In my last blog I raised the question of whether purchasing
land for a possible rail link through the city would reduce the attractiveness of
the inner city living by laying
waste to a corridor cutting through it – shades of the motorway madness of the
1950s and 60s. I suggested that this
will increase the anti-social behaviour after dark that so worries CBD residents
and visitors.
So it was interesting to see in the New Zealand Herald today the concern
over the use of vacant
city sites as places of refuge for people deemed anti-social and particularly
as sites for binge drinking. These are,
of course, informal public spaces, simply being used as such. And with the purchase of 280 properties in
the central city for construction works or sites for rail-related development
in support of our “sometime-maybe-never?”
underground rail link, we are creating more of the same. This will no doubt make inner Auckland more
liveable for the homeless, dispossessed, impoverished, and underemployed. Paradoxically, we could claim from this that laying
waste to inner city sites contributes to the vision of increasing inner city living.
Getting rail up and overrunning
By the way, the $240 million set aside for acquisition
of 280 properties sounds just a little light.
I haven’t searched the records, but I suspect few of those properties
would be valued at under $1million. And
what about the compensation for relocation and loss of revenue and goodwill among the many businesses that currently occupy them, and of course the relocation
costs of displaced households?
To me
it looks suspiciously like we have taken the first step down the budget blow-out
track. But then, that tends to be the
way of big civic
projects utilising public funds, which are almost inevitably subject to optimism
bias and waste, partly resulting from confused accountability.
(On accountability, it is not quite clear whether the train driver
is the Council, the Mayor, or Auckland Transport. And any expectation that the Government should
shoulder much of the cost or should legislate to tax motorists points to
further potential confusion in accountability, in this case between central and
local government. This is particularly significant for a project destined to make a big a hole in
public finances).
Of course, many of the properties to be acquired will be sold
once the link is completed. But assuming
that the holding costs are based on $240m expenditure, any over-run will boost
them.
So will delays to the project as a result of unresolved funding problems, continuing economic uncertainty, and likely fiscal constraints. These are likely outcomes: a Benefit Cost Ratio of 0.4 doesn’t justify going ahead, and the strategic benefits remain decidedly unclear. But that’s another story.
So will delays to the project as a result of unresolved funding problems, continuing economic uncertainty, and likely fiscal constraints. These are likely outcomes: a Benefit Cost Ratio of 0.4 doesn’t justify going ahead, and the strategic benefits remain decidedly unclear. But that’s another story.
Suffice to observe that like alcohol bingeing among people with too much time on their
hands, it seems that playing the train game is a difficult habit for politicians and other enthusiasts to break.
Passing the bucks
Even if we do get to spend all this hard earned (or borrowed) money
down the track, over-optimistic passenger and revenue projections and pie in
the sky proposals for station-based office and residential developments will
mean under-recovery of capital and operating costs. A BCR of 0.4 looks a bit optimistic.
Of course, we can continue to behave badly by excessive, wasteful spending and leave someone else to
clean up the mess. In this case another generation will be left to foot the bill while today’s decision-makers slip – or slope -- off into retirement (most likely in suburbia or their coastal retreats). How responsible is that?
