Holiday highway even less affordable

Written By: - Date published: 8:49 am, April 30th, 2012 - 14 comments
Categories: transport - Tags:

The case for the Puhoi to Wellsford Holiday Highway just got even worse. Before, officials reckoned it would return net benefits worth ten cents for every dollar spent. Now, the cost will equal the benefits – if traffic volumes double in 15 years. Problem is, traffic volumes in Northland are flat or falling in the Peak Oil Age.

It’s actually worse than that. The Puhoi to Warkworth segment will supposed have a 1.5 benefit:cost ratio if traffic volumes double (NZTA grades anything below 2 as a “low” return on investment) but Warkworth to Wellsford will have a BCR of 0.6. That’s right, for every dollar you sink into it, you get 60 cents worth back. That’s worse than what you can expect from SkyCity’s pokies.

And both these crappy returns on investment are based on an unrealistic model for traffic growth. The amount of traffic matters because the main ‘benefit’ of the Holiday Highway is meant to be getting trucks from Northland to Auckland a few minutes faster, avoiding congestion they would face if the existing road had to handle double the traffic. But, if that congestion never materialises, neither does the value in having a new highway alongside the existing one.

Here’s how traffic volumes are tracking in Warkworth with NZTA’s assumed 2026 volume for comparison to the trends:

NZTA’s modellers seem to be working with a pre-peak oil model, wherein traffic growth will continue permanently and swiftly. In the real world, however, traffic volumes are stagnant. How bad does the BCR get if you cut the traffic volume in 2026 by 15,000 – in line with peak oil reality?

As for the second segment up to Wellsford. If you didn’t think it was a waste of money already:

If you live up in Northland, it might be nice to have a billion dollar highway down from Wellsford to Warkworth, and a $760m one from there to Puhoi. But, we live in a constrained world – we don’t have money and resources for every option. The traffic volumes shown in those graphs are pretty typical for the main drag in a small town astride a state highway, and they’re not growing significantly.

I’m afraid that highways that are only just worth their own cost of construction if miraculous traffic growth is assumed ought to be one of Bill English’s ‘nice to haves’. There are more effective uses for that money that will help more people.

14 comments on “Holiday highway even less affordable ”

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  1. Tiger Mountain 1
    30 April 2012 at 8:57 am

    For those of us Northlanders that are not tory sycophants, the Marsden Point deep harbour rail link and what’s more, retention and extension of existing rail, in particular Whangarei, is the way of the future.

  2. Lanthanide 2
    30 April 2012 at 9:23 am

    Using a linear extrapolation isn’t realistic anyway. You don’t have continued and relentless traffic increases forever; there’s only so much freight that needs to be moved.

    • Draco T Bastard 2.1
      30 April 2012 at 3:38 pm

      Yes, I think that’s what he’s pointing out just here:-

      NZTA’s modellers seem to be working with a pre-peak oil model, wherein traffic growth will continue permanently and swiftly.

      • Lanthanide 2.1.1
        30 April 2012 at 5:17 pm

        I mean to say that even a pre-peak oil model that assumes permanent and swift increase is stupid.

  3. ghostwhowalksnz 3
    30 April 2012 at 9:34 am

    While agreeing with the idea that the holiday highway is a poor choice for roading funds.

    The reason for giving the projects a ‘return on investment’ is to compare with other road projects only.
    It doesnt have any commercial benefit in the normal sense.
    But will it increase land values at Omaha Beach where Key has a holiday home ? Certainly.

    The first part ( Orewa to Puhoi) is tolled but would they put a toll on the extension ( where there is an alternative available) at these sort of numbers ? Certainly not.

    To think they are selling our power assets to sink money into this sort of nonsense.!

  4. fatty 4
    30 April 2012 at 9:39 am

    The logic behind the roads to nowhere are rooted in the strive for modernity. Rostow’s famous “the stages of economic growth” from 1960 may seem both illogical and impossible, yet this ‘logic’ still underlies our ideology.
    Rostow specifically cracks a boner over the “cheap mass automobile with its quite revolutionary effects – social as well as economic – on the life and expectations of society”. Rostow also takes aim at the bicycle as a thing of the past.
    1960s economic and environmental beliefs are the foundation of most of NZ’s transport policies.

  5. Jackal 5
    30 April 2012 at 10:14 am

    National are peak oil deniers just like they’re climate change deniers. The thing they’re interested in is getting as many minerals out of the ground and to market as fast as possible. People like trucking mogul Owen Glenn will be foaming at the mouth at the money he will make from National’s economic treason. Don’t expect any rail infrastructure anytime soon.

    • Tiger Mountain 5.1
      30 April 2012 at 10:34 am

      I’m not expecting that Jackal, but you have to try. The Natz Northland MP ex copper Mike Sabin, has been making all sorts of blue sky noises on the back of his generic Crosby Textor ‘local MP’ press releases so he needs to front up on this one.

      Thousands have signed the petition on the below site, which does need updating.
      http://sites.google.com/site/saveourrailnorthland/

  6. vto 6
    30 April 2012 at 10:22 am

    More and faster.

    And when that stage is complete then morer and fasterer again.

    And then again.

    It is all these types of people know. They are certainly not clever. Like the boys applying for the Milford-Dart tunnel ….. what is it for? Just morer and fasterer, nothing else. And when more and faster tourists get to Milford, how are these clever boys going to get more growth from that plateau? Do they have any idea? Do they have any idea about this question?

    • Draco T Bastard 6.1
      30 April 2012 at 3:42 pm

      It is all these types of people know.

      Yep, the drive for profit. Profit can only be maintained by an accelerating consumption of resources and so that is what we get from our political system – unsustainable growth of consumption.

  7. Vivienne 7
    30 April 2012 at 1:59 pm

    Responding to Tiger Mountain.

    Look out for the KiwiRail report in June, I believe, re the Auckland to Northlnad line.

    There is more traffic on the rail now compared to before Save Our Rail (SOR) got active. Also the potential for more freight on the line exists.

    Couple this with past peak oil and other efficiences on rail The Puhoi to Warkworth super construction looks more and more like ‘nice to have’ and probably is yet another ‘best guess’ at economic rationalism by Bill English

  8. Afewknowthetruth 8
    1 May 2012 at 7:53 am

    It is not possible to reason with ‘lizard people’. Their brains are wired to reject any information that challenges their personal agendas, however bizarre those agendas might be.

    Running out of oil? There may be oil on the Moon. Let’s push ahead with our space program.

    Running out of fresh water? We’ll build desalination plants that run on electiricty.

    Runiing out of electricity? We’ll build solar panels to make electricity.

    Running out of oil to make solar panels? We haven’t checked to see whether there is oil on the Moon yet. Besides, if there is no oil on the Moon, there are lots of planets in the universe we haven’t discovered yet which may supply us with oil.

  9. Southern Limits 9
    1 May 2012 at 2:54 pm

    Great post James Henderson. Wondering if I can get permission to cross post this at my blog?

    [go for it. No need to ask. JH]