An article in today’s NZ Herald notes an important discussion at an Auckland Council meeting yesterday over their 10 year funding plan – and in particular what was said about funding options for transport projects in Auckland – including the City Rail Link.
Auckland Mayor Len Brown and the Government are at loggerheads again over the $2.4 billion inner city rail loop – this time over how it will be funded.
Mr Brown yesterday proposed road tolls and congestion charges in the central area as ways to pay for what he called the city’s key project for the next 10 years.
A regional fuel tax and a “betterment” levy on properties which benefit from the rail loop are also being considered by a council team that has spent months investigating alternative cash sources for large transport projects.
Last night, Transport Minister Steven Joyce ruled out a regional fuel tax and said he had “significant reservations” about tolls and congestion charging, as motorists already contributed about 11 per cent of their fuel taxes to public transport.
“I don’t think anyone would buy the suggestion that that very, very expensive project should just be paid for by road users,” he said.
Even if the government was prepared to fund half the cost of this project (and I think eventually some government will), the Council would still need to look at how it’s going to find the other $1.2 billion. So funding options for the council are definitely something that needs a lot of discussion. There are a range of ideas:
Mr Brown’s chief of staff, Phil Wilson, said: “There will be some reasonable concrete ideas in the long-term plan by June next year of alternative funding sources.”
Mr Wilson said it would be another three or four years before tolls would be needed to finance the rail loop because there was enough money in existing budgets for preliminary work on the $2.4 billion project.
The council would need Government approval to proceed with new cash sources, such as tolls, he said.
Previously, the Council for Infrastructure Development has pushed for a $1 to $2 charge on vehicles using Auckland’s motorway network to pay for big projects, and Transport Agency consultants believe tolls of $6 to $8 could pay for a new Auckland harbour crossing.
As I have discussed previously, I’m not sure whether congestion charging (or new tolls) is feasible to introduce in Auckland as an additional cost. Its use is largely as a congestion reducing exercise, rather than a revenue-generating exercise (just raising fuel taxes is a million times easier if you want more money). Cordon-based congestion pricing schemes may well undermine the long-term viability of the Auckland CBD, while more comprehensive schemes are likely to be very expensive and challenging to set up.
It’s odd though that Steven Joyce has come out so dead against the ideas – surely if the Council wants to take the political risk of initiating such a scheme, then why does the government have an issue with that? Though I’ve thought the same thing about regional fuel taxes and come to the conclusion that the government is worried about any scheme that reduces their power over transport spending, so perhaps that’s that reason behind Joyce’s opposition.
In any case, this is really just the beginning of a process of working through the funding options. We must also realise that there’s no need to build all these huge transport projects within the next 10 years – and if we time them properly and also cut back on building more motorways when traffic along them is decreasing, there should be the money available at the time the project is really required. I just hope Len Brown doesn’t try to bite off more than he can chew at this point in time, Auckland needs more than a single term from him if we are going to see projects like the City Rail Link through to completion.
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What gets me is this quote: “I don’t think anyone would buy the suggestion that that very, very expensive project should just be paid for by road users.”
Clearly he doesn’t get that PT projects benefit road users. The Northern Busway, a quarter billion dollar project joint funded from the National Land Transport Fund and the North Shore City Council, has eased congestion levels across the Harbour Bridge to the significant benefit of motorists.
It will be the same for the City Rail Link.
I agree with you but think the emphasis is on the “just.” I.e. he does not want the NLTF to be the sole bearer of costs. not that it ever is given the local contribution rate.
Yes he is being duplicitous because no one has actually come out and said it should always be entirely funded by the NLTF.
Its pretty clearly a power trip thing, the government and SJ in particular couldn’t bear to think that they wouldn’t have control over what’s happening, I wonder what they would do if Auckland just implemented tolls anyway, even if the government doesn’t approve?
Ultimately I think the only way Auckland is going to start getting ahead is by starting to become more independent, the council should have detailed PR campaign about how the government (current and former) have been screwing over the city time and time again and that the only way forward is to give the city more control on things.
Anyone who heard Steven Joyce’s performance on this on morning report this morning (about 7.15am) here – http://podcast.radionz.co.nz/mnr/mnr-20110805-0717-minister_of_transport_pans_congestion_charge-048.mp3 – can no longer be in any doubt that Joyce is out to stick it to Len Brown and stymie any PT initiatives in Auckland as long as a Labour aligned mayor is in office. The interview was straight partisan politics from the minister, and he couldn’t have made it any clearer that as long as he is minister Auckland will be starved of any source of PT revenue and he thinks the money for funding PT should come from privatising the ports and selling the airport shares.
The formula is quite simple. if you want decent PT in Auckland then Joyce has to go. To get rid of Joyce, National has to go.
The interview was straight partisan politics from the minister, and he couldn’t have made it any clearer that as long as he is minister Auckland will be starved of any source of PT revenue and he thinks the money for funding PT should come from privatising the ports and selling the airport shares.
National want to see this anyway, and might not be above a deal in which they provided money for the CRL as long as Auckland came to the party by selling the ports and its share in the airport.
I don’t think Steven Joyce’s objection is to Len Brown. I think he is just simply ideologically opposed to putting lots of money into improving public transport. I mean, when John Banks was standing for Mayor it seemed clear to me that the National Party exerted heavy pressure on him not to be such a vocal proponent for the CBD rail loop. That is why he first said he wanted it and then, sort of, retracted that halfway through the campaign.
@Sanctuary @Lucy think you’re both right, he is against any PT spend no matter who proposes it, and is happy to spoil Brown’s vision as that is the same thing. The local right, Banks, Kaye, etc, ‘support’ the CRL etc only as ideas, not actual projects to be funded and built. And that’s only because they know we the people can see the sense in them and want them. Lip service.
Listened to morning report. On the plus side Joyce now appears to think there are 10 million journeys a day on the rail network. What a jackass, clearly in that intereview he’s pushing for asset sales by the Auckland council. He goes on about squeezing road users and yet he’s hiked up fuel excise duty to fund his monuments of marginal significance.
He does appear to want to control Auckland by stealth. Let’s hope Len Brown gets back in.
Looks like the AA has now come out strongly against this, surprise surprise.
Thinking about it some more, another reason both the government and the AA don’t support any tolls or other charges is that while most people would still drive, there would be a lot for who it would be enough to push them over to using PT, this in turn would make PT more viable, increase the business case for the tunnel (even without the additional funding) and therefore lessen the amount of money spent on roads.
It’s about time the regional fuel tax idea was accepted as being as appalling as it always has been.
It’s only proposed by those ignorant of how around a third of the vehicle fleet is charged, since a third pay virtually no fuel tax at all now. One of the reasons being that between 30-40% of diesel is not used on public roads, so if a regional fuel tax is implemented on diesel (regional RUC is not possible under the current system) then it imposes a significant compliance cost on those users, much as LPG tax imposes on the 90% of LPG used off road.
However, while congestion charging is easy to do for the Auckland CBD as a cordon or area charge, I’d oppose it for two reasons:
– It doesn’t target congestion effectively, because congestion is mostly not about the CBD, so the effects on congestion would be very low;
– It would have highly perverse boundary effects in penalising retail premises just inside any cordon;
– It would encourage decentralisation of businesses from the CBD, and undermine the sunk costs in rail.
On top of that, it would be political suicide to advance congestion charging in Auckland to fund rail, because motorists would get nothing out of it. The evidence from Stockholm, Edinburgh, Manchester and New York is that those paying have to see at least some benefit from what they pay, that means either road improvements or offsetting other taxes.
I’d argue congestion charging in Auckland could substantially reduce ratepayer funding of roads, and this would be positive because it would reward those who don’t drive at peak times, but congestion charging can only be implemented in a way that has minimal distortion by having it be a wider replacement for fuel tax, but that’s another story.
I don’t think the issue of offroad use is particularly hard to overcome. Pumps located at a marinia, for example, wouldn’t have the tax applied.
Of course a much easier solution would be for the NLTF to revert to “R” funds, where a proportion of the tax take could be allocated to local councils throughout the country for the transport projects they want.
As cars get more fuel efficient, ultimately all road users will have to be charged on a per kilometer basis as cars
Also the type of congestion charge being advocated by the likes of the NZCID would be applied at motorway on and off ramps.
Of course his would have the effect of pushing commuters on to non existent alternatives, so the risk is this is seen as a tax.
One possible solution would be to borrow against this future income stream and build the alternative transport first, then apply the charge.
“because motorists would get nothing out of it” – are you including those of us who drive and use public transport? because I’m happy to pay and there are many more like me probably most people who visit this blog and certainly many I know. You see “motorists” are not always some totally distinct group from those who use PT.
We could also get into a debate about the the wider benefits that motorists would enjoy but we’ve been over that many times and your rigid libertarian dogma means you refuse to even entertain the notion that anything can benefit anyone other than those who directly use it.
“(and I think eventually some government will), the Council would still need to look at how it’s going to find the other $1.2 billion” $2.4bn is a huge amount of money (I had previously thought the tunnel would be more in the $1.5bn range). Have the costs blown out or something?
While I think its likely that a future government will contribute much of the costs, if construction is to start soon it may be required to do all the costs, but at $2.4bn this is unrealistic
One of the issues is how much the rail loop would help people move around the CBD and the gains might actually be marginal for people who aren’t long distance rail comutters. If your accessing the loop having come into the city from say Remuera, Pt Chev, Kingsland or Mt Roskill on bus-it seems to me the 3 city and Grafton stops won’t be very convinient. The current bus or a tram going up the hill to K Road or Ponsonby is a much better and more convinient option. The loop dosen’t give any rail access to Ponsonby, Grey Lynn or the University. I think the loop is of very doubtful benefit from a transport, tourism and global warming perspective.
Congestion and tolling road user will all be as much about stopping comutter’s using cars and forcing them onto public transport as raising revenue. Part of the point of a modern inner city tram network linking the closer suburbs would be to create obstacles to car comutting. Both tolls and trams will create an element of political annoyance. The issue is which is sustainable politically. The decision of the London C.Council in l932 and Labour Cabinet Minister Herbert <Morrison ( grandfather of Peter Mandelson) to move away from trams was to free streets for families to have and use trams. So a street tramway system is clearly an obstacle to car use and reflects an ideal of a less family more cosmopoltian city one more oriented to under 40 urban professionsal-most obviously hetrosexual-but not big families.
Long distance rail commutting uses a lot of energy which is probably eventually going to have be electricity produced by coal or nuclear power. Surely rail commutters in particular say those travelling 65 kilometres each way from say Waikanae, Featherston, Hellinsville or Pukekohe should pay much more realistic fares to pay for new equipment the way they would in South England.
The Niki Kay tram system seems to follow a fairly obvious route and would be a good use of the extra revenue raised by any toll or congestion charges- because in any realistic development of such a scheme with say 15 trams needed to operate – I would think even using second hand trams from the l930s to l960s cost would be close to $100 million in my estimate.
I think you might need to read some of the other posts on this blog to understand that while the rail loop provides 3 new stations (one of which is likely to be the busiest in the network) in the city the primary outcome is a doubling of the throughput of the rail network- Britomart is close to capacity already. Yes the chief beneficially is the long range rail commuter, but the question has to be is it more efficient and cheaper to move a bunch of people on a train, or should we continue to expand the motorway network to have capacity for them to drive their own car, which they then have to park somewhere.
I suspect someone wishing to travel from Kingsland to one of the new stations will travel on a train from the well placed Kingsland station rather than a bus.
“Long distance rail commuting uses a lot of energy which is probably eventually going to have be electricity produced by coal or nuclear power.”
The electricity generation process is always the elephant in the room. However in NZ we have massive hydro stations generating the bulk of our electricity. There is one major remaining coal station (which is also powered in part by gas), the remainder is mainly reasonably efficient combined cycle natural gas plants. And of course there are the occasional wind farms to help. I doubt you would get consent to build a new coal plant in NZ and I think the protests against a proposed nuclear plant would make the 81 tour look like a minor fracas.
Robert there will be no nuclear power stations in NZ, all the current growth is in renewables (1350MW consented right now ) and we already generate nearly 80% renewably (79% last year). There is in fact an urgent need to shift as much of our transport as possible to our own electricity and away from costly imported oil. Also there is no point in comparing Nikki’s vague tram plan for Ponsonby with the CRL, they do different things. Both could be good, but one is a vital transport asset of real scale and the ability to transform the functionality and form of the city and the efficiency and interconnectedness of the whole region and the other a piece of the local travel jigsaw. The point about the CRL is not to only move people around the CBD but to unlock the utility of the whole existing network and enable it’s extension. It is for everyone from Papakura to Swanson and all points between, and eventually a much wider network. It isn’t an impossible sum of money interms of both it’s benefits and the amount currently being wasted on pointless motorway projects.
Until we actually run out of diesel, diesel-electric trains actually compare favourably to electric trains on regional runs (in reply to the comment about Wairarapa, Waikanae etc.): https://sites.google.com/a/strickland.ca/www/efficiency.html?attredirects=0
Also, just curious to see how much power TGV consume. Quite efficient per person, but each train has 18MW of installed motor, but with regenerative braking, and much of the time holding a stable speed, the average draw is much lower than that, although I guess when they are accelerating, that’s quite a big drain on the system. This compares to 680KW for a Matangi (although the TGV is a 16 car unit, probably with longer cars).
It’s not unrealistic at all that the govt would find $2.4 billion. Remember, the construction will be spread out over say 6 years. That is 400 million per year. We are budgeted to spend significantly more than that on new motorways each year for next 10 years.
Slightly loopy idea I’ve been toying with. Overseas they have the Average Speed Cameras, two or more cameras with character recognition to read number plates, and allocate speeding offences. A tolling system could be added to this.
Just to spice it up a little more, it would also be possible to have demand-based charging, so the busier the road, the more it costs. In addition to having the expected travel time signs near on-ramps, you could also have a ‘traffic light’ (ie green/orange/red) system indicating the current level of tolling. This would then not just provide tolls, but also encourage people to reduce their use at certain hours. I’d suggest setting the toll rates on a per km basis, and quite low, so that rather than being a “I won’t go right now”, it would have the greatest effect on people travelling regularly in peak times. Even if the peak time toll was as low as 20c per km, someone travelling from Albany to CBD would pay ~$4 a trip
For ease of administration, I’d also wonder about having a ‘freebie’ limit, so that infrequent and out-of-town users wouldn’t get caught out by unusual bills.
It could also be extended by adding other cameras at known choke-points (even off the motorway system).
I don’t know if it would actually fund transport projects, but it certainly could change the driving dynamic (as well as being very big brother-ish).