Report says big economic benefits from road spending

By MATHEW DEARNALEY

Business and motoring leaders yesterday amplified a call for more spending on roads as Auckland's controversial eastern highway project faced being pared to the bone.

The Automobile Association and business groups including the Northern Employers and Manufacturing Association welcomed a report by Australian consultants which promised an average $4.75 economic payback for every dollar spent on four potential roading packages.

Allen Consulting Group chairman Vince FitzGerald told a seminar in Auckland that an early $2.4 billion investment in the schemes, including the western ring route around the region, would reap more than $1.5 billion in annual economic benefits by 2012.

Although Government funding agency Transfund has granted more than $340 million for work to start in summer on Mt Roskill and Manukau legs of the route, a link to the Northwestern Motorway through Avondale costing $600 million to $1 billion is at least 10 years away.

The other three possible projects Dr FitzGerald studied for his AA-commissioned report were roading packages for Tauranga and Wellington and 402 new passing lanes for rural highways.

Tauranga's $482 million package was deemed the most cost-effective, likely to return $6.50 for every dollar invested, but city mayor Jan Beange expressed frustration outside the meeting that not even a sorely needed duplicate harbour bridge was on Transit NZ's 10-year plan.

Missing from the study was any scrutiny of Auckland's eastern highway plan, which will be more than halved in cost to about $1.2 billion if consultants' recommendations issued yesterday are adopted by mayors and councillors after the October elections.

But AA transport policy general manager Stephen Selwood said the report showed that the economic return of completing motorway networks was too good to be thrown away by cost concerns.

Dr FitzGerald said the four projects would increase gross domestic product by $1 billion, providing the Government with $538 million extra taxes above the money needed to pay for the new roads.

He also pointed to extra annual benefits not counted as domestic product, of $66 million from fewer deaths and injuries, and $511 from non-work travel savings.

"It is difficult to overstate the economic and social importance of New Zealand's road network," he said.

But although the dollar value of the network had edged up in the past decade to a replacement cost of about $35 billion, he said spending on roads as a proportion of gross domestic product fell from 1.17 per cent to 0.94 per cent in the 10 years to 2003.

This compared with an OECD average of 1.3 per cent, amounting to a funding gap of about $2.6 billion over that period.

Although the Government has promised an extra $2.8 billion in transport funding over the next 10 years, taking Transfund's overall expected outlay to $18.7 billion, Dr FitzGerald pointed to a decline in roading's annual share to about 82 per cent.

National's transport spokesman, Maurice Williamson, said the report was a call to action to secure massive economic gains but Green Party co-leader Jeanette Fitzsimons queried building billions of dollars of roads which she warned would eventually be emptied by fuel price rises.