Saturday, December 8, 2012

Selective Thinking – When Common Sense Works for Some Projects it Should Work for Others

Auckland’s ambitious port plans
Earlier in the year, I suggested that the Port of Auckland plans for expansion are over the top. The ambitious reclamation that the company claimed was required seemed to be a step or two away from reality in its projections of demand. And it was inconsistent with the Council's ambitions to turn downtown Auckland into a major destination for living, tourism, recreation, and business.

Applying a dose of reality
Now the Council is acknowledging that the port plans were unjustified.  It has received a commissioned report that went somewhat further than my thinking by addressing the potential for greater productivity to make better use of existing capacity on the port, deferring any proposed reclamation, and potentially reducing its scope.  The report also highlighted the potential in Auckland for increased congestion on related rail and roads.

It seems likely that the Auckland Unitary Plan, currently under preparation will adopt a more grounded approach to the provisions it makes for port expansion than anticipated by either the Port Company or, indeed, by the council itself in its earlier spatial plan. Less is definitely better in this case. 

Better planning
Indeed, promoting incremental investment around existing infrastructure often makes better sense than going for the big “transformational” spend.  Pulling back the planning time horizon to avoid the risk of locking communities into long-term projects that they don’t need or can't afford is also good economics.  Acknowledging that there is a range of possibilities for achieving desired outcomes, not all of which are obvious on Day 1, is sound planning.

The bigger picture
In the case of the development of our ports, there is much to be said for the wider perspective and the greater range of options that arise from taking the bigger view.  This means, among other things, \acknowledging the inter-connection of land and sea transport chains, and recognising in Auckland’s case that the future of its port cannot be separated from the future of other ports in the region – whether the region is the Upper North Island or the South West Pacific, and from ongoing changes in shipping and shipping companies.  

The report on Auckland’s port even goes so far as to acknowledge the possibility that at some time in the future New Zealand freight could trans-ship through a Sydney or Brisbane hub.

Now there is a distinct possibility, and it’s not all bad.  It may well reduce costs to our producers, in part through creating a greater diversity of (indirect) connections into Asia and the Americas where demand growth is likely to be concentrated.  (It happens already for much of our freight through different sea-sea and sea-land connections in places like Singapore or Rotterdam).

And it would incidentally breathe new life into regional ports, potentially reduce internal transport costs, and effectively create much more capacity – and more options – at Auckland.

Dealing with uncertainty by retaining options
Simply assuming “build it and they will come” does not make sense, especially when the build is out of proportion to the demand. Bold long-term plans full of commitments to expansion do not reduce uncertainty as some planners and politicians would like us to believe, they simply raise the costs increase the risks..

True, the uncertainty that we are faced with when contemplating infrastructure investment, land use changes, and urban development generally shouldn’t paralyse us, or lead to endless rounds of report proliferation and workshops rather than decisions.  But it does call for a degree of realism in our thinking, the avoidance of over-stretching, and recognition of when apparently bold plans are demonstrably bad plans.  And often decisions that consciously limit risk – including decisions to defer investment – may be better than no decision at all, and certainly better than those built on little more than blind optimism.

The elephant in the Council Chambers
So maybe preparing the Unitary Plan may be just the time to rethink the underground rail link.  The Council could apply a reality check to the demand thinking, the shonky economics, the flaky business case, the fiscal risk, and the land use assumptions behind the proposed underground passenger rail link, and just how far the spending on this transformational project will limit Auckland City’s options in the future.  

There may well be better, less risky ways of maintaining accessibility in and around the city than one which not only misallocates public resources but also locks in a particular and contestable image of urban form and assumptions about land use for a very long time. Isn't this just what has happened to those unrealistically ambitious port plans? 

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