Month: May 2015

High house prices: a blunder of our governments

The comment by Frank McRae was to the point of some hurdles we still face in the residential division of Auckland.

Of note that workshops and mediation for the Residential Zones in the Proposed Auckland Unitary Plan start in late June and late July respectively

Michael Reddell's avatarcroaking cassandra

That was the title of an address I did to a group of several hundred investment management professionals in Auckland this morning.  The organisers wanted snappy titles: mine was inspired by the book, The Blunders of our Governments that I wrote about a few weeks ago.

The essence of my story is in this summary I gave them for the programme.

High and rising house prices in Auckland hog the headlines.  The tax regime and bank lending practices are largely irrelevant to what has gone on.   Instead, increasingly unaffordable house and land prices result from the collision of two, no doubt individually well-intentioned, sets of policies.  Tight restrictions on land use crimp the supply of the sort of properties most people want to live in, while very high target levels of non-citizen inward migration persistently boost demand for housing.  One or other policy might make sense, but together they represent a blunder that is enormously costly to the…

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Continued Sense of Urgent Requirement for the Auckland Transit Link (City Rail Link)

Strong patronage growth illustrated needed for continued investment

As the Auckland motorways are grid locked owing to multiple accidents at the time I wrote this all four Lines on the rail network were running clear in getting people home from work tonight. But there will be a time very soon where the rail network will need that missing link built to open up the latent capacity needed to move more Aucklanders.

From Voxy

Mayor: Patronage leap highlights urgent need for CRL

Auckland Mayor Len Brown says the latest leap in public transport patronage highlights the need for the City Rail Link to be built as soon as possible.

Mr Brown is warning there will soon be serious congestion issues at Britomart both in terms of the number of trains trying to access the station and the number of passengers waiting to board them.

“At this rate, Auckland will meet the Government’s patronage threshold for financial support for the CRL early in 2017, three years earlier than projected. Growth has been accelerating since late 2013.”

“This confirms what Aucklanders keep telling me. They want to get off the congested roads and onto efficient, reliable and modern public transport.”

In the past 12 months:

– Auckland’s overall public transport patronage has grown by 10%

– Rail patronage has grown by 22%

– Northern Express bus services patronage has grown 17% in the 12 months to Apr-2015

– Bus services excluding Northern Express patronage has grown by 7.6%

– Ferry patronage has increased by 6.6%

In April alone, overall public transport patronage jumped 4% year on year with rail up 18.1%.

Auckland Transport Chairman Dr Lester Levy says the growth in rail patronage is particularly pleasing.

“It has been a difficult time as we run both an electric and a diesel system. We expect the growth to continue as we are just weeks away from a full electric operation from Swanson in the west to Papakura in the south.”

Len Brown says the big next leap in rail patronage will come when electric trains service the Western Line from late July. Already the new electric trains have started running on that line at the weekends.

“We have seen huge leaps in patronage once the comfortable quieter and reliable electric trains started running on lines such as Onehunga and Manukau.’

Last week, Auckland Council’s Finance and Performance Committee supported an Accelerated Transport Programme made possible by funding from the new Interim Transport Levy for the next three years.

The money generated from the levy will help fund The Accelerated Transport Programme, which will include projects across the region.

Len Brown says “This means we can now star

—ends—

See: Budget 2015: Even PwC Stipulates Need For City Rail Link to Unlock South Auckland on pressing need for the CRL (Auckland Transit Link).

Budget 2015: KiwiRail Should be Split Into Two

Tracks to NZTA, KiwiRail a partial listed stand alone freight State Owned Enterprise

While I have been writing posts on rail and contemplating Budget 2015 in regards to transport (i.e not a lot apart from reaffirmation in accelerating the Southern Motorway upgrade (starts October)) I was pondering if there was a better way to handle KiwiRail.

KiwiRail is admittedly a money black hole thanks to neglect to our rail system by both sides since the late 80’s (made worse in 93). However, KiwiRail is not a lost cause as rail is the most efficient and economical form of moving people and freight over longer distances on land. But I wonder if improving our rail could be handled differently and give New Zealand better results.

What I am thinking is splitting KiwiRail into two:

  1. Tracks and associated infrastructure get flipped to NZTA who look after the State Highway network. This way a single agency is: planning, operation, maintaining and investing in both land transport modes under a single umbrella. It also means rail comes under the National Land Transport Fund envelope when it is listed alongside road projects. Given that the NLTF is meant to priorities the best valued investments at the top it would be most likely not uncommon for rail to take three of the top five NLTF spots.
  2. Freight operations including rolling stock and rolling stock maintenance facilities spun off into a stand alone State Owned Enterprise. While being an SOE though I would have 49% of it listed on the NZX to allow fresh capital and NZX oversight to this division.

With the freight side spun off though I would also allow others to run their own rolling stock (while paying access fees to NZTA) on the tracks if they are inclined to do so. Port of Tauranga might be such a contender with its growing Metro Port services. That said KiwiRail freight operations could also see another source of revenue by the private rail freight companies tendering their rolling stock maintenance to KiwiRail as well.

So what do you think? Something Bill English should actively investigate? Would it help our rail system as well as the Government books. Would it help our Economy most of all?

Let me know your thoughts in the comments below.