Analysis

88. Most critical assessments of the sufficiency of road infrastructure in New Zealand have been based on anecdotal evidence and have been concentrated on sections of the roading network, rather than on the entire network. The work of Ernst & Young in 1997 on the cost of congestion in Auckland was the first attempt at quantifying the cost of infrastructure adequacy, and established an annual cost of congestion in Auckland of $755 million per annum[22]. This is illustrated by the following comparison with Brisbane, a city of similar size:

Figure 13 - Congestion Indicator Comparison

Source: NZCID, Meeting New Zealand's Transport Infrastructure Needs to 2025, 2006

89. Since the 1997 report, the cost of congestion in Auckland has been inflation adjusted, and further research has largely focused on infrastructure adequacy in urban areas, rather than taking a national perspective.

90. Measuring the adequacy of roading infrastructure is inherently difficult. The percentage of expenditure as a portion of GDP is unhelpful as prior investment is not taken into consideration. Measuring congestion is not entirely useful or at least sufficient. Congestion may be induced by the incorrect setting of user charges, or may not provide an accurate indicator of network performance as it may be concentrated in certain areas and certain times of the day. Moreover, a significant amount of additional funding is currently going into the road sector but because of construction lags it will take some years before the full effects are visible.

91. Compared to other OECD countries, New Zealand has a relatively high rate of road fatalities per head of population (see the graph that follows). Based on 2007 results, has a road fatality rate of 10 deaths per 100,000 population. This compares with 7.7 deaths per 100,000 population for Australia. Our fatality rate is double that in the Netherlands, Sweden and the United Kingdom.

Road deaths per 100,000 population

Source: Ministry of Transport, 2009, based on data from the OECD

92. To help inform which road safety measures are appropriate, the government has released the road safety 2020 discussion document for public consultation.[23]

93. The best indicator of infrastructure sufficiency (including safety features) is likely to be the benefit cost ratios of road projects for which there is insufficient funding. The existence of a significant number of projects with high expected benefit cost ratios that cannot be funded could indicate that there is, or will be, insufficient infrastructure.

94. Officials are currently endeavoring to establish whether there are many projects with significant benefit cost ratios that remain unfunded, and hope to have this information in time for the first National Infrastructure Plan.

Local roads

95. Much of the local road network and structures were developed in the 1950s and 1960s. It has been suggested that many of the structures (namely bridges) are now reaching the end of their useful life and are nearing replacement. Proposed changes to the vehicle mass and dimension rules (allowing heavier and longer trucks on certain routes) will compound the challenges for councils as well as NZTA, which is trying to establish the adequacy of state highway bridges for this purpose. Preliminary analysis suggests that there will need to be increased investment of around $85-100 million to strengthen or replace bridges on candidate routes for heavy vehicle permits.

Efficient use of existing infrastructure

96. Congestion and empty roads could both be indicators that road infrastructure is not being used efficiently. The latter might be a legacy of overbuilding in the past, or the result of changed circumstances. Congestion can be addressed either by building more road space or by taking demand management measures, for example some form of time or location-specific road pricing.

Climate change

97. Transport accounts for an estimated 19 per cent of all New Zealand greenhouse gas emissions. The Emissions Trading Scheme (ETS) will create a price for carbon in New Zealand which, in the transport sector, will be included in the price of fuel. Whether the ETS will lead to a significant reduction in greenhouse gas emissions from the transport sector is not yet known. This is due to the ETS being configured to use prices to achieve emissions reductions in the sector which can achieve these most efficiently.

Communications - why should people travel to work when they can work from home?

98. If the technology is such that the costs of having staff working from home is less than the costs of work-based premises, it is conceivable that communications may to some extent substitute for transport. But this substitution will not be possible for all firms, and even for firms which can provide working from home services, the need for human interaction may limit the extent to which substitution occurs. Ultimately, if transport user charges are set to reflect all social costs, then the market will decide if or how much substitution will be optimal. The users’ decisions will be reflected in travel demand patterns and recognised in the measurement of the benefits of individual road projects when undertaking cost benefit analysis.