On Saturday, Transport Minister Simon Bridges was interviewed on The Nation about transport in Auckland. It was an astonishing interview in which I feel Bridges managed to dig more holes than he filled in. You can watch the interview here and Scoop has a transcript here.
The interview can broken into three key topics
- Transport funding in Auckland
- The economics of the East-West Link
- The Third Main business case
Transport Funding in Auckland
Bridges pushed a similar line to what some of his colleagues have been saying, that it’s Auckland’s fault for not putting enough funding in.
So are you going to pay for the shortfall? Or are you expecting that the council will come up with it?
Well, I think on that front what you’ve got to say is we’re really investing strongly. I mean, it’s about two-thirds of Auckland’s transportation — we invest in about a third — are council. As we continue to do more and more of that, of course, we also want to see the same sort of strong response from the council. I think they’ve just had a budget.
The budget comment is interesting as he goes on later to say he doesn’t know what’s in it. Surely his officials should have briefed him on that by now.
They’ve just passed another budget. I don’t have the details, but I’m very interested to see that. My sense is, though, they are investing more in transport.
Simon, in case you read this, the council have increased their capital spend on transport by $161 million this year.
Perhaps the most interesting part of this section of the interview was a small slip where Bridges basically argues that the Government should be paying more. In talking about how to cover the transport funding shortfall of $4-7 billion over the next decade, he argues that the growing economy is giving the government the ability to fund more projects. The government benefits more from economic growth than councils do as a stronger economy results in more taxes flowing into their coffers and is a lot more responsive to change than council valuations of property. Of course, one of the main purposes of investing in transport is to improve the economy.
The interview moved on to the East-West link and in particular the economic assessment of it.
Let’s look at some of the specific projects you’re funding. The Auckland East-West Link Road, approximately 8 K’s of road that could cost around $2 billion. Now, the original cost-benefit ratio didn’t meet what your government would normally expect of a standard. And you’ve told the council, and Steven Joyce has told the council, to be more efficient with its spending. So why aren’t you taking your own advice?
Because I think some of that is not correct, and, actually—
Some of your advice is not correct?
No, no. The benefit cost of this project is 1.9 now. And I think what we can say is—
No, hang on, hang on. Is it 1.9 now? Because at the time in 2015 it was between 1.4 and 1.9. The cost of the project has gone up since then, so the benefits have gone down, and it’s estimated below 1.
No, I don’t accept that.
The interview continues on back and forth about whether the BCR is 1.9 or not for a little longer. Cam happened to discuss this exact issue earlier this week and highlighted that while the NZTA say they’ve done an economic assessment, four experts hired by different submitters all say they haven’t done it properly. This has included increasing the benefits when the cost has increased to keep the BCR at 1.9. Bridges did eventually agree to provide an up-to-date version but I suspect it won’t be anything new
Okay, so you’ll give us an up-to-date cost-benefit ratio? You’ll make that available to us?
Sure. The latest benefit-cost is 1.9. But I think we got back—
The final section was about the business case for the Third Main, and was related to the East-West Link discussion. Amazingly Bridges went on to both claim the business case done by his own agencies was wrong, and also that his office was right to try and prevent it from being made public.
No, no, this is the substance of it. Do you think that your office overreached, and as a minister you overreached in this?
No. And I think what has happened today is a really good example of why, in fact, with respect, we were right, even though it is out there now. And that’s simply this. This was a very early wrong business case in terms of its numbers, in terms of much of what it said. I happen, as I say, to actually be in favour of the project in general. I think it’s one that is part of a range of projects that may well come through. But in that area, I don’t think we did anything wrong.
Surely if the business case was materially wrong the government or one of it’s Ministry’s or Agencies could point out all the flaws in it. As for the data not being released, the case is now being investigated by the Ombudsman, which he has promised to do promptly.
During the panel section at the end of the show Lisa Owen started of by asking “did you hear him answer a single question that I asked him”. As Simon Wilson says, no he didn’t.