Tuesday, May 22, 2012

At Least Five More Reasons not to build the Central City Rail Link

Second Thoughts
So some Auckland councillors think that the Inner City Rail Link is unaffordable without central funding.  Perhaps they will do away with the latter qualification once they have heard  the budget later this week – at this time and place, it’s just unaffordable regardless of whether we throw ratepayer or taxpayer funds at it. 

Not only that – it doesn’t make a lot of sense.  Here are some reasons. (There are others - I have dealt with demand issues elsewhere).

1.       Its inflexible
Rail corridors are fixed, inflexible, and vulnerable.  Even with an Inner City Link Auckland rail will have minimal redundancy built into it.  Any service disruption will have widespread impacts – even when the cause lies elsewhere.  

Rail is vulnerable to severe weather, floods, or geotechnical disruption – washouts, landslides, earthquakes, events that usually occur when transport corridors become most critical.  How useful would rail have been in the Christchurch earthquake? That’s hypothetical, of course.  But think of Wellington’s rail system and the potentially devastating impact of an earthquake on that.  And think of the impact of extreme weather on rail in downtown Auckland or on the eastern corridor.

2.       Stations have limited accessibility and will generate congestion
Rail is difficult to access for the majority of the city’s residents who live or work more than a kilometre from a station.  Park and ride, integrated PT ticketing, and dedicated cycleways serving the stations might improve accessibility. But there comes a point when the additional time and costs discourage commuters.

And nodes will be further compromised by congestion associated with creating high density development around stations to try to boost patronage.  Even for those living close to a station, the majority of trips –shopping, entertainment, socialising, personal business, education, and recreation - are taken by a mode other than rail.  So travel demand by many more local residents combined with park and ride or feeder bus systems will require major investment in roads and around stations to maintain their accessibility.  Is this budgeted into the rapid rail dream?

3.    An irrational option in the face of peak oil?
If (who knows when?) peak oil really bites by pushing fuel prices to prohibitive levels or through an outright shortage travel behaviour will change.  Two responses seem plausible. 

First, many more people will come to rely on public transport.  But the majority will not be able to access a rail-based system without personal transport.  And if that problem can be solved, and quite apart from issues of inflexibility and vulnerability, rail is inevitably capacity-capped. It just won't be up to the job.

Second, people will travel less.  Part of that may be more ride sharing and more multi-purpose trips, more patronage of local services, more  local employment, more localised village life.  How will a fixed line, long-haul passenger system help with that?

In any case there is a solution to the threat of peak oil in place already: a road network on which public transport can operate to every corner of the region.  When people start leaving their cars at home, it will have plenty of capacity for efficient, fast, and  flexible public transport.

And the mode – who knows?  Probably buses of various configurations capable of moving people quickly throughout the region.  Quite possibly light rail will play a part, perhaps even automated personal transport networks.

4.     It’s the geography, stupid
Auckland is on an isthmus – within which sits another densely occupied isthmus. The result is a stretched out city with a big heart – all confined by hill and water. 

This distinctive physical geography shapes a city already lauded as one of the most liveable in the world.  We have a network of corridors by way of state highways and motorways which reflect this geography, and a regional and local road system tuned to it. 

Auckland - city on an isthmus
And we have inherited a heavy railway that responds to our geography with links to cities to the north and south.  What our rail system might be able to do is make dispersal a greater reality, supporting satellites north (and north west) and south of the city.  Transforming it into a version of the London Tube, the Paris Metro, or the Singapore MRT, though, is a stretch too far.

London - City on a plain

5.    Keeping Auckland Liveable
Rhetoric about transforming Auckland into the world’s most liveable city has its place.  Given that it’s already considered highly liveable, it’s interesting that this is not stopping the outflow of New Zealanders to Sydney, Brisbane, and beyond, though.

So let’s try something different.  How about being a smart city?  Or at least a city that makes smart decisions.  We could start by addressing the risks to our current liveability.

The failure to provide sufficient greenfield capacity for growth is an obvious one. Desperate intensification threatening the green and blue spaces that give character to the city is another.  The ageing of existing infrastructure highlighted by the increasing vulnerability of our underground services is yet another,one which Think Big rail plans threaten to deprive of funding .   

Oh, yes, a sixth reason
Right now the gathering fiscal clouds are perhaps the greatest threat to a liveable Auckland.  It is no doubt this that is unsettling councillors.  It will unsettle residents, too, if foolhardy spending is translated into ongoing increases in property rates and charges for services – like public transport - that fail to address the needs of the majority of resident or business ratepayers in the city (or taxpayers outside it) compromise liveablity, and limit choices in the future. 

Tuesday, May 1, 2012

Expanding Horizon: Rethinking Auckland’s Port Plan

Far-reaching plans
In my last blog I suggested that it’s time for a rethink of Ports of Auckland Ltd’s (POAL) plans for expansion. The current plan cements in a commitment to a critical downtown location by continuing to promote stepped investment, including substantial further reclamation.  The analysis of demand behind the plan seems too slight in content and too inflated in expectations to justify this costly long term commitment and the prospect of a four-fold increase in port related rail and road traffic. 
 Source: Port Development Plan, Ports of Auckland Ltd, 2008

Source: Port Development Concept Plan, Ports of Auckland Ltd, 2008

Debatable assumptions
We are facing a period of unprecedented post-war change to the economies of New Zealand and our trading partners.  Who knows what the configuration of goods crossing our ports will be in 20, 30, or 40 years’ time?  Or the sorts of demands that might be made on some of the city’s most valuable real estate - currently occupied by a transport operator?   Obviously an efficient port is critical to New Zealand’s trading future, but that might just be why it is also important to consider radical alternatives: to achieve the efficiencies and flexibility that uncertain and challenging times demand.

This post provides a few more numbers to suggest why the POAL view of the future may be a little narrow .  It also proposes an alternative – no doubt just one of several that might be considered to promote the evolution of the nation’s long-term trade.

Changing production patterns erode Auckland’s primacy
New Zealand cargo figures from 1989 to 2011 (sourced from Statistics New Zealand 1) reveal interesting shifts. First, growth in cargo handled was slower at Auckland's port than elsewhere:

% Growth in Cargo, 1989-2011

That means its share of national trade has fallen.  I saw no analysis of the reasons for this in the port plan.  

Auckland Port’s Share of National Cargo, 1989 and 2011

In fact, if we think about it, its not  necessarily bad news.  For a start, Auckland’s sea trade is of a higher  value than elsewhere; between 1989 and 2011the unit value of its exports grew by 29% (in nominal dollars) compared with just 8% elsewhere, to reach $3,800/tonne (compared with $1,300/tonne). A  regional focus on higher value exports was reinforced  by the growing freight role of the Auckland International Airport which today accounts for 12% of New Zealand exports by value, and 21% of imports.

Also, Auckland seaport still takes a large share of national  imports reflecting the region's twin roles as centre of consumption in New Zealand and as a trans-shipment point for imports to other parts of the country.

Nevertheless, if more trade is being channeled elsewhere it suggests that there may be other options for growth which are less likely to adversely impact on Auckland's valued harbourside.

Looking to the wider region
Take a look at what is happening elsewhere in the northern North Island.  The ports at Tauranga and Whangarei have grown faster than Auckland, and today jointly account for a larger share of exports by value and tonnage.  Whangarei is, of course, a special case given the role of shipments to the oil refinery.

           Growth, 1989-2011                                                       Share of New Zealand, 2011

Responding to structural change?
These figures hint at an emerging specialisation.  Over the past thirty years, the primary processing industries on which Auckland’s export trade was built have moved out.  Consequently, the downtown port is a bit of an anomaly.  The migration of export trade to Tauranga simply reflects an adjustment in traffic to the changing geography of production.  As higher fuel prices bite, and the overheads of overloading Auckland's transport system increase, there may be good reason to act to sustain that trend.

Manufacturing has changed, too. The import-substitution industry which grew so strongly in Auckland between the 1940s and 1970s has been dismantled by a lowering of trade barriers and by the impact of the new manufacturing culture of North and Southeast Asia.

Today Auckland has a smaller number of specialised, hopefully more sustainable manufacturers.  Some of these do, however, rely for expansion on efficient channels to international markets.  Its is incumbent on the POAL to make sure it responds to their hopefully growing needs.

Is more specialisation an answer?
Of course, our analysis needs to delve deeper before we can be confident about the possible effects of ongoing structural change on the composition and volume of future trade.  But even the crude figures here suggest that there is an opportunity for greater specialisation and consequently more intensive and productive use of the assets of the three northern ports. 

For a start, a strong focus on value-based trade through Auckland seaport would enable the company to do more with less.  At the same time, fully exploiting its inland port sites as consolidation and break-down points for these and other more traditional trades should ensure that they too play a full role in integrating and streamlining internal and international transport.

Tauranga has boomed as a result of a booming rural sector – both by importing inputs and exporting products.  As a gateway to New Zealand’s most productive hinterland – the Waikato, Bay of Plenty and central North Island – we can expect this role to grow.  And if New Zealand’s trade future really is just “more of the same” as implied by the exponential growth on which the POAL port plan is based, then Tauranga  is an  obvious choice for  investing in the capacity to service the primary sectors and associated processing industries as these sectors expand, diversify, and intensify their output.

Whangarei’s long-term role is more speculative, but it possesses an underutilised port which can readily adopt and develop best practice commodity handling, as it has done for forestry.  There may also be real value in shifting lower value and bulk trades from Auckland’s downtown to Whangarei’s Northport as a means of extracting the greatest value out of both.  

Beyond the horizon: the logic behind Northport
Playing to and building on port specialisations would exploit existing investment in inland port operations and boost the productivity of any new investment across the entire transport chain.  It would probably require the rail link between Auckland and Whangarei to be upgraded and the Oakleigh extension to Northport at Marsden Point to be built.  This can probably be justified  anyway for the additional capacity it will provide on the  highway between Auckland and Whangarei by removing bulk traffic.  And by providing a sound alternative to  Auckland for high volume, low value trade  it will avoid  costly reclamation there, and help sustain the quality of Auckland's waterfront. 

The potential development of a new nearby Marsden City and the solid industrial base associated with the oil refinery mean that more trade and investment at Northport could play  a major role to play in  freeing some of Auckland's  harbour edge  for higher value uses.

Radical change calls for lateral thinking, and integrated action
This is just one option.  But looking at it – and others -  seriously might begin to meet former POAL board member Rob Campbell’s concerns about the narrow thinking that promotes incremental change at a legacy port as a way to cater for apparently undifferentiated volume growth - regardless of the wider costs.

Of course, any such suggestions may call for more than rethinking where and how different goods are shipped in New Zealand.  Perhaps the existing owners and operators cannot work together to extract the best out of their investment (for shippers or shareholders).  Perhaps current governance and ownership structures make that too big an ask, as suggested  by the Productivity Commission.

An important  part of the answer may lie in the emergence in New Zealand of an organisation -- or organisations -- capable of integrating and managing the flows across all modes to the advantage of individual trades, regardless of the ownership and management of individual components of the transport infrastructure. Actually, integration in response to globalisation is  not so radical, even if the notion of working together may be anathema  for some of  today's port players.

[1]               Value measured as nominal $CIF for imports and $FOB for exports.