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Coalition deal making heightens Transit shortfalls

9 December 2005

Coalition deal making heightens Transit shortfalls

"Blaming escalating construction costs for Transit deferring improvements to one of New Zealand's deadliest stretches of highway is misleading", says New Zealand Council for Infrastructure Development CEO Stephen Selwood, "in fact actual tender prices are not materially different than the budget. The real issue is that Land Transport New Zealand's projected funding is under significant pressure, pressure that has only been made worse by recent coalition deal making."

Mr Peters' coalition agreement with Labour not to toll the Tauranga Harbour Bridge means that there will be $110 million less available to Land Transport New Zealand (LTNZ) than there was prior to the election. A problem only exacerbated by falling fuel tax revenues as a result of consumer reaction to price increases.

"Two priority projects on Transit's 10 year plan have already been deferred, the unforgiving 7km stretch at Mangatawhiri and New Plymouth's Bell Block, and we are aware that other project deferrals are likely", says Mr Selwood.

"In the last five years 40 New Zealanders lost their lives on the 7km stretch at Mangatawhiri. LTNZ crash data shows social costs of serious and fatal crashes at the site exceed $500,000 per kilometre per year. That is a $35 million saving per annum, and not much less than the $46 million total projected cost of the project.

"The benefits of proceeding with projects like Mangatawhiri are plain to see. Accident statistics following recent upgrades on the adjacent Waikato expressway show that a high quality separated highway can more than halve accident costs. Transit New Zealand's own numbers show the benefit cost ratio for the Mangatawhiri project are four to one. That means a four dollar return for every dollar invested.

"While deferring projects might help to balance the budget, the costs to the nation of continued deferral of priority projects are of much greater significance and far beyond any marginal saving on tender prices".

ENDS

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