What bus and train fare hikes have to do with the government's plans

Analysis - The Transport Agency is increasing the pressure for a big jump in public transport fares, so it can make savings, at the same time it is lining up massive spending on roads.

RNZ reported on Wednesday the new share that NZTA Waka Kotahi may force councils to wear, could push fares by up to 70 percent.

Transport funding was under severe pressure well before the present government came in with promises to build many more big highways. In cutting its cloth, the blade is falling on cycleways, while the push goes on for more user-pays in public transport via higher fares, and in roads via tolling.

For other options for getting about, such as walking and cycling, spending on those projects has already been cut back drastically.

At the same time, the government forecasts for the next decade of investments "are dominated by transport investment intentions".

It is so dominant that "this may require us to make trade-offs between transport investment and needed investment in other areas", a newly released Treasury report from midyear said.

NZTA's delivery budget for roads dwarfs all other parts of its operations.

Its overall investment budget dwarfs all other government agencies - its upcoming Budget requests are put at $23 billion (plus almost $5b for rail), compared to the next largest of $8b for education, and $1.6b for health.

At the very heart of the pressure-cooker is Auckland's long-promised second Waitematā harbour crossing.

The crossing ranks as number one among the 10 most expensive investments planned, and also among the five riskiest ones.

The number-crunching Treasury report provides a new forecast for a crossing option of a new road option plus Harbour Bridge and busway upgrades: $22b-$27b for capital spending in the first phase, from 2029 to 2040.

Waka Kotahi updated RNZ on the new plans Transport Minister Simeon Brown has directed it to make on the crossing, but did not update those costings above, that it gave Treasury in June.

The agency told us it would begin in a few weeks (once again, for the X number of times across many years) looking at the two evergreen options of a second bridge versus a tunnel, despite Auckland mayor Wayne Brown's urgings to bury the tunnel for good.

This review will take till mid-2026.

"Market sounding will also progress early 2025 to understand market appetite for options and identify concerns or preferences potential partners might have," its system design manager Robyn Elston said on Wednesday.

"Market soundings" have grown in importance under the government's directive that one of the Crown's two main ways to pay for an unaffordable mountain of infrastructure upgrades, is "enhanced transport revenue". This encompasses tolling and congestion charging to run roads, and using public-private partnerships and other alternative finance set-ups to build them.

"Market soundings" of commuters about any leap in train and bus fares have not been mentioned by Waka Kotahi.

NZTA has a lot on the one hand - road building - and less on the other - cycleways, walkways and, probably, public transport subsidies.

This might give it room to improve on the former, freeing up money for the latter.

Spotlight on planning

But how good is its planning for road building?

Treasury has this year, at the government's directive, been imposing a raft of new controls around often shaky and gappy investment plans across many agencies.

Treasury talks of "skills and capability gaps and poor asset planning and management".

Up against one of the new measures - "attestations" from chief executives that their agency complies - NZTA was out of step with five out of 15 controls.

It did not have the full asset register required; did not comply on providing "complete and correct investment" reports to Treasury; and was not letting Cabinet know about all investment intentions a decade ahead in the way it should.

Cabinet has been blindsided before, reports show.

NZTA was working to fix all its investment planning and asset management gaps, the attestations report said.

This would put it in better stead for the job of managing its dominant investments, including balancing fare hikes and risky $30 billion harbour crossings.

The Infrastructure Commission has already had something to say about how it does that, when it comes to the second Waitematā crossing.

"We are deeply concerned ... that options analysis has been limited to high-cost infrastructure solutions that aim to meet all of the project investment objectives," BusinessDesk reported recently, quoting an OIA response.

It reported the commission "didn't believe enough work had been done on lower-cost alternatives".