Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


New transport funding tools needed to boost development

Media release
30 March 2012


New transport funding tools needed to boost economic development

"Weaknesses in our transport network demonstrated by road and rail closures around Gisborne and the Manawatu Gorge coupled with a multi-billion funding gap in Auckland and an unidentified capital need Canterbury all expose the huge challenge facing transport authorities nationwide. Transport investment remains insufficient to meet New Zealand's growth needs and will continue to constrain economic development aspirations unless we change our approach to funding major projects," says Stephen Selwood chief executive of the New Zealand Council for Infrastructure Development.

"The Government's roads of national significance represent a long overdue investment in critical transport infrastructure. With a payback of around $2 for every dollar invested, incorporating a discount rate of 8 per cent, the RONS projects are critical to removing barriers to business and improving safety on our state highway network.

"But it is not possible through conventional means to find the approximate $9 billion needed to construct the RONS when annual roading investment equates to little more than $3 billion per annum. And it certainly isn't possible to add demands from Auckland and Christchurch into that equation.

"Unless the outdated "pay-as-you-go" method of allocating funds when they become available is revisited, either local road and other state highway projects, like an upgrade to the now partially closed SH2 out of Gisborne, have to be deferred or the RONS have to be pushed out towards 2030. Current policy is directed towards the former with almost no new expenditure on maintenance and renewal of local roads and state highways planned until at least 2020.

"An alternative is to use either public or private sector debt to cover the large upfront costs of the RONS and then to repay the debt over a longer period, thereby freeing up funding for other improvements. Private funding makes sense when risk transfer and innovative whole of life delivery methods provide value in excess of the higher cost of funds. Such an approach to just the Wellington and Waikato RONS, for example, would release up to $4 billion over the next decade to spend on other critical transport projects, while delivering the benefits of these two major projects well ahead of current funding-constrained schedules.

"Delivering the RONS sooner allows benefits to be conferred sooner, while deferral carries an equivalent cost. We need to ask ourselves whether a pay-off of $2 for every dollar invested, plus an 8 per cent return per annum is something we should have now, or in another ten or twenty years. Deferral of economic transport investment is costing this country its competitiveness. It's time to look at alternative means to fund the much needed investment in our transport infrastructure," Selwood says.

ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Scoop Business: Productivity Commission To Look At Housing Land Supply

The Productivity Commission is to expand on its housing affordability report with an investigation into improving land supply and development capacity, particularly in areas with strong population growth. More>>

ALSO:

Forestry: Man Charged After 2013 Death

Levin Police have arrested and charged a man with manslaughter in relation to the death of Lincoln Kidd who was killed during a tree felling operation on 19 December 2013. More>>

ALSO:

Smells Like Justice: Dairy Company Fined Over Odour

Dairy company fined over odour Dairy supply company Open Country Dairy Limited has been convicted and fined more than $35,000 for discharging objectionable odour from its Waharoa factory at the time of last year’s ”spring flush” when milk supply was high. More>>

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news