Close down the railways is the advice from Treasury. The Minister of Finance says the cost of railways is "unsustainable".
I wonder whether if anyone from the treasury has driven up the southern motorway recently. I drive along the motorway regularly. As fellow drivers can attest the city's arteries are clogging up.
The cost is huge. The OECD says the annual cost of traffic congestion in Auckland is $1.25 billion. An incomprehensible figure but most Aucklanders can put the cost into personal terms. The cost to me is that today to be sure of getting to a meeting on time I have to drive up to Auckland the night before.
What will happen to our roads if the freight that now goes by rail has to travel by road? The treasury says that is not a problem. Road freight pays Road User Charges that meets the full cost of roads. If road freight volumes increase then treasury says that will automatically fund new roads.
While the math is correct the answer is wrong.
It is not a question of money. Road funding is allocated on a cost benefit/ratio. But it has proved impossible to get planning approval for new motorways in the cities. Even if we reform the Resource Management Act, something that needs to be done, it will still not enable new motorways. The public is opposed to new inner city motorways.
This is not new. When I was first elected an MP way back in 1975 the then National Roads Board took me on a tour of its priority roads for Auckland. Their number one priority was a motorway to the airport. Forty years later the airport motorway has still not been built.
Closing down the railways will not result in more roads just more road congestion.
Road congestion seems to be an unsolvable problem. What we do know is what we have been doing for the last forty years is not working.
We need new thinking. Let us think of the motorways as corridors. If we cannot get new road corridors into our cities is there any other corridor? Yes, the rail. Is it possible to increase our use of the rail corridor? Yes.
The only transport corridor that has spare capacity is the railway. Warren Buffett has explained his huge investment in railroads, in just these terms. Railroads he says have the only corridors with spare capacity. The railway network goes where the freight needs to travel.
Looked at this way, Kiwi Rail, is not "unsustainable" but a national asset. Kiwi Rail owns corridors to all our ports and connects all our cities and most towns. We set up systems and then they blind us to the obvious.
The State Owned Enterprise Act that requires Kiwi Rail to be a profitable enterprise and the Road User Charges that makes our roads user pay has resulted in officials thinking in boxes. As one of the architects of the present system I think I am allowed to say it is not perfect. To solve road congestion we need a more holistic approach.
If there is no other way to reduce traffic congestion why not spend a fraction of the road taxes on rail?
I need to declare my interest. I am a Mainfreight director and shareholder. Mainfreight has reduced the number of trucks we put on the road by making more use of rail.
Right now Auckland needs a third freight track into the city. Mayor Brown's rapid urban passenger trains run on the same track as Kiwi Rail's freight trains. Unless a third freight line is built then at peak times freight will be forced off rail onto to trucks. We will have spent billions of dollars to take cars off the road only to have them replaced by more trucks. It makes sense to use Road User Charges to fund the third freight line to keep rail freight off the road.
Parliament needs to give the NZ Transport Agency the responsibility for also funding the rail network. As we know the cost of congestion the agency can calculate a cost/benefit ratio for funding the rail track to reduce congestion. It has to be at least $100 million a year.
Today rail has the capacity to carry twice as much freight. We motorists would notice the difference. With more investment Kiwi Rail could speed up delivery times and attract even more freight from the road.
To those who say rail is "unsustainable" and having Road User Charges fund the track is "corporate welfare" I ask what is your solution to reducing road congestion? You have not got one.
I am sure the Government is right to ask Kiwi Rail to make savings. As owners we are entitled to ask the management and staff to be making continuous productivity improvements. But it is unrealistic to expect Kiwi Rail to make a profit and pay for the full cost of the track.
The Government has recently announced a record $14 billion transport spend that includes $5.5 billion for roads and $250 million for cycling projects. In a $14 billion transport budget a $100 million a year for rail to reduce road congestion is very sustainable.
Richard Prebble is a former MP and Minister of Railways in the 1980s.