The road out of this mess

How do we get out of this mess? Billions of dollars have been spent by the New Zealand Government on Covid-19. That cannot go on for the years it might take to either have a viable vaccine, or to learn to live with this and other epidemics.

We’ve heard a lot from the Government about investing in infrastructure to boost the economy and getting started on “shovel ready” projects to counter rapidly increasing unemployment and financial pain. Big announcements need to be backed by delivery.

The visual that comes with the term “shovel ready” is people behind shovels building something. The reality seems to be a bit of a stretch from that – projects have to go through all the consenting processes and there have to be skilled people behind those shovels. With a closed border, getting workers is an issue.

Together with five like-minded organisations with an interest in the state of New Zealand’s roads, we wrote to Government Ministers and suggested they could add road maintenance projects to the “shovel ready” list. The advantages of these projects are that they can start immediately; provide value for money; enable job creation; and offer scalability, geographic coverage, and year-round work.

All the organisations have been hearing from our members that the poor conditions on New Zealand roads are becoming a greater cost. It’s not only a cost to businesses, but also to road safety. People die on unsafe roads.

The road maintenance programme over the past decade can be characterised by under-investment and declining levels of service on both the state highway network and local roads. The decrease in spending has meant that the volume of resurfacing and foundation replacement work has been significantly below the targets Waka Kotahi NZ Transport Agency sets for network sustainability. Foundation replacements were 50 percent below target for the period.

A study conducted by Waikato University this year for the RTF, showed transport operators have had a 55 percent increase in their repairs and maintenance costs between 2015 and 2020. This is largely due to poor road conditions causing damage to trucks. Interestingly, trucking operators have had a five percent increase in road user charges (RUCs) in eight of the past 10 years. Essentially, they keep paying more, but getting less value from roads.

At a meeting this week, Ministers’ representatives told our group – which includes Civil Contractors New Zealand, EMA, Infrastructure New Zealand, AA, and the Association of Consulting and Engineering – that there had been a 36 percent increase in road maintenance over two years. But that is not what road users are seeing. We are talking about road surface conditions, not the barriers and other trimmings that have been put in place in the name of safety.

Based on road maintenance cost and outputs data for recent years, we estimate that an additional $300 million per annum will be required for the next three years to return the network to an appropriate standard.

Our plea to have the ready shovels applied to road maintenance fell on deaf ears. This is despite there being an unprecedented length of the road network currently operating in a sub-standard condition.

We have also been told to wait for the release of the draft Government Policy Statement (GPS) on Land Transport. The RTF submitted on this and said: The 2021 GPS policy was written for a more settled economic climate and we wonder how much of it will continue to be valid within the foreseeable future.

Covid-19 has changed the shape of things and Government Ministers and their policy-makers need to be re-thinking how and where money is spent to deliver infrastructure projects, based on sound economic principles, that will enable economic recovery.

This might require agility governments are not known for. But there is too much at stake here to get this wrong. Roads have played a critical role in the response to Covid-19, getting essential goods moved around the country. Roads will continue to be the base of economic growth for years to come, getting exports to ports and airports to earn money for New Zealand, and moving New Zealanders to and from work. Road spending needs to be commensurate with the task.

– Nick Leggett, CEO, Road Transport Forum


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