see it this way with Puhoi to Wellsford. As recently as last week NZTA were still determined to press ahead with the project even though they don’t have funding for it.

  3. Just abandoning it is not really politically feasible for NZTA. I think they’re being clever in delaying the project as much as possible (same with Wellington Northern Corridor Project) and hoping for a change of government in 2014 to kill these two off.

  4. Whether rail and road would be competitive “in a vacuum” seems to be immaterial in exceptional ol’ New Zealand. Is it not as the government tells it? Then they shall direct spending such until it becomes so!

    This government is intent on starving rail, honing it to a skeleton network of only the most profitable routes (apparently neglecting network effects) whilst stuffing the coffers of the highway complex. They will not apply any similar calculus to their roading spend, apparently, because new roading is directly analogous to economic benefit.

    The job cuts at Kiwirail are another blow. Does the government want to sell it again in the hope it’d be politically untenable for Labour to buy it back again?

    1. Unfortunately, it’s been a long time since the provincial lines fed much freight to the trunk routes, as the business has moved away from carting doemstic freight. It’s largely a compartmentalized network these days, so the network effects you mention are not that great anymore.

      I disagree the network will be trimmed down though. The damage is already done, with the SOL and Gisborne no longer in operation. I don’t think any further line closures will happen, with the possible exception of Dargaville and Otiria.

  5. Here’s an example:

    “The job cuts may be the nail in the coffin for Northland rail line.

    Business consultant Teresa Moore has completed a social impact report on the possible closure of the Auckland-to-Northland rail link and says job losses will be the excuse to push for the Puhoi-Wellsford highway upgrade.

    “I think it will have a major effect, if they are looking at cutting jobs then Northland rail line is one of the areas that they were looking at the viability of.”

    Ms Moore says if the rail link closes it will have a major impact on transport for local industries such as forestry. ”

    So we see the closure of the North Auckland Line seen as likely to give more impetus to Puhoi-Wellsford.

    1. The cynicism of this government in its determination to enforce a monopoly for road freight by strangling rail is so barefaced that it is hard to believe it is passing by largely uncommented on. Among their motivativations is an attempt to ‘prove’ that Labour was wrong to buy it back by ensuring it fails; literally billions and billions are being showered on road transport to support this spiteful little aim. Witness Key pretending to be concerned about KR’s business as he drives yet another stab to the guts. The fact that this is a great loss for the country as a whole seems to be of no concern to these ideologs.

  6. I’d like to pick up on a comment in the original post. “can we achieve most of this project’s benefits at a fraction of its cost?”
    I agree that there is not enough of this being done; we need some more cost accountants (am i really saying that???)
    Our motorways are so expensive because the engineers are going for the ultimate solution. As a case in point; drive up the north western motorway to the very end. As you go under the bridge over the Royal Road ridge line note how small the (1970s???) cutting is; just enough for trucks to clear the underside of the Royal rd overpass. Then go under the (2011) Westgate overpass. The space shuttle could fly under it. The engineering approach here has been to hollow out the old ridge line to the lowest possible point to give the underpass vehicles a flat run. Sorry no pics so you’ll just have to visualise it. Now look at what they are doing at Lincoln road a seven lane overbridge to provide access to a rubbish transfer station and a small number low grade industrial sites. If that’s not engineering overkill I don’t know what is. Take a drive round any of the ‘newer’ motorways like the works around Hamilton, the Vic Park tunnels (just don’t try to use the wellington on ramp white elephant) and I think you will agree with me that the engineering design teams have taken over. I think they been reading Hitlers original instructions for the design of the Autobahns with their minimal grade changes and huge curves and been trying to apply here. As a nation we are just not wealthy enough for these high standards so what we are ending up with is a small number of very expensive gold plated projects which of coure have no cost benefit because the economics of NZ wont provide it.
    We need to redirect our engineers; start from a positive cost benefit position and work backwards. You can proabbly justify a couple of hundred million on the phuio-wellsford stretch so go and work out the most cost effective way to spend it rather than doing your sums the other way around. I’d be happier paying for it and thelocals would be happier to get reasonably improvements sooner.

    1. This reminds me of the Newlands Interchange saga in Wellington. This was built in the 90’s at an eventual cost of $16m (up from $8m when given the go-ahead) and the prime justification was to remove the former traffic-light intersection on SH1 at the top of the Ngauranga Gorge. By doing this, N minutes would each be saved by X,000 vehicles at Y cents per minute, hence the impressive cost-benefit. However this same benefit could have been achieved simply by closing the intersection to traffic requiring to cross the highway. Sure, it would have inconvenienced a far smaller number of Newlands residents, but the principal benefit to the State Highway would still have been there. In fact the effect on Newlands residents would only have been in the northbound direction, since going south from Newlands does not require to cross the highway. I wrote to the then Transit New Zealand with a suggested alternative scheme, making use of an existing underbridge only 500m away and a small amount of local-road alteration, which would ensure northbound access at this point was maintained, albeit with 1Km of extra distance to drive. Needless to say it was ignored. But my point is this. The benefit to the State Highway could have been achieved for a tiny fraction of the cost of the scheme. The only remaining justification was in preserving Rolls-Royce access for Johnsonville-East/Newlands/Paparangi/Grenada residents (12,200 of them in the 2001 census), so the $16m worked out at about $1300 each person, man woman and child. Would an average family of 4 have been prepared to pay $5,200 of their hard-earned money for the privilege of a fancy grade-separated right turn? If not, then there is no way that this scheme was justified over the alternative.
      I could not help but contrast this gold-plated approach to a road scheme with the familiar paring-back-to-the-minimum which tends to accompany public transport schemes – or at least did back then.

  7. It is really only Puhoi to Warkworth at the moment. NZTA have not come out with even an indicative route for Warkworth to Wellsford and may not do so for some time. I have heard that NZTA are looking at splitting Puhoi-Warkworth into at least 3 sections with the first section to be built being Warkworth to somewhere around Perry Rd. This would effectively act as a Warkworth bypass (non-tolled) until, at some later stage, they can link up with Puhoi. Given that this first stage has few cuts, fills and viaducts it would possibly be one of the cheaper to build – but one of the more expensive when it comes to the cost of property purchase – something which I believe is giving NZTA a bit of headache because NZTA don’t have the budget for property purchases – certainly not the numbers who wish to paid out sooner rather than later.
    If we are talking about being rational when it comes to spending we could ask why, if NZTA are planning the first stage of P2W as above, Auckland Transport is still intent on spending money to build the Warkworth Western Collector – which will also act as a bypass of Warkworth (albeit closer to the existing SH1) and will also exit onto SH1 not far south of the intended motorway interchange! Why don’t these two get together and build just one road and share the costs? By doing this they may release some funds that could be used to pay off the poor property owners who are left wondering when they will be allowed to get on with their lives.
    One of the biggest impetus for P2W (Warkworth not Wellsford) has been the recent determination by Auckland Council (no doubt agitated for by Penny Webster) that Warkworth is to be one of only two satellite “towns” catering for overflow development for the estimated increase in Auckland population. Now, regardless of what any of us think of ‘sprawl”, development in Warkworth is already happening and certainly over the past 4 years has gathered pace. What were once fields are now housing developments, retirement villages and retail centres. If even half of the projected increase in population for Warkworth occurs during the 10-20 year timeframe then Auckland will have a city the size of Whangarei on its northern boundary. Quite frankly, having driven SH1 between Warkworth and the city on a regular basis – I don’t think the existing SH1 would cope. It looks like a battle between the road planners and the town planners to see what happens first – the new city of Warkworth with a super-congested SH1 taking commuters into the CBD or a new road which may not have the immediate patronage but which would cater for the planned future growth of Warkworth.
    Regardless of who wins – I hope someone takes better care of the victims of this road than has hitherto been the case!

    1. I have heard that NZTA are looking at splitting Puhoi-Warkworth into at least 3 sections with the first section to be built being Warkworth to somewhere around Perry Rd. This would effectively act as a Warkworth bypass (non-tolled) until, at some later stage, they can link up with Puhoi.

      Wasn’t that a key part of “Operation Lifesaver”?

  8. “vast subsidy to the trucking industry”

    I think it is not just that. It is a subsidy to the road construction industry which the government is pumping money into because it genuinely does believe that this is one of the best ways available to it to keep the economy from (pun!) crashing.

    Why the government is happy to do this with transport and DOESN’T see it as a form of market interference, but doesn’t want to interfere in the market when it comes to housing is just one of the great mysteries of our times. Maybe something to do with the habit of years in hypothecating the fuel tax meaning that they don’t see it as money which they could spend elsewhere? I’ve never met Tony Friedland but must he be a really persuasive guy….

    The other possible explanation is that the government know it’s crazy to invest in the RONS but are doing it anyway for more cynical reasons. However, that seems unlikely.

    1. Yeah the NZ Council for Infrastructure Development seems to have huge sway over this government.

      I actually think that the government’s primary reason for supporting the RoNS relates to politics: they’re generally fairly popular. People like government “doing something” and nothing says that better than building new roads – especially flash, fancy fast roads.

  9. Why do the ‘Roads of National Significance’ remind me so much of the ‘Patriot Act’ and ‘No Child Left Behind’? 🙂

    1. According to this government roads are of national significance, whereas children are just a discretionary item.

  10. This is an fascinating and topical media release from NZTA regarding the Otaki Levin section of the Wellington Northern corridor RONS. Looks like they have puhsed back from Joyces sillyness for four lane highway to north of Levin and concentrating on short term improvements to nasty bridges and intersections. An eminently sensible thing to do, and what should be done on other RONS corridors, including this corridor further south, and Puhoi Wellsford.
    Sensibility slowly creeping in as the RONS projects are wrecking NZTA’s budgets for a decade to come.

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