Tuesday, September 29, 2009

George Wood urges caution on Auckland rail

While the outgoing Chair of the ARC, Mike Lee, plays politics (he is an Alliance member from way back) in demanding the government cough up money for lavish rail plans that haven't even had any serious investigation done, George Wood talks some commonsense in the NZ Herald. The basic questions that rail enthusiasts, like the ARC, evade and avoid, because they have a grand vision of changing Auckland.

Wood is concerned about accurate costings and whether all these projects are good value for money, he notes "The Northern Busway Project was a good case in point. The final costs were considerably greater (nearly double) than the initial early estimations.". The record of rail project in the US shows on average public transport projects finish 20% above budget.

"A few decades ago the majority of employment was in the Auckland Central Business District. People now find their place of work is in the outer suburbs where they live, or they travel to other parts of the region.

In the case of North Shore City, in excess of 60 per cent of workers do not have to leave that city to find work. These days the majority of the Auckland region's workers never have to travel into the Auckland CBD."

He's right, but the planners still think of Auckland in the 1950s or want to go back to it. Only 11.7% of jobs in Auckland are in the CBD. So you might ask why spending over a billion dollars to service those jobs is worthwhile, particularly when half the people in those jobs don't live anywhere near a railway station or line. Half as many jobs are in Mt Wellington and Penrose, but the planners have no interest in commuters going there.

"In the next three years the operational subsidies provided by ratepayers will amount to $43.3 million. The remaining 60 per cent of this three-year operational cost, which amounts to $108.2 million, comes from petrol taxes and road user charges paid by Auckland's motorists."

So $36 million a year in subsidies, for around 8 million trips a year. So that means every trip carries a $4 subsidy. You might think it would be better if fare payers could pay that, but even if they did, it wouldn't start to cover the capital costs.

"Once the new rolling stock is purchased someone, and again it will probably be the ratepayers and motorists, will then have to pay for the depreciation of this equipment. This will amount to around $12 million a year" Oh and you're forced to pay for the rolling stock new as well of course.

"In 2001 ... we were told that 25 million passengers would be using the metro rail network by 2015. We are still a long way off this figure. The Auckland Regional Transport Authority has now revised its target down to 17 million passenger trips by 2016. This is still a huge increase when last year's annual figure was 7.9 million."
In other words, the massively inflated targets for patronage aren't being met, so the targets get revised and history is rewritten. What does that remind you of?

"Buses operating in the region carry six times the number of passengers carried by our trains. Buses are a far more cost-effective means of providing transport services to all our communities."

Indeed he is right. Buses carry around 43 million trips a year, (2007/2008) compared to around 8 million on rail. Some bus services are unsubsidised, but the annual subsidy total in Auckland for buses is around $93 million, so around $2.16 per trip. Cheaper than rail certainly, and it would be cheaper still if the ARC hadn't poured so much into contracting over commercial routes, and decimating profitable bus routes with the competing rail services. Subsidies were only $45 million in 2005, with similar levels of patronage, so the ARC geniuses have more than doubled subsidies with no net increase in patronage. Given the big increases to and from the North Shore with the new busway, this means significant declines on the Isthmus. This was before the recession.

So while George Wood is largely right, I wouldn't take the ARC or the new Supercity as the great model in fiscal prudence in looking after public transport in Auckland. I most certainly wouldn't think Mike Lee has any good record in knowing how to spend ratepayers' money. It's about time Auckland and central government took stock before pouring more money into Auckland's public transport networks.

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