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Rail vs Road: Rail Wins, Transparency Loses
The release of KiwiRail’s business case for the “Third Main” freight rail line between Otahuhu and Wiri raises three massive issues.
First, this is one of the first times that road and rail infrastructure spending have been evaluated on a level playing field, and rail came out the clear winner. Second, it raises questions over transparency; why was the National-lead Government reticent to release this information, while they pursue road projects with fervor? Third, it calls into question their image as responsible managers of the economy – whether they can make good decisions on the basis of simple business cases.
Road vs Rail
For many years the Government has claimed that roads are the best investment, while the Greens have cried out for more rail. More recently, NZ First has jumped on the Green’s wagon.
TOP’s position is that our infrastructure spending should go where the return is greatest, which requires evaluating road and rail projects on a level playing field, comparing apples with apples.
This report does just that. Rail won the day, by a long way.
This is just one instance, but the Greens can chalk it up as an early win. More broadly, it shows the value of doing these types of evaluations, so that the public know they are getting the best value for money from their infrastructure spending. It is all very well to have a business case for a new project, but the question we should always be asking is, “What else could that money be spent on? “
Given the obvious value of doing these kinds of transparent assessments comparing road and rail, the question is why Minister Bridges was so eager to withhold this one. The Ombudsman has cleared his office of wrongdoing, but the public still has a right to know why he wanted to withhold the document in the first place.
The Minister claims that the report was a draft or was misleading. He should now justify exactly why he thought that was the case. Surely some information is better than none. The public deserves to know whether they are getting value for money from their infrastructure investments. This report suggests the Otahuhu to Wiri Third Main (and perhaps a Fourth Main) would be a relatively good investment for a growing Auckland (certainly better than relying on road freight). So why did the Minister not want people to know this? He needs a pretty good reason, particularly given he is pushing ahead with the East West Link road when there is no business case and the benefit cost ratio is questionable. The whole situation smells of double standards.
Are the Government Really Good Economic Managers?
National has long been criticised for pursuing The Roads of National Significance when they have such a poor return on investment. This result will only increase the questions about whether National really are the good economic managers they claim to be. The manager of any business knows that when you get a business case for an investment, you invest in the option that has the greatest returns. From this example it appears that National are not interested in doing that. The public are rightly asking whether they are getting value for their transport dollar, and if not, what exactly is the National Government’s agenda?
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