Auckland Transport has made it through the tough weather, with almost all flood-impacted roads reopened and bus schedules returning to normal following worker shortages and industrial action.
But although things have largely returned to normal after a rocky start to the year, senior officials at the agency are warning its current funding model is unsustainable.
Auckland Transport chief executive Dean Kimpton told Auckland Council’s transport and infrastructure committee that the current level of funding up against the cost of refurbishing and maintaining roads and other assets could see widespread deterioration in the network over the next decade.
“We cannot really progress as Auckland Council or Auckland Transport with our transport system unless we resolve the funding and revenue model,” he said.
He said with the shifting of money from investments in renewals (the refurbishment or maintenance of major assets) to capital spending, the fault rate across the network has spiked, almost doubling over the past decade.
Kimpton argued that the funding extended to Auckland Transport was not enough to keep up with the rising costs of a deteriorating system while expanding it for a growing population and said it needed to be “urgently reviewed”.
“Costs will all but double over the next 10 years, over the same time the revenue base will be declining unless we make a change,” he said.
Fuel excise taxes and road user charges would not be enough to cover it as the agency went forward, and he argued the responsibility should rest with the Ministry of Transport.
A one-off public transport investment from the Crown delivered sufficient funding for the next year or so, but beyond that, the agency is not sure exactly who will be paying for Auckland’s many transport needs.
Auckland Transport’s assets are valued at around $26 billion, and just maintaining and renewing this broad portfolio can cost big.
The agency is the steward of 7597km of road base, which is all expected to last between 45 and 150 years from its point of construction.
One to 2 percent of this is recommended to be renewed each year. However, in the financial year of 2022/2023, Auckland Transport only renewed 0.1 percent of this.
Then there’s the surface of the road, which only lasts seven to 20 years after it’s laid. In that same year, the agency renewed 5 percent of this – while recommendations say it should be aiming for an 8 to 10 percent annual renewal rate.
They are not enormous gulfs of difference, but as the years go by they add up.
Kimpton has already sounded the alarm on this to the board of the transport agency, telling them last month if the issue is not resolved, everything but AT’s capital programme would be used to fund renewals by the mid 2030s.
“So I’m signalling, I’m sounding a big alarm,” he said. “We have to do something different, if we keep repeating the same action it feels like it could go down to a definition of insanity.”
Budgetary tensions have forced the agency to make unwanted compromises on maintenance schedules.
Manurewa-Papakura councillor Daniel Newman asked whether Auckland Transport would take a more maintenance-focused approach in future and put some other projects to the side.
“Auckland Transport I presume is going to have to come to us and say we can’t be all things to all people,” he said.
“We simply have to preference the renewals ahead of all else, because you are right, we are falling behind … it’s just going to get more and more expensive to catch up.”
He said while it wouldn’t be ideal to close down a failing council building, it would be possible – “but we can’t just let the roads fall apart”.
Kimpton said the AT board was looking to prioritise renewals, but said there remained huge demand to invest in new capital projects.
“That is a really difficult tension to balance unless you address the funding and revenue side of the equation,” he said. “Otherwise you are just moving things around in a very small pool. And yes, we can improve value for money and efficiency but that’s 10 percent of the question, it’s not the 100 percent that we will be short.”
AT board director Kylie Clegg said the pendulum of spending needed to swing more towards existing renewals.
Waitematā and Gulf councillor Mike Lee was concerned Auckland was at the “mercy of a cartel of construction corporates” and wanted to ensure value for money in roading contracts.
“We’re dealing with the market and we’re dealing with aggressive corporates who always have their eye on the bottom line for shareholders, and so should we,” he said.
It wasn’t all doom and gloom from the Auckland Transport senior officials, however. They were able to signal the end of the worst disruption on Auckland’s roads from this year’s storm events.
Just six roads remain closed, while 10 have access restricted to residents. Roads around Muriwai, where damage was extensive, reopened to the public in the middle of last month.
Meanwhile, public transport patronage is slowly trending back to what it was before the pandemic, despite challenges such as strikes and worker shortages.
The bus driver shortage is down to just 88 drivers, which Kimpton said was a small enough number for scheduling to return largely to normal.
Public transport passenger numbers through June were 77 to 84 percent of the equivalent monthly period in 2019. AT’s target is to reach 100 percent of that number, which they did in fact achieve if just the numbers across last week are taken into account.
But portents of difficult times to come will be the last thing the council-controlled organisation will want to face in an environment where they are already embattled by difficulties on multiple sides, and a sometimes-thorny reception from Auckland’s public.
Waitakere councillor Shane Henderson asked why it took months for enquiries to be handled by Auckland Transport, which he warned could become a reputational issue for the agency.
Kimpton said rates had improved in this area, although there were a number of complaints “that had just taken too long” to be resolved.
“Part of it is a philosophical and practical shift to getting resolution as close to the first point of contact as possible,” he said.