Transport Minister names new Waka Kotahi chairman: but will the Agency get the funding needed for new motorways?

In one of the most significant appointments the government has  made, Transport Minister Michael Wood has named Dr Paul Reynolds as chairman of Waka Kotahi Transport Agency NZ. He takes  over from Sir Brian Roche at a  time  when – according to critics – NZ’s roading system has suffered  from a  lack of funding and, equally importantly, a lack of ministerial direction, particularly in the first term of the Ardern government.

Now the government is  playing catch-up  and Wood  says  the government’s commitment to infrastructure investment continues to play a critical part “in securing NZ’s economy”.

He adds  that Waka Kotahi is crucial to the delivery of many of these projects, such as the Transport Choices package, Penlink, the Northern Corridor, Eastern Busway, Takitimu North Link, Mt Messenger Bypass, Manawatū Tararua Highway, and Ngā Ūranga to Pito-One.

“Waka Kotahi requires a Chair that is a highly experienced governor who can navigate complex environments, drive the development of strategy, build consensus and effectively engage with a diverse range of stakeholders.

“Both Waka Kotahi and the wider transport system are facing challenges such as climate change, the transition to a focus on multiple modes of transport, the need for effective and modern regulation, and how to manage significant change equitably. “All of these require a collaborative working approach, and a solutions-focussed leader with a vision for the future.

“Dr Reynolds is an experienced Chair and public sector leader, as well as an excellent strategist. His appointment strengthens the Board’s regulatory and environmental capabilities, as well as offering an additional perspective of the specific transport challenges experienced in regional New Zealand. As Chair, he will work collaboratively with transport and Treaty partners to solve problems and explore new opportunities.

“I am confident Dr Reynolds has the right skills to lead the Board for the next three years and am excited to work with him”.

The big  issue, of course,  is  whether Wood  can secure  the funding  required for the major  new  motorways the country still needs.

Critics complain the government thought the priority should turn to make the existing  system “safer”, without understanding that  much of the system is obsolescent.

In his press  release  Wood acknowledged Sir Brian for his dedicated service as Chair for the past three and a half years.

“He entered the Board during a challenging period for the organisation, and was able to make key structural changes while also managing the impacts of the COVID pandemic and other significant challenges.

“Waka Kotahi has benefitted from his calm and collected approach, and I am grateful for the advice and support he has given me in my time as Transport Minister,”  Wood said.

Dr Reynolds will replace Sir Brian as Chair from  February 1.

He served as CEO of the Ministry for the Environment from 2008 until 2015. Before that he worked at the Ministry of Research, Science and Technology (1998–2002) as Chief Policy Adviser and from 2002–2008 he was Deputy Director General (Policy) at the Ministry of Agriculture and Forestry.

He has a background in scientific research, holding a PhD in Biochemistry from the University of Otago.

Sir Brian  was a  partner in PriceWaterhouseCoopers for over 20 years before retiring in 2009 to take up the role of Group Chief Executive of NZ Post.  He left there in 2017 and has been involved since as both a director and or advisor across a range of entities and activities.

Sir Brian was involved in a defence policy review in 2015 and again in 2019.

He chairs Antarctica NZ  and City Rail Link as well as Waka Kotahi-NZTA, and was appointed by the government to panels tasked with scrutinising the handling of Covid-19 in both 2020 and 2021.

Sir Brian earlier in his career advised governments dating from the Bolger era and was chairman of the Transport Agency when the National government began its motorway programme, the Roads of National Significance.

Transmission Gully: Kapiti commuters can save time by driving on the motorway or save on lower fares by opting for rail

At  last  Transmission Gully is  open, an engineering  and  construction marvel, a moorway that’s delight to travel  on.

Cutting the ribbon for its  opening, the PM seemed almost  surprised by  the  excitement it  created.

It  was ”testament to  what can be achieved in spite  of a  rough start and in spite of a one-in-100-year pandemic”, Jacinda Ardern said.

For Kapiti Coast commuters, the  new motorway, 27km in length, provides welcome relief from the  old, highly dangerous, time-consuming Centennial Highway.

But the Ardern government has presented them with  a  fresh dilemma.

It comes  through the introduction of half-price  fares on public transport, meaning  those  who use the Metro trains on the run between Paekakariki and  Wellington  can save $125 a  month  on  the  cost  of a  monthly commuter ticket.  If that becomes permanent the saving  translates to $1500  a  year. 

Yes, we could play the blame game, but look on the bright side – Transmission Gully expressway will soon be open for traffic

One of  New Zealand ’s  great  construction projects  will soon be  open for  traffic.  It  is  the Transmission  Gully  expressway   over  27km north  of  Wellington  from Porirua to  connect  with  the  expressway  south of  Paraparaumu  through to  Otaki.

Wellingtonians  familiar  with  the  Centennial  Highway  (the  sole  highway  at present to the  north  out of  the capital) that dates back to  the  days  of  Labour’s  great roadbuilder, Bob Semple, have  been frustrated   with the  delays  stretching   the  construction period  far  beyond the  original timeline.

Yet  the  blame  game for  the  delays  cannot  disguise  this  project is  an  engineering  marvel   that  will alleviate the traffic bottleneck that  often chokes traffic  moving  to  and  from the  capital.

The four-lane  expressway  will  be  a  particular  boon  for the  heavy traffic  vehicles   that have  become  an essential element in the  supply  chain.  It cuts  through  what  was extremely difficult  terrain   and  those  who have seen  it  from  the  air  say  it  is  a spectacular  achievement  for  the  roadbuilders.

The case for Air NZ focusing more on its freight operations

New Zealand’s vulnerability in terms of air and shipping services has been among the ominous consequences of the Covid-19 pandemic.  Air NZ has parked its fleet of eight Boeing 777-200 and seven Boeing 777-300 and reckons they will never fly them again. All its international services are based on its Boeing 787-9 with the -10 on order. These are providing limited passenger and freight services.

Pure freighter services are provided by Qantas with its cargo Boeing 767s while other carriers offer ad hoc Boeing 747-400 cargo flights.

Shipping is even more compromised with limited and increasingly expensive services to North America and Asia.

In the US the situation is more dire because of the notoriously inefficient and slow-moving container ports on the US west coast.  The east coast is much better but the shipping times via the Panama raise costs for shippers.

ANZ Truckometer points to an economy humming along at an encouraging pace

NZ’s  domestic  economy is  tracking  much  better  than  many predicted, as  it  adjusts  to  something closer to normality   after  the Covid-19  lockdown.  Just  how  well  may  emerge   when  the  Reserve Bank  delivers its  verdict  this  week on  whether   there is  any  need for  new  monetary  policy  moves.

Bank  economists  are  divided  on   the  issue:   some  argue   it  needs  to apply  more  stimulus  through  its  quantitative  easing programme,  others   that  because  the  economy is  doing better than  anyone expected,  there is  no  compelling reason  to  lift the cap  on QE  just yet.

The  most recent  data  on  how the  economy  is  performing  came    from  the  ANZ’s Truckometer,  which   underlines  how  NZ   is  back in business.

ANZ  chief  economist  Sharon  Zollner  reported the Light Traffic Index lifted 5.6% in July, while the Heavy Traffic rose 2.7%.

Light traffic in the month of July was 9.5% higher than the same month the previous year while heavy traffic is up 10.2% on year-ago levels.

Sapere report says there’s no need for haste on Auckland port freight decision

By Barrie Saunders (who chaired the Port CEO Group from 2002-2015, and has his own blogsite www.barriesaunders.wordpress.com ) 

The most interesting thing about the Ministry of Transport-commissioned Sapere report on the future of POAL’s freight operations is that, compared with the status quo, all options will add costs to the economy.

However Sapere’s terms of reference required it to assume POAL’s freight operations would have to move sometime, so the question was when does this have to happen and where is best?

A new port at Manukau is assessed as the least expensive option, producing net benefits of -$1,982 million net present value, and the Firth of Thames is the most expensive at -$7,294 million.  Moving the entire freight operation to Northport was estimated to be a net -$6,252 million, Port of Tauranga (POT) a net -$3,703 million and a shared Northport – POT a net -$6,847 million.

Sapere helpfully provides an explanation as to why its conclusions materially differ from those of the Wayne Brown-led Working Group.   A key point is that they took a 60-year perspective rather than Brown’s 30-year.   (See page 15 of the executive summary – Sapere “Analysis of the Upper North island Supply Chain Strategy Working Group Options for moving freight from the Ports of Auckland”.

POAL – Aucklanders (not the government) should decide its future

Barrie Saunders writes…

One of the 1984-90 Lange-Douglas government’s most successful reforms is now at serious risk, because of a self-serving political campaign by NZ First, aided and abetted by others driving their own agendas.

In 1988 the Port Companies Act came into operation, which commercialised New Zealand’s ports and required them to operate as a “successful business”.   At the same time the failed New Zealand Ports Authority was disbanded and harbour regulatory functions were left with local government.

The reforms worked extraordinarily well as the port companies became very efficient and cost-effective.  Some including the ports of Auckland, Tauranga, Timaru, Napier, Lyttelton and Bluff, ended up at various stages with private shareholdings, but the local authorities typically held the majority of shares, and some partially privatised were later bought back.  Undoubtedly the private shareholding improved the performance of port companies.

Light rail was promoted as a “game changer” – but govt must change gear (and the minister, maybe) to quicken the pace

We wonder if there is any surprise among readers that the  Ardern  government   has  made a hash  of  delivering    another  of its   flagship   policies, Auckland’s light  rail  project.

Ardern  labelled the project  to build  light  rail from  Auckland city to  the airport  a  “game changer”.  And  she  promised  to extend it to  Mt Roskill within four years  of taking office.

This  week   deputy PM  Winston Peters   told  Parliament “exploratory” work has  still to be  completed.

As  Point of Order sees it, those who wonder why the project  is close to  foundering should ask who is in  charge of the  project.  They will find it is  Phil Twyford,  whose  performance  with KiwiBuild  was so disappointing – and became so politically embarrassing – that the PM this year gave ministerial responsibility to someone else.

Twyford retained   Transport, though  Ardern’s  judgement was questionable.

Simply,   the  government’s  excuse  in blaming   failures  on   “nine years  of neglect”  by  the   previous   government is  coming back to haunt ministers  like Twyford.  For if  ministers  in the previous  government  didn’t  do their job,  how  come  the  current  crop  so neglected  the preparation and implementation of a better policy that  they are  failing  even more spectacularly to deliver  what they promised?

Twyford, of course, shuffles off  responsibility for  the  botch-up to the  NZ  Transport  Agency  and the  new  chairman of  the  agency, Sir Brian Roche,  concedes  it  did  “drop  the  ball” —but  where does   this leave  the  principle of  ministerial responsibility?

Opposition  Leader Simon Bridges opened   question time in Parliament  on  Wednesday  by asking the PM when construction  would begin on  light  rail  in Auckland. This  was the  answer he  got  from the  deputy PM  (standing  in for  Ardern)::

“Like every person that understands both transport and business, when we have the forward costings organised, all the engineering reports, and all the alternative views are put on the table, then we will make a commercial decision”. 

That doesn’t  sound   like any  time soon.

Here’s  another  exchange  from  Parliament on Wednesday:

Chris  Bishop  ( Opposition—Hutt  South)  : Is it correct that the government is assessing only two bids for the Auckland light rail project—one from the NZTA, and one from NZ Infra—and, if so, is he confident that the Crown will receive value for money from this procurement process?

Twyford: After years of under-investment in our largest city’s transport system and the gridlock that that caused, our government is determined to build the transport networks that a modern international city needs. It’s not correct to characterise the process as containing only two bids. Cabinet has asked the Ministry of Transport (MOT) to run a competitive process between two approaches. One is the proposal from NZ Infra which would see it finance, build, own, and operate the light rail lines, and the other approach, being developed by NZTA.

According to  reports, Treasury has warned the government that getting it wrong could see the cost of the $6bn project balloon like Edinburgh’s light rail, which took six years to build and cost twice its initial estimate.

In August the government said work wouldn’t even start in 2020, as it still had to weigh up who would build and run the scheme, NZTA, its own transport agency – or the NZ Super Fund, which made a surprise, unsolicited offer to build and run the project in April last year.

A   report  by Stuff  contended Twyford was warned by officials the NZ Super Fund bid wasn’t up to scratch. In fact, the initial bid was just six power-point slides.

Twyford now says Cabinet has asked the Ministry of Transport to run a competitive process between  two approaches. One is the proposal from NZ Infra, which would see it finance, build, own, and operate the light rail lines; the other approach being developed by NZTA would include the more conventional public-private partnership (PPP), or design and build models.

Early next year, Cabinet will decide which of these two approaches it prefers.

Clearly   it will be a  slow  march to  end   Auckland’s  gridlock.

Non-stop Air NZ flights to New York reflect changes in the aviation market

What do we make of the Air New Zealand decision to quit the Auckland-Los Angeles-London route?  Nothing much as it simply reflects the changing dynamics of the airline industry.

Gone are the days when Air NZ took the McDonnell Douglas DC-10-30 into the fleet and began flying Los Angeles, then the UK.  Most New Zealanders heading offshore had London as their destination.

To circumvent awkward international air services agreements, Air NZ was obliged to code-share with British Airways on the route to London, which in those days meant Gatwick Airport.

Then  Air NZ bought the Boeing 747-200 and Prime Minister Robert Muldoon over-rode strong Air NZ opposition to require the new 747s to be fitted with Rolls Royce RB211 engines.

Air NZ’s regional challenge: French-Italian aircraft may help the airline fly into smaller airports

Air NZ’s new CEO, Greg Foran,  will  have  much on his plate when  he  moves into the job. Early on the agenda should be a shake-up of regional air services.

Out in the provinces there’s a strongly held view the airline doesn’t care that much beyond the main trunk and places like Queenstown.  Air Chathams has stepped in but its problem is that of a small company with an elderly fleet including  a WWII DC-3, with one exception, its ATR-72. It is understandably  reluctant to nudge its large neighbour too hard having witnessed what happened to others.

Air NZ is rolling its Mount Cook ATR72 fleet and Air Nelson’s Q300 into one consolidated air operator’s certificate and this will have wider implications. The rationale for splitting the company’s domestic operations in three was to avoid the “stove piping” effect where pilots would move seamlessly from being, say, an Q300 first officer to an ATR72 first officer, then a similar position on an Airbus A320. By keeping pilots on three different company employment contracts, costs could be held.