Friday, 14th July, 2017

The first issue we are faced with is catch-up. For 15 years Auckland has benefited hugely from a fast pace of growth, but failed to fund and deliver the required supporting transport infrastructure.

The second issue we face is to provide the urban development, including infrastructure and other services needed to keep pace with projected growth. We’re expecting an additional 700,000 to 1 million people to call Auckland home over the next 30 years.[1]

The Way Forward

To catch-up and get ahead of the growth curve requires us to take bold transformative action with a mindset of speed and urgency.

The Auckland Business Forum wants the next Government to immediately:

  • Task and resource a Special Purpose Vehicle (SPV) to accelerate and complete within 10 years the “catch-up” transport investments agreed in 2010 as needed to service Auckland’s existing urban platform[2]; and,
  • Confirm an Auckland Urban Development Authority (UDA) to develop a new urban platform to enable the city to cope with projected future growth (in a way that protects the quality of living within Auckland’s existing urban platform).

In delivering this agenda, the Government’s focus needs to be on four key areas:

  1. Confirm funding for the work of the SPV and UDA for the immediate catch-up investment and identify new revenue streams to provide for future growth,
  2. A shared governance arrangement between Government and Auckland Council,
  3. Accelerated pace of decision-making,
  4. Integrated urban and transport planning, funding and delivery.

On Funding – 10-year Catch-up Programme

The $4-7 billion Auckland needs immediately is obtainable. With Government acting as guarantor, the SPV can be set up as a single, pragmatic ‘here and now’ funding authority with a clear 10-year mandate to:

  • Identify the money required to fast-track investment on Auckland’s agreed critical ‘catch up’ agenda;

To have skin in the game with Government’s funding contributions, available sources of money for Auckland Council to tip into the SPV include:

  • Sell-down of capital tied up in Council assets (but retaining regulatory control) – Watercare ($3-5 billion), Ports of Auckland company (around $1 billion less the value of the port land, from which Council would generate rent revenue) and Auckland Airport shares ($1-2 billion);
  • Debt funding – The around $2 billion NZTA and Auckland Transport are annually allocated for investment in transport could be the base revenue stream to repay debt on a loan programme for fast-tracking a work programme to clear the backlog; and,
  • Value capture revenue streams – Land development contributions, special rates, parking levies & bonus floor area sales (e.g. from Park ‘n ride on NZTA/AC land), and numerous other commercial possibilities.

On funding – long-term

The study Government-Council has announced for officials to design a scheme to manage congestion long-term is ill-defined and too far away. Its purpose also needs to include raising the revenue Auckland requires to fund improvements to the transport system long-term. Options for a new approach to raise revenue for the long-term include:

  • Expanding user pays funding tools; e.g. tolls on existing roads (i.e. a network toll) and/or tolls on new roads in addition to petrol excise and road user charges
  • Crown and/or Council land development (using the UDA facility)
  • Other taxes such as targeted rates and petrol taxes.

On Governance:

The ownership of Auckland’s transport infrastructure is divided between Government and Council:

  • Major roading projects are jointly managed through shared accountabilities between Auckland Transport and NZTA;
  • Rail infrastructure and service governance is a mixed grill of accountabilities between Auckland Transport, KiwiRail, Ministry of Transport and Treasury;

Consequently there is huge churn (& resulting delay and inefficiency) in transport decision-making between Wellington & Auckland on major road and rail investments. The result is that Auckland’s transport governance is failing to meet Aucklanders expectation because of weak board leadership and uncoordinated management, lack of a customer focus, lack of transparent accountability and lack of a clear direction and plan of action.

Aucklanders seek (and New Zealanders deserve) certainty that Government and Auckland Council have forged a partnership with a singular purpose and clear accountability.

To help co-ordinate (and speed up) decision-making and reduce Auckland-Wellington churn, the governance of the SPV (and UDA) would be established under the local government principle of subsidiarity to promote devolution of transport decision-making and resource allocation from central government to Auckland; i.e. to where local people know the problems and the solutions.

The ultimate aim of a reformed governance arrangement would be to integrate NZTA, Auckland Transport and Kiwirail network responsibilities into one entity in Auckland.

On pace of decision-making

The pace of decision-making is far too slow. A sense of urgency and innovative thinking and processes to get things done faster is required right through the system – an attitude thing.

  • We have the projects, we have a revenue stream; transport providers from board level down need to join the dots and adopt policies and international best practice for the fast lane to MAKE THINGS HAPPEN.
  • Even if Auckland had all the money it needs, a procurement process needs to be put in place so large projects can be done in parallel, e.g. by expanding the NZTA role with support of international contractor supply lines and capability, including workforce recruitment; and,
  • Work could/should be proceeding on business case, consent and design steps for all catch-up projects; to have them ‘ready to go’ when funding is confirmed.

Clarity of a project pipeline of sufficient scale and longevity is central to attracting international investment and construction capacity domestically and internationally. We need a clear set of rules in place so that when the SPV money is confirmed, a construction schedule can move into the fast lane immediately.

On Disconnected urban and transport planning

There are huge disconnects between the Auckland Unitary Plan intensification programme and proposed Transport infrastructure. Work by Government and Auckland Council agencies to retrofit an integrated transport and land use plan setting out what additional road and public transport (buses, rail and ferries) capacity will be required[3] confirms three things:

  • The infrastructure solution proposed lacks scale and urgency.
  • Traffic congestion will be entrenched for the foreseeable future.
  • Subject to funding it is proposed to implement the plan over 30 years.
  • Clearly, it is the wrong strategy and a 30-year time frame is far too slow.

With Auckland’s transport problems now at crisis level it is obvious new thinking and alternative urban development ideas are needed.

A long-term option is a new city, located to the south

The Unitary Plan identifies the south (Papakura to Pukekohe)[4] as the largest urban growth area in Auckland. It is adjacent to water and electricity supply lines, as well as potential expansion of trunk rail and motorway links.

The end point would be a new (satellite) city connected to the heart of Auckland by a rapid transit system. Fast, efficient and reliable train services to the new city (and nearby Hamilton and towns in between) would provide a platform on which to accommodate Auckland’s population growth; and would -

  • Be master-planned to enable densities sufficient to support a compact “live-work-play” city model, including hospital, tertiary education, recreational facilities and other city amenities, and eventually grow to have a population of 200,000 – 400,000 (instead of the additional 100,000 that the current plan envisages);
  • Enable development at a scale sufficient to attract global investment funds and international construction supply lines, capacity and capability;
  • Focus densification on locations with high levels of access to rail and bus stations;
  • Take the emphasis off current proposals to expand in suburbs served by already congested motorways.

To develop and promote the new city idea, the Auckland UDA would be established with an independent chair and members nominated by government & council drawn from the private sector. The UDA’s urban development plan for Auckland would give consideration to:

  • An upper North Island focus - Auckland is a distribution hub for moving people and goods around the upper North Island.

The growing interdependence for business, tourism and residential growth between Auckland, Hamilton, Tauranga and potentially Northland (as the upgraded State Highway north of Warkworth occurs) has created a demand for modern and integrated transport infrastructure and travel service connections across the upper North Island

[1] Statistics NZ medium and high growth projections, 2013
[2] Subsequently re-confirmed by Government and Auckland Council in the ATAP indicative programme published in September 2016.
[3] See “Supporting Growth: Delivering transport networks,” published 2016 by Auckland Transport, Auckland Council, NZTA and the NZ Government, March 2017.
[4] See “Supporting Growth”, op. cit., p.18.

 

For more information contact Michael Barnett, mobile: 0275 631 150 or mbarnett@chamber.co.nz
Michael Barnett, Chief Executive, Auckland Chamber of Commerce.

* The Auckland Business Forum: Members include Auckland Chambers of Commerce, Employers & Manufacturers Association (Northern), Ports of Auckland, Auckland Airport, Civil Contractors NZ, Infrastructure NZ, National Road Carriers. These organizations represent a cross-section of Auckland industry and commerce whose role includes guardianship of businesses responsible for more than 450,000 Auckland jobs and generating 42% of New Zealand’s gross domestic product (GDP).