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Infrastructure Rant – Part 2

I was on the North Shore last night and I saw all the work and expense going into the bus lanes. I wondered how many people are actually going to use the bus when the are bus lanes?

I couldn’t help but wonder what would have happened if they had decided to put rail in instead. If they had decided to close two lanes of the Harbour Bridge and make it rail. (I know it is probably not technically possible due to the incline but bear with me).

Suddenly you are sitting in 3 lanes on the harbour bridge rather than 4, watching the trains fly by. Would you then look at catching a train tomorrow if you really don’t need your car at work?

You bet!

Quickly transport movements are freed up and productivity improves.

Steve W raised 2 really valid points to my last post.
1) Auckland is an isthmus. In my view this further drives the need to act now, as it takes longer to make tunnels and bridges.
2) The second crossing needs to be joint rail and road. I agree if it doesn’t have rail and connection into southern rail network Auckland is stuffed.

Finally, in my last post I said that strong leadership is needed. Ideally that would come in the form of one strong leader with the desire and mandate to fix the problem.

The problem in Auckland is far greater than that however. There is no one body that really controls Auckland. The councils are often out to protect their interests rather than collaboratively work together. Even when they have the right intentions and start working together it appears Central Government and Transit slow the process to a grinding halt.

What’s needed, in my view?
Either, one regional council that combines all of the councils. This makes the most sense for the long-term planning and productivity of Auckland, but I suspect will take 3 – 5 years too long to really happen and will only be a half hearted attempt.

Or Central Government appointed relentless leadership (not a commission of inquiry or working party) who have the legal mandate to steam roll Transit and the councils with clear short-term goals to make it happen.

 

Infrastructure Rant – Part 1

We need strong, long term leadership to fix Aucklands problems and we need it now!

The most noticeable thing to me when I first hit Melbourne was the infrastructure!

They actually have a transport infrastructure.

They have a motorway from the airport to the city and beyond. You can get everywhere in the city by Train, Tram or Bus. You can pick-up a rental car in the centre of Melbourne at 8:30 in the morning drive aimlessly around the central city and get onto a motorway in 10 minutes. Even as I left the city the inbound traffic was mildly congested, maybe 10 minutes slower than normal.

Compare that to Auckland with a population half the size.

The second thing I notice is that when they decide to build a road. They build it. They work around the clock to make it happen (Oh, that means they get lots done at night when the traffic is not around) If it is a critical road they pull out all the stops with the consent process and push it through.

Compare that to Auckland. The Greenlane intersection (which is outside our Auckland Office) will take 9 months longer to complete, will be have grown in cost from $14 million to $26 million dollars.

I was in Auckland this week and there was no work happening on it at all. What would I expect? After all it was the school holidays and traffic is lighter so it makes perfect sense to do nothing.

“Almost finished the upgrading of the Green Lane intersection” is the first transport highlight that Dick Hubbard sights on his website as a reelection highlight. 9 months late and $12 millions dollars over spent. Now that’s a highlight.

I know that not all cities in Australia have the infrastructure and planning that Melbourne has. But at least when they decide it is needed. They do something. In New Zealand we talk and talk and talk and talk. But nothing happens. Nothing.

Auckland in all reality is not any better off than it was 15 years ago when I joined the industry. No light rail, no real improvement to inner city traffic.

If we want to continue to grow as a country. We need strong leaders that will make it happen.

I find it all quiet disheartening and can see why 2,000 people a week head off to Aussie.

 

Supply Chains are critical!

An interesting article about the importance of the supply chain from the NZ Herald this morning.

Here are a couple of excerpts

• Companies no longer compete for market share by differentiating their products. Technology is now so advanced that almost anything can be copied. Communication is instantaneous. The result is products don't compete. Supply chains do.
• "Few people realise that 10 per cent to 40 per cent of the cost of most goods is supply chain cost.
• "For example, 45 per cent of the cost of a leg of New Zealand lamb sold in the UK is supply chain cost."

Its great to see Geoff Vazey trying to get some positive spin around the supply chain. 

It also has a bit to say about Trevor Mallard's ‘dream’ of building a stadium on the Waterford. That would have been a disaster for New Zealands supply chain.

Ports of Auckland move 685,000 containers each year with 45% being export and 55% import.

Ports of Auckland and Tauranga end talks

I know that this is now old news, but Ports of Tauranga and Auckland have decided not to merge.

From the Herald

ARH chairwoman Judith Bassett said the board had decided not to support Tauranga's merger proposal, otherwise known as "Project Mako".

"With the aid of independent advice and having regard to our statutory obligations we have resolved not to support the merger of Ports of Auckland and Port of Tauranga," she wrote in a letter to Port of Tauranga chairman John Parker.

Deputy chairwoman Joce Jesson said: "The merger doesn't align with ARH's long-term strategic investment approach for both this equity investment and ARH's total $1.4 billion investment portfolio."

The risks "outweighed any identified possible benefits in relation to ARH's long-term strategic approach for the company", she said.

It would seem to the untrained eye that Auckland Regional Holdings (owned by the ARC) became the sticking point. This is hardly a surprise and one of my key questions at the beginning was “Practically how do a listed company, and a delisted company (owed by councils) effectively merge?”

Way to hard!

On another note a collegue and myself went on the Port of Auckland tour a couple of weeks ago and the cellphone pictures attached prove it. A nice sunny day in the middle of winter, a ferry ferry ride around the ports. It’s a hard life, but I would recommend the tour.

Land Transport and Transit to merge?

Land Transport and Transit are set to merge as further consolidation in the government agencies continues.  This follows the previous merge of Transfund a few years ago.

Minister of Transport Annette King said: "Despite recent improvements, transport agencies need to work more collaboratively and with a common purpose."

I believe that this is a sensible move and will remove one additional layer of bureaucracy and hopefully enable a quicker more consistent approach to land transport in New Zealand.

The government is also considering directing all road user charges to roading rather than the general fund.

If this happens and transit and LTNZ have a common vision we may actually see some real change and much needed infrastructure in place sooner.

Why can’t we have a simple budget?

Labour continues to deliver complex policies, that may have good intentions, but that in reality add extra layers of bureaucracy and cost to our country and slows progress to below that of a snail.

To recap, there is KiwiSaver, which will compel employers to contribute an additional 4% of salaries to the KiwiSaver programme.  Secondly there is the Regional Roading Tax for Auckland and Wellington.

Both of these will have a huge affect on the profitability and compliance costs for any Transport and Logistics business, and both have huge positives and negatives to them.

The enormous problem I have with most of what the Government is doing is this…

Nothing is simple!

KiwiSaver will be a huge administrative nightmare for business and rather than just give tax cuts or making contributions tax free they are giving tax credits. How confusing to the average person!

As for the tax on fuel to cover roading in Auckland and Wellington.  Labour have told the councils they must consult extensively with the public about where they spend the money. This means the money won’t start being collected for another 15 – 18 months.

Auckland and Wellington need roads now, not 5 years of consultation and happy talk.

Councils need the ability to lead, not get caught up in consultation and RMA’s.

For more simple summaries of the budget from treasury click the below links:

KiwiSaver Employers Fact Sheet (PDF)
Infrastructure Changes for Roads
18 Pages Executive Summary of Budget

Auckland and Tauranga ports in merger talks

Talks of a merger between Auckland and Tauranga ports as reported in the NZ Herald bring mixed emotions for me.

"A merger would have major implications for all New Zealand ports, particularly in the North Island. The companies acknowledged there would be competition issues."

You think? And what happens after they have the largest market share, will they start behaving like Auckland and Wellington airports who make a disproportionate amount of money for the capital invested.

Tauranga, the country's No 2 container operator, set up the country's first inland port, Metroport, in June 1999 in South Auckland and it had been siphoning off Ports of Auckland business. ... With Tauranga's predatory tactics a constant threat, the pressure came on for Auckland to seek more of its business from the rural export hinterland south of Taupo.

Tauranga's Metroport was a classic example of a small company using guerrilla warfare to take on the big company and succeeding! Auckland then replicated it in lower North Island. If I were Auckland merging would be a great idea. I get back the volume I lost.

And finally two questions the Herald didn't answer. Practically how do a listed company, and a delisted company (owed by councils) effectively merge? Also I find the timing very interesting as Jon Mason has just left.

All that said. If they do merge it would be no different that any other big company with branches in various locations. It will also be interesting to watch the impact on Transport and Rail volumes.