Funding transport projects outside of Auckland – there is a problem

This post first appeared on the TraNZport blog and is republished with permission.

I read this morning in the paper (Dominion Post) that the Let’s Get Wellington Moving (LGWM) package of transport projects, due to be announced late last year, is still stalled in the water over funding issues. This illustrates a problem that I think was pretty obvious before, but is increasingly becoming one that can’t be ignored. How to fund transport projects in cities outside Auckland, particularly Wellington and Christchurch.

Firstly, what is LGWM?

LGWM is intended to provide a package of transport projects including state highway upgrades and public transport improvements (including light rail from Wellington railway station to the airport) is expected to cost up to $4 billion. However, the sticking point seems to be funding, principally how much of the package will be picked up by central and local government respectively.

The issue…

This is a common sticking  point when it comes to large infrastructure projects in New Zealand, and was a major issue with the rebuild after the Christchurch earthquake. Where it isn’t so much of an issue is Auckland, where legislation passed last year allowed Auckland Council to introduce a regional fuel tax to help pay for its share of transport projects. However, this has been ruled out for other cities by the government.

This, of course, leaves a problem for the next two largest cities Wellington and Christchurch; how to pay the local share for much needed transport infrastructure. Without the option of a regional fuel tax… well, there really aren’t a lot of other options to raise additional funds. Check out my previous post on the recently approved public transport plan for greater Christchurch. Although approved, the implementation of this plan, which includes a massive expansion of high frequency bus services, bus priority, and two rapid transit lines, requires a bucket load more money be spent on public transport than current (which is, admittedly, abysmal).

More money is needed from both local and central government in Christchurch in particular, but the local contribution is the weak point because of limited options for local government to raise it. Wellington is proving this and Christchurch, with already huge commitments to other projects associated with the rebuild, will certainly be under pressure.

A little more detail about the pressures these cities are feeling

Wellington’s transport corridors in the inner south heading east-west and north-south have long been a problem and solutions have been planned for and debated for years. Cheap solutions and road-only solutions have been proposed, but finally a more multi-modal package looks likely to be delivered, with extra money being spent on developing a less intrusive road component (it is expected to be largely underground/trenched) and a commitment being made to rapid transit. Locals will tell you this has been needed for years, and plans to intensify Wellington’s inner suburbs from Newtown through to the CBD, which is arguably already occurring, is piling more pressure on these key routes which are maxed out in the mornings. Removing bottlenecks and traffic conflicts and improving public transport is what is needed, and is what is planned. What makes this situation different from Auckland? Scale? Maybe, but it is still along deferred project in a high growth area.

Christchurch has its plan together, as explained, and it will require a significant increase in spending, which could be the sticking point. The key problem for Christchurch, however, is its growth. With greater Christchurch currently growing at about 10,000 people per year, and with much of the city entrenched in auto-dependent sprawl, I fail to see how there is not a need  for funding mechanisms to enable local government to meet its transport infrastructure costs. Unlike Auckland and Wellington, Christchurch does not have a ready-to-go list of key transport projects lined up waiting for funding commitment from central government, which should be a source of embarrassment for local body politicians, although that is another story for another post. However, if a regional fuel tax, let’s say, were extended to other areas like Christchurch, this could help instigate the development of such a list. Further, the approved regional public transport plan and future public transport business case should throw up projects that are fund ready in short time.

There is a funding problem in our second tier cities

So it begs the question why these areas are being boxed in, with less tools to get much needed infrastructure funded and brought forward. I’m not necessarily advocating an extension of Auckland’s regional fuel tax, although perhaps that is the option that we already have experience with to some success in Auckland, but certainly what all this highlights is that we need solutions in this area so infrastructure can get funded. I certainly think it was a mistake for the government to rule out extending the regional fuel tax option to other areas, particularly Wellington and Christchurch where there are strong comparisons to Auckland in terms of the issues faced, although admittedly smaller in scale.

Whether fuel taxes, congestion charges, a car parking levy or whatever, more tools for local government to meet its costs would be welcome and would enable councils to make funding decisions by lessening risk and providing greater certainty. The risk is that nothing will get done, poor behaviours will become further entrenched, or, perhaps worse, poorer solutions will be implemented.