Monday, March 16, 2009

Auckland rail electrification - a very bad idea

Well you KNEW I would have to comment further on this.

So first - what the government said:

Steven Joyce said "Rail is an important and growing way for Aucklanders to get to work each day". Important? Hardly. Growing? Yes, but at the expense of what? Less bus users (when you ignore the Northern Busway), less carshare riders.

He further said "The government has decided in principle that now that KiwiRail has been re-purchased by the government, it should be the owner of the new crown-funded passenger rail stock in Auckland and Wellington.

Mr Joyce says this will save costs over time and ensure the most efficient use of transport funds." I don't have a problem with the Crown owning something new, except of course that the moment the Crown holds onto it, the value of the rolling stock will drop significantly. The global market for secondhand electric multiple units on narrow gauge is not high. More importantly, the trains wont ever make a profit.

The Q&A on the press release asks

Why are you committing to Auckland rail?

The says:

"The government has decided in principle that now that KiwiRail has been re-purchased by the government, it should be the owner of the new crown-funded passenger rail stock in Auckland and Wellington. This will save costs over time and ensure the most efficient use of transport funds."

That ISN'T an answer why. It DOESN'T say why rail is good for Auckland. The answer is not "because ARC said so", because this is public policy and economic snakeoil.

I've talked about rail electrification before, so let me just summarise yet again why it is a very bad idea, starting with the claims of the enthusiasts - or indeed the heroic and shoddy assumptions in the "rail business plan":

1. It will make an imperceptible difference to traffic congestion, less than 1km/h faster trips on the motorways parallel to the track;

2. It conceivably can only provide an option for a maximum of 6% of all commuters in Auckland (less than half those commuting to the CBD), of whom perhaps a third will use it. Most Aucklanders don't live or work within a cooee of a railway station - so said Helen Clark once;

3. Outside peak times it will be grossly underutilised, around two thirds of the trains will be used for only 6 hours a day, the rest of the time lying idle. Same with track capacity;

4. It will render even more commercial (unsubsidised) bus services unprofitable. Already the proportion of bus services in Auckland that are unsubsidised has dropped significantly since money was poured into rail;

5. Most of the users are people who would otherwise have caught the bus or rideshare with a car commuter - in other words, the majority are not former car users. Maybe at best 1 in 4 would have driven a car. Why are you subsidising the other three? It is a sheer lie to claim the people who would use rail would otherwise have travelled by car.

6. It will make an imperceptible difference to pollution levels in Auckland or CO2 emissions, as the trains running around all day are going to be carrying the equivalent of busloads of people.
7. It will never make a return on capital and never make a operating profit. In other words it commits central and local government to subsidise trips for people travelling to downtown Auckland on a mode of their choice - the part of Auckland with some of the highest value employment. The low income workers in Manukau City wont be getting the train to work, but their rates and fuel taxes will subsidise suits travelling from Tamaki to Britomart.
8. It doesn't matter how many people ride it, unless the majority would have driven and it makes a measurable difference to congestion. However, neither of these claims are true. High growth is just subsidising people's choices of home and employment.
9. Nowhere in the New World (North America/Australia) has a new rail transport system made any measurable difference to road congestion levels. The cities have too low a density, too diverse travel patterns, and there are not corridors with anywhere near the consistent density of trips to make rail superior in economics to high quality bus routes.
10. The claimed capacity of heavy rail over a motorway is true, but Auckland rail will NEVER be carrying 25,000 people per hour. It is like buying a Boeing 747 to fly Wellington to Auckland.
11. The plan is predicated on no changes in commuting patterns over time, like peak spreading and telecommuting, both of which are encouraged by congestion and properly pricing peak road capacity. It subsidises old patterns of behaviour.
12. Auckland’s rail corridors are an irreplaceable asset. Yet it is a grossly underutilised one and will continue to be so. Trains every 5 minutes at peak times is quite a period without another vehicle using the corridor. Find any arterial road in Auckland and count the vehicles passing every 5 minutes.
13. 28% of Auckland's population will NOT live within 800m of a rail station by 2016. This is a highly "optimistic" forecast based on more people wanting to live in medium and high density housing adjacent to a station. Do you want to do that? Do you want to walk 800m four times a day (remember the other end) to get to a mode of transport?

My solution is not libertarian, but more economic rationalist. Let the current contract run its course, and then -while the government underprices peak demand for road space - use some existing road tax revenue to subsidise peak rail fares only to follow second best pricing principles. In other words, pay for the benefits road users get for those switching from car to rail. That wont be enough to justify electrification or new trains. As existing trains need replacement, cut services and remap the Auckland rail network for what it should be:
1. A freight line from the main trunk to Southdown and via Tamaki to the Port (the Overlander can use this if it is viable);
2. Dedicated tolled commercial vehicle corridors along the abandoned North Auckland line (the rail network north of Auckland is not worth saving). The stations can be adapted for buses (including Britomart for low emissions buses). Yes, you'll have to manage the Public Works Act and Treaty of Waitangi implications of changing rail land to another use - but that is about having a will to change legislation.

Then rail in Auckland can get on and do what it does best - long haul freight.

You see - I want to know why the government thinks Aucklanders want this. Because they are too lazy to vote for an ARC that wont pursue pet projects like this? I want someone to robustly critique the claim in the "rail business plan" that "The “Exit Rail” option was eliminated early in the process when it became clear that it would involve considerable additional expense estimated at greater than $1 billion and would increase traffic congestion. Also, the “Exit Rail” option is inconsistent with the Regional Land Transport Strategy and Government strategies and so was not pursued." Why considerable additional expense, when the rail electrification plan will cost a fortune anyway? What increase in traffic congestion? Who gives a damn if the strategies are wrong?

Electrification of rail in Auckland is fundamentally wrong, the business case is grossly optimistic on a cost and benefit basis, it neglects to properly evaluate a cheaper alternative because the ARC is ideologically wedded to this project (and the last government was as well). You can see this in the statement that "It has become clear that applying Land Transport NZ’s standard project evaluation methodology to a major Passenger Transport investment such as this is too restrictive in its nature and does not allow for the full benefits to be realised."

Code for - the project is a bad investment when compared to all the other ways that road taxes could be spent, so we had to come up with a methodology to give the answer we wanted.

Want to know more? Well let's have a look...

6 comments:

Bryan Spondre said...

This issue needs some serious scrutiny in the news media. The amounts of money being spent are obscene. Bernard Hickey gives the issue a kicking here. "under the standard Land Transport NZ assumptions for such transport business cases the Auckland rail plan only generated 87 cents of benefit for each NZ$1 spent."

Anonymous said...

Rail in Auckland, in NZ (and even in Wellington)
is fundamentally wrong

Only by getting rid of the existing tracks - scrapping the lot! - will we ever prevent another Labour government spending billions on stupid fucking trainsets.

If it cost 500 Million to grind up evey track, every sleeper, every signal, every overhead wire, every carriage, every wagon, and then dump the junk in the middle of Cook Straight it would be money well spent

It would be vastly cheaper that any option on maintaining the railways - and it would prevent such waste ever happening again.

john-ston said...

"It will render even more commercial (unsubsidised) bus services unprofitable. Already the proportion of bus services in Auckland that are unsubsidised has dropped significantly since money was poured into rail"

I must question this point. Correlation does not necessarily equal causation, and while there might be some truth, I don't think it is 100% of the picture. I suspect that at least some of the subsidies have come about through the operating companies milking the ratepayers for what they are worth - all that has been needed has been a mere threat of cancelling a service, and the ARC have come with an open cheque book.

Unfortunately, we don't know the truth because the operating companies have never needed to reveal their books to the likes of the ARC.

Anonymous said...

What a negative uninformed blog.

Pure poisoned prejudice without any logic.

libertyscott said...

What a mindless vapid comment. Pure poisonous criticism without a hint of evidence.

Anonymous said...

Your points about Density in Auckland are not seeing the full picture. The focus on rail now is a lot to do with urban planning in Auckland. Auckland has basically spread out to its urban limits. There are very few greenfields development sites left. Aucklands population is growing rapidly and we have to fit in another half a million people or so within the basic boundaries of Auckland as they stand today in the next 30 years or so.

Where will thee people go?. The obvious answer is near rapid transport options linked with high density employment areas (the cbd). This means development around train stations will be incredibly important in the next 30 years, and beyond. This means more density in Auckland, and more highly used corridors, suiting train travel, over car travel (motorways are not built to handle large numbers of similar trips)
Auckland will not remain as it is forever.

Your points on subsidies are not correct either. Subsidies are dependent on the amount of users. With the increase in rail users over the last 5 years (2.5million to 8 million trips per year) subsidies for rail are projected to be equal to that of buses in 2013. So, if you dont like subsidies, encourage more train use. This will bring it down.

Your business case for rail in Auckland is based, it seems on your opinion and not much else. You said people do not leave their cars for a train... why not???. This is just your opinion. When gas prices went up last year train patronage went up a massive amount, and traffic declined in some places around 10%.
This i an important point in support of rail in Auckland. AGs prices are unstable. Whether you and I can afford to live well or not depends on whether some nut job on the other side of the world walks into a refinery and blows himself up. As a nation we are completely dependent on world affairs because we rely so heavily on foreign oil and cars.
Auckland spends 2 billion a year on gas. and hundreds of millions on cars. There are no oil companies in NZ, and no car companies Continuing with a car dominated system means we will continue to send money out of the country. rail money stays in the country.

Another part of the economic equation you have not written about is the disposable income of each user. Studies have shown that cities with good public transport spend less of their money on transport than car dominated cities like Auckland. In an extreme example, European and Asian cities spend around 10% of their disposable income on transport. In Auckland it is around the high 20's. That means we work , on average an extra day per week , just to get around the city.

Lastly, Electrification offers other possibilities. The problem with Auckland rail atm is that Britmart is a terminal. Only a certain amount of trains can go in or out each hour. To increase capacity and provide more frequent and better services, Auckland needs an underground loop back to Mt Eden to free up capacity at britomart. You need electrification because its obviously not a goo didea to put diesel trains underground.This means train lines can be built to the airport, or to the north shore, which will be needed in the future. Without electrification, no expansion is possible, meaning Auckland will have the same train service in 100 years as it does now. Obviously this is not an option. So Electrification is the first step to allow other things to be done.