Wednesday, February 15, 2012

Len Brown's Think Big plan - 10 questions

When you look at Len Brown's plans for spending a fortune on transport infrastructure in Auckland and his plans to charge those using it rather than tax various groups to pay for it, you might ask some real fundamental questions about what he isn't saying and in fact why you trust politicians to get these things done at all.

You see when you look at the underground rail loops, with cold dispassionate eyes, you can see this:

-  An underground rail tunnel and stations costing NZ$1.5 billion plus, that wont be a saleable asset.  Nobody will want to buy it outright for anything approaching 5% of that cost, without getting some subsidy for doing so.  In other words it is a wealth destroyer on the face of it.

- Those who would be forced to pay for it wont be those using it, regardless of what taxes are imposed to force others to pay for it.  Indeed those using it wont even be paying for the cost of running the trains through it.  At best they might pay half the operating costs, one day.  They are not paying for the trains either, you are.

-  Besides the users, the others benefiting are those businesses staffed or patronised by the users, who also wont be paying for it directly, well no more than you are paying.

-  There will be no discernible difference in traffic congestion, because both central and local government run the roads as Soviet style assets charging all users similarly regardless of time and location, with no attempt to ration scarce resources except by queuing or to invest in new capacity unless it is approved by political fiat.

The biggest problem I see in considering urban transport in Auckland is the complete lack of context of the debate.  You see if you want to fly to London, there is precious little involvement of politicians deciding, anymore, the prices, the frequencies of services, the types of planes, the timetables or in getting taxpayers to cough up money for the planes, or the airports.  Similarly if you want to send a container from Albany to Manukau.  You find a company that does the job and you pay it, with the company finding a truck, setting the price and then using the road - and paying road user charges for the privilege (and hopefully avoiding the queues inspired by the Soviet style rationing of the state and council's roads).  In neither case does what the Mayor of Auckland think have too much influence, although in the latter he'd clearly like to tax it more to pay for some unrelated infrastructure.

Yet when it is about people commuting, it suddenly becomes interesting.  Compare even simply getting a bus from Auckland to Whangarei, which is a service run by a private company for profit, buying its own buses, setting its own timetable and prices and providing a service for passengers willing to pay admittedly using State Highways.   Getting a train from Auckland to Manukau involves a train bought by the government, owned by the council, running at prices and times set by the council, managed by a private company, with its costs paid for by ratepayers, taxpayers and road users.

1.  Why are there always alleged "funding crises" for "Auckland transport", mostly involving shifting large numbers of people short distances, but not for moving freight short (or long) distances and not for international passenger or freight transport?  Could it be because the latter is virtually always the responsibility of private companies operating for profit, but the former is dominated by local authorities and planners deciding how they people should move, rubbing up against most Aucklanders who decided long ago they can buy a car and figure it out for themselves?

2.  Why is it that new ships, aircraft, trucks, buses, bicycles and cars (i.e. NOT infrastructure, just the objects that use it) are always  paid for by their owners, because in almost all cases they get enough from their users (if they are used to offer paid for services), but not trains?  Could it simply be that the people that use trains don't like them enough to pay for new ones?  Could it be because government is too lazy to spread the cost of capital of new trains over the life of the asset? 

3.  Why is it that users of ports, airports and the state highway networks all pay for the full costs of maintaining and building them, but users of railways and local roads don't?  Why are they special?

4.   If Aucklanders so desperately want an underground railway loop to use, why does no one, not even the uber-council of Auckland want to borrow the billions required to build it?  Could it be because there wont be enough money raised by the users of the railway to pay for the cost of operating a train through it, let alone pay for the railway in the first place? 

5.  If the underground railway loop is not about the people using the trains, but about revitalising the Auckland CBD, why wont the property owners of the area served by it invest in the loop, or at least support a specific rate to pay for the cost of it?  Is it because they know they Mayor and government are a soft touch with taxpayers money, or do they really simply not believe that the underground rail loop will make a lot of difference?

6.  Given the government has committed to spending NZ$1 billion of other people's money electrifying the current network (with the users not paying a cent towards it), predicated on ambitious prediction for growing usage (and reducing usage of the roads), why would anyone commit to spending several billion more before it actually being demonstrated that the earlier predictions for the results of destroying taxpayers' money on an unsaleable liability would meet expectations?

7.   Why is it good to shift large numbers of people from using a mix of subsidised and commercial bus services to using far more expensively subsidised rail services?  Could it be that advocates of the rail strategy don't like this inconvenient issue being highlighted?

8.    Outside peak times, how much of the capacity of Auckland's rail network lies idle, how much more will lie idle after electrification and the rail loop (I suspect around 66% given international benchmarks)?  How does that compare to the recent extensions to the motorway network?

9.    Why should road users across Auckland, on all roads, at all times, pay for a piece of unprofitable infrastructure that will

10.   Finally, why wont Auckland's Mayor and grand council face up to the fact that if it replaced rates funding of local roads with a form of direct tolls with congestion charging, that it would do far far more to relieve congestion and improve mobility than any rail scheme at next to no cost (whilst giving Aucklanders that don't contribute to peak jams some tax relief)?  Or is it far simpler politically to promise people big infrastructure baubles they don't have to pay for?

Want to know the common denominators with all of these?  A hint is this:

-  Planners don't like people moving about at times, places and in ways that they don't understand and can't organise.  They inherently fear this.  What they ignore is that there are planners in the transport sector that make things work smoothly, but they are commercial planners.  They make airports work like clockwork, logistics companies arrange for parcels to go from Dunedin to Dar Es Salaam and major to do all of this, because the incentives are right.

- Politicians don't like telling people they can't continue to have recourse to other people's money to subsidise their activities any more.  They much rather offer people something for nothing the cost of taxing others.

- Privatising the roads terrifies people because they have been inculcated with legends of fear from past privatisations perpetuated by hysterical socialist doom merchants. 

You see anyone who pretends that an underground rail loop will fix Auckland's transport woes is either a fool, naive or a liar.  Have a guess as to which one the people who should know better are.  If they don't like answering any of the questions above with a straight answer, then you'll know it isn't because they are stupid.


Mark.V. said...

Charging tolls will do little to relieve congestion because motorists using the roads at peak times have little choice but to use the road at peak times. Their job requires them to start at a particular time, usually 8am and finish at a particular time usualy 5pm.

In order to use resources effectively employers require their workers to be on deck ready to work at a particular time and to finish at a particular time, they are not going to change.

Motorists already pay a "toll" to drive at peak times, the time it takes them to drive to and from work, if they could avoid that they would. Charging them a toll on top of that is adding insult to injury.

libertyscott said...

Mark, both economics and the evidence of peak tolls contradicts your view. You assume all peak users have the same trip purpose. They don't. In fact a 5% reduction in trips can have a 30% reduction in delays, as has been proven with congestion pricing in London, Stockholm, Oslo, Singapore, Sydney Harbour Bridge, Bay Bridge San Francisco and numerous HOT lanes. International evidence is that responses to such charging include changing mode of travel, changing route, changing time and not travelling at all (someone may decide not to have an appointment at peak times). The peak spreading already apparent, with people starting work between 7 and 9.30 and finishing 4-7 shows that there is scope for changing times.

Many employers do not need people to be there all at the same time, certainly the services sector and office work doesn't need everyone starting at finishing at the same hour.

The penalty of queuing imposes different costs on different people. Some people will pay to get a faster trip because reliable travel time is important, others wont. The current way of rationing road space, queuing is grossly inefficient and not only wastes time, but also fuel and adds to pollution and means expensive capital assets are badly utilised.

Most other scarce resources are priced according to demand and supply, resisting it with roads is like embracing Marxist economics whereby people queue up for cheap stale bread because everyone should be "treated equal". People don't queue up at airports waiting for a ticket to get on a plane not knowing when they might finally get to go, they shouldn't for roads.

Anonymous said...

Who gives a shit about bludgers & Labour voting "workers" getting around? Not me mate, not me.

London's great - there aren't any cars worth less than GBP40K (say NZD100Kin the central city because bludgers can't afford the charge.

Key should have ripped up all the tracks and sold KiwiRail for scrap - and let most of the SOEs go likewise. Given NZ is basically bankrupt, if Shanghai Pengxin was to take 'em of the govt, good on 'em.

And then they can charge whatever-the-fuck they like to whoever-the-fuck they want because, dammit, they'll own the roads.

libertyscott said...

Anonymous- Nonsense bit of trolling. I have a car worth less than a quarter of that and the majority of those paying the congestion charge in London are actually tradespeople and deliveries. Kiwirail could be sold as a going concern, it has profitable parts. I've never argued that privatising the roads means selling them.