Transport projects as economic stimulus post-lockdown

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

Right now we are in interesting times. I’ve had a draft post I’ve been tinkering with, exploring in-depth the likely economic response to the corona-virus lockdown and how that might impact on wider transport policy settings, but events simply kept moving too fast for it to remain relevant for more than a day. So I thought I’d explore what direction the government’s touted economic stimulus package might look like in terms of transport projects, given that transport is one of the key areas tagged by the government for investment.

A bit of background

In case you don’t know, with the lockdown currently underway, and our borders closed, the government is looking at ways to push the economy forward as soon as possible. Last week the Minister of Finance signaled that a big economic stimulus package, titled a ‘huge nation-building programme of infrastructure and public works’, and said he’d asked the Minister for regional Economic Development and Minister of Transport to find projects that could be brought forward that would boost economic activity and create jobs. He also warned that New Zealand would have to look at its fundamental economic settings, and touted that the government is already looking at clean energy initiatives and the housing market to avoid past mistakes.

New Zealand won’t stop being a country that looks out to the world … but we’ve also got to look inside ourselves a little bit more at what we do here in New Zealand.” – Grant Robertson, Minister of Finance

Then this morning, more announcements were made. This included reaffirming the determination to invest in big infrastructure projects, touting a possible “Ministry of Works” style entity made of of Crown Infrastructure Partners, which would be huge changes, and a clear sign of a shift in fundamental economic policy coming. That’s something to watch this space on. More immediate was the establishment of an Infrastructure Industry Reference Group whose job it will be to identify “shovel-ready” projects that exceed $10 million that are shovel-ready within the next six months. The government’s also paying contractors in advance to ensure construction workforces are ready to hit the bitumen come the end of lockdown.

Infra Map 1
January’s big infrastructure package was a roadsfest. Will post Covid-19 be the same? 

What does this all mean?

What this means is that there is currently political currency for major change. How much, how deep, is a question that cannot be answered right now, as we are in the midst of the event that is pushing all of this in unknown directions. What can be certain, however, is that things will change. So we are likely to see a swelling of government spending, especially on major infrastructure projects, and that means transport. However, at the same time, we are seeing a rethink going on about how New Zealand’s economic framework looks, and how that plugs in with the rest of the world.

This means New Zealand is in a position to really push for a fundamental reset on what kinds of things we fund to get the kind of economic and environmental outcomes we want. With the government clearly identifying clean energy, transport and housing as critical areas going forward, it stands to reason that any stimulus package for a post-lockdown New Zealand should include transport projects that embolden a more sustainable future.

However, not so fast. We also have to factor in the speed at which the government wants to get a package not only together, but also shovels in the ground. The government aren’t idiots; they know that the electorate will not tolerate any dilly-dallying, and while there is a lot of currency right now for ‘doing things differently’, as time goes on people will increasingly yearn for a ‘return to normal’. Such a turn could undermine a push for a more sustainable approach to building transport infrastructure.

Don’t believe me? Then ask yourself why this government went backwards on their key transport policy planks and funded a roads-fest of a package in January this year? Or perhaps look at the boondoggle Auckland light rail has increasingly become. If you want further evidence, then look at the post-earthquake response in Christchurch. High levels of public support for an ambitious response soon wilted with delays, and the eventual government package was a shadow of what people had initially desired, and it was accepted without hesitation.

Will government changes to how it does big infrastructure projects mean things like Auckland light rail can progress much easier?

What’s likely to get funded then?

Minister of Transport Phil Twyford said the government needed to learn from the past in their approach to getting big projects off the ground, so perhaps he has referencing mistakes made with the ongoing Auckland light rail project, which is a positive sign. I just hope the mistake wasn’t “fund something like light rail instead of roads”. Anyway, what may get funded is a bit of an “up in the air” question. the Provincial Growth Fund is redirecting $800 million of funding to shovel ready projects, and the Minister of Regional Economic Development signalled roads as a major benefactor. A lot more spending is planned, however, but it is going to be hard for the government to ignore those road projects which can get off the ground quickly, even if government involvement in these types of big projects changes to a more direct one to make them easier.

The government response in terms of what infrastructure to back is going to be a balancing act. remember, they have to balance their desire to make a fundamental shift with shifting expectations. My crystal ball gazing is that we will see the government empty the stack of road projects that have been on the books and are ready to go(ish) as a way to get runs on the board, while increasingly moving to a more balanced, mode-neutral package as the timelines extend out. So, in other words, we could see a mix of projects, but there will be a front loading of roads, with longer-term projects being a more mixed bag.

What are our major cities thinking?

Both Auckland and Canterbury are already working on providing government with (wish) lists of projects to consider for funding. Please check out this Greater Auckland post for a run down of what Auckland is asking for, but I will say it is a really good mix.

Let’s hope Canterbury is as ambitious and forward thinking, but I imagine it will include a lot of non-transport infrastructure, particularly related to projects currently expecting a large local government contribution (the link above seems to imply this heavily), finishing the cycleway network, and a few big road projects such as the Woodend Bypass motorway extension. What I’d like to see the Canterbury Mayoral Forum (which is coordinating the response) do, however, is request an envelope for the outcomes of rapid transit  and public transport studies so they can be implemented as quickly as possible; that would certainly be a very smart thing to do, if the criteria allows for it. And I don’t know how shovel ready it could be, but with previous government promises on commuter rail, and the recent works on the Hamilton to Auckland service showing the pace such a project could be put together, maybe there is hope there too?

As for Wellington, this is a huge opportunity to seek advancement of key Let’s get Wellington Moving (LGWM) projects (in current order of prioritisation) in a similar vein to Christchurch. This could include meeting local government shortfalls. I do, however, think there may be more regional roading projects in the midst, and I also fear some of the roading LGWM projects might be brought forward, depending on the way political cards fall. That’s definitely something to keep an eye on.

Christchurch has plans – what prospect is there that these could be hurried up with post Covid-19 funding?

It’s a fast-moving beast

This is going to be a true nation-building moment, and will likely set our built environment for generations. Every day there seems to be more news, so I am sure there will be some interesting new developments to come. With a little time on hand at the moment, I will keep an eye on these and comment as appropriate.

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