Transmission Gully opens at a cost to taxpayers of at least $1.25b as Horowhenua and Kapiti landowners celebrate $7.8b in tax-free capital gains on their land over the five years it took to build
The 11 minute average cut in journey time is not particularly consequential in good traffic conditions, but the real benefit of Transmission Gully will be in having an alternative route if one gets blocked by an accident or slip (and the chances of an accident or slip on the new road are much less because of the engineering differences). The cut in journey times also be much more substantial in times of heavy afternoon traffic, where it could take over an hour to get from Plimmerton to Paekakariki.
Transmission Gully conclusively proves that Public Private Partnerships don't benfit the taxpayer. The only agency in NZ's history which built cost effective infrstructure was the Ministry of Works & Development, abolished by that economic illiterate, Roger Douglas.
Wellingtonians get their new road without having to pay for it. Instead of making it a toll road for X years or $Y earned to pay for it, it is being paid for by all NZers via NZTA.
It seems user-pays has been dropped as a policy because it's too neo-liberal (sarcasm).
The nearest to any sort of value capture will be the increased rates paid by owners on the Kapiti Coast.
I'm currently reading Mariana Mazzucato's book "Mission Economy". The two biggest value destroyers these days are PPP's and consultants.
Do you really think there won't be another PPP? The Infrastructure Commission, which has establishing PPPs firmly embedded in its DNA, appears to be focused on ways to improve PPP establishment and operation rather than questioning the choice of using a PPP in the first place. Looks like the 'no true Scotsman' fallacy in operation. And, as you've pointed out, with the low debt level targets still in place there is a strong incentive to move projects off balance sheet with PPPs or SPVs (at least there is a chance of value capture in the SPV levy setting). I would not be surprised that in a few years there will be another PPP that will be prepared to fight the last war, and will find a whole new method to privatise the profits and socialise the losses.
The thing I haven't heard explained re Transmission Gully is how robust its engineering is in terms of likely earthquake damage. It's a really steep gradient through a narrow cutting.
The reason this matters: reduced travel times and greater road capacity are straightforwardly immoral, in a decade when we desperately need to be reducing car and truck use. But the thing I was shocked by when I moved back to Wellington five years ago, having never thought of it when I was growing up here, is how isolated the city is if you knock out two very earthquake-vulnerable roads and one very earthquake-vulnerable airport. After a Christchurch-level quake, Transmission Gully might be the only way to get food and water into the city for a substantial period. Unless the earthquake knocks it out as well.
Good stuff on the deep dive. However, Wales really is a terrible comparator when it comes to roading policy.
Their population has grown by about 500000 in 60 years! That’s 5-6 years of popn growth pre covid.
The population of 3m is clustered along one stretch of Cardiff, Newport and Swansea which is already connected by the beautiful concrete 6 lane (sometimes 8 in smart lanes around Cardiff) M4. They have as much need for new motorways as Wellington does for more wind and rain.
Looking forward to a tolled PPP under the next Nat/Act govt that finally connects Chch to Ash and beyond.
Getting our tax system in line with OECD is the closest thing to a silver bullet on offer for NZ (as it drives Inequality etc and diverts from innovation) so thanks for highlighting this aspect. If only the voters could see the bigger picture
A harsh (but probably fair) critique of the Welli climate Bernard. We do have excellent mountain biking though. Looking forward to a hoon up the new TG road with a bunch of other Subaru enthusiasts on Sunday (hoon being a Kaka reference only, it will be very civilized and law abiding)
Great deep dive Bernard. Really enjoyed listening. How do land value uplift rates differ from standard rates? To a layperson like myself both seem to capture increases in value?
The 11 minute average cut in journey time is not particularly consequential in good traffic conditions, but the real benefit of Transmission Gully will be in having an alternative route if one gets blocked by an accident or slip (and the chances of an accident or slip on the new road are much less because of the engineering differences). The cut in journey times also be much more substantial in times of heavy afternoon traffic, where it could take over an hour to get from Plimmerton to Paekakariki.
Transmission Gully conclusively proves that Public Private Partnerships don't benfit the taxpayer. The only agency in NZ's history which built cost effective infrstructure was the Ministry of Works & Development, abolished by that economic illiterate, Roger Douglas.
Wellingtonians get their new road without having to pay for it. Instead of making it a toll road for X years or $Y earned to pay for it, it is being paid for by all NZers via NZTA.
It seems user-pays has been dropped as a policy because it's too neo-liberal (sarcasm).
The nearest to any sort of value capture will be the increased rates paid by owners on the Kapiti Coast.
I'm currently reading Mariana Mazzucato's book "Mission Economy". The two biggest value destroyers these days are PPP's and consultants.
Do you really think there won't be another PPP? The Infrastructure Commission, which has establishing PPPs firmly embedded in its DNA, appears to be focused on ways to improve PPP establishment and operation rather than questioning the choice of using a PPP in the first place. Looks like the 'no true Scotsman' fallacy in operation. And, as you've pointed out, with the low debt level targets still in place there is a strong incentive to move projects off balance sheet with PPPs or SPVs (at least there is a chance of value capture in the SPV levy setting). I would not be surprised that in a few years there will be another PPP that will be prepared to fight the last war, and will find a whole new method to privatise the profits and socialise the losses.
The thing I haven't heard explained re Transmission Gully is how robust its engineering is in terms of likely earthquake damage. It's a really steep gradient through a narrow cutting.
The reason this matters: reduced travel times and greater road capacity are straightforwardly immoral, in a decade when we desperately need to be reducing car and truck use. But the thing I was shocked by when I moved back to Wellington five years ago, having never thought of it when I was growing up here, is how isolated the city is if you knock out two very earthquake-vulnerable roads and one very earthquake-vulnerable airport. After a Christchurch-level quake, Transmission Gully might be the only way to get food and water into the city for a substantial period. Unless the earthquake knocks it out as well.
Good stuff on the deep dive. However, Wales really is a terrible comparator when it comes to roading policy.
Their population has grown by about 500000 in 60 years! That’s 5-6 years of popn growth pre covid.
The population of 3m is clustered along one stretch of Cardiff, Newport and Swansea which is already connected by the beautiful concrete 6 lane (sometimes 8 in smart lanes around Cardiff) M4. They have as much need for new motorways as Wellington does for more wind and rain.
Looking forward to a tolled PPP under the next Nat/Act govt that finally connects Chch to Ash and beyond.
Getting our tax system in line with OECD is the closest thing to a silver bullet on offer for NZ (as it drives Inequality etc and diverts from innovation) so thanks for highlighting this aspect. If only the voters could see the bigger picture
A harsh (but probably fair) critique of the Welli climate Bernard. We do have excellent mountain biking though. Looking forward to a hoon up the new TG road with a bunch of other Subaru enthusiasts on Sunday (hoon being a Kaka reference only, it will be very civilized and law abiding)
Great deep dive Bernard. Really enjoyed listening. How do land value uplift rates differ from standard rates? To a layperson like myself both seem to capture increases in value?