Does anyone else feel like local and central government infrastructure spending is the gift that keeps giving?
Just when you feel you’re over one phenomenal cost blowout, another rears its ugly head and pales the first event into insignificance. There’s no doubt that the fiscal events surrounding Covid-19 added a couple of extra zeros to every significant project, but the past couple of months have blessed us with a clutch of wondrous examples to be floored by.
An easy place to start is the (now- scrapped) Auckland Light Rail, a project that appeared severely short of local support from the start – not the concept itself, but the financial magnitude indicated at its outset. Remember that this was one of Jacinda Ardern’s poster pledges from the 2017 election; in her idyllic world, we’d have been commuting to the airport by rail for several years by now! Promises aside, the fact has emerged that nearly $230 million has been spent on the project to date, with not a digger boom hitting terra firma to show for it. I can understand the cost in isolation, but what I can’t understand is how that’s been consumed over the six years since its announcement without a sod being turned.
Traffic management has been another infrastructure-related expense that’s been to the fore in the past couple of months, and it’s brought with it some eye-watering numbers that, sadly, I suspect came as no surprise to many industry observers. A BusinessDesk article (2 February 2024, penned by Oliver Lewis) that put things in perspective for me, relayed comments from Ross Copland, CEO of the Infrastructure Commission: the likes of a water utility now factoring 15% of its maintenance costs into traffic management, or the (power) lines company having traffic management appear as 20% of recent project costs. Pleasingly, there was a further inference from the chair of the commission, Alan Bollard, about the non-financial costs that were contributed to by such intervention by way of additional congestion and reduced productivity.
The last cab off the rank has been the government’s scrapping of the iReX inter-island ferry and terminal project, a project initially billed at costing well under $1 billion, whereas most recent projections have suggested a price tag of $3 billion or more. The reality is that there’s no question around greater resilience and capability being built in the interi-sland road/rail connection, but that same reality also strongly suggests that projects simply can’t triple in cost before they’ve even commenced; the risk this implies from the outset is immense, and one shudders to think where this project may have ended up landing cost-wise had it proceeded.
At the same time, as a director of an operation that uses the inter-island connection extensively, I fully support the need to assess and act to beef up this connection. However, I believe that it must be done in the most cost-effective, and more critically, the most resilient, manner possible to ensure that our industry, and ultimately the New Zealand economy, gets the biggest bang for its buck and some genuine efficiency gains are made.
MOVe Logistics had obviously commenced (but now abandoned) its project to create a RORO service linking New Plymouth and Nelson. While I don’t know how the economics of this looked, I commend the thought process of looking at alternative routes to connect the islands, options that inherently deliver greater resilience simply by way of geographic separation (well, as much as we can obtain given the precarious position our landmass occupies on a fault line).
While on the topic of ferries, and coming from a completely different angle, I recently spent a night heading across Cook Strait accompanying several swap trailers destined for the South Island. It was an opportunity to see things from the inside out and again proved a tremendous endorsement of what our industry pulls off, day in, day out, or in this case, night in, night out, to keep products moving across the country. The steady flow of trucks and all but non-existent passenger vehicles in both directions highlighted the might of the road transport network at work; the ferries get plenty of credit for joining the big dots, but once again, it’s ‘our’ collective fleet that’s doing the heavy lifting.
Finally, I wanted to acknowledge the immense turnout and support for the celebration of Kenworth’s centenary at Mystery Creek in early February (I suspect there’ll be ample coverage of it elsewhere in this magazine). (See article – Ed.) I’ve said it before, and I’ll say it again, but there aren’t too many industries, or tools of industry, that could garner the level of passion and attention that this event demonstrated, and the contribution of Southpac Trucks and so many participating operators and drivers in such an industry showcase is something we should all be immensely thankful for, Kenworth-affinity or otherwise!
