Thursday, May 13, 2010

Gareth Hughes a clown once more

What the Greens say about an unprofitable Hamilton-Auckland passenger rail service.

Ohhh a new rail link? Yes, we want it, you should pay for it, it must be good, it's a railway. People like trains, see the petition of those people who want it? No we didn't ask how often they'd use it, stop being mean, we want it, you pay for it. Go on, it's good for you. How much? We don't know, who cares, you'll be made to pay anyway. It will reduce congestion? How much? We don't know, we ignored any evidence that says it will do nothing.

Gareth Hughes is proving he is as much of a clown as Keeping Stock showed he himself demonstrates.

He says "the commuter rail connection had real merit and offered a long-term option for linking Auckland and Hamilton. Yes, so hard to get between those cities with that state highway, the buses that use it and even the Overlander rail service.

He goes on as the Waikato Times reports "Hughes pointed to the 2011 World Cup as a "great incentive to get a commuter service happening"". Yes, nothing so good for the environment as encouraging Aucklanders to live in Hamilton and commute, and commuting has everything to do with the Rugby World Cup, right?

Follow the thinking so far? Well Gareth doesn't even know there is a railway already between Auckland and Hamilton (most of it double-tracked) "The Greens wanted to see a "corridor of national significance", with construction of a rail-line – or space for it to be built – alongside the Waikato Expressway". Presumably he's never actually travelled between the two cities by land.

This staggering level of ignorance should render the Greens as being a laughing stock. Let alone the wilful blindness of the Greens and local authorities in Waikato ignoring that the last time such a service was trialled, it was for 16 months from 2000 to 2001, undertaken by the then privately owned and unsubsidised Tranz Rail (you know that awful foreign company that leftwing legend has it destroyed the railways). The trial was not a success, even though it used the relatively comfortable Silverfern railcars, it carried on average 12 passengers a day south of Pukekohe.

That's not even a profitable busload. A profitable rail service would need to carry at least 12 times what the trial did, every day, in each direction.

However, the Greens aren't about economics, or reason, for them railways are a religion, and any idea of a new service must inherently be good because trains are good, always.

You should be forced to pay for them because of this, because it is about faith "Mr Hughes said the Greens did not have costings for a Hamilton-Auckland commuter rail link, but they believed the cost-benefit ratios would still be greater than those for new roads.

No costing, no idea about how many people would use it, but they BELIEVE it would be more beneficial than new roads.

If the Greens are so blindly ignorant about something which is rather easy to dismiss, can you imagine how often the Greens engage in such a faith based view of the world (especially given how they dismiss those who have one they disagree with?).

8 comments:

Jeremy Harris said...

It's a shame you went and said Hughes should be rendered a laughing stock as this post does something quite similiar but from the other side...

Firstly it has been costed and has a positive BCR, secondly the previous trial was almost a decade ago and there has been significant population growth in both centres as well as increase in fuel costs, thirdly the NZTA modelling shows well over the 90 persons a day needed to make the proposal viable will use the service...

I find it sad that you like to claim you are pro the defition of the free market while seem to denigrate rail or public transport for subsidies, rarely talking about roading subsidies (which in NZ greatly outweigh PTs)...

A bit more research before anti- Green party tirades would be good...

Tony said...

Jeremy, have you seen the BCR Calculation for the Hamilton/Auckland Rail service that claims a positive BCR ? I have and this is what it says to me.

Firstly, the forecast was done by ex TranzRail Exec Murray King et al ... hardly a neutral consultant.

Secondly, the starting patronage is estimated at 130/day even though there were only 332 HAM-AUCK commuters total in the 2006 Census (i.e. 19% switch to rail from day one)

Thirdly, from a base of 6 TIMES HIGHER than the previous trial, the rail BC also assumes 4% continues annual cumulative patronage growth for the next 15 years to 225/day

Fourthly, the BC assumes start-up costs of only $200,000 and total operating costs of only $1.84M/year (with NO Opex increase even though patronage nearly doubles in 15 years).

Finally there is the average one-way train fare (including concessions) being $24 when you can get a one off bus fare (unsubsidised of course) for $14 (Intercity 7:30am) or less today. Even with a fare double the bus fare, there is still a funding shortfall of nearly $1M/year

Now I may have read it all wrong (some of the calculations literally do not make sense to me) so I am happy to be corrected.

Until then I would say that the BCR for Hamilton-Auckland is actually based on some bold assumptions and pretty suspect calculations . . . but them that is really what Liberty Scott is actually saying.

To summarise, the HAM-AUCK commuter rail BC assumes a 6 times the previous number of HAM-AUCK rail commuters will switch use the new service even though it is twice the price of the current bus and is based on old current rolling stock with minimum investment. The service will then successfully run for 15 years during which rail patronage will nearly double without any increasing costs or needing any refurbishment. The $1M/year subsidy for this service is worth it because 72 car commuters will stop driving. Yeah right

libertyscott said...

Jeremy: I've seen project appraisals done which are essentially "Prepare something that gives us the result we want". Do you seriously believe every BCR ever done is on a common set of assumptions? NZTA spends ages pulling to bits the over-optimistic appraisals done by those seeking funding, because if that wasn't done it would be very easy to just make up figures. You have simply raised some strawmen, and I am sure you wonder why public transport face such scepticism and scrutiny from those who have to manage public funds. This is a case in point.

Tony made the fundamental points, but can I add to that:
1. The population increase in the two cities is not 600%, and the number of commuters I wager has also not increased by that proportion.
2. You don't know where the current car commuters go, but it would be a fair bet most don't go to downtown Auckland (or near stations on the NIMT), and most don't live near Hamilton station. How many transfers do you expect people to undertake instead of driving? Bear in mind also that any rail service is not going to be faster than driving, except perhaps for a person who lives and works near the downtown stations (and even then it will be marginal).

Of course I am pro-free market, I've long advocated commercial and private ownership of all modes of transport. I've posted several times against general taxation money going into roads, as well as rail, so please don't make up things.

Nevertheless, the subsidies on a per passenger km and per trip basis for rail absolutely overwhelm the same for bus (we are talking services here, not infrastructure).

On top of that, nobody can even pretend that rail passenger services generated a return to invest in capital renewal for rolling stock, let alone track. Yet it is clear the state highway network produces substantial financial surpluses.

That simple fact is very uncomfortable for the Green Party. It treats revenue generated from using roads as if it is general taxation that should prop up uncompetitive modes. It exagerrates the externalities from roads, (which are mostly around congestion), and then doesn't promote the main solution, which is efficient pricing.

Efficient road pricing would put all modes on an even footing, and would justify ending subsidies for public transport on economic grounds. Peak car commuting would become more expensive where road space demand is high, offpeak driving would be cheaper. Public transport fares at peak times would similarly be expensive, and very cheap off peak. Ratepayers would save a fortune and resources could be reallocated from road building and public transport subsidies to what people would rather spend money on.

and yes, that means the Green Party, the petition signers and the individual councillors spending their own money on trialling a train service. Yet it is funny how the Greens didn't ask for $100 from everyone signing the petition to help pay for it, because people paying for what they want is contrary to Green philosophy. The Greens much prefer forcing everyone else to pay.

Jeremy Harris said...

I think BCRs are largely a waste of time due to the massive over inflation of the benefits of time savings, particularly in terms of road's ability to provide such benefits, so I'm certainly not going to argue that they can't be made to say whatever one wants, Puhoi to Wellsford is a case in point where the discount rate has been amended in one of the final options for no reason, but I digress, except to say where is the post railing against Joyce..? Hughes wants to spend $1,400,000 (from memory) over three years on a project with a positive BCR and Joyce wants to spend $1,600,000,000 over 10 years on one without, still it isn't a railway...

I find it curious though that your post didn't mention that a BCR exists and that (as it stands) has a positive BCR...

Your basically denigrating Hughes for supporting a project the overwhelming majority of those that voted for him support...

My personal opinion is both the Waikato Expressway and this trial should go ahead...

Tony said...

Firstly, apologies to readers, my previous post has a calculation mistake. The 130/day assumed initial rail patronage for the HAM-AUCK business case is not 6 times previous attempt (that averaged 12/day) . . . it is over ELEVEN times the previous trial !!!

JH: I think BCRs are largely a waste of time due to the massive over inflation of the benefits of time savings.

Well it is only this overinflated time saving benefit that enables the rail service to get even close to being viewed as viable.

LS: Nevertheless, the subsidies on a per passenger km and per trip basis for rail absolutely overwhelm the same for bus (we are talking services here, not infrastructure).

Taking up this point, the HAM-AUCK Bus Case in that it does not consider this valid alternative (even though it is a requirement of the NZTA process). Lets say, instead of the $970,000/year annual subsidy required to take 130 commuters by rail ... lets consider the options of taking these same commuters by bus.

Now lets see, the retail adult one-way bus fare from Hamilton to Auckland is $14.00 (the total bus cost would certianly be no more than this fare), times trips per day (2), times days travel per year (260), times the number of commuters (130). Run the numbers: $14 * 2 * 260 * 130 = $946,400 !

Bus total cost = $946K vs Rail subsidy cost = $970K.

LibertyScott is quite right. Even using unsubsidised full retail bus ticket prices it would be cheaper to make bus travel from Auckland to Hamilton FREE than implement the proposed rail business case !

JH: ... on a project with a positive BCR and Joyce wants to spend $1,600,000,000 over 10 years on one without ... Your basically denigrating Hughes for supporting a project the overwhelming majority of those that voted for him support....

I assume you are talking about Transmission Gully. Of course this project is going ahead because of the huge public support. For those who remember, what actually happened was Transit NZ (now NZTA) recommended the Coastal Highway option (over Transmission Gully) as part of the Western Corridor Study and this recommendation was overwhelmingly rejected by the public consultation (lead by Porirua City Council).

Jeremy, you seem like a reasonable guy but you are all over the place with how to apply criteria for transport projects ... use BCR or not BCR ? ... or do you want things to be chosen by public opinion irrespective of what the BCR shows. Or is are you "mode specific" ... BCR for roads but public opinion for rail ?

Jeremy Harris said...

Nope talking about Puhoi to Wellsford, which I said in my last post... It has a cost of $1,600,000,000 and a BCR of 0.8 (and that is being very, very generous)...

Puhoi to Wellsford is a project which Joyce has pulled completely out of his arse and is a pork-barrelled spend to try and win Rodney after Lockwood Smith retires, no one is calling for it, it will lose hundreds of millions of dollars and yet LS is moaning about Hughes and railways and a million odd dollars...

It smells like Green bashing for the sake of Green bashing which I find disapointing because the Libnz like to talk about the individual's rational mind as the most important thing, then engage in collective Green and rail hating when there are much, much bigger problems in transport at the moment like a guy (Joyce) no one voted for (he didn't even stand for an electorate) taking part in economic vandalism on a scale not seen since Think Big (which at least had a chance of working)...

I take BCRs with a grain of salt, I just found it curious LS discreetly left out the fact that the proposal (as it stands) has a positive BCR, LS obviously knew this but left it out of his post... Why..? Perhaps because it doesn't make Hughes look like such a nutter..?

libertyscott said...

Jeremy: Please make your mind up, when you say "I take BCRs with a grain of salt" but want me to talk about it, it's a bit like saying "I'm not a Muslim, but the Koran says xxxx and so why are you not acknowledging this".

It makes more sense to argue on philosophical principles and arguments you consider to be correct, than to use ones you regard as bogus and accuse someone else of not using them. For example, how can you say Stephen Joyce is unelected because he doesn't represent a constituency and then be sympathetic to a party which has NO constituencies? Joyce represents people who gave National their party vote, but if you don't believe in list seats then support FPP, AV/PV if you wish.

I have a tag called "National party disappoints", you'll find articles like this one:

http://libertyscott.blogspot.com/2009/12/transmission-gully-subsidy-to.html

http://libertyscott.blogspot.com/2009/12/think-big-hits-wellington.html

http://libertyscott.blogspot.com/2008/08/national-looks-to-muldoon-and-pork.html

I don't think Puhoi to Wellsford need necessarily be built (and the primary positive justification is safety), but it should be planned for. I have argued consistently that road funding should all be on a strongly positive BCR, but then you don't believe in objective economic efficiency based funding allocation so I shouldn't waste my time. Presumably you don't believe transport funding should be about whim worshipping like it is almost everywhere else in the world, but I'd be interested to see how you'd calculate value for money.

The BCR on Auckland-Hamilton passenger rail is virtually worthless for reasons already outlined in this thread kindly by Tony.

I have yet to be convinced that the Greens even start to think about transport from an objective viewpoint that all modes should be treated on their merits. The evidence is that it is basically like this:
- Planes = bad
- Ships = good (except foreign ones)
- Cars = bad
- Trucks = bad
- Trains = good
- Trolley buses = good
- Diesel buses = good but not as good as trolley buses and trains
- Bikes = good.
- New roads = bad
- New railways = good
- Subsidising railways = good
- Subsidising roads = bad
- Pricing railways efficiently = bad
- Pricing roads efficiently = bad
- Penalising road users = good
- Slowing traffic = good

Every single Green party statement on transport policy can be compartmentalised into this quasi-religious thinking, and dare I say the same banal approach applies across a number of sectors.

Jeremy Harris said...

Lol, that is a pretty funny list there Scott...

My mind is made up, BCRs are often a waste of time or poor evidence because of the over inflation of time savings and, as has been pointed out, the ability to twist and turn them for personal reasons but I wouldn't completely disregard them... The point isn't really about my take on BCRs, it is about yours...

My point is simply that you said this: "You should be forced to pay for them because of this, because it is about faith "Mr Hughes said the Greens did not have costings for a Hamilton-Auckland commuter rail link, but they believed the cost-benefit ratios would still be greater than those for new roads".

No costing, no idea about how many people would use it, but they BELIEVE it would be more beneficial than new roads." all the while knowing that there was a costing, a BCR and it was positive... I contend you didn't mention this (and that you didn't agree with it) because it got in the way of a good old Green bash-a-thon...

Of course I believe in objective economic efficiency based funding allocation, they are my taxes, that is why I want to see BCRs take into account more accurate measures of time benefits and the principle of induced demand, you changed my mind on infrastructure time frames...

I dislike Joyce because he did not stand for an electorate yet presumes to waste %10.7 billion of taxpayer money, the Greens aren't in a position to do that, so escape my hatred for now...