Tuesday, October 12, 2010

Len's boondoggle

If you want an example of why politics should be taken out of the sphere of transport then Len Brown’s policies provide some pretty clear guidance.  A lot of attention has been paid to his policies focused on building expensive electric rail lines to the North Shore, Auckland Airport and an underground CBD rail loop. These lines that would cost billions of dollars, would lose money year after year to operate and hence couldn’t be sold for even one twentieth of what it will cost to build them.  However, Len Brown is a politician – he has visions, visions of how to spend other people’s money and he doesn’t care whether this spending is worth it financially, economically or environmentally.  No, he’s joined one of the religions of recent times - Railevangelism – driven by faith, passion and a belief that trains are good, and a little thing like money shouldn’t get in the way of Auckland having more.





The cost of his plans approach NZ$5 billion.  To put that in context that is around two years total spending on land transport by government on roads and public transport, across the country.  It is double the total annual national take of fuel tax, road user charges and motor vehicle licensing fees.   So if you like Think Big, you’ll love Lenin’s Think Biggest. 





Ahh, but wont people use it?  Well sure they will, but you wont be charging fares that even cover the costs of running the trains (which need to be bought too, the $5 billion doesn’t include those).   You see the whole urban rail strategy is based on the trains not making a financial return.   So not only will the capital expenditure be a deadweight loss, but it will bleed money continuously unless the fares are increased to change that.  Funnily enough if the fares were increased the trains would be empty, which tells you exactly how much those who would ride the trains truly value them.





Ahh, but wont their be economic benefits from reduced traffic congestion?  You’d hope so for that sort of money, and a year on year subsidy, but this is where things break down a little.  Yes, the NZTA estimates that removing one car from peak time roads in Auckland and shifting the users to rail is a $17 benefit in reduced congestion.   However, will everyone on those trains have been people who would have driven cars?  Hardly.   Many will be existing bus users,  for the CBD loop some will have otherwise walked, some will have been car passengers (so the car is still being driven but the train offers a convenient option for the passenger) and yes some will be drivers of cars.  On top of that some will be new trips, trips that otherwise wouldn’t have been done,  but which you will have been forced to pay for.   Funnily enough the railevangelists treat everyone on a train as if it is someone who is doing good for everyone else by not driving a car, ignoring that many of them would not have driven in the first place.





Oh but wont congestion be reduced?  Really?  What new world city has made any impression on traffic congestion by building a new electric rail network?  Los Angeles? No.  Portland?  No.  Atlanta?  No.  In all cases the impact on traffic has been minuscule, and is more than made up by the continued growth in road traffic.  A large amount of money spent for next to no gain.   In Auckland only 12% of commuters terminate their trips in the CBD because most jobs are not downtown.  Len Brown wants to build a railway focused on servicing downtown Auckland where over 30% of commuter trips are already by public transport (mostly buses, which get ignored by many railevangelists because they aren’t politically sexy).  The simple truth is that his ideas will benefit a tiny percentage of commuters at a cost of thousands of dollars for every Aucklander.





Surely a rail line to the airport is a good idea and will take lots of people out of their cars?  Well it might take some businesspeople (they always need a subsidy) from taking taxis to the CBD, but the catchment area for airport trips is across all of Auckland.  Who will take the train to west Auckland or Penrose or Pakuranga or Long Bay or Point Chevalier?   Auckland does not and will never have the kind of high frequency metro service seen in London, Paris or New York,  so it will remain highly inferior to take any connecting trips by rail.   An airport line wont ever stack up.





Let’s be clear, the last and the current government have committed to wasting your money on a heinously expensive rail electrification scheme that is already costing a fortune.  Before that has even been built or proven by any measure, Len Brown wants to build the next few stages at around 3x the cost of what is committed already.   He isn’t even saying “let’s wait and see how it goes” in case it proves to be a financial failure or simply doesn’t reduce congestion, he’s calling for more money to be poured down this tunnel of faith.





The economically rational response to the rail programme is to treat it as a sunk cost, let the current contracts be concluded and eventually sell the whole thing off to whoever wants to run it.  The economically rational response to Auckland’s traffic congestion is to commercialise and privatise the road network so it can be priced and invested in according to demand, rather than political whim, and finally for Len Brown to get his pilfering hands out of the wallets and purses of ratepayers.   He is no better at planning how Aucklanders should move than he would be if he wanted to plan how Aucklanders should eat, dress or be housed!

9 comments:

FAIRFACTS MEDIA said...

Sounds like Lenin's policy is raily loopy!

Jeremy Harris said...

I agree with you that if all transport infrastructure was privatised and the chips fell where they may that would be optimum but you fail to currently realise what a massive, massive subsidy to road use minimum parking requirements are...

In a truly free system the elimination of this huge subsidy would see a massive increase in the viability of rail... You're argument also fails to realise that if the rail system was closed far more road trips would have to be made into the CBD via roads that already canot handle them in peak hour... Southern line trains are already at capacity...

If we are going to have socialised system of transport and if in a free market system rail use would be higher due to roading subsidies I have absolutely not problem with money being mover from the low BCR Holiday Highway to the CBD loop which will have a much higher BCR...

libertyscott said...

Jeremy: I don't think anyone has done an objective study on the parking issue, so I think the jury is out on that. Yet if you are correct surely the solution is to deal to that parking issue, not pour a fortune of taxpayers' money into a loss making operation.

If the rail system was closed you'd have corridors able to be used for exclusive access roadways for buses (and other commercial vehicles). However, the other problem is underpricing peak travel, as it is about time that business was incentivised into telecommuting and timeshifting when people need to be at work. It doesn't take many to make this work, but constantly subsidising peak commuting undermines this.

Of course the Puhoi-Wellsford motorway should simply be built as a tollway funded by tolls/future RUC and fuel tax revenue from motorists. The CBD loop could never be funded from future fare payers in your wildest dreams given they can't even pay for the operating costs of the trains.

A sensible approach for Len would be "let's wait and see" and let the committed expenditure deliver what is promised or not. Unfortunately the Auckland Council doesn't exactly have a vested interest in being proven wrong.

Jeremy Harris said...

I have advocated for the elimination of parking requirements, I asked Brown to his face if he would get rid of them and he said no (in many, many more words)... I think you are right in what you say while at the same time being wrong, i.e. what you advocate is the theorhetical ideal but in reality, in a left leaning country, it isn't going to happen... My point is if we are going to have a socialised system, lets have the most balanced system possible that takes into account the subsidy imbalances, you seem to argue for roads because the current subsidies favour them and like all libertarians you have a road fetish...

You actually couldn't use former rail space for buses/HOVs etc except maybe out West if all the rail north of Auckland port was closed, as the Southern line (and Eastern to a lesser extent) are required for freight purposes to the port...

I do think you're love of the "freedom of cars" and theorhetical perfection, while objective, really crowds out your sense of what is practical to achieve in actuality...

libertyscott said...

Jeremy: Oh I am sure you have advocated for removing parking requirements and good for you.

I would think it might be valuable for a proper study to be done on the impacts of those requirements (not commissioned by any lobby group side, but maybe NZTA).

I advocate for roads because they are the most flexible form of transport infrastructure around. Railways are bespoke closed networks that in an urban context are useless for freight and cannot even start to go everywhere. Back at the beginning of the 20th century there were freight trams, which disappeared in a generation because they simply couldn't do the job as well once internal combustion engines made medium sized trucks competitive. It is a matter of technology.

This is why I believe high quality bus services can do the job of rail until you get into serious densities of usage across more than short peak times. The key to making the buses competitive is pricing off enough demand on the roads to allow them to operate at reasonable speeds (and for road use to be properly valued as a result).

Rail is good for very high volumes of people travelling between set points of intense activity, it isn't very good at much else. If Auckland had pursued more intense bus operation and bus priority, focusing on comfortable and clean vehicles, safe stopping points and frequency I believe it could achieve far more than rail for each dollar spent.

The NIMT may remain for freight heading south, but clearly the Western line and from Auckland to Southdown could be tolled express road corridors (even restricted to low emission vehicles). The big issue about doing any of that is the Public Works Act, given some of the land was taken for rail purposes.

No I don't have a road fetish, a man who once had a model railway and has travelled overland by rail from the Pacific to London over 10 days can't be accused of that.

What I want for Auckland is a transport network that is economically efficient and has the best allocation of resources possible. The more this is driven by what users want and economic rationalism in rationing the supply of scarce resources the more likely this is possible. The more it is driven by politicians grandstanding with big schemes using other people's money the less it is.

I reject Len Brown's scheme as much as I reject John Bank's original plan for an exhorbitant Eastern Corridor.

However, Auckland's transport failing are entirely down to politicians who thought they could direct resources to where they were best needed - they have almost always failed, witness the decades of mismanagement of the bus system which saw the right ignore it as something not worth worrying about, and the left constantly kowtowing to the unions who milked the system for their own paypackets starving it of capital.

Jeremy Harris said...

I'd love such a report on parking, it'd be very interesting to know exactly how much is added to the price of goods, services, property, rates and how much lower wages are due to parking requirements...

I agree with you on the potential of bus services, even if ARTA's goal of 100,000,000 PT trips by 2016 is achieved 80,000,000 will be by bus...

The best way to achieve an increase in economic performance outside of increasing the road network or by introducing pricing is to increase the integration of the bus network, this can been achieved by creating the network effect and having a far more competetive tendering process on routes... And also cycling, there are dozens of cycling projects around Auckland with BCRs of 20 and above...

I support the CBD loop, I think it will have a good BCR and given the unlikelihood of road pricing and the electrification, it makes sense at this point, Josh's proposal for Puhoi to Wellsford - Operation Lifesaver - has a good BCR, achieves the outcomes desired and saves a billion which could be used for the CBD loop...

I'm not keen on Airport rail simply because Avgas is something that will be very hard to replace, if not impossible, after oil production peaks, market forces will sort out most of our other energy needs but a completely new technology is needed for the airplane quite apart from the fact the airline industry seems to lose money year after year...

North Shore rail is a nonsense till the Busway is approaching capacity... East Auckland is in some serious need of some rapid transit...

Rebel Radius said...

Great post.

A couple of points.

As mayor of Manukau, Len Brown throws so much of tax payers money at Fairfax media, it imparts collective propaganda with the slickness of Pravda on a bad day!

I went along to one of the campaign rallies to listen to what Banksie had to say, which disappointingly was nothing vastly different to Browns collective ideals.

Banksie wanted to kill private enterprise by regulating dairy owners in selling liquor, he also wanted "to get people out of private motor cars and into public transport" Namely rail.

The future of Auckland appears to be well mapped out. Like many other Kiwi's I will be selling up and moving south.

libertyscott said...

Jeremy: The CBD loop can only be functionally justified if there is insufficient capacity at Britomart. Until that is demonstrated it is foolish to go further, it would be like building roads well in advance of demand. Let's see if the wild forecasts of electrification come to pass, before committing more of other people's money to something they wont be using. Let's be clear, the people who primarily benefit from Auckland rail are a tiny proportion of Aucklanders.

I'm more optimistic about aviation because it is continuously more fuel efficient, with composite airframes and next generation engines easily able to squeeze another 25-30% out of aircraft in the next 10-20 years.

The airline industry is shaking out thanks to the removal of trans-national restrictions on investment and mergers (and I recall when Richard Prebble once opposed deregulation domestic aviation in NZ!).

Agree on North Shore obviously, but the east? Let's start with express buses and bus priority, but also use the NIMT through Tamaki given it is there. No more lines though, the Onehunga and Manukau extensions are serious money down holes, the latter because it bear no relationship to travel patterns, just political egos.

Jeremy Harris said...

On the loop, it will have a 10 year lead time from approval to completion, a decade of overcrowded railcars is not my definition of an efficient transport system, given currently ridership levels, rate of growth and the well documented "sparks effect" I don't think it is unreasonable to get moving on this now... As for who benefits whether it is the small percentage of users or the city as a whole depends I guess on whether you believe in decongestion benefits...

I'll have to some googling about airplane advances, I know turboprops use much less fuel without an equalivalent drop in speed... I just read Prebble's book "I've been thinking", he didn't mention anything about that - just how great it was Ansett was let in...

The problem of bus priority out East is that when it reaches Panmure it is on to local roads or a transfer to the train (if heading to the CBD)...

Onehunga cost $15 odd million, so I guess ridership will determine whether it is worth the re-opening money, Manuaku never made sense and stops too far away for the "CBD" (read central parking lot and mall) also...