We recently highlighted a blog post by Rob Salmond looking at the government’s regional roads package. Rob based his post on the results of an OIA request to the minister for briefing papers he had received on the projects and noted:

Five of the roading projects receive the worst kind of assessment from the officials at NZTA, an estimated benefit cost ratio of “0 to 2.” (see page 32) This means the officials cannot discount the possibility of these roads having no benefits at all, despite costing the taxpayer millions. More on this later. All the projects have a benefit cost ratio quoted as a range, partly to fudge against the public knowing the exact numbers.

Why would they want to do that? More on that later, too.

Officials estimate that up to $130 million of the highways money mooted in these projects and investigations would be wasted on roads with likely no net benefit. If some of those roads are not ultimately funded, that will represent less money wasted on roads, but more money wasted on unnecessary investigations to tell us what we already know – these projects are dogs.

NZTA considers a benefit cost ratio of 1 as an absolute minimum, as anything below that involves the country actually losing money by doing the project. Usually, of course, benefit cost ratios have to be much higher than that to attract funding, because there are so many possible good things a government can do with its limited money.

As I mentioned in my post, I had also sent of an OIA request when the package was announced however instead I had gone to the NZTA asking for the reports which contained the economic evaluation. I limited my request to reports from the last 5 years – as any evaluation done prior to that should really be discounted considering the amount of change our transport sector has seen in over that period – and as such I didn’t get back results for all projects. The projects that the NZTA said they had no reports for were:

  • Normanby Overbridge Realignment, in Taranaki
  • Motu Bridge replacement, in Gisborne
  • Taramakau Road/Rail Bridge, on the West Coast

However for the other projects the results were surprising and in some case significantly higher than range in the briefing papers given to the Minister which is below (click to enlarge)

Rob Salmond Regional Road OIA BCRs

Below are the BCRs in the reports I received (which are all available here).

Kawarau Falls Bridge, in Otago

The briefing paper was the same one that Rob received which showed the BCR at 1.1

Mingha Bluff to Rough Creek realignment, in Canterbury

A BCR 1.4 is obviously within the 0-2 range in the document above

Mingha Bluff to Rough Creek BCR

Akerama Curves Realignment and Passing Lane, in Northland

The BCR from in 2012 suggests it is over 4 which is greater than what’s in the ministerial briefing paper.

Akerama Curves BCR

State Highway 35 Slow Vehicle Bays, in Gisborne

The BCR from 2009 suggests a BCR of over 4 – although the costs now seem to be quite a bit higher.

SH35 Passing Lane

Whirokino Trestle Bridge replacement, in Manawatu/Wanganui

I was referred to this page on the NZTA website and the publications page contains this document showing the BCR at well less than 1.

Whirokino Trestle BCR

Opawa and Wairau Bridge replacements, in Marlborough

Opawa Bridge is at 1.4

Opawa Bridge BCR

Wairau Bridge is at 2.02

Wairau Bridge BCR

Loop road north to Smeatons Hill safety improvements, in Northland

For the short term options the BCR is quite good at 3.6 however the medium term options are poor. I’m not sure what the focus is with the governments package.

Loop Rd BCR

Mt Messenger and Awakino Gorge Corridor, in Taranaki

There are no reports on this but a link was provided to this document suggesting a BCR of 0.2-3.8

All up a real mixed bag showing some projects do seem to be decent value – and probably better than most of the RoNS – while others are quite bad, especially the Whirokino Trestle Bridge.

On a related note, in a separate OIA I received back yesterday I had asked for the business case for the Puhoi to Warkworth motorway project (along with a whole lot of other things). The business case was presented to the NZTA board in July 2013 however the NZTA have decided to withhold the business case

to protect information that would be likely unreasonably to prejudice the commercial position of the NZ Transport Agency.

I’m guessing that means

  • the result probably isn’t good
  • they want to hide any discussion about tolls
  • they don’t want details released about the PPP they plan to use to fund it

I may follow up with the ombudsman about this yet

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  1. Good post which really nails the issue with the government’s announcement: the cherry picking of individual projects. If they had allocated extra money to NZTA for regional projects then we would have seen the good ones happen and the bad ones not. This way there are some wealth destroying dogs still happening because some minister chose them for pork barrel reasons.

  2. It wasn’t that long ago that the Motu River bridge was fully replaced (the old wooden bridge was replaced by a new concrete one). The only reason they are replacing the new concrete bridge with another new concrete bridge is because the first new one was designed for 44 tonne trucks, not 62 tonne trucks.

  3. The big problem I have with any of these projects is that the funding is coming from the asset sale slush fund. Road users charges and fuel excise are supposed to cover these kind of projects. Where did the tax go?

  4. I don’t understand how the two Marlborough bridges can possibly have a BCR of more than 1. All the two projects are doing are replacing existing two-lane bridges with wider ones on the same alignments.

    The Opawa River bridge already has a pedestrian/cycle footpath, so how can a new bridge provide $224,000 in walking/cycling benefits?

    Are there more detailed documents available as to how the NZTA made those calculations?

    1. I was told by a local just yesterday that when two large trucks meet on the Wairau Bridge, one of them (and any/all vehicles behind it) has to reverse back off it.

  5. @Bryce P, the Land Transport Fund (which should have been used to fund these) was gobbled up by the Roads of Insignificance programme.

  6. Encourage you to follow up with the ombudsman. Commercial sensitivity around the use of taxpayers money seems absurd – the public interest must outweigh these concerns if they are valid at all. Often, in my experience, what happens is that ministers insist on vetting OIA responses and can arbitrarily refuse to provide info against officials’ advice on what legally should occur. If you shake the cage it could be interesting to see what comes out about how the response was handled. Govt agencies need to be aware that they can be subject to the scrutiny of the ombudsman, otherwise political pressure can push them to increasingly act outside of the spirit of the OIA.

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