Tuesday, July 01, 2008

Government announces annual transport funding programme

Land Transport New Zealand (the government's land transport funding agency until now) released its final National Land Transport Programme outlining how it intends to spend your fuel tax, motor vehicle registration and licensing fees, and road user charges for the next financial year.

From 1 July it merges with Transit New Zealand, so that the funding agency gets to fund its own activities - whilst local authorities get to compete with that. Yes, Labour has reversed some of the transport reforms of the 1990s which ensured transparent competitive bidding for transport money. After all who needs to ensure value for money, or accountability when you can have one big behemoth of a bureaucracy.

$2.439 billion from the National Land Transport Fund, plus around $220 million extra from taxpayers. Yes Labour is spending your motoring taxes on transport.

$908 million is for routine maintenance of roads, the administration cost of the relevant agencies (which isn't small), the Police policing the roads (see this is managed separately but is very hard to get accountability for), and research and development associated with managing road networks.

Another $402 million is for periodic and preventive maintenance on roads, which is about renewing the whole surface (and includes bridges and the like). The precision of spending on maintenance is important and better than most countries (certainly better than the USA). Even so, Chris Olsen Chief Executive of Roading New Zealand (an industry association of contractors) says the maintenance spend is inadequate. Certainly it is at an efficient level, but it would be interesting to know if local authorities and Transit are concerned. The funding system should avoid underspending on maintenance, if politics is kept out of it.

Beyond that we have new construction with just over $1 billion being spent on roads, most on state highways. My only question is whether local roads are getting enough, especially since local authorities have to get around 45% of funds for new local roads from hard stretched ratepayers. There is a case for local road improvements being funded by road users, but ensuring local authorities are accountable for this is critical, and it is one reason I supported requiring local authorities to put their core arterial and collector networks into roading companies.

The Greens complain that not enough of road users' money goes to subsidise public transport, this year $325 million is going into it, which is nearly ten times the amount in nominal terms compared to when Labour first was elected, and $86 million more than last year. It is $100 million more than what is going into upgrading local roads - remember local roads carry half of all traffic movements and comprise over 80% of the network, but public transport's share of journeys is less than 10% nationwide.

On top of that another $49 million is to be spent on "community focused activities" (encouraging people to change travel behaviour), walking and cycling, and subsidising rail and sea freight. All activities that don't actually pay a cent into the National Land Transport Fund.

Now one thing politicians like to do with this announcement is claim that they are personally responsible for the decisions of a statutorily independent board for funding pet projects.

So it's worth having a look at this enormous document to see what really is happening with a handful of high profile projects. I thought I'd look at:

SH20-SH18 "Western Ring Road" in Auckland
Kopu Bridge replacement approaching the Coromandel Peninsula
Transmission Gully in Wellington

There are bound to be others that interest people, but well these all have a profile, some of which is undeserved:

Western Ring Route: Five sections of this route need completion, and money has been allocated to complete four of these. This will mean the Upper Harbour Motorway is finally completed allowing fast efficient trips between the North Shore and West Auckland bypassing Hobsonville. It also will mean a continuous motorway from the Southern Motorway at Manukau through to Mt Roskill, with a second Mangere Bridge relieving the bottleneck north of the airport. However it does still mean a problem between Mt Roskill and SH16 - the Waterview connection. The PM wants a massive tunnel to be built on this section (the only part of the route proposed for tunnelling curiously enough), when it could just be built on the level with overbridges like all of other sections. $5.5 million is to be spent investigating this further. All in all 4 out of 5 for the Western Ring Route, the parts worth building are being progressed at a fast pace. However there really has to be some sober thinking about the Waterview connection. Current estimates have it costing more than all of the other segments of the road built combined (and that is six individual projects), so one has to ask why this part has to be goldplated and greenplated?

Kopu bridge: $100,000 of funding to complete design. Nothing about starting construction. Hmmmm. Surely a 2 out of 5 for that, perhaps there are RMA reasons? Perhaps it too has become too expensive?

Transmission Gully: Well that $1 billion folly will get $1 million spent on completing the investigation phase, but more importantly $13 million on detailed design in the next year. That is serious money for design alone, but the total design cost is $41 million. That is more than the total road budget for some councils. So big money ploughing into it, but resource consents not yet achieved or enough property purchases. So maybe 3 out of 5 for progress, but it is an enormous waste of money.

It would be nice to think National will change things, will refocus funding towards projects that are economically efficient, less money on public transport just because it is "nice to do". It would be more nice for the Nats to change things to be more commercial, less political and seek the funding provision and management of roads to be decided based on what users want, not what politicians think is the populist "road of the year".

The Nats once did have such a policy - there is no good reason not to at least go back to that.

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