Next week the central and local government starts a new financial year. A lot of the focus during the council’s recent budget was on operational cost savings. However, that – combined with the need to address the storm damage from earlier this year – has had big implications for AT’s capital programme.
Interestingly, this is the first time that AT have put their budget and capital programme up for decision in the open session of their board meeting.
AT say they will have a capital programme this year of $1,058 million, which is a more than 10% reduction from the $1186 million originally planned for in the Regional Land Transport Programme (RLTP). In addition to this, AT are budgeting $125 million for flood/storm recovery works. This means that combined, AT’s capital programme is around $250 million smaller than expected – which has some big implications for what they’ll do over the coming year.
While this budget includes $125 million for helping recover from the floods and storms of earlier this year, that’s just the start. AT estimate the total costs of recovery at about $380 million. Some of that has already been spent, but it means about $175 million is needed in the 2024-27 period.
This of course means that these two climate-change enhanced events will delay action on projects that will help mitigate the effects of climate change for years to come.
To fit their capital programme in this reduced budget, AT say they’ve used this prioritisation criteria which focuses funding for projects already committed and contracted.
What is concerning is that the Mayor’s Letter of Expectation (LoE) seems to get priority over other agreed programmes, such as safety and climate action. Surely high-level programmes like these which are the result of council and government policy, and which have been through extensive consultation and political endorsement, should get priority over the Mayor’s whims.
So, how does this all play out? Here’s a high-level summary. As you can see, all categories, other than Asset Management and Resilience Recovery are taking a hit, with the biggest impact – both in terms of actual amount ($83m) and percentage (63%) – to the Cycling and Corridor Improvements category.
This is broken down below, and a couple of other things stand out:
- The biggest individual cuts come from corridor level programmes and projects, such as Connected Communities: this was meant to deliver bus, active mode and streetscape improvements to a number of corridors including New North Rd, but the programme was recently cancelled.
- The cut to Midtown Bus Improvements means the planned improvements to Wellesley St likely won’t happen (these are meant to complement the current works on Victoria St)
- The cut to the funding for Rosedale Bus Station means it is now not expected to open till 2027.
- Cutting the safety programme is particularly concerning.
It is going to be even harder for harder for AT to meet their climate change and mode-shift goals when they’re reducing the funding for many of the projects essential to helping achieve those goals. Though that’s not to say the money is all going towards projects that are about “more roads”, either.
There is also “considerable uncertainty about funding beyond 30 June 2024“. This is because most of our planning and funding processes are refreshed every three years, and so changes in council or government policy could have big implications for what gets funded.
This is even more of an issue because much of what remains in AT’s capital budget are a handful of large, multi-year programmes, like the Eastern Busway, which were committed to before these more recent cuts and the flood/storm damage. Further cuts in budget from the council or government could put those at risk too, and lump AT with the costs of cancelling projects already underway.
This is what that same table currently looks like for the 2024-27 years – but as noted above, this will be subject to change. The big programmes – the Eastern Busway, and CRL Day One projects to deliver more trains and level crossing removals – continue to dominate a large portion of the budget.
AT have included this table showing how they’ve prioritised projects within the Urban Cycleways Programme. It’s worth remembering that these projects were all announced in 2015 by the previous government, and were meant to have been completed in 2018.
Finally, the capital programme is of course only one side of AT’s work. While there has been a bit of discussion of the operational budget, they have included this document which is much clearer about opex that we’ve seen in council documents.
The board has allocated 40 minutes to discuss the budget and the capital programme – it’s hard to imagine them not just rubber-stamping it.