What to do about Roads of National Significance?

The most significant recent development in transport policy is the Government’s decision to reschedule the Roads of National Significance (RoNS) programme. The sheer scale of the proposed projects makes them neither affordable nor practical to build within the next three to five years.

The funding gap was already clear from the Infrastructure Commission’s analysis. Delivering the full package of proposed land transport spending would require fuel tax and road user charges to rise by around 70% (and then continue rising with inflation). A petrol tax increase of nearly 57 cents per litre (including GST) is politically toxic — no government could expect to survive it. Something had to give.

Even if road users nationwide could somehow be forced to pay more, there is simply not enough construction capacity to simultaneously deliver multiple large highway projects across several regions.

Deficit between user fees and planned land transport spending

From the late 1970s through to the 1990s, New Zealand typically had one — or at most two — major road projects underway in its most populous regions at any one time. In the late 1990s, for example, Auckland’s biggest project was the Northern Motorway extension from Albany (Greville Road) through to Silverdale/Orewa. This steady, measured approach kept skilled people and equipment reasonably utilised and helped control costs.

Spending increases at the time were carefully managed so they did not overwhelm the sector’s ability to recruit staff and secure plant. That disciplined approach stands in stark contrast to today’s stop-start political cycles.

Construction capacity is not just a national numbers game. It is highly regional and specialised. Every region needs a baseline level of capacity for routine maintenance, renewals, and emergency response (clearing slips, rebuilding after storms, etc.). For large projects, it makes sense to sequence them so that one flows into the next, preserving expertise and minimising mobilisation/demobilisation costs. Certain skills and equipment — particularly tunnelling — are especially scarce in New Zealand. Running multiple major tunnelling projects concurrently would be inefficient, but so would long gaps between them. The current major tunnel project, Auckland’s City Rail Link, is now largely complete. The next significant one is likely to be the 850-metre Dome Valley tunnel on the Warkworth to Te Hana motorway — the largest road tunnel since Waterview. It is prudent to avoid starting another large tunnelling project in the upper North Island until this one is well advanced.

So what has the Government done?

It has rescheduled the RoNS programme, which was really the only realistic option politically. Raising national fuel tax and Road User Charges so that drivers in Southland subsidise roads in Auckland and Wellington is neither fair nor efficient. Tolling can help at the margins, but it typically recovers only 10–15% of construction costs. While useful, tolling is nowhere near enough to fund these projects — and it can divert some traffic back onto older routes, diluting the intended benefits.

The infographic below summarises the outcome of that rescheduling. The first page shows projects now under construction, including Roads of Regional Significance and other priority works.

There is a solid spread of projects across Northland, Auckland, Waikato, Bay of Plenty, Hawke’s Bay, Manawatū, Wellington, Canterbury, and Otago. These are the schemes we know will proceed. By far the largest is the Warkworth to Te Hana section of SH1, which alone accounts for 26% of the distance from Warkworth to Whangarei.

The remainder of the RoNS programme remains unfunded for now. This includes the extension north of the Christchurch Northern Motorway, the Hope Bypass near Nelson, upgrades to SH1 in Wellington, and the balance of the Northland expressway — including the long-awaited bypass of the Brynderwyn Hills (which is already in pre-implementation and likely to follow Warkworth to Te Hana).

This situation is the predictable result of excessive political ambition, ongoing budgetary indiscipline in other areas of government spending, and a funding system that lacks rigorous discipline on costs and project scope.

It would be optimistic to expect the politics around these projects to disappear with a change of government. The other side of politics has shown little concern about cost blowouts on the City Rail Link, and appears relaxed about the $1 billion earmarked for a new rail branch line to the Port of Marsden Point.

That Marsden Point branch line stands out as a genuine boondoggle — right up there with the worst of any RoNS project. Its Benefit-Cost Ratio was massaged from a dire 0.32 to a more politically acceptable 1.19 under the Ardern Government through heroic assumptions about massive freight transfers to rail. Making the project even remotely credible would require another $1.3 billion to upgrade the North Auckland Line. Some might call this economic alchemy; most would simply call it a government-commissioned business case. Notably, it was Winston Peters who helped create these circumstances — one of the more expensive “costs” of that coalition agreement to the taxpayer. 

It would be refreshing to see a consistent willingness across the political spectrum to reject boondoggles, regardless of mode. However, that currently seems unlikely.

Background

I understand why the Key Government launched the Roads of National Significance (RoNS) programme. For the previous two decades, the land transport funding system had struggled to deliver large, transformative road projects.

New Zealand has long funded roads on a fundamentally different basis from energy, telecommunications, aviation, and port infrastructure. While those sectors moved toward commercial models in the 1990s, land transport has continued to rely almost entirely on the cashflow from motoring taxes. With few exceptions (mainly legacy toll roads such as the Auckland Harbour Bridge and Lyttelton Tunnel), the system operates on a pure Pay-As-You-Go (PAYGO) basis.

Under PAYGO, new capital projects are funded from existing road users — whether or not those users will ever benefit from the new infrastructure. Future users pay the same charges, but their contributions are spread across further new projects and ongoing maintenance of the existing network. PAYGO works reasonably well for maintenance, renewals, and smaller-to-medium projects, but it is poorly suited to large capital investments. Funding capacity is limited by annual cashflow, making it difficult to finance major projects that take many years to build.

While there has been some increase in borrowing (via PPPs or Crown loans) against future revenue, it remains the exception rather than the rule. Roads are still managed as a government function rather than a commercial business.

The RoNS programme was a pragmatic workaround. It directed a significant portion of available cashflow toward a small number of big projects, bypassing a system that was otherwise well-tuned for maintenance, renewals, and high-value projects under $100 million. Large projects only proceeded if they offered exceptional benefits. Many of the successful ones — such as much of Auckland’s SH20 and SH18, the Albany to Puhoi extension of SH1, and large sections of the Waikato Expressway — clearly met that test.

By explicitly listing specific mega-projects, the National Land Transport Programme was reoriented to prioritise them. However, this approach came with real risks.

The two big issues with the RoNS are:

• Displacement of higher-value projects: Lower-profile but collectively more beneficial initiatives were deferred or cancelled. The Melling Interchange, for example, should have been built 10–15 years earlier.
• Weaker cost control: Politically prominent projects often faced greater cost escalation. Officials and contractors, wary of cancellation, tended to apply less rigour to commercial risk management and scope control.

That said, few people today would argue against key RoNS projects such as Transmission Gully. Even the Puhoi to Warkworth section — once derided as the “Holiday Highway” — is now widely seen as worthwhile. 

Completing the Waikato Expressway has saved lives and dramatically improved connectivity from the Waikato and Bay of Plenty to Auckland. Importantly, the RoNS programme would never have been necessary had the Clark Government not dismantled two critical elements of the more independent, professional funding system established by the previous National and Labour governments.

Why did it go wrong?

From 1996, Transfund operated as an independent Crown entity responsible for land transport funding. It was financed entirely from what is now the National Land Transport Fund — revenue raised directly from motoring taxes. Its job was to spend that money in ways that maximised value for the road users who had paid it. In effect, it functioned as a proxy user-pays system.

The Transfund Board was required to deliver a safe and efficient roading network. This naturally led it to prioritise maintenance, renewals, and resilience first, then fund only the highest-value improvements. It was never intended as the final destination of transport funding reform, but rather as a stepping stone toward a more complete user-pays model.

Transfund’s main constraint was the level of motoring taxes set by Parliament (in practice, the Government of the day). It advised Ministers on what could realistically be delivered at different tax rates. When first established, the revenue from those taxes was sufficient to cover maintenance and renewals while still allowing new capital projects with a minimum benefit-cost ratio (BCR) of 4:1.

That was a deliberately high threshold, yet at the time there was no shortage of projects that comfortably cleared it.

Merge funder and provider

This arm’s-length funding model was dismantled in two stages. First, Transfund was merged with the Land Transport Safety Authority, which had responsibility for the motor vehicle and driver licensing registers, commercial vehicle operator licensing, and land transport safety programmes. 

Second, the resulting entity — Land Transport New Zealand — was merged with Transit New Zealand, the state highway manager. The New Zealand Transport Agency (NZTA) was born: an organisation that was simultaneously the primary funder of land transport, its largest single recipient (as state highway owner and operator), a safety regulator, and the administrator of key licensing systems. “Chinese walls” were established in an attempt to preserve the independence of funding decisions. In practice, it was always going to be difficult for an agency whose board and chief executive were also responsible for building and managing the state highway network to avoid favouring its own projects over those of local authorities.

I remember Transport Minister Maurice Williamson in the mid-to-late 1990s openly welcoming the separation. He was “glad” when people lobbied him to build a particular road, because he could reply: “It’s not up to me — it’s up to Transfund to decide how best to spend the money on the roads.” The principle was simple and sound: professional, evidence-based funding decisions would deliver better outcomes for road users than politicians picking high-profile winners.

Enabling political direction of funding

One of the more damaging changes in New Zealand’s transport funding framework was the introduction of the Government Policy Statement (GPS). Setting aside the clumsy decision to appropriate a widely understood acronym, the Clark Government effectively dismantled Transfund’s operational independence. In its place, Ministers gained the power to direct spending: defining funding categories, setting allocation levels, and leaving NZTA to manage delivery. This structure inherently allows Ministers to prioritise politically favoured projects, including Roads of National Significance.

The results have been underwhelming. Successive governments of both major parties have channelled funds into large, high-profile projects while maintenance and smaller, high-value capital works have been squeezed. Under National, this meant big motorway projects. Under Labour, it meant heavy emphasis on rail, public transport, and cycleways — often accompanied by years of expensive planning and design work on schemes such as Auckland Light Rail and Let’s Get Wellington Moving, with little to show for the expenditure.

Politicians are rarely effective at picking infrastructure winners. We saw this clearly in the 1990s when decisions on airport terminal developments were taken out of political hands, finally delivering Wellington an airport terminal fit for purpose rather than a leaky 1920s relic. No one would suggest politicians should dictate the location of mobile phone towers, yet the trend toward greater political interference in infrastructure has re-emerged strongly in recent years.

The long-running saga over replacement of the Cook Strait rail ferries is a textbook example. A commercial operator has been prevented from making a straightforward business decision (i.e. not having rail enabled ferries) because politicians insist on vessels that users are unwilling to pay for at the price required — hence the need for taxpayer subsidies.  That's a different argument though.

So what should happen?

While a more fundamental reform of New Zealand’s land transport funding is ultimately needed, a practical interim step would be to restore genuine transparency around the merits of individual projects. This would allow genuinely high-value initiatives to be advanced on their own terms. Once the National Land Transport Fund (NLTF) is exhausted on its core priorities, any additional Crown funding from general taxation could then be directed transparently to whatever other projects Ministers deem worthwhile.

The next Government Policy Statement (GPS 2027–2030) should be the last. It should focus squarely on delivering an efficient, productive, and safer land transport system. Clear targets and funding criteria should be set for improving network productivity, reducing congestion, enhancing trip reliability (including resilience to disruptions), and cutting serious deaths and injuries on our roads.Any Roads of National Significance (RoNS) or other major projects that sit above this baseline should be funded separately through Crown grants or loans raised specifically for those purposes. Some, such as the Hawke’s Bay Expressway upgrade, already stack up as relatively strong value-for-money investments on their own merits.

To support this approach, NZTA (and its successor state highway manager) should develop corridor plans for all State Highways. Similarly, local road controlling authorities should prepare plans for their major arterial corridors. These plans would identify the key challenges on each corridor — whether safety black spots, capacity constraints, or resilience gaps — and set out a prioritised pipeline of interventions across short, medium, and long-term horizons.Longer-term projects would provide the justification for early land acquisition, consenting, and design work. Shorter-term fixes could be advanced quickly to deliver immediate user benefits. The result would be greater certainty for the construction sector, better cost control through a steady pipeline of work, and more disciplined prioritisation overall. Some corridors would require little beyond routine maintenance and renewals; others would need substantial, staged upgrades.

For example, a corridor plan for SH1 from Auckland through Northland would sequence improvements to the Whangarei area based on actual user demand, safety data, and network performance. The solution might not be a full expressway the entire way, but a series of targeted, high-return interventions. Investment decisions would flow from evidence rather than political whim. If a future government wanted to accelerate large-scale upgrades, it could do so — but it would need to top up funding transparently from general taxation, without cannibalising the core NLTF programme. This model would also create a much clearer picture of future spending needs, borrowing requirements, and the balance between road user revenue and expenditure on the network.

Wouldn’t this be more honest, more transparent, and ultimately more effective? It would deliver a steadier flow of work for the sector, ensure road users receive the benefits of continuous renewal and improvement, and create a far closer link between the people who pay for roads and the roads they actually receive.

Next up: What about the choices made for rescheduling projects?

It's time to reform land transport funding and management

I'm not usually a supporter of new bureaucracies, but I'll give the Infrastructure Commission its due, it's done quite a good job at summarising the main strategic problem in land transport funding.  That being that political ambitions, which match a lot of public ambitions, for spending on roads, railways and public transport, exceed the political willingness to tax the public to pay for them.

More precisely, it seems to exceed the willingness of the public to pay more fuel tax and road user charges, or rates, or for public transport, fares.  I say this because I think it is a fair bet that Luxon and Ministers Willis and Bishop don't think the public would swallow double digit increases in fuel tax or percentage increases in road user charges largely to pay for big highway projects, mostly in the North Island and mostly near Auckland, Hamilton and Wellington. 

The Infrastructure Commission notes that:

Since the late 2010s, spending on roads and rail has far exceeded user revenues, requiring large top-ups from general taxes. In the 2024–2027 funding period, Crown grants and loans totalled $12.8 billion, or nearly 40% of the $32.9 billion in planned expenditure. 

Source: Infrastructure Commission

The Commission continues:

New Zealand spends more on land transport than any other type of infrastructure. Mature road and rail networks connect most parts of the country, supporting the smooth movement of people and freight that underpins a well-functioning economy. While these networks perform reasonably well against peer countries, some important gaps remain. Land transport infrastructure providers face limited external oversight and no economic regulation to protect consumers – which is unusual compared with network sectors where consumers can’t choose between multiple providers. Transport faces several challenges, such as rising congestion on urban road networks, rising carbon emissions, and high health impacts from air pollution and road crashes

What's new

So this gives the impression that there are problems, today in 2026, with congestion, emissions and safety. You might think that this isn't exactly new, and you'd be right. Let's turn the clock back over 27 years...

Maurice Williamson, Minister of Transport, 18 November 1998

For years we have seen steady growth in traffic volumes. Currently, the traffic on our roads is increasing by about 4 percent each year. Also, the way we use our roads has changed. Expanding industries like forestry, dairying and tourism have increased road use in many rural areas beyond their capacity. Population growth in areas such as Auckland, the Bay of Plenty and parts of Waikato has meant that road use in these places is growing more quickly than in other parts of the country.

Some roads are less safe than they could be because they were not designed to carry either the volume of traffic or the amount of heavy vehicles they do. We can improve the safety of our roads, and reduce the human and financial costs that crashes create. The increasing use of our roads also puts greater emphasis on the environment - the environmental impacts of road use can be reduced.

Traffic growth is causing increasing congestion problems in many, particularly urban, areas. It is also increasing maintenance costs and the demand for new roads. We are struggling to meet these new financial demands.

Simply spending more money on the problems would add costs to our total economy, which we would all have to bear. What we need is a system that is smarter at informing road users of the costs they are creating, and smarter at deciding where new investments should go.

A system that results in our road resources being used very wisely. If we wait the problems will get worse and the costs of changing will be greater. If we act now, the changes can be managed in a gradual process with minimal upheaval.

That press release was in the context of announcing a major reform of the land transport funding system, that didn't proceed.  

What did happen was three things. One of them is the most obvious, politicians threw money at the problem, and as happens so often when government spending increases exponentially, it doesn't deliver the value for money that it used to.

Spending spree

If we compare 1998 in real terms (using CPI inflation to bring 1998 prices to 2025 dollars), spending on road infrastructure and public transport alone (there was little government spending on rail infrastructure in 1998), has increased by around 350%. That's 3.5x increase over and above inflation in spending on roads and public transport.

As you see above, 40% of current land transport spending isn't coming from motoring taxes (let alone charging rail users even a quarter of the costs of maintaining their infrastructure), it's coming from general taxes. 

Taxpayers are literally subsidising the movement of goods and people by rail and by road, or to be more precise, subsidising those engaging in the construction and maintenance of the network. In 2025, $4.211b was collected from motoring taxes (fuel tax, road user charges and motor vehicle registration/licensing fees). User fees are sufficient to cover road maintenance and a little more, but not to cover road maintenance and all spending on public transport, or road maintenance and all spending on road improvements.

This table below outlines that increase, using the budgeted spending in 1998 (it being harder to access reported spending online) compared to reported spending in 2025.

Comparison of 1998 and 2025 land transport spending: New Zealand

Where has the money gone?

Public Transport

Despite what you might think if you pay attention to the likes of Julie Anne Genter, or some environmental lobbyists, by far the biggest increase in spending over this period has been on public transport subsidies and infrastructure.  That's money to subsidise the operation of trains and buses, and money to subsidise renewing or improving infrastructure, such as railway stations, busways, the City Rail Link in Auckland and the National Ticketing Solution.

This has been over a twelve-fold increase in spending on public transport. 159 million trips were taken on public transport in the 2025 financial year. It was around 60 million trips in 1998.  With a 40% increase in population during that period, that's an 89% increase in patronage, but I'll leave it to others to judge whether that increase in land transport spending by central government has been good value for money.

Then roads

Also notable has been a big increase in maintenance for local roads and state highways. While some of that may be attributable to increased heavy vehicle traffic, it also shows a remarkable drop in productivity and inflation in costs.  The system has not incentivised or encouraged much in the way of efficiency in managing existing assets.

While much is rightly made of the increase in spending on state highway construction (and much more is planned), but what hasn't happened is that local road construction has not grown anywhere near as much.  The demands for local road improvements are, on average, likely to be lower than the state highway network, as most local roads are either suburban streets or lightly used rural access roads, but there is little real indicator as to whether this split in spending is appropriate or not.

What does seem clear is that highway construction and maintenance costs have grown exponentially, especially in maintenance which, in real terms, should not have increased that much above inflation. 

Warnings about risking poor quality spending.

However, this was exactly what was forecast in the late 1990s if there had been no substantial reform.  When spending on land transport infrastructure was increased then, there was concern about the capacity of the contracting sector to efficiently accommodate growth without inflating the cost of capital works.  After 1996, the Government increased spending gradually. Lowering the threshold for funding from a BCR of 5:1 to 4.5:1 in one year, then down to 4:1 in the following year, and at that point there were ample projects to advance. It was, at the time, thought that spending might be increased further, alongside increases in motoring taxes and reducing the diversion of part of fuel tax to the Consolidated Fund (this diversion ended completely in 2008). However, the view from Treasury at the time was that the threshold of spending should be a BCR threshold of 2.5:1.  

(Footnote: Be cautious about comparing BCRs of projects in the 1990s and 2000s to today, because today's BCRs include a lot of additional benefits, the evaluation period is longer and the discount rate is much lower than it used to be, but that's another story).

The main conclusion in the late 1990s was that just pouring more money into the system was far from optimal.  Big reasons why the system was not ideal were identified:

• The PAYGO method of funding capital from cashflow could not support large scale capital spending that has transformative impacts
• The artificial distinction between new capital and renewing capital/maintenance, with short term funding cycles for the latter generates poor incentives to optimise spending on maintenance across the asset life of roads
• Without better pricing of road use, some roads would be overused at certain times, with some road users not paying enough, and some paying too much to the use the roads.  Far better to enable pricing to reflect demand, capacity and the costs of supply on a more refined scale than the national average across all roads across the country.
• Little relationship between road users and road providers, with very limited feedback from road users to road managers and poor incentives on road managers to respond to the needs of the former.

Quite simply the incentives for innovation, especially for efficiencies was not good enough. This is particularly an issue for territorial authorities, which are more reluctant to engage in long-term contracting for road maintenance, or to consolidate contracting across multiple councils.  While it is possible to have political direction around some of these matters, none of this matches having financial and institutional incentives to optimise maintenance and performance,

On new projects there are five big factors that have influenced inflation in project costs:

1. Contractors do not think there is sufficient risk that large projects, once committed, will be cancelled or scaled down, so price accordingly. This is because the projects are explicitly politically identified, and contractors know that the risk of a politician cancelling a project because of cost, especially after a project has started, are low. Look at City Rail Link and Transmission Gully. Nobody was going to pull the plug on projects already underway because costs went up, and the New Zealand contracting market is too small to fear someone else being brought in to finish it. That's what happens when it is a politically-driven, not commercially-driven model of managing assets. By contrast, look at the M6 project in Sydney, which may be abandoned because the contractor is unwilling to complete the project under the current budget, following an unexpected collapse of part of the tunnel.
2. Gold-plating of projects to meet either institutional or political aspirations. The Northern Gateway toll road north of Auckland had its design speed increased and a tunnel included in its scope specifically because the agency involved wanted to "show off" what a great toll road the first new generation toll road would look like in New Zealand (the original design had a gully instead of a tunnel, and 80 km/h design speeds). Whether that was justified or not, the reasoning for doing it was nothing to do with economics, it was driven by a belief that the money would be spent anyway and for a Crown Agency to "show off" to the public. Likewise, insisting that the Northland Expressway is four lanes throughout with grade-separated interchanges its full length, amplifies costs with insufficient economic benefit to justify the cost.  There are very sound reasons to rescope (and indeed this used to happen in New Zealand from time to time).
3. The start-stop-start cycle of project development. The infrastructure sector advances this as the main reason, which is false, but it is an important factor. Long term strategies for corridors would help plan both the resourcing, sequencing and encourage competition in project delivery, so that equipment and skilled professionals could be guaranteed being occupied for a decade or longer. Starting and stopping projects is wasteful, unless of course, the projects were poor value in the first place (like Auckland Light Rail).  The presence of a long-term pipeline of economically viable project would be a good thing to help build a competitive industry and build capability.  A sector which sees commitments to projects appear and disappear depending on who is in power will charge more to manage that business risk.
4. Incremental growth in the costs of doing business. Part of it can be blamed on local government through the RMA, but it can be seen in the significantly higher amounts of planning, consultation and investigation work needed today compared to the 1990s. The process has become more complex, time consuming and seen a vast increase in the numbers of people involved in these projects. Some of this reflects increases in the cost of doing business, contracting and employment in the sector, due to incremental measures implemented by successive governments. However, the effects of this have been insufficiently appreciated (though this is also seen in construction more generally)
5. Rent-seeking behaviour by professional organisations in the sector. Competition has simply been insufficient. While there have been increased in construction costs, part of this has been opportunism for extracting greater profits from a sector that has been flush with money for some years. It has also been outrageous that the professionals involved in investigation and design work have increased their scope and fees at the same level, even though they don't face the increased input costs for construction.  On average it was always assumed that the pre-construction phases for major road projects were around 15% of the construction costs. Quite why these costs should increase at the same rate is unclear.
6. Higher labour costs for a shortage in professionals. There aren't enough technical experts to go around, and they are working in a global market for their experience. This is expensive for a country with a relatively low exchange rate, low GDP per capita, that is far away and has relatively high housing costs compared with say the United States.  However, having a steady stream of work for projects should help that over time.

The Infrastructure Commission notes:

The RoNS projects are expected to cost significantly more per kilometre than earlier New Zealand motorway and expressway projects, and significantly more than the OECD average. Indicative target cost ranges published by NZTA suggest costs should ideally be much lower. The Northwestern Busway is expected to cost much more than previous New Zealand busways, potentially exceeding the per-kilometre cost of many underground rail projects overseas. These cost increases constrain what can be delivered without displacing other needs.

The thing is, NZTA seems unable to fully understand why this is the case, let alone be able to contain these costs. 

Politicians have made the system worse

The entire system is not particularly well set up to challenge these, and since 1998 two major reforms have made it much worse:

• Creation of the New Zealand Transport Agency
• Almost complete politicisation of the National Land Transport Programme

In 1998, funding was decided by an arms-length independent funding agency called Transfund. It was small, nimble and focused on essentially buying the best value for money for maintenance and improvements to roads and public transport for motorists, who fully funded it through road user charges, fuel tax and motor vehicle registration and licensing fees. There was no Crown money from general taxation. The 1998 National Roading Programme was fully funded by road users, and money was allocated first to road maintenance, public transport subsidies and then whatever was left was available for capital improvements.  

The Clark Government merged it with the Land Transport Safety Authority in 2004 (then responsible for regulating drivers, vehicles and commercial vehicle operators, and managing the motor vehicle register and collecting road user charges).  Making the new agency - Land Transport New Zealand - a regulatory and funding agency. However it was in 2008 that it was merged with Transit New Zealand - the state highway manager - to make a land transport agency monolith - the NZTA. The National Land Transport Fund was now being allocated by the same agency which also is the largest spender of those funds.  No longer would the state highway manager have to be worried about convincing Transfund about what funding it needed, or on its performance, to justify funding it wanted.  NZTA funds itself.

That mistake would not have been quite so bad had the Clark Government not also all but destroyed the independence of NZTA through the Government Policy Statement (GPS) process of directing land transport funding. The GPS essentially politicised land transport funding, with the Minister of Transport able to simply direct how much money would go into whatever funding categories the Minister wanted.

That meant that three-yearly National Land Transport Programmes were politically directed.  From a system that rationed maintenance and focused on optimising maintenance so that capital spending could be maximised without degrading the road network, to a system whereby the whims of Ministers could redirect money where they saw fit.  Roads of National Significance,  public transport subsidies, rail projects, cycleways, whatever was wanted, could be funded. Furthermore, when Ministers or Governments changed, the whole programme was up for grabs. Projects might be cancelled and new ones started, with Ministers demanding to know "how soon" a project could be "shovel ready" to show progress, because once it started, it was hard to stop.

Imagine the incentives that puts on the contracting sector, both to please NZTA by getting work started, and to not be concerned about cost inflation once a project has commenced. It also sent a signal about investment in capital and professional staff through a political cycle.

The Infrastructure Commission puts it politely:

NZTA acts as both funder and deliverer of projects – combining functions previously kept separate. Between 1997 and 2008, one Crown entity (Transfund, renamed Land Transport NZ in 2004) was charged with administering transport funding and making investment decisions. Transit New Zealand was responsible for state highways and had to bid for funding alongside local road controlling authorities. Maintenance took precedence over new capital works, and only the highest-value projects were funded.

The Government Policy Statement on Land Transport (GPS-LT) directs spending in the sector. Unlike other network providers that invest to meet demand, land transport investment is heavily influenced by the Government of the day’s objectives. The Minister of Transport determines funding ranges for expenditure categories through the GPS-LT, based on advice from the Ministry of Transport but without independent oversight. In recent years, Governments have also directed specific projects for delivery, leading providers to spend more than user revenues allow.

That was destroyed by the Clark Government, and the Key/English and Ardern/Hipkins Government did nothing to change this, but rather all doubled-down on growing the NZTA's role and functions, and demanding ever more money be spent on their "objectives".

So what next?

The 1998 warning was part of an announcement to radically reform how roads would be funded and managed. They would become businesses, like state owned enterprises. They would be paid by users, directly. They could borrow against that money for new projects. They would be subject to regulatory oversight, and it would have removed ratepayer funding for roads. There would have been maybe eight local road companies, and they would have been expected to make a profit and pay company tax. 

Obviously that didn't happen, and there is little sign of it being revived, but there does need to be a change... more on that to come...

UPDATE: Corrected earlier PT figure estimate which was too high.

The climaxes of those who absolutely love expensive and scarce oil

There are people absolutely loving the price of fuel going up and eager for there to be fossil fuel shortages. It’s getting them terribly agitated, in a quasi-sadistic scolding way. “Told them so” said one, “those car fascists are going to pay” said one politician, “if only there were cycleways, the teachers and nurses would use them to get to work” said an earnest unionist. “It’s ironic that the white supremacist genocidal Zionists are helping up” said keffiyeh wearing angry woman.

It started online of course, chatting together getting all excited. “Shortages will show them we were right all along, public transport is better, that’s why we need to tax people more to make it free” said the urban planner. “The people, well I mean they aren’t really human are they, that own Ford Rangers or RAM are going to feel it bad, and they’ll realise how uncool and hate filled such vehicles are” shouted the Greenpeace staffer. “Child murderers!” cried out the neurodiverse kindness campaigners. “They’re not all ACT or Winston supporting straight white men who don’t have degrees though right?” said the elder gentleman who once marched against apartheid”. “No, but 90% of them are” said the suspicious purple haired non-binary student. The university lecturer noted “Look this will expose the far-right white supremacist Zionist Trumpist terror supporters to the mass of good people who support a powerful exemplar of decolonising resistance”, before the photographer yawned and said “steady on now, we need to be practical if we are to free people from the car addiction they don’t want.

A failed list candidate said “Great, even though the climate destroying far-right scum are in power, it’s election year and can get The People on our side.  We can finally show people how wonderful it is to share journeys with others on public transport, or enjoy being with nature in a cycleway”. A sick, sniffing one said “and it doesn’t matter about the Nazi Ranger drivers, all we need is for the Greens to give Labour enough of a boost to kick out Peters and Seymour”.

I might jest, but they really are almost tumescent in their excitement. 

This is the chance, the central planners can take more taxes, they can impose new rules, they can spend more of your money and direct the poor “addicted” car users to the more enlightened future of more public transport use, more cycling, more walking and of course freight should go by rail.  Not having convinced enough people that abandoning driving was necessary to save the planet, they think they can convince people that it is for their own good to abandon their transport choices.  

What do they want? You don’t even need to ask it’s all pretty clear:

• Make driving less attractive. Slower speed limits, remove general traffic lanes, remove parking, tax cars more.

• Tax you more (now or later) to subsidise public transport even more with cheaper fares, despite demand being up and the cost of providing services going up as well.

• Tax you more to subsidise rail freight, because businesses that use it already need a helping hand from… you.

• Tax you more to subsidise people who can afford to buy new cars to buy EVs, and for other people to buy e-bikes. 

Lunatic fringe academic Timothy Welch is one of these people . He’s a senior lecturer in urban planning, which of course is something we need much less of.  He gets republished by leftwing media because he plays to its unconscious bias, as he really knows little about the commercial side of the transport sector and is keen to selectively quote data as facts to support his own point of view.  His claims are mostly value judgment nonsense. 

His latest piece of polemic sees him supporting taxing buyers of petrol vehicles to subsidise buyers of EVs (it wasn't long ago he was bemoaning EVs saying "EVs require the same amount of road space and, due to their increased weight, potentially cause more road damage. But EV owners don’t buy petrol, which means they don’t pay excise tax – the same tax that pays for expanding roads". EV's don't cause more road damage, but then after the Government put EVs onto road user charges he bemoans it making EVs "less competitive".  More generally he supports making new vehicles more expensive (through the “Clean Car Standard”) which helps ensure the vehicle fleet stays older for longer, but Welch doesn’t like cars at all.  He loved that fewer utes and SUVs sold under the Clean Car Standard.  He bemoans the car ownership rate of 815 cars per 1000 people “one of the highest in the world”.  This should be celebrated that so many can afford a car and have the freedom it provides (urban planners aren't big on this), but he ignores that NZ is larger than the UK with 8% of the population. He claims that every decade there is an oil shock, which isn't really true, but even when it happens that all dies down (remember people like him warned us of Peak Oil? That was until fracking discovered more).  The 1979 oil shock one provoked Rob Muldoon to advance Think Big, and every single one of those projects turned out to be a net drain on the economy, because in a few years oil prices dropped right back. Welch doesn’t let that stop his excitement for reducing car ownership.  He finishes with this absurdity:

Every bus electrified, every cycleway built, every train funded is a direct reduction in exposure to the next crisis. The question now is whether New Zealanders begin to treat their car dependence not as a lifestyle choice but as a strategic liability.

What utter rot. Unless the bus is taking people out of cars, and unless a cycleway takes enough people out of driving cars to offset its cost of construction, it does nothing to reduce exposure.  He advocates fully taxpayer funded public transport, which has been shown in multiple examples (e.g. Tallinn, Estonia) to largely replace walking instead of driving (in Tallinn car use dropped 5%, but walking dropped 40%, and car mode share climbed back up because public transport was overcrowded with people riding it for short trips). 

There’s photographer Patrick Reynolds made a name for himself as an urbanist, and has for some years been an activist for the Green-left’s war on private motoring. This is why he was appointed to be board of NZTA in the first term of the Ardern Government, as the Greens strongly advocated for him.  He’s positively excited about the crisis on the Green Party Greater Auckland blog. He says we should think strategically (i.e. don’t just react to the crisis, but think of the “long term”).  His next step is to “rapidly reduce demand” and to “ensure an equitable path”. He said we are “structurally addicted” to driving. Curiously he floats the idea of lower speed limits for everyone but EV drivers, which is nonsense of course. Of course he doesn’t talk about aviation or shipping because These are blind spots because, by and large, governments don’t tax you to pay for their infrastructure, vehicles or services, because you’re willing to pay for them yourself (directly or indirectly through freight).

Of course it is now rounded off by the Greens. Chloe Swarbrick has, finally, taken time out shouting for the destruction of Israel and touting Hamas propaganda to demand "free" public transport and a new tax.

This wont excite the car hating mob though. Nothing gets them over the top quite as much as penalising car driving. Cars, the epitome of individual freedom, expensive capital assets that exist purely to sit idle for the owner to use when wanted, to go when and where they want to go.  So unlike public transport which is planned (!) and scheduled and directed to be a sharing experience, not so fast, not so direct and not so "selfish".  

And No.  Unlike the control freaks, I really don't care how you get around, or how goods get around, as long as people pay for it themselves.  No modes of transport are "bad" or "good", they just are well suited for different purposes. For as long as this fuel crisis continues, people will respond to the price signals in the ways they want.  Some will drive a bit less, some may buy vehicles that use less or no fuel, some will ride public transport, some will bike and some will walk.  Most people are quite happy buying their own cars, fares, bikes and shoes, and the way it SHOULD work, is the more people buy of one mode, the more that can be provided.

Funny how the planners don't really think that should be the way isn't it?

UPDATE: Oh look another one, this time from Professor Alistair Woodward, from the University of Auckland's Faculty of Medical and Health Sciences, who RNZ conveniently cited without counter-argument that there should be regulations on people buying vehicles he thinks are bad.  The public health lobby's appetite for micro-managing what everyone does, because a small handful engage in bad behaviour has no end.

SH1 improvements in Wellington - a lot to like, but it wont complete the job

So this was a quick couple of hours of thoughts... Feedback to NZTA is due by Sunday 14 December if you are interested.

Background information is here (PDF)

A video flythrough is here 

Apologies, I've been following this whole segment of road for far too long, from growing up being driven through Mt Victoria Tunnel, to some work on the Inner City Bypass 20 odd years ago to living near the tunnel today.

....

The Government’s proposal for a 2nd Mt Victoria Tunnel, 2nd Terrace Tunnel, reconfiguration of the roads around the Basin Reserve and widening of Vivian St is the latest set of proposals to fix the unfinished business of the Wellington Urban Motorway.  We will see whether all, some or any of it proceeds, but for the sake of Wellington at least some of it should (specifically the tunnels), because the status quo, notwithstanding the largely evidence free claims of Green Party politicians, is an absurd waste of time and energy in a city of this size.

History

It wouldn’t be hard to write a book about the history behind all of this, which started with then US consultancy firm De Leuw Cather, preparing a “transportation master plan” for Wellington. It considered the option of a waterfront motorway (see Seattle and San Francisco for now demolished versions of this), but preferred what was known as the Foothills Motorway. It follows the existing motorway, with two instead of one Terrace Tunnel (3 lanes each way), with 2 lanes continuing on a motorway going under and over various streets and, initially, demolishing the Basin Reserve for a motorway interchange, before finishing up at a second Mt Victoria Tunnel (2 lanes each way using the existing tunnel). De Leuw Cather also proposed placing the Wellington commuter rail service underground to Courtenay Place, through the reclamation land.  Of course that latter proposal wasn’t going anywhere, but the motorway started from Ngauranga (not connected to Ngauranga Gorge, but rather as just an extension of the Hutt Road from the Hutt). In the 1960s and early 1970s, the motorway cut a swathe through Thorndon and Kelburn, with much of a cemetery dug up and interred in a mass grave (don’t think that this was an era of much consecration to Christian religious values). However, the 1974 oil crisis (entirely stemming from the Yom Kippur War) saw a slowing down of the project, with the Muldoon Government ultimately deciding that it (and multiple other road projects) would be terminated at Willis Street, with the segment from Bowen Street south halved in scope. One Terrace Tunnel, one lane southbound, two lanes northbound.

At the time, with the motorway only being SH2 (SH1 still being the Hutt Road from Ngauranga to Aotea Quay, and continuing along the waterfront to the termination point of Jervois Quay and Taranaki Street), this made some sense. It was never congested, and the scale of traffic through Te Aro was easily handled by the Vivian St/Ghuznee Street one way pair. 

In 1983 the Ngauranga Interchange changed all that, by around doubling traffic on the motorway, the end of the motorway became a bottleneck, exacerbated by the single lane in the tunnel. Further bottlenecks existed with Ghuznee Street and Buckle Street, with the dog leg route from the Basin Reserve to the motorway being utterly unsuitable for the traffic volumes going through it.  This situation persisted for 12 years.

Meanwhile, a scaled back proposal to ease the traffic pressure came from the then National Roads Board. A motorway extension designed as an arterial highway with 70km/h speed standards. The original plan to destroy the Basin Reserve for a motorway interchange (which had been shelved some years previously) was replaced with a highway bridge across the northern boundary of the park.  The Terrace and Mt Victoria Tunnels would be linked by a fully grade separated highway going under Willis and Victoria Streets, severing Cuba Street (except for a pedestrian bridge), passing over Taranaki Street before darting under Tory and Sussex Streets. One lane would extend from Mt Victoria Tunnel under Sussex Street to join a second lane from the south. Whereas one lane would exit at the Basin to Cambridge Terrace and Dufferin St, with one lane extending to Mt Victoria Tunnel.  

1980 scaled down motorway extension proposal before it got dropped in a trench in 1991

Fully trenched but not covered in this brutalist image that looks like it was designed to kill it

The next decade or so would see the project rise up the regional priority rating, as other projects were built: Upper Hutt Bypass, Mungavin Interchange, Silverstream-Manor Park 4-laning etc, but then the funding system for roads was reformed. The Ministry of Works was abolished, and shortly thereafter, Ruth Richardson slashed funding for roads. At the time, funding was mostly allocated based on a cost/benefit analysis, with 25 year return periods. For around two years funding was not even sufficient to keep up with maintenance, and as the 90s progressed, the Wellington Urban Motorway arterial extension went up in cost and was always borderline for funding. However, it always had a BCR of over 2 when the threshold for funding was 5 or 4. 

At the same time the nascent Green Party campaigned vehemently against it.  To try to address concerns the project was first redesigned to be trenched the whole way across Te Aro, then put in a cut-and-cover tunnel to the bridge on the north of Basin (called Tunnellink).  However, it was clear by the mid 1990s that funding wasn’t likely for over a decade. So a three stage project was advanced. First a simple one-way pairing of Buckle and Vivian Street, followed by what is now known as Karo Drive. Karo Drive literally took around 12 years from its inception to opening, largely because of the opposition to it by the Green Party spreading vast amounts of misinformation. Then Green MP Sue Kedgley always called it a “motorway extension”, and eventually when it got funded by Transfund, and all legal avenues under the RMA to stop it were exhausted, it got built.  It was only meant to be a ten year stopgap until the Tunnellink could be built.

However, by then Transit NZ (later to be merged with Transfund and the Land Transport Safety Authority) had largely given up on the idea of a cut and cover tunnel.  So the next step was to fix the Basin Reserve, and plus ça change it was stopped by an organised campaign of the Greens and Mt Victoria NIMBYs. This was for a two-lane 50km/h one lane bridge clear of the Basin Reserve, westbound. 

2001 - preferred Basin grade separation without Tunnellink

2008 - one of the options for the Basin Bridge 

At the tail end of the Key/English Government there was a commitment to a second Mt Victoria Tunnel, but of course that all was stopped under the Ardern Government, as the Greens made sure that the Let’s Get Wellington Moving project would prioritise emission reductions, and put little value on reducing general traffic congestion. 

The Ardern/Hipkins Government did support a second tunnel, but it was to close the existing tunnel to motor vehicle traffic, and build a new one with four-lanes, two for buses. In short, no relief for general traffic.

What’s been proposed?

So here we are today with essentially five main elements to upgrading SH1 through Wellington. Once again the Greens are talking about “building a motorway through Wellington” which it absolutely does not do. It doesn’t build one metre more of motorway, but it does widen one section along an existing motorway corridor. The five elements are:

- Second Terrace Tunnel

- Upgrading SH1’s one-way pair through Te Aro

- Basin Reserve reconfiguration

- Second Mt Victoria Tunnel

- Widening eastern approach roads to Mt Victoria Tunnels.

Second Terrace Tunnel:  This is sensible, because it will the single biggest measure to remove 20% of traffic from the waterfront route. It is on a smaller scale than the original proposal (will be two-lanes not three southbound and the existing tunnel will only be two-lanes northbound), but should not be controversial.  What will constrain it is…

Upgrading SH1 through Te Aro: Reversing forty years of planning, Te Aro will still be blighted by heavy highway traffic pushing through it, by widening Vivian Street (which has been designated on the Wellington District Plan for many years) to three lanes one way.  As a stopgap this is satisfactory from a traffic flow point of view. but is hardly a long-term solution. It should have a cut-and-cover tunnel along the line of Karo Drive, which would be expensive and disruptive, but would be transformational for Te Aro. A proper bypass would make a huge difference, but for now with the two tunnels being the major bottlenecks, that idea isn’t progressing. In short, this will be the new bottleneck, exposing the greatest number of pedestrians (and traffic) to delays and emissions. It’s the cheap part of the package, and it will need to be addressed at a later date.

What’s disconcerting is that there is little future proofing to enable a solution to his, especially with this proposal…

Basin Reserve reconfiguration: There is no shortage of options designed to fix this problem, which is essentially the need to separate east-west traffic from north-south traffic, while also allowing it to interchange.  The latest proposal partially separates traffic, but it means the same number of traffic light controlled intersections westbound and eastbound on SH1. See below:

No doubt clearing Mt Victoria Tunnel congestion will improve eastbound flows, but it is far from clear that retaining a network of pedestrian controlled traffic lights and keeping SH1 at ground level in front of the Basin Reserve will not create new bottlenecks, and worsen the concentration of traffic/emissions across the northern side of the Basin. The Rugby/Dufferin Street sections outside the schools will be quieter, but be a ratrun for traffic from the city to SH1 west, and from Newtown to SH1 east. The big winner is north-south traffic to and from Newtown towards the city.

No doubt there will be a net improvement, but it is clear from the proportion of benefits of the total package that this is where not much will be gained. What’s particularly concerning is that it doesn’t look like it provides for future proofing building a parallel eastbound pair of lanes to take traffic from Vivian Street and over to the second Mt Victoria Tunnel. I understand the reluctance to elevate SH1 near the Basin, but it could be done by elevating Sussex Street over SH1 and building an artificial hill to carry the road with significant mitigation of the visual and noise impacts of a bridge. This is a mess. The new Green Link looks like it is preserving an option, or maybe it is preventing it.

Second Mt Victoria Tunnel: This is like past proposals and is entirely suitable as a solution to this problem. It is a shame that westbound its capacity will be constrained by unnecessary intersections at the Basin.

Widening eastern approach roads:  Four-laning Ruahine St and Wellington Rd (six lanes at points) has long been the right approach, but the design of intersections seems bizarre indeed. Grade separating at Hataitai Park (to a new road where houses currently exist) seems over the top. The removal of Taurima St access to Mt Victoria Tunnel needs a solution, as does access to Hataitai Park, but why is this intersection getting such lavish treatment, but Wellington Rd/Ruahine St (which enables access from Newtown to the airport, from Hataitai to Newtown, and for access to southern Newtown to and from SH1 bypassing the bottleneck in front of the Hospital) is curtailed to simple slip lanes in one direction only? The latter should be a full scale intersection. Previous plans simply had an elaborate intersection at Goa Street, although there is some merit in having grade separation, it seems odd that a low traffic intersection gets it, but not the much heavier traffic ones at Kilbirnie Crescent and Evans Bay Parade (although imagine the outcry if that were proposed). 

There are lots of minor details in this section which make access between Kilbirnie, SH1 and Hataitai worse, presumably to save money from more comprehensive wider intersections. Much of this looks worse for residents. In particular, anyone driving from Newtown to the airport will weirdly have to drive through Kilbirnie’s CBD (but not in the other direction). Anyone driving from Hataitai to Newtown will either have to go through Mt Victoria Tunnel to ratrun past the stands at the Basin Reserve, or go into Kilbirnie and ratrun up Duncan Tce. (a narrow street with poor visibility at the top). 

This is all details though in intersection design, which I expect locals to have their views on. The Greens are claiming a big increase in traffic in Moxham Avenue will occur, but that’s mostly a shift from Taurima Street and the existing intersection on Ruahine Street.

Thinking more widely

There is talk of tolling the route, although no details have been presented, it is difficult to envisage it not simply being at the tunnels. On its own this would have merit if the whole proposal enabled free flow traffic all the way. It doesn’t.  Paying a toll to drive through the Terrace Tunnel to end up at Vivian Street isn’t a compelling proposition, and would divert local traffic from the tunnel to The Terrace.  Likewise paying to use Mt Victoria Tunnel to reach a pair of traffic light controlled junctions by the Basin Reserve. A full scale freeflow bypass would be another proposition, offering a high value fast trip, but that isn’t what is proposed.

On the other hand, a central Wellington congestion pricing scheme within the boundaries of SH1, which helps pay for this, would have much more merit as it would reduce traffic towards the city at peak times, and enable better flow of traffic around it.  An AM peak inbound, PM peak outbound price for driving in and out of Wellington on weekdays would have some merit.

Much has been raised about the BCRs of the project, but although I put some value on economic analysis, when it comes to tunnels, the return period for them is much longer than any conventional highway or bridge. Tunnels last almost forever once dug, and only need moderate upgrades throughout their existence.  So I treat the two tunnels as very long term investments in addressing the resilience of the city’s transport network, and enabling a future full scale bypass of the city.

Claims from the likes of the Greens that “car tunnels” (a deliberate misinformation campaign to diminish the role of freight and buses) will just induce more traffic are largely nonsense, especially if congestion pricing is introduced in parallel. There is no more capacity that will be build north of Ngauranga Interchange, so more traffic cannot be attracted from that direction, and with much of the traffic on the route bypassing the city, little of that is going to be attracted from public transport to driving. Modern cities have good bypasses, Wellington has lacked it for decades. 

So I’m in favour of the tunnels, in favour of the widening east of Mt Victoria Tunnel (with some caveats), but the upgrade through Te Aro is cheap and nasty, and needs to make provision for something better once the two tunnels are built. It will be obvious the city needs a proper bypass. The Basin Reserve proposal is messy and poor value. It’s unclear why north-south traffic going in a four-lane trench is better than being on a four-lane bridge over the east-west traffic, and why so many light controlled intersections should be kept. It should be reconsidered.

And for the opponents...

"A City for People" is, of course, a Green Party oriented activist site (they always claim to be non-partisan, even though the members are largely not) ideologically and philosophically aligned to the other Green oriented activist ginger groups (which have a lot of interchangeable members) like Generation Zero, Parents for Climate Aotearoa, Cycle Wellington, Women in Urbanism, Renters United and the Sustainability Trust.  

The propaganda inference is that if you don't support their policies, you don't want a "city for people". It's a shade of the People's Republics, which imply if you oppose them, you're opposed to The People.  While I have some support for their campaign to enable more intensification, this isn't a group in favour of more freedom and less government. It is not in favour of people who want to drive, or people who ship goods or deliver goods. 

It claims "A whole generation of people are being forced out from the city spending hours every day in traffic jams".  While I have  lot of sympathy about housing prices, the idea that people in Wellington are spending "hours every day in traffic jams" is nonsense. 

It states:

The cost of this project is truly bananas. Per kilometre it’s the most expensive roading project in the entire country. It’s $2.9-3.8 billion (with a B - looks like this).

And it’s all about a relatively small aspect of Wellington’s transport problems: private-car congestion at selected times.

It makes no attempt to fix what will make the most difference to people (and LGWM’s origin story): the bus-network that’s already at capacity and hamstrung by being stuck in general traffic.

Even just for general traffic congestion, this project is jumping to a platinum-plated mega project solution before we’ve tried all the other things first.

It could do irreparable harm to Wellington, just as we’re starting the transition to being a real city.

It IS expensive, but tunnels are. I'd note that the Let's Get Wellington Moving project to build a single tram line to Island Bay and a second Mt Victoria Tunnel that added no new road capacity (but freed up the existing tunnel entirely for cycling and walking, and added lanes for buses) was $7.4 billion.  That would have delivered a tram to Island Bay that would have been no faster than current bus services, and only modest relief to traffic congestion at the Basin Reserve.

The claim that the proposal is just about addressing "private car congestion" is misinformation, and minimises a situation that exists most of the day during weekdays and much of the weekends. It also affects bus congestion from the eastern and southern suburbs at the Basin and Kilbirnie Crescent. It isn't just cars, it's also trucks (the Greens pretend freight doesn't matter), taxis and rideshare services, besides the majority of trips undertaken in Wellington are by car, either as drivers or passengers.

It WILL fix bus network capacity issues, especially at the Basin Reserve, Kent Terrace and from the Eastern Suburbs, as traffic will flow much more freely, and take 20% of traffic off of the waterfront route.  It's wilful blindness to pretend otherwise (because these people think any new road capacity is malign).

The claim it is a "platinum plated mega project solution" before "we've tried all the other things first" is pejorative nonsense, especially from people who were happy to spend double that, mostly on a tunnel and tram line.  The only option that might help somewhat is road pricing, but the advocacy for that is muted. There is no realistic chance of significant modal shift for trips that bypass the city, because they have a diverse range of origins and destinations. Likewise, without an additional tunnel to the eastern suburbs, there will not be modal shift from there as buses cannot flow freely.  It's fair to object to spending a lot on transport infrastructure, but not when you're solutions are more expensive and require significantly more taxpayer cost over time to subsidise their operations.

The claim it could do "irreparable harm" to Wellington is pejorative hyperbole. The land for the second tunnels is hardly significant, part of it is within the motorway corridor in any case. 

Finally, their claims about the proposals are weak:

• It aims to “fix” traffic congestion by building a bigger road in the centre. Never, not ever, has this worked.
• If you look at the numbers for how LGWM’s package was going to “fix traffic”, it wasn’t the very expensive road-building that was going to do the heavy lifting: it was congestion charging (digital infrastructure and some gantries) and the second spine for public transport (paint, signage, timetabling). And the costs for civil construction (which this expansion project is all about) have rocketed since then.
• There are lots of flaws with the logic: smooth, faster-flowing traffic through the city centre while also somehow not worsening severance in Te Aro, and while also allowing lots of cars to turn on and off it…
• Its Cost-Benefit Ratio is already low (even with the extra-low discount rate now allowed to be used) and the Inner City Bypass was found to have been probably not worth the money spent on it (we lose more than we gain from having it) so it’s highly likely this will be worse given its far greater costs. The opportunity cost of this public money is dismaying.

First bullet is wrong. It is not a bigger road in the centre at all, and yes building new roads has fixed congestion in many cases, especially in smaller cities. Many cities have inner bypasses that work, such as Oslo, Berne and Bergen, and they DO relieve congestion.  The first motorway in New Zealand, the Johnsonville-Tawa segment, remains adequate for traffic at most times and there is NO proposal to widen it.  It's time that the oft-claimed "every new road induces traffic until it fills up" is tempered by reality that this is only true in some cases.

Yes, congestion charging will have a big impact on traffic, which is also being enabled by this government.  The second spine for public transport wont work effectively without a better bypass to take through traffic off the waterfront (and any good congestion charging scheme enables traffic to bypass it because public transport does not do well serving most demand that does not start or terminate in the central city).  Furthermore, just converting lanes on the waterfront to bus lanes will make congestion worse, which backs up to buses elsewhere in the network. 

The third bullet has a point. Not building a proper bypass under Te Aro will worsen the severance due to SH1, but the Greens spent years campaigning against a cut and cover tunnel under Te Aro to fix this.  Nothing will magically fix this problem, short of kneecapping the economy and demand for travel.

Yes it is a low value project, but it underestimates the real lifecycle benefits of tunnels (which last for much longer than any appraisal period).  It is fair to argue about the opportunity cost of the money, but then I don't think the people pushing this want people to pay lower taxes and spend the money themselves! The Greens opposed the project when it had BCRs of 2-5 in the 1990s, with a much higher discount rate and 25 year appraisal period.  It is difficult to believe that if it had a BCR of 5 or 10 the opposition would change, it is a blanket opposition to any new road capacity regardless of whether it is priced or not.

The whole wording of the opposition is childish and sneering towards people's choices.  The language that sneers at ""popping down to Moore Wilsons” and “going to pick the kids up cos it’s raining”" is misanthropic.  So what if people want to do that, as long as they pay at peak times.  Most people can't live within walking or cycling distances of where they want to go. 

These groups stopped Wellington getting a proper bypass in the 1990s and beyond, and the blight of having at at-grade SH1 through Te Aro is because of this philosophy. 

Could it be better? Yes. Should there be pricing? Yes.  Should it mean the tunnels shouldn't proceed? No.

No to another mega-Ministry

One of the ideas getting traction within the Government is the idea of merging the Ministry for the Environment (MfE), Ministry of Housing and Urban Development (MHUD) and the Ministry of Transport (MoT) into a mega agency. The “logic” behind it is threefold:

• More integrated policy thinking that will not only enable more housing to be built, but also the infrastructure to support it;

• Diluting the de-growth and pro-central planning culture of MfE (which most recently decided it was appropriate to submit on the Regulatory Standards Bill);

• Saving money (through administrative rationing).

This is a mistake, because its theoretical basis is rooted in some assumptions that don’t bear close scrutiny. Working backwards the notion that mega-departments are more efficient is largely a chimera. The larger the bureaucracy the slower it works and the less responsive it is, and it more difficult it is to retain specialised knowledge and experience as it gets swamped within multiple layers of management. Treasury likes mega-agencies for two reasons:

• Fewer managers is said to be more efficient;

• Fewer agencies makes them easier to monitor and hold accountable.

Unfortunately, this ignores the behavioural responses of public servants to this sort of structure. In a large department it becomes harder to get the attention of the top layers of management. In some cases that can help, because clever and competent public servants can get on with their work unbothered by the chief executive or deputies, but that also means the less clever and competent have their work not subject to the same scrutiny. The Adam Smith Institute in the UK has called for the UK Home Office to be broken up for exactly that reason. The incremental savings of a few fewer managers (which is disputable when you look at the structure of MBIE – New Zealand’s existing mega-Ministry – which has large units, with branches under them and sub-branches) is lost when there is significant failure both in delivery and public policy.  

The UK already has had experience merging Transport, Environment and Local Government, from 1997 until 2002. Transport was split out again because the cultures of the agencies clashed internally, slowing down progress and making it difficult to get institutional focus on major reforms.  

Australia by contrast does have a mega-agency responsibility for transport policy at the Commonwealth level, in an organisation called DITRDCA (Department of Infrastructure, Transport, Regional Development, Culture and the Arts), which struggles to retain institutional knowledge in any segments of its activity. However, as a Federation, many of the functions in those sectors are carried out by States and Territories, so it is less of a day to day concern. Similar mega agencies do not exist at the State level.

The benefit of smaller agencies is that they can be nimble and responsive, and can pivot quickly when policy priorities change.  They can readily collaborate and work together with each other, if there is clear project leadership across agencies. The idea that collaboration within a large agency, with managers and branches with their own interests is necessarily easier than between smaller agencies is largely theoretical, because it depends on the individuals. Bear in mind MoT implemented radical restructuring of ports, airports, land transport funding, the governance and delivery of urban passenger transport all as a small agency, stripping down its functions over the years.  It's not clear what radical reforms MBIE as a major agency has done, and it is abundantly clear that DIA, with its de facto oversight of the water sector (i.e. next to none) did little until the Ardern Government saw it as a way to bail out local government and start to implement the principles of He Puapua (which remains on ice). 

On the second point, the idea that a key reason to merge agencies is to dilute the culture of the one you don’t like, or which is corrosive to government policy is not a good way of diluting the poison, because it spreads the poison across a wider field. The answer for the Ministry for the Environment is not to merge it, but to cull its responsibilities and split what remains among other agencies.

The Partnerships, Investment and Enablement business group should be abolished because Government should not be seeking to “tangibly shift mindsets and change behaviours in New Zealand through effective partnering and engagement within the public and private sectors”. The culture of MfE is anti-development, anti-growth and it the behaviours that need changing are those ones.  

At best the Environmental Management and Adaptation business group should be placed within the Department of Internal Affairs to work with local government, specifically regional councils on their statutory function, and the Climate Change Mitigation and Resource Efficiency business group should be part of MBIE, which has oversight of economic regulation of natural resources.  

It is so obvious that the next time a Labour-led Government takes power, almost certainly with the Greens, that a Ministry of Housing, Infrastructure and the Environment would be rebranded into a Ministry of Sustainable Development or the like. The culture that would be dominant will be the one inherited from MfE and will seek to decimate private provision of housing, as well as turn transport policy into one big behavioural change programme that treats active travel and public transport as being good, at any cost, while treating private motoring and the movement of freight by road as being malignant. 

One of the legacies of Labour Governments is that they implement structural reform of Government that National Governments rarely reverse.  Don’t forget the optics of splitting MfE (“integrating environment across policy”) may not be great and of course the Opposition will cry that it is about decimating the environment, but the public largely will not care (other than the ones who vote Green anyway). Splitting MfE into Internal Affairs and MBIE will dilute MfE’s culture because it divides it. Merging it with MHUD and MoT keeps it intact, despite pleas from some that it will dilute the priority of the environment, it will place it in the centre of two agencies seeking to resolve issues that are, in part because of the prioritisation of the environment through the RMA that stops stuff being built.

The MHUD is essentially an oversight agency for Kainga Ora, as well as the regulator of rental housing and other accommodation. The synergies with the MoT are weak, especially given MoT’s functions range from monitoring the land transport funding and regulatory sector, through to the economic functions of all transport modes. There is little that MHUD can bring to aviation policy, and indeed most of the transport policy issues affecting MHUD are undertaken by local government. 

If there is a case for a merge, then MBIE makes more sense for MoT than MHUD, because MBIE does look after network industries in infrastructure, such as energy and communications, but that was tried before in the late 1990s and ultimately abandoned. 

So the idea of merging agencies should be put in the bin. There is a better case for reviewing their functions and determining whether some should exist at all, and if so, who is better placed to manage them.  Putting climate change policy in the DIA or MBIE is likely to be preferable than having it dominating housing and transport.

Merging MfE, MHUD and MoT smells of something that the Greens or TOP (remember them?) would advocate. MfE is by far the agency with the most dominant culture, and it is one that is philosophically antagonistic to the Government it is meant to be serving. It should not poison housing and transport policy with that culture. 

The Government should run a mile from it.