Dean Scanlen: Billions wasted on roads while rail is run off the tracks

Photo / Mark Mitchell

Several commentators, including Luke Malpass and John Roughan, have complained about spending by the New Zealand taxpayer on KiwiRail. The suggestion, albeit often somewhat veiled, is that our rail operation should stand on its own as a commercial operation.

But such people seem to have completely missed two factors that destroy their arguments. The first is that any rail operation is as much part of the transportation infrastructure as the roads. The second is that our road network (and its use by motorists) is subsidised much more heavily than rail.

I acknowledge that rail does lend itself to privatisation more than roads. As some of us remember, the Labour government of the 1980s did privatise rail. Perhaps not so well known is that the operation was virtually asset-stripped by its private owners.

It is tempting to blast those owners for short-term thinking and/or poor planning and there might be at least some justification for that response.

But I believe there was another factor at play. In the economic environment of the time, most of the rail operation could only be commercially viable if its assets were stripped and/or run into the ground.

This all raises the question: is it better to subsidise our rail operation to keep it viable, or leave it to make its own way in the market (and almost certainly be run into the ground on all but a few routes in high demand)?

It may only be worth leaving rail to its own devices if we are giving it a "level playing field" to compete in. But we certainly don't in this country. Our road network and road users are, and have always been, much more heavily subsidised.

A report commissioned by the New Zealand Transport Agency (October 2009) found a shortfall of $1.5 billion a year between what is collected from users of our state highway network and what is being spent on it.

That shortfall, made up by taxpayers, is already several times what is proposed to be spent on the rail operation and is far from the only taxpayer subsidy given to roads.

Our local road network is also heavily subsidised through local authority rates - about another $1 billion a year. There are the "externalities" - road trauma, health problems caused by air pollution, noise, loss of amenity, severance of communities and damage to the environment (including greenhouse gas emissions, which have increased by more than 70 per cent since 1990).

Those costs are either funded by the taxpayer or individuals (particularly the owners of land alongside busy roads) or they are essentially withdrawn from "our" environmental bank account.

Such costs amount to many more billions of dollars. Road trauma alone is estimated to have a "social cost" of more than $3.5 billion a year. Some is funded by ACC levies, the rest by taxpayers and individuals who weren't directly involved in the crashes. Also, motor vehicle pollution is estimated to kill about the same number of people as road crashes.

Despite the high subsidies our roads already receive, our Government is planning to spend some $21 billion on road upgrading, more than half of which is earmarked for "roads of national significance". Is this a more effective use of taxpayer funds than the few hundred million some are complaining about rail receiving? I think not.

I have examined the trends at traffic count sites near the Government's seven "roads of national significance". I found that, since 2005, the traffic at three of the locations have been trending downwards. At the other four, the growth is well below what NZTA states is the average for the regions in which the roads are located.

The Auckland Harbour Bridge is particularly interesting; since 2005, its traffic has been trending downwards by an average of more than one million movements each year.

Even if those routes were all experiencing high and positive traffic growth, any good traffic engineer would tell you it's probably a waste of money upgrading them anyway.

Upgraded roads almost always attract traffic from other routes, and/or trips that wouldn't have been made during congested periods. This is known as "triple convergence". It causes most upgraded road routes to become congested again within a relatively short time.

It's time for people criticising the Government funding of our rail operation to turn their attention to the much larger sums being wasted on our roads.

* Dean Scanlen is a professional transport engineer based in Whangarei.