Archive | Infrastructure

Bennett rejects councils’ tourism infrastructure funding list

Deputy Prime Minister & Tourism Minister Paula Bennett thanked Local Government NZ yesterday for its $1.4 billion tourism wish list, but said she “rejects that most of these should be funded by Government”.

Local Government revealed details on Tuesday of a survey commissioned by Tourism Industry Aotearoa, which identified $1.4 billion of local infrastructure projects that might be useful in responding to ongoing tourism growth.

Mrs Bennett said: “I absolutely agree that there are some areas of tourism infrastructure that need to be addressed and that some of these will need help from central government. However, the list Local Government NZ has referenced includes things like town halls, council facilities, airport runway extensions, airport upgrades & expressways.

“These are either already funded by other areas of Government, are not considered a priority or should be funded by local councils. My priority is to support smaller councils with low rate bases with essential facilities. I am currently working with officials to establish how best to do this.

“Government is working with local councils to help with tourism infrastructure. Today we opened another round of the regional mid-sized tourism facilities grant fund of $5.5 million to help cofund things traditionally funded by local councils like public toilets, carparking facilities & freedom camping facilities. This comes on top of the $12 million announced in last year’s budget.

“I think most taxpayers would agree that restoring old council chambers is not a priority in terms of tourism infrastructure.”

Mrs Bennett said the Government “recognised the challenges that have come with growth in tourist numbers and are assisting where appropriate. With tourism now a $14.5 billion export earner, and 188,000 people working in the industry, these visitors are incredibly important to our economy, particularly in the regions.”

Local Government NZ says tourism needs well beyond communities’ resources

Local Government NZ said on Tuesday the survey of 47 councils revealed over 680 mixed-use infrastructure projects valued at $1.38 billion that were being developed.

Local Government NZ president Lawrence Yule said it was well beyond the resources of local communities to fund these projects, which included the development & ongoing operation of toilets, wastewater systems, carparks, access roads & wifi, and that a new funding mechanism was needed.

“The arguments for a new, sustainable way of funding infrastructure for tourism are undeniable. We just need to get on with it now, and these figures provided by just over half of our councils further illustrate the scale at which we need to act.

“There is much that could be done to protect & enhance the visitor experience, and provide some relief for our communities, many of which have a small ratepayer base. If we don’t act and with the right level of investment, we will be in no position to cope with the forecast growth of tourism – 4.5 million annual visitors by 2025. ‘Just in time’ infrastructure can mean ‘just too late’.”

For tourism, Mr Yule said: “Cofunding, with contributions from central government, councils & the industry in a way that allows for maintenance & operational costs, is required.”

He said the gst contribution from international visitors rose from $950 million in the March 2015 year to $1.5 billion in the March 2016 year.

Local Government NZ issued a discussion paper on funding in February 2015 and, last December, welcomed a report commissioned by the chief executives of Air NZ, Auckland International Airport Ltd, Christchurch Airport & Tourism Holdings Ltd on the tourism infrastructure gap.

That report called for the creation of a national tourism infrastructure levy which, between the industry and matching Government contributions, would generate $130 million/year to fund local tourism infrastructure needs.

Mr Yule said then: “The major issue for local government is ensuring that any new funding goes where it is really needed, which is not only on toilets, freedom camping facilities & carparks but also on major infrastructure like wastewater, which are some of the most costly pieces of work small communities are faced with.”

Local Government NZ funding review discussion paper, February 2015

Attribution: Ministerial releases, Local Government NZ.

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Council agrees to reprioritise land supply schedule

Auckland Council’s planning committee skipped the most pressing part of its business yesterday – decisions on refreshing the overarching Auckland Plan – but did spend time on its future urban land supply strategy.

Committee chair Chris Darby said the Auckland Plan refresh and how the council would consult on it had been deferred until Tuesday 28 March because more preparation was needed.

But the committee discussed in detail the future land supply strategy and agreed to a number of changes to sequencing.

Staff recommended advancing work on some areas and deferring it elsewhere because of infrastructure constraints. The estimate to install bulk infrastructure over the next 30 years is $19.7 billion.

Areas to be brought forward: Warkworth North, Wainui East, Silverdale (business), Red Hills, Puhinui (business), Wesley (Paerata), Opaheke Drury, Drury South.

Areas to be pushed back: Kumeu-Huapai-Riverhead, Whenuapai stage 2, Drury West stage 2, Puhinui (business), Red Hills North, Warkworth North-east & Takanini.

Public consultation on the Auckland Plan is scheduled for the period 29 March-18 April.

East-West link

The planning committee also identified a number of concerns about the East-West link project intended to run through Onehunga.

The Government identified the project as a road of national significance and referred it to a board of inquiry. The NZ Transport Agency’s applications were publicly notified on 22 February and submissions close on 22 March.

  • This is an overly short version of events at yesterday’s committee meeting – being in 2 places at once doesn’t always work. I’ll come back with more detail on the land issues and the East-West link.

Committee agenda

Attribution: Council release, agenda.

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Property Council joins call for new infrastructure funding

Property Council chief executive Connal Townsend said today central & local government “need to develop a range of innovative funding tools beyond rates & individual project funds. To be sustainable those tools should be linked to growth.”

He agreed with mayor Phil Goff, who told a Property Council breakfast last week funding infrastructure with rates wasn’t sustainable: “Rates are a limited & extremely blunt way of raising income. The property industry continues to have issues with rates & the development contributions system. It is not an effective or sustainable way to fund local government.

“Yes, Central Government should & does make significant financial contributions to individual projects. But that is not sustainable either.”

Mr Townsend’s solution – partnership between the 2 levels of government – is at last on the way in 2 forms, though neither is adequate to meet the challenge.

One is the formation of the Auckland transport alignment project last year, when the Government & Auckland Council joined in establishing long-term priorities. However, there would be a long-term deficit and there’s been no resolution of how that should be funded – the project calculation has started with a $24 billion funding need, and a $4 billion shortfall projected.

Mr Goff said: “Auckland Council would need to come up with at least $200 million/year to meet the shortfall. I’m not going to ask ratepayers to shoulder that burden, it’s not viable nor is it equitable.”

Secondly, the Government has announced its proposal for urban development authorities, which would be project-related and combine the forces of both levels of government. Those authorities would focus on regeneration in a specific area and close down on completion, though it would make sense to retain the same governance structure and enable an authority to switch to the next project rather than start afresh.

The mayor has proposed in the council budget that the hotel sector be charged for tourism infrastructure. Mr Townsend commented: “If we are serious about Auckland becoming a global city we need a partnership between central & local government. They need to develop a range of innovative funding tools beyond rates & individual project funds. To be sustainable, those tools should be linked to growth.”

The flipside of that is that, when there’s a downturn, the industry wouldn’t pay for what would be long-term infrastructure provision.

And the other potential source of funds, not mentioned, is the hike in gst which the Government retains in good times, inadequately funding local infrastructure required to support the tourism growth.

My conclusion: It’s scary, really, that we have so many political & business leaders with not one new or innovative idea among them on alternative funding, that the same issue is raised often without any thought of resolution.

The one solution, a variation on a bed tax, is a more expensive way of doing what a slice of gst could do more easily & neatly.

The world has cities which have created infrastructure to meet these kinds of needs, and the world has potential infrastructure funders. They’ve been walking through the mayor’s office in Auckland for a decade.

Attribution: Property Council release, my thoughts.

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Valerie the tunnel borer lines up for a new stretch

Valerie – the 2m-wide tunnel boring machine named in honour of the strength of Olympic shotput champion Valerie Adams – is about to begin the next stage of an underground journey through downtown Auckland for the city rail link.

The machine will simultaneously excavate & install a new stormwater pipe under Albert St.

It’s completed the first 290m of tunnelling & pipe-jacking work between Victoria & Swanson Sts and is being refurbished in the shed at Victoria & Albert Sts in preparation for the next stage of its journey. It will be lowered down the shaft to begin the final 200m stretch towards Wellesley St, and is expected to arrive there in April.

Project director Chris Meale said the stormwater diversion was needed before the cut-&-cover tunnel construction of twin tunnels can be delivered by Connectus, a McConnell Dowell & Hawkins joint venture.

A smaller tunnel boring machine is working under Victoria St, diverting the Orakei sewer main and enabling the existing sewer to be strengthened under the future midtown Aotea Station.

The city rail link will join Britomart & the city centre to the western line near Mt Eden. Construction began in December 2015.

The project, now a joint venture between Auckland Council & the Government, has tender documents out for major components. Expressions of interest were sought at the start of February for the design, procurement, installation & commissioning of all tunnel track work & rail systems between Britomart Station & the western line at Mt Eden.

City rail link

Attribution: Company release.

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More transport services found for March Madness

Auckland Transport said yesterday it would put on more bus, rail & ferry services to meet passenger demand during March.

AT metro operations group manager Brendon Main said be 56 more citybound bus trips would be provided in the morning peak than last March: “That’s 5% more capacity overall for bus services and an increase of up to 34% on some corridors.

“We know the number of public transport passengers peaks in March as students head back to their studies, schools are in term and lower numbers of people are on leave. It’s known as ‘March Madness’, and since March last year we’ve worked hard to get more services on some of our busiest routes.”

Double-decker buses will start on the Birkenhead route next Monday to help meet demand.

The rail timetable change due on 12 March will add 1194 spaces inbound during the morning peak – 796 spaces on the eastern line and 398 on the southern line.

Mr Main said most ferry routes had sufficient capacity to cope with anticipated patronage demand, even given the significant growth experienced over the last year.

A new timetable started for Gulf Harbour in October, which added about 150 inbound spaces in the morning. More backup vessels for the West Harbour services will potentially add over 40 seats in the morning. Reallocating vessels on the Hobsonville run will add 52 seats inbound and vessel reallocation options for the Half Moon Bay service are also available to increase capacity.

Auckland Transport, public transport services

Attribution: Auckland Transport release.

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Joyce flatly rules out fuel tax for Auckland

New Finance Minister Steven Joyce flatly refused to contemplate a fuel tax for Auckland when he made a speech on the economy yesterday.

Former Labour leader Phil Goff, elected Auckland’s mayor last October, expressed his disappointment at the decision and challenged the Government to come up with another workable & sustainable solution.

Despite that challenge indicating a divergence away from last year’s more co-operative stance by council & government, Mr Joyce (pictured above in his early days as a sod-turning digger driver) said the Government was keen to discuss other tools with the council.

Urban development authorities – a proposal out for public consultation – are one aspect of improving public bodies’ handling of infrastructure programmes, but both central & local government have avoided any advance in their thinking on financing infrastructure.

There are acknowledged ways to do it: they just have to choose. But one choice they shouldn’t make is one that’s on its way: charging for parking at park-&-rides, while not providing adequate parking for the growth in commuting by public transport. That would be a resolution by the unhinged.

For big projects which will interest the private sector, the Government & council need to establish a finance & project administration culture that will bring smaller partners in, especially local partners, in a way that project performance can be guaranteed. That, also, can be done: it’s just a matter of having the will to do it. At the moment, both sides in this standoff can only be congratulated for their intransigence.

Joyce adamant            

Addressing a Massey University & Auckland Chamber of Commerce audience, Mr Joyce said: “First, we would expect that any road pricing initiative on existing motorways & highways would predominantly be a replacement for petrol taxes & road user charges, not in addition to them.

“And second, I stress that we are not interested in introducing a regional fuel tax. I have reiterated to Mayor Goff this morning that we do not see regional fuel taxes as part of the Government’s mix for transport in Auckland because they are administratively difficult, prone to leakage & cost-spreading, and blur the accountabilities between central & local government.

“However we are keen to have a more detailed discussion about demand management tools, and explore further options for longer-term funding for new infrastructure, including the use of private finance for certain projects, such as Penlink. Mayor Goff & I have agreed to work together on those.”

Goff stance

Phil Goff, in digger uniform last October.

Mr Goff expressed his disappointment at the decision: “While the Government has the power to rule out a fuel tax, it has a duty to the people of Auckland to come back to council with alternative solutions. Aucklanders are fed up with sitting in their cars on the motorway for hours at a time.  It’s lost time for them and lost productivity for the city.

“People want the Government to work with council to find an agreed solution. In my view, a regional fuel tax is a fair, effective & efficient way of helping close the current $400 million/year gap in transport funding.”

Mr Goff said putting the burden of resolving the transport funding deficit onto ratepayers would result in a rates increase of about 16% next year: “I don’t intend to do that. Ratepayers have been shouldering the burden for too long. We must find new revenue streams to fund our much needed housing & transport infrastructure rather than continuing to load the cost of growth on ratepayers.

“The Auckland transport alignment project was a good start in getting the city & Government working together. However, it doesn’t go far enough in solving Auckland’s congestion and already faces a funding gap of $4 billion over 10 years. We need a solution now and can’t afford to wait another 4-6 years to deal with this problem.

“I’m committed to working with the Government to develop new transport funding measures. If they remain adamantly opposed to a regional fuel tax, they need to urgently come up with another workable & sustainable solution.”

Attribution: Ministerial & mayoral releases.


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Warkworth-Wellsford indicative route unveiled

The NZ Transport Agency released an indicative route on Tuesday for the State Highway 1 replacement between Warkworth & Northland.

Image above: The NZ Transport Agency’s map of the indicative route. Link below is to a larger version of the map.

The route will run well west of Warkworth then head east to skirt Wellsford & Te Hana, returning to the existing highway route at Vipond Rd, a few bends south of the border between the Auckland city/region & Northland province.

3 interchanges will connect the motorway with Warkworth, Wellsford at Wayby Valley Rd and Te Hana at Mangawhai Rd.

The project is a continuation of the road of national significance that started by bypassing Silverdale & Orewa and currently returns to the old route just south of Puhoi.

Transport Minister Simon Bridges said: “It will reduce the overall travel time between Warkworth & Te Hana by bypassing town centres, and avoiding the steep & winding Dome Valley. The straighter road alignment will also reduce the high crash rate through this area and reduce congestion & frustrations for motorists that often get stuck behind slow-moving heavy vehicles.”

The Dome Valley is not exactly steep but is constrained from widening, while the chosen route looks like it will cut through hillier terrain.

The 18.5km Puhoi-Warkworth section is scheduled to open in late 2021. It’s being delivered by the Northern Express Group (NX2) as a public-private partnership. The transport agency is working towards designating the 19.5km Warkworth-Wellsford section route by the end of 2018.

The route is also on the Government’s Connecting Northland strategy. Mr Bridges said: “Improving this road is part of the Government’s commitment to ensuring transport infrastructure is in place to connect communities, get people to places of work and freight to key export markets, which are all vital in helping Northland’s economy grow.”

NZTA, Ara Tuhono, Warkworth-Wellsford
Ara Tuhono map pdf

Earlier story:
28 July 2014: NZTA gets Puhoi-Warkworth consents, no standard condition 1, economic & alternative objections sidelined

Attribution: NZTA, ministerial release.

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US urban specialist warns against big road spend – and against transit in wrong places

Aaron Renn.

US urbanism specialist Aaron Renn warned in a Manhattan Institute report out a fortnight ago against big highway spending – a likely target for increased public spending under the Trump administration.

He also warned against funding transit in the wrong places.

Mr Renn wrote: “Improving the country’s infrastructure will likely be high on the agenda of the incoming administration & Congress. To accomplish this goal, federal spending should strongly favour repairing & maintaining existing roads, highways & bridges, not building new ones. That’s because as much as 20% of the nation’s major roads are in poor condition, and tens of thousands of the country’s bridges are structurally deficient. Fixing them will yield the best return for the taxpayer dollar.”

He said spending on new or expanded highways was already showing lower economic returns than maintenance: “In the past, traffic engineers could use projections of population & job growth to extrapolate the need for new or expanded highways. But 2 developments may render such projections increasingly unreliable.”

The first development is self-driving cars and the second is the possibility the US might reach what some analysts refer to as “peak car.”  Mr Renn said the timing & spread of self-drive car technology was uncertain, but many researchers expected an impact on congestion.

The long-term US trend in traffic growth – both total & per capita – reversed in 2007 and declined for 6 years.

“Vehicle miles travelled, total & per capita, has begun to grow again, but some researchers believe the US may be at or near the end of the era of per capita traffic growth.”

The consequent uncertainty extended to the kind of roads the country might need.

As for rail, he said the prospects weren’t always good there either. 20% of federal surface transport spending went to expanding transit, some to buses “but a significant amount has been badly misdirected to build new rail projects in cities with limited histories of rail transit, and infrastructure designed overwhelmingly around the automobile. These projects, like Dallas’s light rail system, are even more speculative than highways.”

Meanwhile, he said, the existing rail systems in Washington, Boston & the New York subway were poorly maintained.

Mr Renn, proud of his small-town upbringing in Indiana, had a 15-year career in management & technology consulting but has been blogging for 25 years. He’s a senior fellow at the Manhattan Institute, a contributing editor of City Journal and an economic development columnist for Governing magazine.

Aaron Renn of Urbanophile LLC, Manhattan Institute report, 31 January 2017: Driverless cars and the future of American infrastructure
Advisor Perspectives

Attribution: Aaron Renn, Manhattan Institute, Advisor Perspectives (graph).

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April start for Tamaki Drive intersection upgrade

A $7 million upgrade for the intersection of Tamaki Drive & Ngapipi Rd is scheduled to start in April after an independent hearings panel approved Auckland Transport’s proposal.

The waterfront route to the eastern suburbs carries 30,000 vehicles/day.

Auckland Transport’s major capital group manager, Andrew Scoggins, said last week it was one of Auckland’s most dangerous intersections: “21 crashes have been recorded at the intersection in the past 5 years, with 13 resulting in injury. Tamaki-Ngapipi is ranked number 10 on the national top 100 list of crash risk intersections.

Image above: An artist’s impression of the upgraded intersection.Link: Tamaki-Ngapipi project overview

Attribution: Auckland Transport release.

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Housing infrastructure fund enters final submission round

High-growth councils have submitted $1.79 billion of proposals to the Government for support from its $1 billion Housing Infrastructure Fund, but ministers said on Wednesday they weren’t happy with what they’d seen.

The councils have until 31 March to submit final proposals for a share of the fund, and Infrastructure Minister Steven Joyce and Building & Construction Minister Nick Smith said they wanted councils to be more ambitious in their final proposals.

Mr Joyce said: “Only a small number of the 17 proposals received through the expressions of interest phase would result in projects being advanced earlier than previously planned by the councils. We want to see more ambitious projects that will have a greater positive impact on housing supply over the next 5 years.”

Dr Smith said the Government had set up the fund last year because council constraints in financing the necessary infrastructure – the water supply, stormwater, wastewater & roading – could slow the opening up of new housing areas. He said the fund could support construction of 50,000 new homes, depending on which final proposals were supported.

The 2-stage process had enabled councils to ‘test drive’ & refine their ideas before the final proposal stage: “The final proposals will be assessed by an independent panel, with priority given to those initiatives that enable the most new housing. We expect to announce the final allocations later this year.

“The Housing Infrastructure Fund is part of the Government’s comprehensive plan to grow additional housing supply alongside special housing areas, the new Auckland unitary plan, the national policy statement on urban development, reforms to the Resource Management Act, the Crown land programme & the HomeStart scheme. We have been successful in more than doubling the house build rate from 15,000 to more than 30,000/year.”

When the Government set up the fund, it highlighted the growth areas it was looking at:

Auckland: Helensville, Waiuku, Pukekohe, Pokeno (Waikato) & Clevedon
Tauranga: Tauriko (in the Kaimai foothills)
Hamilton: Taupiri & Cambridge
Christchurch: Kaiapoi, Rolleston & Lincoln
Queenstown: Arthurs Point, Lower Shotover-Lake Hayes-Arrowtown & Jacks Point.

Housing Infrastructure Fund

Earlier stories:
8 January 2017: Housing infrastructure fund call for final proposals imminent, and panellists required
3 July 2016: PM talks $1 billion infrastructure fund, English talks payback frame, Smith talks grabbing more power

Attribution: Ministerial release.

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