In which Councillor Cameron Brewer tries extremely hard to find a possible cost to ratepayers in a privately funded and user pays addition to our transport networks, while ignoring the real cost of $13m to ratepayers for a free-to-use walking and cycle project in his ward [just one example].
Here at transportblog we are very keen on value for money for all publicly funded projects, which means every single transport project in the land. Except one. The SkyPath. To campaign that this project is some kind of burden on ‘the poor suburban ratepayer’ is so silly as to be beyond parody.
Ratepayers’ watchdogs play a potentially valuable role. But they need to be coherent and consistent, oh and factually accurate. Especially when they are taking a ratepayers salary to do it. Here Brewer is complaining about a user pays route but ignoring the fully subsidised one that happens to run through his ward. So either he really has no idea what’s going on or is being more than a little deceitful in order to score some kind of political point.
Don’t get me wrong, I am entirely in favour of both the taxpayer and ratepayer funding of the Eastern Connections route, but also think the SkyPath should be so funded. And it is also clear which route costs ratepayers more. A certain $13 million versus a possible future liability.
Basically the people of Auckland are getting a huge bargain with the SkyPath. Either it costs nothing, or a much lower sum than it would if funded like every road, bus lane, train station, or cycleway in the city. And this doesn’t even begin to calculate the years of free work contributed by those who have made it happen. And all to make up for what is essentially an institutional failure in transport provision. SkyPath is listed as the region’s most import Active route yet our current institutions weren’t able to get started on it themselves, somehow.
Perhaps it really is time Councillor Brewer took his financial expertise into the private sector…?
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The problem with the so-called right is
(a) They don’t have a leader and
(b) They don’t often
get their facts right
One of the reasons that Len Brown became a second term mayor was because the so-called right put up a candidate who was barely known. And at the rate the “right” is going Len Brown is going to cruise in for a third term, simply because the councillors who identify themselves with that part of the political spectrum suffer from a bad case of foot n mouth everytime they open their mouths.
Has anyone heard any reliable scuttlebutt on whether Len Brown is going for a third term? And if not, where Phil Goff stands on transport/urbanism?
Len Brown would be crazy to run again. I’m sure there are enough people from his own side telling him to step aside.
I do hope he stands aside without fuss. It would also be good if he could take a few with him and let some fresh blood onto the council.
I came in on the tail end of the broadcast. Felt as though neither speaker won the debate.
Of course Brewer knows this and knew it at the time, he advocated for it, he knew of the announcement for cycle funding that was coming (for which council would have to stump up its share) as the Chair of OLB told the residents Association AGM right in front of Brewer and 200 other attendees in the Residents Association AGM meeting on the 24th of June – that I was at (and that the OLB chair, then Brewer and later on myself spoke at), that there would be an announcement on Tamaki cycleway funding the next day at about 4pm.
And lo and behold there was – the UCF funding was announced. So there is absolutely no way Brewer didn’t know about it.
How could he not know when the Chair of the very local board that he is the ward councillor for did know and said as much and the two work hand in glove?
Brewer is just belly aching – he sees that $13m as “payback” for his ward having (his words NOT mine) “the highest share of Auckland rates and the lowest per capita spend of rates money by the council of any ward”.
And of course the OLB paid for the existing boardwalk network down by Orakei basin from their own funding allocations (again their words not mine). So they see that $13m as right a justifiable payment of a quid pro quo.
And even if Skypath was to “fail” to reach it patronage targets, exactly when do these $2m guarantees kick in that council would need to pay to the PPP funder?
Year 5 at least I’d bet, if not later, so any “call” on council funds is over 2 [local and general] government election cycles away, and if and when the transport targeted rate is still active then, well $2m (and mere 2%) of it can be “earmarked” for paying that shortfall.
And if $2m is all it takes to get a walking/cycling path over the bridge then its dirt cheap – you couldn’t buy it cheaper even if council got a 90% subsidy from NZTA.
And since when do NZTA subsidise **anything** for over 50% except for State Highways/Motorways?
“the OLB paid for the existing boardwalk network down by Orakei basin from their own funding allocations”
Because they have no other pressing issues to fund, unlike most other Local Boards, prehaps?
Brewer absolutely dispatched by Reynolds. Gold!
I fail to see why there is any conflict. If the pro cycling lobby believe the projected numbers to be correct, and the company’s business case is built around these then simply take out the clause that makes the council/ratepayers liable for any shortfall. Simple. Then there is no conflict.
The investors won’t invest without that provision. It’s pretty simple. People didn’t just make it up for the sake of it.
The investors are primarily in it as a business proposition and they know that the business model based on very optimistic patronage will in reality not work. That is why they need the ratepayers underwrite. Another example of it being real easy to spend other people’s money.
The only reason there is a private solution for this project is because those advocating for it got fed up with waiting for the institutions to do something. This is no kind attempt to make a fortune. The team behind it have given years and years of their time to the project at considerable personal cost. If NZTA or the Council turned around and offered to take it over I’m sure they’d be delighted, after all there’s now some $300+million being spent on other cycling projects in Auckland, and none of them are as deserving as this one.
I find the focus on the one not being built with public money frankly just bizarre. Hundreds of millions are made by private companies every year on transport projects all from tax and ratepayers’ pockets and this tiny user pays one is somehow supposed to be a scandal or a trick? People are strange.
Patrick, people aren’t strange. This is being sold to Auckland ratepayers based on a business case using numbers that it seems (from comments in this blog too) people do not expect to stack up. You and I both know that IF the numbers have been pulled out of the sky that is called fraud. Normal people are understandably offended when faced with such dishonesty. Either the numbers are real or they are not. Ratepayers in Auckland are being hit with increasing costs from an incredibly irresposnsible and inefficient Council. They are currently very sensitive about any more costs being added to their rates. Nothing at all strange about that.
The hearing commissioners looked long and hard at the projections of patronage for the purposes of working out whether the roading network and proposed mitigation measures would actually work.
They were not so much concerned about low patronage to be sure, but they were concerned that the modelling done to determine those numbers was science based, as accurate and robust as possible to try and ensure that they wouldn’t be too low, as that would mean many of the mitigation measures may not work.
They questioned the patronage expert Skypath used to draw up their figures, at length, and in the end the commissioners couldn’t fault his analysis and said so in their decision.
They also pointed out as noted by the expert that there are limited examples in this part of the world to compare with to know for sure, as comparison examples like Sydney Harbour Bridge and Golden Gate Bridge have distinct differences which make a direct comparison difficult.
Thats 4 independent hearing commissioners who came to that decision, so what makes you think you have better information that they did?
And if you do, lets see it then.
So Ricardo, was NZTA’s funding of the duplicate Mangere Bridge fraud?
(See the chart in Matt L’s recent post looking at how inaccurate their numbers are.)
Agreed with Patrick.
Hugo what this is is an example of is a transport project that will be mainly if not completely funded by the private sector. If all transport projects were funded along the same lines as sky path the effect would be a massive reduction in the spending of public sector money. So if you are against every transport project in the country, good for you. But if I were you I’d focus the projects that will spend several orders of magnitude more public money, if not infinitely more, than the skypath.
Mathew Hugo and I and much of the public are concerned about the potential deception to get this over the line. Are the user numbers true or false? Simple.
The project ‘got over the line’ for resource consent without a look at the funding as that is irrelevant to that process. It got over that line on its own merits. The options for funding are either the normal system where you and I spend $33m upfront no matter how many use it, or accept other people paying for it to be re-copued with tolls.
The fact that the ratepayer is providing a $2m backstop to this still makes it a great bargain even if we have to pay it. $2m< $33m
Ricardo, no it isn’t that simple. You seem to believe in a world where the future is completely predictable. The reality is quite the opposite. I work in an industry where risk is real and has to be taken seriously. Often we run up against people like you who don’t get that, or don’t want to get that, and so we spend a lot of effort educating people about risk and it’s management.
Now, unlike you, professional institutional investors are well aware of the reality of risk and indeed it is at the core of what they do. They also tend to be a conservative bunch. (It’s about return of your money before its about return on your money). They tend to put a lot of weight on precedent. Now given the lack of pedestrian and cycling turnpikes in NZ (let alone the world), what is surprising is that they are prepared to even give the sky path the time of day, let alone fund it. I doubt you would find many (any?) other transport projects they would fund on the same basis.
“Are the user numbers true or false? Simple.”
Umm neither, they’re predictions of events in the future. They can’t be true or false before it’s open!
If they build it and run it for a couple years we can see if the prediction was accurate or not.
“I and much of the public are concerned about the potential deception to get this over the line. Are the user numbers true or false? Simple.”
Is your house going to burn down or not? True or false. Simple. If it is not true that you’re house is going to burn down why are you wasting money on insurance?
This figure of $2m maximum exposure for the council I have heard repeated several times now, is there a link that explains how this is calculated somewhere?
At the end of the day it’s NZ Super Fund money funding the Skypath with Morrison & Co pocketing the management fees isn’t it?
If I put a contract like that to my clients I would get told to go away. If my business case was full of facts and then I included a big ‘out’ in case my research was wrong do you think I would get paid?
How are those traffic growth projections you would have had in plenty of your projects working out them?
Oh really? And all those failed toll roads in AUs? Where is the trucking lobby fronting up with the cash for their own $1billion road in Onehunga?
It seems the cyclists have much more faith in their convictions than big trucking.
Really, all my contracts have opt outs for various circumstances I can’t control, they note any predictuns I do are just that, and they outline our professional indemnity.
What sort of business are you running exactly where you can be 100% certain everything always goes perfectly right?!
Ricardo almost every professional services contract I have seen that includes work around forecasts would have some sort of caveat. If you think forecasts can ever be classed as facts at the time they are made you are seriously deluded, and if that’s the way you represent your work to your clients that raises some red flags to me.
but the assumptions that were used to prepare the forecasts can certainly be challenged. Making incorrect or baseless assumptions as a professional will certainly get you into hot water
You mean like a limitation of liability clause in your contract, which is basically what this is?
If you don’t have one of those in your contracts then you need a new lawyer. They are absolutely normal business practice. I say this as someone who regularly negotiates them.
Not wanting to derail the thread but, Ricardo, you would hold the govt to the same account over the holiday highway?
Anyone else had heaps of trouble trying to listen to this? Mobile and regular site – nothing.
Worked for me, volume a bit soft though.
Cameron Brewer isn’t getting a “ratepayer’s salary”, he is a democratically elected representative of the people.
Like him or hate him (I think he’s an idiot), he’s entirely entitled as a politician to argue his point. That’s the difference between the public service/bureaucracy and elected officials.
There are a few people with technocratic leanings around here though…
I don’t have a view on Brewer personally, I haven’t met him. My point is that the defender of the ratepayer is a noble enough role, but please can he not over play it? To him all Council spending is evil, so surely that must extend to his own salary. Of course that’s a reductio ad absurdum argument but the point is valid. Of course Councillors should be paid.
What is he in favour of? It is hard to get away from the idea that it is just politically self serving to attack every project, but quietly fudge the ratepayer source of funding for projects in his own ward.
Len Brown, the Gamechanger, Chief Councillor and Lead Advocate of Skypath tells us what he really thinks about cycling on the new Carlton Gore cyclepath: http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11481467