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Time for Government to deliver not defer

Time for Government to deliver not defer: Think laterally on transport funding

22 february 2006

Transit today released its Draft 10-year State Highway Forecast, hailing more project deferrals which according to the NZ Council for Infrastructure Development , "are unacceptable and cannot be borne if the Government is to make its economic aspirations reality.

"If we are to achieve the standard of living to which the Government says it aspires, we cannot afford more delays to key transport projects", says NZCID CEO Stephen Selwood.

"Prior to today's release the forecast already suffered serious funding constraints and omitted numerous key projects. For many other projects 10 years is too long to wait.

"Critical progress on Wellington's Western Corridor, improvements to SH1 between Auckland and Hamilton, SH2 between Auckland and Coromandel, Avalon Drive in Hamilton, Tauranga's strategic roading network and the Northern and Southern Motorways in and out of Christchurch are all obvious examples of projects needing advancement.

"10 years is too long for Aucklanders to wait for the Western Ring Route to be completed. The project will not be delivered until 2015 and this will only be possible if Aucklanders accept current plans for tolling.

"The roads of Auckland, Wellington, Waikato, Bay of Plenty and Christchurch, include some of New Zealand's worst black spots and in just those regions 279 New Zealanders lost their lives in 2004.* The social and economic costs of dilly dallying on progress towards delivering our key roading projects is simply too high to endure.

"Already cost of traffic congestion is over $1b per year in Auckland alone, 25% of which is carried by the manufacturing & distribution sectors. From 2002 to 2003 the average delay per kilometre travelled almost doubled and our average travel speeds are now 7km/hr slower^.

"Certainly NZCID acknowledges that funding is the key issue for Transit who are doing an admirable task of working within the budget they have. By our projections though, to deliver the projects that are essential within an acceptable timeframe, Transit will require $15b, $3b more than the $12b they are currently allocated.

"The impact of rising fuel costs on transport revenues should not be over estimated. While it is true that rising fuel prices have led to a slight reduction in fuel demand and thus tax revenue, overall demand is increasing. Funding shortfalls had already been an ongoing and significant issue.

"We are encouraged by the Government and officials looking at other means to bridge the funding gap and NZCID endorses Transit intentions to utilise debt funded activity. What we need is more of the same though. Internationally, many countries have successfully achieved their infrastructure development goals to great result by thinking laterally on funding. Funding options including debt financing and forms of private sector involvement can and should be considered to cover shortfalls and avoid costly sacrifices on project delivery.

As recent as February 14, in her Statement to Parliament the Prime Minister described progress on Auckland's transport infrastructure "critical", promising that Government would be working "to meet the goals we have set for major improvements over the next decade"#. Also encouraging were announcements by Finance Minister Michael Cullen last August that transport projects would be advanced earlier in light of and unexpected tax windfall of $500m. More recently Dr Cullen described cutbacks as "unacceptable to the Government" and assured that "the shortfall would be attended to"+.

"NZCID is encouraged by statements like these but now we are looking for the Government to deliver".


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