by Russel Norman
The Government’s release of its Policy Statement on transport (GPS) details how significant amounts of funding are being taken away from sustainable modes of transport to now be spent on roads. In a snap shot, over the next three years:
- Spending on public transport services (buses, trains, ferries) will be cut by up to 23% (down by up to $175M)
- Spending on public transport infrastructure (integrated ticketing, stations, real time information systems, new busways, new rail lines) will be cut by up to 89% (down by up to $490M)
- Spending on walking and cycling will be cut by up to 66% (down by up to $60M)
- Spending on travel demand management will be cut by up to 47% (down by up to $105M)
- Spending on rail and sea freight development (to get trucks off roads) will be cut by up to 100% (down by up to $45M)
Thankfully, the money is not going to be spent on just ordinary roads. According to Steven Joyce, these are “roads of National Significance”. What does this mean exactly? It means that these are roads politicians want built despite being neither properly costed nor prioritised by our land transport planners in the NZTA.
The Campaign for Better Transport are launching today their “Action Stations” campaign to gain assurance from central Government that funding for a range of essential public transport initiatives such as integrated ticketing, new stations, and ferry terminals will proceed as originally planned. These are all now at risk because of the Government’s reprioritisation of land transport spending. Information released to them under the Official Information Act demonstrates that no business case has been released for these expensive new roads while the benefit cost ratios for the public transport projects range from 3.0—4.0.
In Joyce’s GPS announcement, he qualified that any future spend on rail would, “be made subject to achieving a reasonable commercial return over time.” In speaking to the Bus & Coach Association, he is reported as saying that investment in public transport needs to be economically efficient. “There has to be a cost benefit analysis to see that they make sense in their own right.” So while we fairly need a strong economic argument to justify significant investment in rail freight and public transport infrastructure, there is no such similar rigour for the billions of dollars now being spent on new roading.
Gentle reader, please be reminded that the latest benefit cost ratio of a motorway through Transmission Gully is 0.36 to 0.50. That is, for every dollar spent to build the road, there will be $0.36—$0.50 of net benefits. Who knows what the current benefit cost ratio will be for the Waterview Tunnel in Auckland? What we do know is that this Government will spend our money to build it nevertheless.
Published in Economy, Work, & Welfare | THE ISSUES by Russel Norman on Wed, May 20th, 2009
Tags: Government Policy Statement, GPS, transport funding
More posts by Russel Norman | more about Russel Norman
on the trolls and those who are unable to keep on topic
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> Thankfully, the money is not going to be spent on just ordinary roads. According to Steven Joyce, these are “roads of National Significance“. What does this mean exactly?
Kevya explained this some time ago. Roads of national significance are roads of significance to likely National voters.
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sorry, should be ‘Kevyn’
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The cost-benefit ratio of the full tunneled Waterview Connection was 1.15. So perhaps the lower construction cost of the new option would mean a higher cost-benefit ratio. However, that ignores greater enviornmental and social costs of this option versus the full tunnel.
But anyway, that’s minor compared with the huge lies that are being told about “time-savings benefits” to bump up the BCRs of roading projects. The Waterview Connection had $2.6 billion of time-savings benefits added to its BCR. (more info here) This was based on (among other things) traffic modelling which shows that 98% of people travelling from the North Shore to the airport would use the link, and that 28,000 cars per day would be removed from the CMJ (it makes me wonder why we’re spending $600 million on the Vic Park Tunnel and the Newmarket viaduct if the Waterview Connection would supposedly solve our congestion problems).
Time savings benefits ALWAYS ignore induced traffic, and they’re actually strongly criticised in international transport literature as possibly not even existing (citation here) as better transport links just encourage people to drive further. Of course there are economic benefits of completing such a link (as with most transport projects) but should “time savings” be the main way to measure these benefits considering how criticised they are, or should we look at something like “enhanced accessibility” to really measure benefits? Furthermore, that $2.6b in benefits figure needs some RIGOROUS analysis as I think it’s hugely exaggerated.
Regarding the government policy statement in general, it is stupid 1960s thinking to shift money away from public transport, walking, cycling and even roads maintenance and local roads funding all into state highways. Traffic flows on Auckland’s state highways are declining FFS!
More ranting from here on this issue: http://transportblog.co.nz/2009/05/19/government-takes-us-back-to-the-60s/
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Russel, I am really curious to know what these public transport projects with such good BCRs are. Rail to the airport? CBD tunnel perhaps?
$1.4 billion (the cost of the Waterview Connection) would pay for the CBD rail tunnel. Time for a comparative cost-benefit analysis I wonder? (done properly this time, without the exaggerated time savings benefits)
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Goodness this is depressing. Doesn’t he know that NZTA have increased their per km benefit estimate from walking and cycling to a still conservative $2.70 and $1.45 respectively.
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Ugh. This is so depressing. 6 Inches forward and 5 Inches back…I’ve got an angry inch
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# pingpong Says:
May 20th, 2009 at 12:51 pm
> Goodness this is depressing. Doesn’t he know that NZTA have increased their per km benefit estimate from walking and cycling to a still conservative $2.70 and $1.45 respectively.
did I read that right? are they actually rating walking as a higher benefit than cycling? If so, is it because it doesn’t create any parking issues?
And what’s their rating for cars?
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Jarbury,
Those public transport projects with healthy benefit cost ratios (BCRs) are all the ones previously due to be funded under the Auckland Regional Fuel Tax. They include: ferry wharf upgrades, integrated ticketing, real time information systems, and train station upgrades. The BCRs are all taken from Cabinet papers released to the Greens under the Official Information Act. These projects are now at risk.
Action Stations is on to it: http://www.bettertransport.org.nz/campaigns/action-stations/
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Don’t forget the cycleway!! That will really help!
Honestly Russel – what else do you expect from this crowd? They are dinosaurs!
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Thanks frog. I would be quite interested in finding out more info on how those BCRs were calculated.
I am working towards a “if you spent your $1.4 billion Waterview Connection money on x, y and z you would get a far better return”.
Are you able to email the papers to me? My username @yahoo.com
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well the recent upgrade o’seas has meant a subway for the likes of you AK/WG passengers – been to see it – electically driven – no smog no hassle – looked good to me. Gonne spend a fortune anyway huh?
Q; If you like animal rights – what r u doing about ‘uman rights in Numb Country?
Unless of course, you Love Animals More.
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The ARC is actually looking at long-term plans for an Auckland Metro/Subway.
I chatted on bFM about it yesterday: http://www.95bfm.com/default,191340.sm
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Well, San Francisco was the best blend of over/underland I studied; left all the Spanish Missions intact; wow.
Similar to Wgtn – San Fr., civil engineers are needed. Fine tuning is more than smart – it’s right!
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Melbourne is Brilliant too, if your’e interested Kiwi.
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Let the Record show: – the first Act of the AKU is to install suicide barriers on the Grafton Bridge;- what is this ? A new anti-fashion?
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Mark, what are you on about?
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…in regard to what exactly?
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Four questions:
1) Isn’t it just a bit brave referring to this as robbery when the money being stolen is actually roading revenue?
2) Are the reduced amounts less than what Labour actually spent in the last three years or only less than what Labour was planning to spend over the next three years before the economy went down the gurgler?
3) Has the construction price index fallen, softening the blow at all?
4) Why isn’t this re-diverted money being spent on really important things such as providing local authorities with assistance with repair costs following major weather events, meeting the Road Safety 2010 Strategy’s target of no more than 240 road deaths next year and, of personal interest, fixing the atrocious mid-corner bumps on SH1 in Weld’s Pass..
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Nice use of language to distort the truth Russel.
1. The cut in funding public transport services is a cut in the rate of increase in spending. Spending is still going up, just not as fast.
2. The cut in funding public transport infrastructure largely reflects rail network capex being funded from the Crown account not the NLTF. That was explicit in the GPS, so why evade it?
3. Walking and cycling and TDM funding is flat lined, so it will be static in real terms, not a cut (just no growth).
4. Sea and rail freight is being cut, yes, but then again rail is being addressed through ownership (and subsidising capital).
Nice to see the Greens caring about BCRs, since you fought so hard before to ignore them. Also you evade that new road spending needs to have a good BCR, priority given to those with BCRs over four, with much more scrutiny over those with BCRs less than 2. Transmission Gully hasn’t a hope in hell under this, and changing the scope of Waterview increases the BCR.
Jarbury: Waterview would never address the congestion at Victoria Park, and Newmarket Viaduct has structural issues demanding its replacement. You wont find a NZ rail project with a BCR of 2 or above either.
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What is the new Waterview BCR? Does anybody know the answer to that question?
Is anyone actually making sure that time savings benefits are actually real, when international literature suggests they are often just a short-term phenomenon? How was that $2.6b of time savings benefits for Waterview actually calculated in the first place?
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Hi
Benefit-cost analysis is generally pretty abysmal in transport. The biggest influence in the direction of dumb decisions is the way time is valued.
Traditional roading CBA says “take all the small changes in trips resulting from a new roading project and assign the time changes a monetary value” These tend to be very large for motorway projects but have little connection with reality. First, people don’t value time linearly – this “inconvenient truth” has been known for around 30 years. Second – small time savings are not realised in any meaningful sense unless they excess the variance of journey times. Thirdly – it is increasingly apparent that people operate using time budgets rather than a linear (ie per minute) value of time.
Now add in the fact that in general new road capacity is an inefficient use of land, and raises the share of income spend on transport since it disperses journeys and destinations. Add to this the well-established empirical findings that (i) roading capacity tends to generate new journeys leading to little overall change in travel times; and (ii) improved public transport capacity tends to reduce travel times for motorists and public transport users.
Put all these together and you find out that 1. In general B/C ratios are pretty low in transport and 2. sustainable transport does better than traditional road capacity increases.
Our current transport policy seems determindedly leaping backwards to the 1950s and the days of the Federal Highway Programme in the US. If we want to emulate a US President – how about we choose Obama rather than Eisenhower
Stepping out further the basic problem is that transport planning is not about projects and engineering. Traffic is simply an every changing group of people who are temporarily in the same space. Proper transport planning looks at how to meet people’s needs cost-effectively.
For example in Wellington there is a debate about whether to build a flyover at the Basic Reserve but little discussion of why there is traffic congestion and alternative solutions. Invariably a package of measure aimed offering more choice in how to meet people’s needs will create a much more cost-effective response than building a piece of road to shift a congestion point.
The whole language needs to change – instead of corridors we need to recognise land as a series of living rooms and travellers as temporary guests. Destinations need to be privileged over journeys. The roads lobby needs to be exposed as denying choice rather the protecting it.
Sustainable transport advocated are the ones advocating choice. The current government’s transport policy is all about compelling car use and denying choice.
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I agree 100% jgg. Well said!
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on’t forget robbing the research funding also, which gives a 17% return on investment:
http://www.stuff.co.nz/dominion-post/politics/2424845/Nats-set-to-cut-science-budget
The road lobby must be getting the best return on their investment! I wonder how much they donated to the NActs?
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Dinosaurs is a kind description of this lot – To argue that each project must show a high cost benefit is missing the point entirely when considering transport infrastructure – the whole works as a whole, not as the sum of each of it’s parts – therefore an overall plan, constantly updated to account for changing conditions is essential to have any chance of long term success. Each part of a roading, rail, or any transport project only works when connected to other schemes designed to integrate with it. This is so obvious as to be almost school-pupil stuff !
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I agree bigbluekiwi, however the funniest thing is that their “flagship” roading project – the Waterview Connection – has a pretty low cost benefit ratio and is based on very very debatable time-savings benefits.
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Almost everything jgg says is correct.
“First, people don’t value time linearly – this “inconvenient truth” has been known for around 30 years.”
Einstein published a paper getting to the very heart of this issue. I can’t recall the full title but it included the ‘Time Dilation’ Einstein observed that an hour chatting with a pretty girl and a minute sitting on a hot stove can appear to last equal amounts of time to the person expereincing those activities. It is only a small step to conclude that value of time will also dedepnd on what the time is being used for.
“Add to this the well-established empirical findings that (i) roading capacity tends to generate new journeys leading to little overall change in travel times; and (ii) improved public transport capacity tends to reduce travel times for motorists and public transport users.”
(i) recent studies by Robert Cervero has found that the pre-eminent mid & long term source of this generated traffic following capacity increases on a specific roadway segment is the ‘location, location, location’ phenomenon so well known to real estate agents. In fact, the very phenomenon that is promoted as a benefit of building light rail. Of course, the rush to locate on a less congested corridor leads to rapid traffic growth.
(ii) the greatest short term cause of accelerated traffic growth following capacity increases is triple convergence and suppressed demand. Every study I’ve seen for PT initiatives, and also for London’s congestion cordon, has come to the same conclusion that free-up road space was quickly consumed the same as if a bypass had been built. The problem with the congestion cordon was that car trips entirely within the cordon remain uncharged so of course the removal of a huge amount of ‘foreign’ traffic unleashed the suppressed car trip demand for those trips within the cordon. The effect is so strong that, even though the number vehicles crossing the cordon had barely increased in the five years after the cordon’s introduction. the traffic volumes on roads within the cordon experienced 20% traffic growth. In fact, that makes central London the only major metropolitan center in the EU to have more traffic growth between 2003 & 2008 than between 1993 & 1998.
Nevertheless, Copenhagen seems to have decided to have bob each way. A congestion cordon, more PT, more ring motorways and more road widening.
http://www3.kk.dk/PolitikOgIndflydelse/Byudvikling/Trafik/Traengsel/~/media/Politik%20og%20demokrati/Byens%20planer/Traengsel/green%20urban%20mobility%20%20-%20copenhagen%20capital%20region.pdf.ashx
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Perhaps the biggest gap in all of the discussions is price. Roads at peak times are underpriced, public transport at peak times is underpriced as well (just not so much). Fixing this pricing issue, and then letting each mode keep the money it generates (and expand capacity where it is efficient to do so), would be more sustainable than arguing over building roads or building public transport. The Greens are in the same boat as the AA and RTF in worshipping people and goods moving, when in fact as long as transport is user pays, and pricing is used to manage demand and supply, it doesn’t matter.
If you fix peak pricing of roads and public transport, it would cost more to drive and ride at the peaks, probably the same as now in cities off peak to drive (but less to ride) and the response would be:
- Relatively free flowing traffic on roads, for the vehicles that value road space the most (commercial traffic);
- A significant shift of discretionary trips to off peak periods;
- Strong encouragement to time shift employment, telecommuting and the like spreading demand;
- Strong encouragement for cycling and walking (modes that aren’t underpriced);
- Encouraging regional development and for business to shift to locations with lower transport costs;
- Less emissions as there wouldn’t be excessive supply or congestion induced wasted fuel;
- People living closer to where they work;
- Less taxation of those not using transport (ratepayers);
- Higher mode share for public transport at peak and off peak (because driving at peaks would be relatively more expensive, and off peak fares would be cheaper).
Improvements to roads would end up being for those that significantly benefit users all day (safety, or capacity where there is a chronic undersupply issue), and public transport likewise. However, most importantly, the overall cost of transport would drop.
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With the price of oil heading back up again will we be able to afford to drive on these new roads. A fitting end to the end of the age of oil. Riding our bicycles along these beautiful three lane motorways without a car in sight. I think the govn is spending the taxpayer’s money in the wrong places.
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Don’t worry Peter, a 50% increase in the price at the pump only requires a 33% reduction in petrol use to stay withing the current household or business transport budget. As with conserving electricity there are many free ways to save petrol and just as many ways to make big savings when people or businesses are prepared to invest a few thousand up front. The problem at the moment is that petrol isn’t expensive enough to convince most people or business decision makers to commit to those modest capital investments.
A new Johnson Controls survey, conducted by Harris Interactive, finds that 88% of US adults believe the United States must become a leader in hybrid vehicles and 84% that the government should support the advancement of battery technology in this country.
While the survey found that 90% of US adults are open to choosing a hybrid if they were in the market for a new vehicle, it also determined that 80% of US adults think financial barriers such as purchase price and/or insufficient cost savings prevent people from buying a hybrid car.
At the same time, 84% see incentives and tax credits as an effective way to encourage consumers to purchase hybrid cars. Among adults who do not already own a hybrid, more than one in three (35%) would buy a comparable hybrid vehicle as long as it was priced the same as the gasoline-powered equivalent, and more than one in five (23%) would be willing to pay more. However, one-third would expect to pay less.
http://www.greencarcongress.com/2009/05/jc-survey-20090520.html
Of course hybrids aren’t the only option. Downsizing repmobiles from a Falcon to a Mondeo will achieve that 33% saving at a lower capital cost but with a small reduction in load space. Like all good things, coping with peak oil can be a win-win situation.
Have a quick browse of the older posts [<<] to see Ford and Audi’s cheaper alternatives to hybrids. They’re very important because a majority of the car companies are developing variations of these alternative approaches.
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the whole works as a whole, not as the sum of each of it’s parts – therefore an overall plan, constantly updated to account for changing conditions is essential to have any chance of long term success. Each part of a roading, rail, or any transport project only works when connected to other schemes designed to integrate with it. This is so obvious as to be almost school-pupil stuff !
From
Maintaining a floor
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