Public Private Partnership to build giant Auckland tunnel
It seems the PM is going to pay a private company to dig dirt from under her, or at least from under her electorate.
As you’d expect, I don’t really want the Western Ring Route built. If the government has a spare $2 billion lying around to spend on transport I would have thought a comprehensive, fast and efficient public rail system might have been the way to go rather than a giant tunnel underneath Mt Albert.
But say you decided the best way to prove you were the ’sustainable government’ was to encourage even more cars on to Auckland’s clogged motorways by building a massive $2 billion tunnel for cars, well then why would you go down the Public Private Partnership route? No Right Turn has a good summary of the situation over in London at the moment where:
‘Gordon Brown’s ill-fated determination to impose a public-private partnership agreement on the London Underground will cost the taxpayer £2bn’
Concidence that two billion. That’s a big number to lose.
Here’s Steve Maharey, only four months, ago saying Public Private Partnerships are not the way for New Zealand to go when constructing roads. I guess the Member for Mt Albert doesn’t agree.
February 8th, 2008 at 10:28 pm
I would have no objection to the ring road spending if a similar committment was made to public transport. Auckland needs something to make the place habitable and there is now the population base for both (especially when those who want the ring road now might prefer to use PT once fuel prices double by the time they are both available to use).
But the cost of the guarantees to a private partner just means that the cost of the project would be inflated and the money lost is money that should go to public transport.
February 8th, 2008 at 10:56 pm
Got it SPC.
But for $2b we could have a rail link to the Auckland Airport, connecting to Avondale on the Auckland West line through Onehunga and to Puhinui on the Auckland South line - and have heaps of money left over.
This would kill the plan for a second Auckland international airport, because it would mean people from West Auckland and the North Shore could get to the existing one on public transport in far less time than it takes them to drive there now.
Cut down the passenger traffic to and from the airport, which is what currently congests that route, then there is no need for a motorway.
Durhh!
February 8th, 2008 at 11:22 pm
The problem is commercial goods transport is not facilitated by public passenger systems, and the nature of the preference for the motor vehicle is multi-facited (young people having the independence and such and the travel of family groups etc).
But we might agree about what the Green Party can do, show what else could be done with the same amount of money in public transport- and then rather than enter a too late protest over a fait acompli, argue why both should be done.
February 8th, 2008 at 11:40 pm
Um, SPC, if you have a rail line into Auckland airport, connecting to Puhinui and Avondale, doesn’t that sort the problem?
The airfreight will go to the airport by rail, rather than by road. It’s not just passenger transport I’m talking about here.
Problem with doing both, Will, is the cost - probably about $3.5b at a rough guess.
But get most of the airport passengers and freight off the roads and onto rail, and I think the existing roading will likely serve us well for at least 20 years.
February 8th, 2008 at 11:51 pm
I don’t disagree about a preference, if they did only one, but if they go ahead with the tunnel as they will because the two main parties support it …
Even if there is a rail line, not everyone will use it and whether the option is the tunnel or rail, demand (people choosing to move around) will rise with the supply (of an ability to do so).
There is signifiant non airport transport which is restrained by lack of supply at present.
February 9th, 2008 at 4:47 am
toad, Do you have any studies supporting the contention that it is airport traffic that is currently congesting this route?
This route was included in the master transport plan decades before air travel showed any signs of becoming affordable for the masses.
The route was necessary because:
1) Only an idiot builds a network with no redundancy therefore a second north-south link was needed to prevent accidents from triggering gridlock across the entire network;
2) The land for the first sections of the southern motorway was purchased when the Wiri/Otara developments were originally planned to occur at Massey/Te Atatu and therefore only three lanes would ever be needed on this corridor therefore future capacity would need to be on an alternative corridor;
3) In the medium term a container port would be built at Traherne Island and the southwestern motorway/railway corridor would provide the link between the new port and Onehunga/Mt Wellington;
4) Although a motorway had already been built halfway to the existing airport marginal electorate vote buyer led to the decision to build a new airport at Mangere thus creating pressure to extend the motorway further south, to the point where it where it would costs very little extra to provide an additional link to the southern motorway.
The political decisions to move key developments to the south is what has led to Auckland’s “sands through the hourglass” congestion. Those critical changes to land use went against the advice of transport planners and left the transport planners in doubt as to the eventual results if the well understood (in 1946) relationship between population growth/income growth and traffic gowth continued into the future.
That the current levels of congestion were predicted more than 50 years ago without including airport traffic suggests airport traffic is merely aggravating the underlying legacy of political land use decisions.
When traffic problems are measured empirically rather than anecdotally Christchurch trumps Auckland on every negative transport measure including car ownership, low population density, traffic congestion and air pollution. The true magnitude of the winter smog from keeping the homes fires burning can be truly appreciated from the fact that while traffic pollution is worse than in Auckland it only accounts for 10% of winter air pollution in Christchurch. Christchurch doesn’t have any motorways but it has always invested in good public transport. While investment in public transport as a social service is important it has been thoroughly discredited as a solution to congestion. The maxim you can’t build your way out of congestion comes from the first study that found that BART and SF’s freeways had failed to relieve congestion for exactly the same reason - reducing the time cost of congestion simply attracts more traffic. In a bizarre twist it turns out that to permanently reduce congestion
the reduced time cost would have to be matched by an increase in some other travel cost. Hence the popularity of congestion pricing.
Hence the radical conclusion that the economic cost of congestion doesn’t exist. This argument is very straight forward. Use typical travel speeds in smaller cities or large towns as your baseline measurement of acceptable travel times. Building motorways allows traffic to travel faster thus reducing congestion. Concentration of economic development along these motorways and in cities with motorways at the expense of cities without them. Thus the economic benefit of faster travel in Auckland and Wellington creates an economic cost to every other city. When this economic distortion overloads the motorways smaller cities regain their economic competitiveness because travel speeds are the same again. Thus Auckland’s congestion isn’t any worse than in any other city but it appears to be simply because there were a few decades when Auckland was less congested than other cities. In fact the KiwiRAP maps provide evidence that average speeds on Auckland and Wellington state highways are higher than average speeds on the rural state highways in Gisborne, Northland and West Coast regions.
Of course using congestion pricing to reduce congestion should work because the reduced time cost is balanced by increased financial cost because the space that is created can’t be “freely” used by new traffic. But that does means the economic cost of “congestion” stays the same which is why some researchers have suggested that congestion is a natural price of prosperity.
Unfortunately the rail lobby, and lightrail in particular, misrepresent the can’t build your way out of congestion maxim as only applying to roads and then compound that error by using outdated research on the relationship between traffic growth and roadway capacity to argue that more roads just create more traffic. Unfortunately Robert Cervero’s earliest studies which found that half of all new road capacity was consumed by induced traffic formed the basis for the 1994 SACTRA report’s conclusion that the entire new capacity was consumed by induced traffic. Cervero’s research so far this decade
http://www.uctc.net/papers/papersuctc.shtml
has made huge strides in understanding the complex interactions between traffic, capacity, land use and wealth factors. The current best understanding is that new capacity generates new land use investment which attracts new traffic. In Britain local councils have learned to wait until the government has built congestion relief bypasses before making greenfield land use changes to “stimulate economic development”. Traffic engineers can’t include the extra traffic from greenfields developments into their planning if there are no such plans when the bypass is being planned. Not surprisingly they end up underestimating future traffic volumes which they wouldn’t if they included the developments. This has led to erroneous conclusion that new roads create new traffic when this only happens when there is the intermediate step of new land use. This goes back to the earlier argument of comparing big city motorway congestion with normal urban traffic speeds.
February 9th, 2008 at 10:26 am
Frog
I am sure that even you can see that finishing the motorway makes sense, once that is done we can then work on a rail or light rail network.
February 9th, 2008 at 10:43 am
Given possible changes in fuel cost by the time the road is completed and the cost to the government of further tax cuts to help motorists afford them, simply building a new rail development now makes sense.
February 9th, 2008 at 11:42 am
Wonder if the tunnel designers will have the smarts to include facilities for a double line rail track to bring the point chev-waterview-western springs area into the rail network?.
Plus of cource provisions for underground train station at various points.
And would it be to much to expect the planners to provide a service tunnel for high tension electricity lines to be placed underground (aka Penrose to CBD)?
What the proponents of rail have to figure into their calculations is where the electricity to run these trains will come from. Is Auckland sufficiently serviced with electricity supply for these new train facilities?
Must say that the Auckland train system is now a vast improvement from what it was even eighteen months ago. Full marks to the operators. $10 for an all day pass is a brilliant idea. Frequancy is much improved but riliabity wont improve until new electric units are available.
February 9th, 2008 at 12:36 pm
I do think that Gerrit has the plan here.
Let it go ahead with INCLUSION of rail and the required stations and the electrical transmission line in the trench. The road is then not nearly as wasteful as it provides the impetus for extending the rail and electrical infrastructure.
Don’t fight it. Use it.
BJ
February 9th, 2008 at 4:37 pm
BJ, There is only one problem with Gerrit’s proposal is that I can see.
Transit will have no problem borrowing against future toll revenues for it’s share of the costs. Ontrack and ARTA can’t easily borrow because even their current capital investment is being payed for by rural road users rather than the regions rail operators.
The ultimate cost being payed by rural road users was highlighted on the official opening day of the North Shore Busway. On that day a British tourist was killed in a bus crash on the West Coast. Back in 2000 the West Coast region almost knocked Auckland out of the number one spot for most capital funding per vehicle kilometres travelled. Since then Auckland’s funding has been increased fourfold whereas the West Coast’s funding has been reduced fivefold, in real terms to less than the funding under the first Labour government. Helen Clark may genuinely believe that “Transit has been spending too much money on safety and not enough on reducing congestion” (NZ Herald), despite the LTSA telling her otherwise. I’m sure most greens will consider it ethically abhorent to take money away from rural life saving just to spend it on urban time saving, whether in the form of roads or rails. But this particular conundrum has a simple solution, although apparently not a politicly attractive one. Increase the petrol tax to the point where it meets the needs of everyone. Except the reds who will bitch that it is a tax on the poor.
February 9th, 2008 at 4:40 pm
SPC, Further tax cuts to help motorists? You mean there’ve been some already? Where do I sign up for my share?
February 9th, 2008 at 6:36 pm
Kevyn
I think time make take care of the issue of increasing the price of fuel (to reduce congestion).
I am and was referring to the calls for tax cuts to alleviate the rising costs in food, power and petrol or late. The problem of course in doing so (and evidently both major parties are intending on doing so) is that when the budget surplus is gone, costs of food, power and fuel will continue to rise.
Meaning of course that while we can stimulate the economy now to avoid a recession, we may be faced with a return of 1970’s style stagflation the next time round (and we may avoid it this time only because of the housing market stalling while we enjoy tax cuts).
February 9th, 2008 at 6:36 pm
bjchip
We agree on this.
February 9th, 2008 at 6:38 pm
Public Private Partnerships. Why?
How does introducing profit help build roads? Even if they should be built.
The state can borrow money cheaper than the private sector.
All road building is a partnership, now, with the private sector, as it is the private sector that owns the diggers.
If PPP means giving Fletchers construction the right to toll Auckland motorists for profit I struggle to see how that helps.
Is there a political reason maybe for suggesting a PPP? I know there is no economic or financial one.
peace
W
February 10th, 2008 at 4:22 am
SPC, Thanks, that makes sense.
It’s rather worrying that Brash has suggested that the Governor of the reserve bank should be given the power to alter the rate of Crown petrol tax as tool for stimulating or dampening spending to control inflation. There seemed to be a suggestion that the revenue from the tax go to treasury, possibly as a fund to control the dollar?
February 10th, 2008 at 2:26 pm
With petrol prices rising, expensive toll roads are becoming an even worse idea than ever. Definitely best to spend that money on a transport network that will provide benefits to those other than the people willing to spend money on both petrol and tolls. The government has to decide if Auckland is a city of people or a city of cars.
February 11th, 2008 at 9:47 am
Having worked on both sides of PPP arrangements, including spectacular failures, I understand how PPPs work.
The key benefit from the government perspective of a PPP is the offloading of risk. In theory it should work well. The government specifies what it wants, hands over the problem to the PPP contractor, and then it’s up to the contractor to deliver before they get paid.
In practice, PPPs fail for the same reason government projects fail; the government can’t make up it’s mind what it wants, and is unrealistic in it’s expectations, and then needs to meddle. The other supposed benefit is that the government can just walk away from a mess, but in practice, that doesn’t happen either.
Turns out that PPP contractors can no more work miracles than can governments.
What I learned from PPP - its still garbage in, garbage out.
February 12th, 2008 at 4:16 am
The problem with No Right Turn’s post on Metronet is that it is half the story. The other half is that the OTHER PPP looking after the London Underground - Tube Lines - is doing well and within budget, the key difference appears to be that Metronet bit off more than it could chew, and its own internal procurement processes were poorly designed to optimise its supply chain. Of course if you look at how the rest of the tube was built under public ownership (and remember most of it was not) it was haphazard, well over budget, with massive overruns with timing and underinvestment in capacity (Jubilee line was the last example).
The Waterview extension is grossly overpriced (why have a tunnel?) and it wont recover most of its costs with a toll, so if the users and those who benefit from it wont pay for it, why build it? All of the arguments for public transport completely ignore that none of these can just be built, they have to be heavily subsidised to have fares people are prepared to pay for them. The Greens seem to have a fetish to subsidise people using transport, I don’t see why that is a good thing.
There is a good reason to borrow to fund major projects and repay from proceeds collected from those who benefit from it, mainly because the benefits are generated by future users, not from current taxpayers.
Rail in Auckland is such an incredible waste of corridors and capacity and money, it costs a fortune per passenger to subsidise rail passenger movements in Auckland, and trips are far too widely dispersed to get the necessary economies of scale. Rail is mostly taking people from unsubsidised buses in Auckland - and it is useless for most freight movements despite the dreamy ideas of most.
February 12th, 2008 at 8:32 am
“unsubsidised buses”? I thought you said they were all subsidised?
February 13th, 2008 at 8:31 am
Some bus services in Auckland are commercially run, mainly those on isthmus corridors.
June 11th, 2008 at 9:49 pm
Public-private partnerships are great as long as they improve things. Improvements cost money and they have to be paid for some how, no one works for free. I personal have no problem with my government investing £2Bn to improve the tube in London (even though I don’t live in London) I would like the same sort of investment going into public transport in other cities in the UK as well. Charging car drivers ridiculously amounts of money for something and offering no alternative is just pure stupidity.
June 11th, 2008 at 9:50 pm
Public-private partnerships are great as long as they improve things. Improvements cost money and they have to be paid for some how, no one works for free. I personal have no problem with my government investing £2Bn to improve the tube in London (even though I don’t live in London) I would like the same sort of investment going into public transport in other cities in the UK as well. Charging car drivers ridiculous amounts of money for something and offering no alternative is just pure stupidity.