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Nats waste money on roads, ignore rail

Written By: - Date published: 6:17 am, November 25th, 2010 - 22 comments
Categories: public transport, transport - Tags: ,

It’s official: the Auckland CBD rail loop would bring more benefit to the country for its cost than any of National’s ‘Roads of National Significance’. And that’s even before we talk about peak oil. Any rational government would put the money into the project that gets most benefit for the taxpayer buck. Not this one.

The report on the CBD rail loop says it will return $3.5 worth of benefits for every dollar spent on it. Compare that to the benefit/cost ratios for the Roads of National Significance:

Puhoi to Wellsford – 1.1
Wellington Northern corridor – 1.4
Waikato Expressway – 1.8
Tauranga Eastern Link – 2.1
Christchurch projects – 2.4
Western Ring route – 2.7
Victoria Park Tunnel – 3.2

So the CBD loop returns more benefits than any of these projects, some of which (the Puhoi to Wellsford ‘holiday highway’ in particular) are just white elephants that will return little if any net benefit.

Put it another way, for an expenditure of $1.3 billion the government would create $4.7 billion worth of value to the economy by building the CBD loop. To get the same value from the RoNS it is planning to spend $3.6 billion.

Surely, Transport Minister Steven Joyce would be jumping all over this project – it’s a chance to get the benefits of the Holiday Highway and new Wellington motorways for only 36% of the cost.

Nope. Here’s Joyce on the CBD loop:

“at the end of the day there’s always going to be a point where somebody says well, who’s going to pay? I mean, these are very big numbers. Even the CBD rail loop at $2bn [that’s the construction cost not the present value cost] is a very big project. Sounds quick if you say it quick, but when you’ve got a Govt faced with debts rising very quickly, you’d have to have a pretty strong justification.”

You would think that the same logic would apply to the RoNS. You would think that with strained finances the government would be utterly determined to get the most bang for its buck. But they’re too blinded by ideology and too determined to follow through on their mindless promise to saddle us with white elephant motorways.

22 comments on “Nats waste money on roads, ignore rail”

  1. It all depends on what you rationale is of course.

    If you don’t care about a population being able to travel in a sustainable fashion you build roads because let’s face it most people will be to poor to travel either by car or by train in the foreseeable future and the masters need freedom of movement, their soldiers need to get to were ever the uprisings and demonstrations are to arrest the rabble and put them in the new and improved privatised jails.

    That’s their rationale and it’s perfectly sane to them. Poverty and slavery for all of youse and more money and wealth to them.

  2. PG 2

    Perhaps I’m missing something, but a quick look at the relevant documents suggests that when compared on a true apples for apples basis (8% disccount rate, & inclusive of claimed wider economic benefits), the CBD benefit-cost ratio is in fact 1.1, identical to the Puhoi Wellsford RONS.

    • Marty G 2.1

      you are missing something – for all the projects, I’ve quoted the BCR with wider economic benefits (WEBs) at 8% discount rate figure. That’s the number the government uses for its RoNS.

      What you’ve done is compare the basic BCR at 8% for the CBD loop to the BCR with WEBs at 8% for Puhoi to Wellsford.

      That’s not comparing apples with apples. that’s comparing half an apple with an apple.

      If you don’t like the BCR with WEBs measure then the basic BCRs at 8% are:

      Puhoi to Wellsford: 0.8% (ie less than a dollar of benefit per dollar spent)
      Wellington Northern Corridor: 1.1
      CBD rail loop: 1.1

      But why you would refuse to count the WEBs is beyond me.

  3. kriswgtn 3

    Why do you think we have the donkey national cycle way for?.
    US peasants are going to have to either walk or use the cycle ways in the not too distant future because we WILL be too poor to afford to travel by car or train or even bus

    • Marty G 3.1

      I wonder what the BCR on the cycleway is? Wasn’t it meant to generate 3,000 and hundreds of millions in tourism.

      • Jeremy Harris 3.1.1

        Cycling projects usually have really high BCRs because they don’t have to be thick slabs to take a lot of weight, so they’re cheap… Also cycles take up less than 1/8 the space of a car so they have high capacity…

        For example getting bike racks put in the CBD at 15 locations (from memory) had a BCR of 22…

  4. ghostwhowalksnz 4

    Puhoi to Wellsford CBR is 1.1 ????

    Not on the standard figures its not

    Using the normal methods it comes out as 0.8 ie the benefits are LESS than the cost
    And looking at the graphics on the draft alignment the costs are way way too conservative. The geology is a nightmare with large cuts expected in many areas…. equals big bucks for the contractors

    The 1.1 number comes from a fudge factor, whereby incidental benefits are added.

    • Marty G 4.1

      I’ve used the BCR with Wider Economic Benefits measure because that’s what NZTA is using now.

      If we use the basic BCR then the figures are:

      Puhoi to Wellsford: 0.8% (ie less than a dollar of benefit per dollar spent)
      Wellington Northern Corridor: 1.1
      CBD rail loop: 1.1

      and the others higher, up to 2.1 from memory.

      • PG 4.1.1

        Table 2 of the CBD link report shows a BCR of 1.1 when wider economic benefits are calculated using the NZTA methodology. This still looks to me as the appropriate apples for apples comparison to the 1.1. Puhoi BCR, which includes WEB calculated on the same basis.

        Table 3, which reports 3.5 ratio, gets there by adding 3.3b of benefits attributed to \”greater CBD productivity\”. This looks like a (far) broader definition of economic benefits than that used by the NZTA, so certainly doesn\’t look apples for apples.

  5. erentz 5

    Steven Joyce and John Key have made it clear that they will not entertain any rational debate about transport spending. To them these RoNS projects are very definitely not about improving New Zealand’s economy, that’s just how they’re trying to sell it. They’re doing RoNS for other reasons that we can only speculate on. I would like to say that arguing the facts is the way to go, but having had a bit of correspondance with Steven Joyce and John Key on the matter a few years back I’m pretty much convinced that anyone trying to have a rational debate will just be bashing their head against a brick wall. Joyce and Key are quite happy for you to do that and get nowhere while they blow a massive portion of our country’s infrastructure spending that should be used to grow our economy not deflate it. If you don’t like it, the only option is to try bring Steven Joyce down. That’s where our leaders in Auckland and Wellington need to be more bold about saying, “Hey, look this isn’t what our people want and it isn’t going to improve our economy, and no I won’t stand back and bite my toungue because you’ve told me to, this is our city…” and raise some trouble in the electorates. That’ll be the only thing that will get National to budge on this.

    • Jim Nald 5.1

      Come on, Folks.

      It is time to rewrite the social contract for our communities, the future, and the coming generations.
      I’ve said this before, and I’m saying this again.

      Let’s rewrite the social contract.
      Or will you keep handing over blank cheques. And let the power & rich elites and their cronies continue to blunder and plunder on.

  6. BCRs are an inexact science. The Auckland Transport Blog has a very good analysis at http://transportblog.co.nz/2010/07/17/holiday-highway-the-dodgy-business-case/

    The business case for the holiday highway presupposes an increase over the next 16 years of 4% per year. If we are not there already it is extraordinarily likely that we will hit peak oil during that time and peak oil will blow the supposed benefits out the window.

    And the BCR for the tunnel will then start to look exceedingly cautious as the train system becomes more and more important for Auckland’s transport needs.

    If only we had a Minister and a Government that could look into the future.

    • Colonial Viper 6.1

      micky, Bill and John looking forwards into 2011 is, technically, an ability to “look into the future”.

      • Draco T Bastard 6.1.1

        Except that they only see 1911 when they do look “forward”.

        • Bored 6.1.1.1

          Interesting experience yesterday, had lunch yesterday by a rail / road bridge near Waiouru. A train with about 30 containers came by, during the next half hour at least an equivalent number came by on road. The rail was powered by overhead electricity. If I was to sit in the same place in a few years time I bet that the ratio will be one truck to one train. You are right, expenditure on roads is a total misallocation of funding.

          • Macro 6.1.1.1.1

            When building a garage 3 years back I searched for cladding on the net. Living at that time just north of Auckland I approached the local timber merchant and it was going to cost $75 to deliver the material the 12km to my property. I found I could buy the equivalent material much cheaper from Carterton. – the cost of transporting it – $25. It arrived two days after ordering. It was transported to Auckland by – RAIL.
            My sister in Martinborough (the next town to Carterton for those who don’t know the Wairarapa) sent a parcel by road – it took two weeks – travelling first to Invercargill!
            I’m a great fan of rail. 🙂
            Anti Spam “ordering”

        • RobertM 6.1.1.2

          It was probably faster to move around Auckland by light rail tram in l911 than it is today by car or bus. Iv’e always suspected the Wab steam tanks in l951 would also have been faster than present day rail commutting. It would be interesting to see a timetable comparisom.
          I however am not sure the loop is justified. A $50 million to $100 million light rail system out of the Viaduct area and Britomart might be more sensible extending first to a a loop around Q St, K road, Ponsonby and Victoria Park. The new or l930s trams would have priority at lights and the point they would slow and get in the way or motorists would discourage car commutting. Return the trams to contest road space and provide street level opposition to the cars.

    • I meant to say … “an increase in traffic over the next 16 years of 4% per year …”

  7. John Dalley 7

    Well surprise surprise, Stephen Joyce does not believe the case for the rail loop is questionable.
    Might hen then explain the “Science” that justifies spending billions on his :”holiday highway”

    the man is a F***King useless muppet.

  8. Sanctuary 8

    National appear to regularly completely mis-read the mood of Auckland. From the Mt. Albert by-election to the super-city mayoral campaign to their mad opposition to rail in Auckland they just don’t seem to understand the Auckland public. This is important heading into the next election, since it hardly needs pointing out only one of the many polls conducted before the mayoral election accurately picked up the swing to the left in Auckland (this to my mind shows how badly affected traditional polling techniques are affected by Auckland’s atypical demographics). Elections are won and lost in Auckland, and National can’t afford to keep getting the mood of Aucklanders wrong.

    Why might this be? I have three possible reasons. First, both National’s chief spin meister, captain panic pants Kevin Taylor, and their chief pollster, the penguin himself, are firmly ensconced in Wellington and seem to view Auckland from a poll driven telescope installed on the ninth floor of the Beehive. I’ve already noted how most of the polls conducted by traditional methods failed to detect the size of Len Brown’s victory. Anyone who watches Key can’t fail to notice he often waits 24 hours before commenting on an issue, an indication of just how much influence Kevin Taylor and polls have on the Nats. David Farrar might be getting rich on National’s incessant polling, but it doesn’t mean that those polls are necessarily picking up what is going on in Auckland, and hence their dissonance with Auckland’s public mood.

    Secondly, even if National were in tune with Auckland public mood politically there won’t be much they can do about it. National’s key financial backers are right wing big business, who are viscerally ideologically opposed to public anything. The trucking lobby hates PT and that lobby in particular has invested heavily in this government – you cannot make any sense of the “roading strike” (back in ’08 or was it 07?) unless you recognise that it was engineered as part of a campaign to ensure the election of a National government, and National owes the trucking lobby big time for that support. Also, the rural rump that votes so heavily for National fears and loathes Auckland and the likes of the incredibly hard right Federated Farmers (CEO: Connor English, brother of the double dipper…) are fanatically opposed to spending any money on Auckland at all.

    Thirdly, I don’t think John Key himself grasps the power of provincialism in New Zealand. He is a fairly rootless character, someone who clearly identifies himself more as part of the globalised, internationally mobile Anglosphere neo-liberal elite than an “Aucklander”. This leads Key – and National – to underestimate the ability of a Len Brown to damage the government with a simple “Auckland wants its fair share” message. In provincialist New Zealand, such messages always resonate, even in an amorphous place as Auckland.

    National is very good at reading the mood of New Zealand’s complacent and arrogant suburban middle class whites and rural reactionaries, a grouping that in turn dominates our media voice and therefore the public discourse. And after all they should – this group forms the key voting constituency for National. They are not so hot, IMHO, at reading what is going on anywhere else. This offers a significant opportunity for the opposition, because at the moment National’s polling allows it to detect and shut down nascent political problems before the opposition can gain any traction. If Labour can harness a major sleeper issue in the place that makes or breaks governments – Auckland – it may be able to build a momentum that all of the National’s expensive polling won’t detect until it is a major (as in vote changing) election issue.

  9. alloverrover 9

    there will be less and less oil used per capita for transport in OECD nations — including New Zealand according to the latest IEA World Outlook 2010….

    http://oilshockhorrorprobe.blogspot.com/2010/11/nz-will-live-with-less-oil-its-official.html

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