New Zealand Budget

Analysis

Infrastructure: Customer and technology driven change challenge transport momentum

2017 New Zealand Budget

By Tim Arbuckle

New Zealand’s central and local government transport agencies should take a well-deserved bow. But they can’t rest for long in the face of dual challenges from increasing customer expectations and digital disruption.

Over the last decade we have seen real momentum in dealing with the supply side of our transport infrastructure in the fight against congestion and its impact on productivity, liveability and social standards in our major cities.

Wellington and Auckland have new and larger fleets of passenger trains. Double decker buses are becoming more commonplace on our urban roads. Ticketing systems are smarter. And our largest transport project ever, the $3 billion City Rail Link (CRL) in Auckland’s CBD, is underway. When completed, the CRL will deliver much needed capacity for the rail network as well as a massive boost for development in the areas of the city it will serve.

Let’s not forget our roads that do the heavy lifting in terms of urban mobility. The Government’s Roads of National Significance (RoNS) programme is in full implementation. The 2.4 km ($1.4 billion) Waterview Tunnel, a key piece of Auckland’s Western Ring Route, is set to open this year, connecting Pt Chevalier and Mt Roskill. The Kapiti Expressway has recently opened north of Wellington and Transmission Gully is underway. These are two of the eight projects that make up the Wellington Northern Corridor.

Both the Western Ring Route and Wellington Northern Corridor are among the seven RoNS projects, already completed or under construction, around Auckland, Hamilton, Tauranga, Wellington and Christchurch. When completed these projects will provide much needed transport resilience to New Zealand’s five largest population centres.

Central and local government agencies are now much more joined up in their planning and aware of the need to consult with key stakeholders. Last year’s report from the Auckland Transport Alignment Project (ATAP) shows how planners across the levels of government can work towards a common goal. Similarly, the Let’s Get Wellington Moving initiative is aimed at building consensus around the future transportation system for the nation’s capital.

The $4 billion more ($11 billion over four years) of infrastructure spend in Budget 2017 continues to build on this demand-side momentum.

As part of Budget 2017, the Government has announced that it will invest $9.17 billion in capital into the state highway network over the next four years, including $4.4 billion from the National Land Transport Fund. This funding will progress a number of transport projects over the next four years including:

  • The completion of Auckland’s Western Ring Route
  • Northern and Southern Corridor State Highway 1 improvements in Auckland
  • The Transmission Gully and Puhoi to Warkworth Public Private Partnerships
  • The State Highway 1 Peka Peka to Otaki Expressway

In addition, the government has allocated $812 million toward repairing State Highway 1 north and south of Kaikoura and $436 million of new capital for Auckland’s City Rail Link (as the first tranche of funding).  It will also invest $548 million of new capital funding to maintain and upgrade the rail network, including $450m for KiwiRail over the next 2 years.

Everyone agrees that we can’t build our way out of the congestion problem.  Supply side action is also needed. Our hero needs to be transport pricing – a key recommendation in the final ATAP report and with options now being developed by transport planners. The other driver for changing the way we charge for using our roads is the impending wave of electric vehicles over the next 3-5 years that will begin to undermine traditional fuel based revenue collection systems.

Dynamic road pricing and real time traffic information, using the internet of things (IoT), is a key part of the mobility domain in Deloitte’s Smart City framework. Deloitte’s 360° Smart City looks across every aspect of a city’s operations to use technology to improve outcomes. The result is an urban centre – underpinned by digital infrastructure – that not only leverages technology to improve its own operations, but connects with citizens, business, and non-profits in new ways.

Transport pricing is just one element of a broader trend towards mobility as a service (MaaS). MaaS is all about meeting the increasing customer demand for choice when it comes to mobility. Customers want to be able to plan their journeys by integrating travel across multiple modes (both privately and publicly managed) using a single platform and payment channel.

But with MaaS will come even more disruption to traditional business models and planning paradigms for urban transport. We have already seen how Uber has turned the point to point travel market on its head. Public and private players will need to collaborate and work together across multiple markets and sectors, including those outside of the traditional transport sector such as property, insurance, energy and telecommunications.

Deciding on where government plays in the future of mobility ecosystem and how it embraces collaboration and technology change will be critical decisions for our transport agencies in order to maintain the momentum of the last decade. While there might still be differing views about what the future will look like, we can be certain that the pace of change to be faster than we have seen in the past.

You can explore Deloitte’s 360° Smart City framework and content across different domains – mobility, security, education, living, environment, and economy – smartcity.deloitte.com.

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