Legal matters can be confounding to the lay person, to say the least, and the ongoing saga of the New Zealand’s Air Line Pilots’ Association (“NZALPA”) vs the Civil Aviation Authority (CAA) Director (“the Director”) and Wellington Airport International Limited (“WIAL”) has been more confounding than most. This saga started back in at least 2013, when WIAL asked the Director of Civil Aviation to consider allowing a 90m minimum runway safety area (“RESA”) when extending the runway into Evans Bay, to the North. The Director agreed, based on WIAL’s provided cost-benefit analysis, that such an extension would only need the minimum 90m RESA. However, he also said that clear costings had to be provided first, and that the ruling was provisional only. NZALPA’s peer review of the cost-benefit analysis (CBA) provided by WIAL found significant short-comings (as have all other CBAs provided by WIAL since!).

When the airport decided to instead put the extension South, into Cook Strait in 2014, it went back to the Director with assessments for a 100m, 200m and 300m extension, at similar costs as the $1 million per linear metre quoted to the North. The Director again accepted the airport’s reasoning that a 90m minimum RESA was sufficient. However, since this decision, WIAL has further changed the design to now be 355m to the South, at a cost of $330m. Shouldn’t this change have required another decision by the Director?

Instead, NZALPA had to go to court to get the Director to reconsider their decision, as the pilots asserted he had erred in law when considering cost to WIAL instead of safety when deciding what was a “practicable” safety margin when extending the runway. The initial High Court ruling went with the airport and Director, but a Court of Appeal then overruled the High Court Judge, meaning the final step was for WIAL and the Director to take NZALPA all the way to the Supreme Court. Which they did, in mid-2017, thus halting the Environment Court process we had been embroiled in since mid-2016.

Now, in the meantime, WIAL continued to push ahead with its runway extension as if this quite major safety issue was of no consequence to their plans. Indeed, they originally never even provided the Director with any other safety considerations, such as a longer RESA or an engineered material arresting system (EMAS), such as crushable concrete. The latter could have meant a shorter RESA than the “240m minimum… if practicable” that was prescribed as a standard in the 2004 Civil Aviation Act. However, the airport never bothered to even investigate such an option and the Director, wrongly as it turned out, simply took the airport’s considerations without asking for more safety options to be provided. On page 28-29 of their decision, the Supreme Court states:

Starting with what the Rules require rather than with what the airport operator proposes is not an inconsequential difference of approach. Rather, it is a matter of mindset, and the Director’s mindset in this case is illustrated by his first reason for refusing to consider an EMAS solution, namely because it was not part of WIAL’s “decision”, so that he did not have any information about it. It may be that an EMAS is not a viable technique at Wellington and could be quickly dismissed, but the Director did not turn his mind to its merits even though it was a matter raised by NZALPA in the course of consultations. He did not see that as part of his function, which was, as he perceived it, focused on assessing what WIAL had proposed. This is an erroneous approach.

In the end, the Supreme Court was very clear in its decision when it sided with NZALPA against WIAL and the Director:

By basing his decision on a cost/benefit analysis, the Director acted as if the Act had not been amended in 2004. To that extent, we consider he erred in law. The Director should consider that application in the light of the Court’s reasoning.

The Supreme Court also rejected WIAL’s frankly ridiculous claim that the Court of Appeal’s ruling would mean that current operations were threatened due to the minimum 90 m RESA at Wellington’s, and several other AustralAsian airports:

Counsel for the Director and for WIAL argued that if a 90 m RESA was not acceptable for an extended runway, it was therefore not acceptable for the runway as presently configured. We do not accept the hypothesis that the Director’s determination in relation to a proposal to extend the runway has necessary consequences for current, previously accepted arrangements at the airport. This is because we consider that what is “practicable” must be assessed in the particular context in which the issue is raised.

So, to sum up, WIAL wasted everyone’s time and money, since 2013, by simply ignoring its obligations to the safety of its passengers. The Civil Aviation Director erred in devolving his decision to WIAL as the operator, despite the 2002 warning by experts that “the incentives and interests of airport operators and regulators do not always coincide. Clearly, in promulgating the Rules, the Minister considered that an airport operator’s decision as to RESA length should be subject to independent regulatory scrutiny.” What is worse, is that the Association for pilots and air traffic controllers – whose primary mandate is passenger safety! – was dragged through several years of unnecessary court proceedings and smeared by WIAL in the media in the process (as patsies of Air New Zealand, among other things).

And last, but certainly not least, the millions of ratepayer dollars that were wasted on a half-baked proposal which may have to go back to the drawing board, pending on another CAA Director decision. The Guardians of the Bays and dozens of other groups have also spent 1000s of volunteer hours and $10,000s of dollars fighting the runway extension in an Environment Court case which was utterly premature – as the Judge pointed out to WIAL. WIAL forced the public through the convoluted process of making 100s of submissions, finding experts and lawyers and reading 5000 pages of technical reports, when it clearly knew this decision was still outstanding and could jeopardise the whole project. We are glad that someone has finally stepped in and stopped this madness before more costs are paid by the community.

However, there is now an update to the proceedings: WIAL has asked the Environment Court yet again to postpone its hearings and is trying to get the CAA Director (again!) to agree to the same 90m RESA this entire rigmarole started. Even though the Environment Court Judge was clearly unhappy with WIAL’s abuse of everyone’s time and resources, it did give them until October 31, 2018 to get another decision on the RESA. It does seem pretty unlikely, after the Supreme Court rebuke, that the CAA Director will simply take WIAL’s word into account that it is too costly to provide a longer RESA or EMAS – despite the obvious safety benefits that would entail (the difference between a 90m and 240m RESA in undershoots that aren’t captured is 17% and in overshoots it is 27%!).

Even though WIAL does acknowledge it could install a 130-140m RESA by taking out the grass bank at Cobham Drive and replace it with a structural retaining wall (which they think is “easy” to get a resource consent for), it is basically pushing the CAA Director to make the same flawed decision based on the same flawed arguments – that the financial benefits to the airport should override the international safety requirements New Zealand is signed up to. We hope that the Director will take the Supreme Court decision and reminder to his responsibilities, particularly in light of the changes to the Civil Act in 2004 (which now include not just safety and security, but also access and mobility, public health and environmental sustainability) more seriously and will deny WIAL the less-safe option. Although – when the Guardians asked, under the Official Information Act, to see the whole application by WIAL, the CAA Director simply refused, quoting sections of the law but no reason how these sections would apply in this instance. We have no choice but to ask the OIA Ombudsman to get involved. And so, the saga continues…

For immediate release 6 March 2017

Residents’ and ratepayers’ group the Guardians of the Bays have today welcomed news that Wellington International Airport has requested an interim adjournment of proceedings from the Environment Court. The request from the Airport comes in response to the Court of Appeal ruling that the Civil Aviation Authority must reconsider its decision on the length of the proposed runway safety area.

Guardians of the Bays’ Co-Chair Richard Randerson said the request showed that WIAL has not considered all the issues in enough depth. “We are pleased that the Airport is reconsidering its position. The runway extension proposal continues to face hurdles because it has not been well considered or evaluated. This serious concern around safety is just one of many examples where the numbers don’t stack up. There is already evidence that the proposal is likely to cost more than the $350m originally suggested. An extension to the runway safety area would push costs well over the half a billion dollars it is currently expected to reach and would put the project well outside the parameters of the current Environment Court application.”

Co-Chair Dr. Sea Rotmann said the burden to ratepayers and taxpayers of the proposed extension continued to be unacceptable – particularly as the suggested benefits are anything but guaranteed. “No airline has committed to flying into an extended airport and the one airline currently flying (via Canberra) is getting very low loadings, according to an independent monitor of routes around the world. The Airport has specified the limit for its own investment in the extension at $100m now. Anything above this must come from Wellington ratepayers and New Zealand taxpayers. The business case for the runway still hasn’t gone through the Treasury’s Better Business Case process to prove if it is even eligible for public funding.”

In a meeting with the Guardians last month, Mayor Justin Lester said that the extension was not likely to happen anytime soon and that Wellington City Council would not commit to providing more than $90m. “It was heartening to hear our Mayor show he is sensitive to the issues at play and that he has put a limit on more public funding to support the Airport’s case – we expect him to stand by that,” said Dr Rotmann. “The Council already gave the Airport $3m of ratepayer’s precious money to fund the creation of its reports, which are consistently being shown to be little more than ‘spin’ to support the Airport’s slant on the proposal.”

“It would be best for the Airport to withdraw its application completely, rather than further burden the hard-working individuals who are raising their own funds to be able to participate in the Environment Court Process.”
ENDS

Media contacts: Dr Sea Rotmann 021 246 9438 and Richard Randerson 04 976 6050/ 021 159 6734

 

 

 

 

Thank goodness for the Air Line Pilots Association (ALPA). The Court of Appeal has just ringingly found in favour of the pilots’ union over the safety issues raised by the Wellington runway extension.

Not only has the previous High Court ruling been overturned. The Director of Civil Aviation (CAA) has also been ordered told back to the drawing board to properly do the job of evaluating the size of the safety areas required for the extension, in full accord with New Zealand’s international obligations. The pilots union were also compensated by the Court of Appeal judges for their costs in bringing the court action.

Interestingly, the reasoning in the Court of Appeal decision almost exactly mirrored the detailed critique of the original High Court decision made in this Werewolf article last October.

All along, the pilots’ safety-related legal challenge had revolved around the size of the 90 metre long Runway End Safety Area (RESA) being proposed for the runway extension. Basically, the RESA is the safety zone required if and when planes ‘run off’ the runway proper and need to decelerate safely, in the event of an emergency, or because of a runway undershoot or overshoot. A 90 metre RESA at each end is the minimum requirement under the international aviation standards, but is less than the 240 metre zone distance recommended – whenever this is ‘practicable’ – under the rules set by the International Civil Aviation Organisation (ICAO).

As Werewolf pointed out in October, the High Court ruling by Justice Karen Clark had supported a chain of dubious reasoning, based on the CAA Director’s acceptance that a 90 metre sized RESA met the ICAO minimum requirements – and that anything further than this could be validly assessed as to whether the additional costs would be “practicable”. In effect, it meant that beyond the 90 metre length RESA minimum, safety issues would be rendered liable to a cost benefit analysis by airport management, and with this dubious process receiving a CAA stamp of approval, and validation by the High Court. Not any more.

The issue hinges – as Werewolf argued and the Court of Appeal has also followed – on the wording of the relevant Part 139 of the Civil Aviation Act and on Annex 14 of the ICAO regulations: “A RESA must extend to a distance of at least 90 metres and, if practicable to a distance of at least 240 metres from the end of the runway strip.” In the High Court, a lot of freight got heaped onto that key word “practicable.”

By way of a possible compromise, the pilots’ union had all along proposed to accept a RESA distance shorter than 240 metres if an artificial buffer zone called an EMAS (for Engineered Materials Arrestor System) was installed in Wellington, of sufficient quality as to create, in effect, a 240 metre RESA safety zone. Basically, an EMAS is made of crushable materials into which the plane wheels can sink, thereby bringing an overshooting (or undershooting) aircraft safely to a halt. One telling sign of the difference between a 90 metre RESA and a 240 metre RESA in safety terms? Reportedly, a 90 metre RESA will capture only around 60% of overruns. By comparison, a 240 metre one will capture over 90%.

The legal battle – in both the High Court and the Court of Appeal – was waged over the tension between what the relevant aviation rules require, and what they recommend, given that the ICAO rules and New Zealand regulations allow for an unspecified degree of discretion, which was duly exercised by the CAA Director in greenlighting the 90 metre RESA minimum length – even though the ICAO advocated far longer where “practicable.” Many of the legal arguments turned on how far the notion of what is “practicable” should have been pursued by the CAA, and to what degree safety recommendations should be weighed against the cost of compliance, given what’s known of the risks involved.

Is it desirable for best safety practices to be traded off against what is “practicably” affordable – in a context where many bigger, heavier and faster landing aircraft on long haul flights (ie laden with jet fuel) will be flying into the notoriously weather-challenged Wellington International Airport in future? After Pike River, many New Zealanders would probably have expected the authorities to err on the side of caution, on matters of health and safety.

Not this time – or not initially, anyway. Arguably, the airport management/CAA/High Court line had defended the minimum safety regulations as good enough – and with anything costing more as being either not “practicable” or at the very least, facing an uphill battle to justify its existence. This, as the Court of Appeal has now found, is not what “practicable” means in the context of New Zealand’s airline safety obligations.

The indefensibility of the CAA/High Court position (as Werewolf showed last October) was most readily demonstrated with respect to the pilots’ suggested EMAS arrestor system compromise. Werewolf’s inquiries with the main international supplier of EMAS systems revealed an installation cost of circa $NZ14 million, which would add only an extra 4.66% to the mooted $300 million cost of the entire runway extension. This would seem entirely “practicable” on cost grounds, one would have thought.

Yet bizarrely, the High Court defended the CAA Director’s refusal to even consider an EMAS, because – Justice Clark reasoned last July – the legislation doesn’t expressly require him to carry out such an evaluation! Here’s how Justice Clark justified the sidelining of an available, relatively affordable safety option:

[125] For this argument to succeed NZALPA must identify the source of the obligation on the Director to consider the engineering techniques and construction options realistically available to the airport operator, including the potential for using EMAS, when assessing the practicability of a runway end safety area longer than 90 metres. Mr Rennie’s argument [for NZALPA] relied on “practicable” bearing the ordinary meaning of “actually able to be constructed”. Accordingly, the Director was bound to consider what is actually able to be constructed.

[126] In undertaking his comprehensive analysis of the proposal put to him the Director was not required to turn his mind to alternatives. Part 139 is silent as to EMAS technology. There is no requirement for EMAS to be installed and no assumption that it will be. Part 139 is dissimilar from Annex 14 which permits shortened runway end safety areas where an arresting system is installed. The focus of Part 139 is on length rather than arresting systems.

Thankfully, the Court of Appeal has now quietly shot this rationale down in flames:

[73] The other error identified by Mr Rennie was the Director’s failure to consider whether an arresting system might provide the necessary degree of additional safety otherwise available from a 240 metre RESA. He simply discounted this consideration on the ground that the viability of an arresting system had not formed part of [Wellington International Airport Limited] WIAL’s plan or decision.

Clark J justified this omission because Appendix A.1(a)

is silent on arresting system technology the focus on length limits the Director’s function to ensuring the physical characteristics of the RESA are acceptable. However, her observation reinforces the importance of correctly applying Appendix A.1(a)’s emphasis on the safety available from a 240 metre RESA.

[74] We are satisfied that the Director in exercising his statutory power was bound to consider carefully whether an alternative means of ensuring safety was available without a 240 metre RESA irrespective of whether or not that alternative was referred to in the rule or in WIAL’s plan. In assessing practicability in light of the statutory purposes of aviation safety and New Zealand international obligations, the availability of an arresting system (as an alternative measure referred to in Annex 14 to the Convention) must be a relevant consideration in assessing the acceptability of the RESA length.

In sum, this has been a victory for common sense – and for safety – over cost-cutting expedience. It is now back to the drawing board for the CAA Director, who may well struggle to explain how a RESA beyond 90 metres in length is not ‘practicable.’ There are several options for him to consider. These are (a) whether some length somewhere between the 90 metre minimum and the 240 metres advocated by the ICAO can be found (b) whether some trade-off can be found between the proposed length of the runway and the length of the RESA and (c) whether an EMAS can be installed that either in itself or in combination with a RESA, will be equivalent to a 240 metre RESA.

In itself, this Court of Appeal decision may not be enough to derail the runway extension. Yet given that (a) the project funding (b) its economic viability and (c) the environmental impact of the extension are all looking like uphill battles…it could well be time to finally pull the plug. In the meantime, the Court of Appeal decision will have some obvious downstream implications for the mooted Queenstown airport runway extension as well. Thanks to the pilots union and to the Court of Appeal, the regulation of airline safety has now become something more than a rubber stamp process in this country. In future, it will be harder for passenger safety to be prematurely traded off against cost savings and profit maximisation.

By Michael Reddell, October 17, 2016. Link here.

Fairfax’s Hamish Rutherford had a substantial piece in Saturday’s Dominion-Post on the proposed Wellington airport runway extension, under the heading If we build it, will they come? (a rather similar title to my own first post on the airport last year).  It seemed like a fairly balanced article, covering many (but not all) of the key uncertainties about the project.   Most of them wouldn’t be a matter for public concern if this was to be a privately-funded project, but it isn’t –  and everyone agrees on that.

There was an interesting quote to that effect at the start of the article from airport company chair Tim Brown.

As Tim Brown tells it, the first time he discussed a “back of the envelope”-type analysis of the cost to extend Wellington runway with the airport’s chief executive, Steve Sanderson, the conversation was “completely negative”.

…..Brown had just been presented an outline of a $300 million project, aiming to enable non-stop long-haul flights to the capital.

However, the  potential gains to the airport (two-thirds owned by Infratil, the rest by Wellington City Council) were likely to see a boost in profits that would only justify it investing around $100m.

Whatever the final costs of the project might be (and the estimates are unmoved in the years since), Brown was clear about the chances.

“Literally within 10 seconds I said: ‘So what? What do I care? We’re not going to do that, are we?’,” Brown recalled this week.

This isn’t a project that might need the last 10 or 20 per cent of the cost picked up by the taxpayer/ratepayer to make it viable.  Instead it only works –  even on their own numbers –  if the Crown/WCC picks up two-thirds of the capital cost (and ratepayers have already paid millions of dollars to get the proposal this far).  This is a politically-driven project at least as much (and probably more) than it is a WIAL/Infratil one.

The whole process is getting underway again now, both because the airport company (WIAL) has restarted its resource consent application, and because now that the election is past the ability of citizens and ratepayers to hold in check the big spending “boosterish” tendencies of the mayor and councillors is diminished considerably.  It is difficult to tell quite what the balance of the council now is, but the new mayor has been at the forefront of the various “booster” projects the Council is spending money on, and one councillor who was vocally opposed to the extension in the previous term is no longer on the council.  WCC’s track record –  of wanting to “do something”, spend money on big ticket initiatives, often with little or no public scrutiny (sometimes not even with scrutiny from councilors) – is pretty disquieting.

Presumably under some pressure during the election campaign, the new mayor Justin Lester modified his stance somewhat in responding to pre-election candidate surveys.

I have committed to seeking the resource consent for the airport extension project. It’s too early to say whether the project will proceed because the following three caveats will need to be satisfied before it proceeds:

1. Resource consent approval

2. Financial support from Central Government

3. Commitment from airlines to fly direct routes to Asia.

This is a 50 year project and needs careful consideration before any decision is made.

On the face of it, that looks like a fairly insurmountable set of hurdles.  It is very unlikely that any airline is going to give a commitment to fly direct long-haul routes between Asia and Wellington in advance of (multi-year) construction even starting –  they couldn’t know what would happen to fuel prices, the world/regional economy or the like in the intervening period.    That is especially so given the expressed lack of interest in flying long-haul from Wellington from the one airline that always will be flying New Zealand routes, Air New Zealand.

And, to date, central government seems to have been commendably non-encouraging about any suggestion of central government financial support.

So what –  beyond the track record of poor quality secretive spending – makes me uneasy about the Lester-led Council?  First, Lester knows very well that he won’t get commitments from airlines before the Council has to make decisions on whether to fund the runway extension –  but he might get non-binding expression of interests, which could be politically spun to sound a bit like commitments.  Second, the government has a  track record of ending up funding uneconomic infrastructure projects, including ones it initially poured cold water over.  One could think of Transmission Gully, or KiwiRail, or Northland (by-election) bridges or –  perhaps most concerningly – the City Rail Link in Auckland.   With a modest budget surplus to be subject to an electoral auction next year, is it so inconceivable that the government could change tack (government built houses and immigration last week) and throw $100 million in the direction of the runway extension?  Compared to the spending on Transmission Gully, it would be chicken feed.

And while Lester is quoted extensively in the Fairfax article, neither of the conditions in the pre-election quote above (airline commitments, central government funding) is repeated.  [UPDATE: I gather they are still part of his set of pre-conditions]

So ratepayers beware.  Citizens beware.

In the Fairfax article, Lester tries to blunt possible ratepayer concerns by suggesting the bulk of any Council funding should be raised from business rates rather than from residential ratepayers, because “the majority of the benefit would go to the business sector”.  That might sound superficially plausible (if there were material benefits at all) but the mayor seems unaware of the notion of tax incidence: that the party who writes the cheque to pay a tax or rates bill isn’t typically the party that bears the economic cost.   Much of any company tax is actually borne, over time, by workers –  because less investment occurs than otherwise, and wages are lower as a result.  Just as renters bear some/much of the incidence of rates bills paid by landlords, we should expect that the wider pool of Wellington citizens would bear much of the economic cost of higher business rates to fund an airport extension, even if no non-business ratepayer ever has to increase their direct rates bill.  This is an issue that should bother all citizens, not just business ratepayers.

A lot of the decision-making should turn on a robust cost-benefit analysis of the proposal.  WIAL and the Council have commissioned their own analysis, which suggests large positive national benefits.  Not many people who have looked carefully at the numbers have found their numbers persuasive.  Justin Lester seems to suggest this is all about self-interest

“I’m not going to have people telling me and telling Wellington and telling our council what we should be doing because of their own interests.”

If one wanted to descend to a similar level, one could ask about the incentives on and interests of councillors –  spending other people’s money on big ticket projects.  But, perhaps more importantly, advocates like Lester would do better to front up and explain why they disagree with specific points raised by critics –  whether those critics are representatives of the airline industry, or other commentators and economists.

In the last few weeks, questions have begun to surface about the estimated cost of the runway extension itself.  In a private sector project, citizens wouldn’t need to worry too much.  After all, if the company proposing the development gets it wrong, its own shareholders will be the ones who lose money.  But this is a project where large amounts of ratepayers/taxpayers money will be at stake, and where it isn’t clear how well aligned incentives really are.  The construction estimates are being done for WIAL, which has already concluded that it would only be worth them putting in around $100 million.  If the project is to proceed central or local government will be on the hook for the rest.  Mightn’t the incentives at present be to keep the construction estimates to the low end of a possible range?  Doing so might (a) increase the chances of getting a resource consent (since, sadly, the Environment Court needs to do an economic appraisal) and (b) increase the chances of getting central and local government approval to proceed, with political commitment to the project, with any later cost-overruns perhaps largely falling on those parties.

My own unease has been around three main points; developed in earlier posts:

(a) the large assumed increase in long-haul visitors to New Zealand, simply because of an option to fly long-haul into Wellington (rather than Auckland or Christchurch.

(b) the very large assumed “wider economic benefits” assumed to flow from such increases in visitor numbers, even if the passenger projections were accurate, and

(c) the discount rate being used to evaluate such gains (many of them decades into the future).

I dealt with the visitor number points in this post late last year.   The WIAL cost-benefit analysis uses passenger projections which assume an increase of 200000 visitors to New Zealand (building up over time) simply because it becomes physically possible to fly long haul into Wellington.   That seems implausible.  In his own look at the passenger projections, Ian Harrison of Tailrisk Economics, noted that the numbers assumed that within 20 years 30000 more Americans a year will come to New Zealand simply because they can fly directly into Wellington.   One can imagine a few more might want to arrive via Wellington, but is it really credible that so many more will come to New Zealand as a whole?  Perhaps more startling were the assumptions for “other Asia” (ie other than China and Japan).  At present, only around 30000 people come from those countries to Wellington in a year.  The projections assume that putting in a runway allowing long-haul flights will provide a boost of an additional 105000 visitors annually within 20 years.  Were Wellington Florence, perhaps it would be a credible story.  As it is –  and even with some more marketing spending and a heavily subsidized new film museum – it just doesn’t ring true.  Long-haul passengers don’t come to New Zealand for its cities –  the cities are mostly gateways, and in the case of the lower North Island, Wellington isn’t the gateway to much.  (And yes, I can see the South Island as I type, so perhaps there is a small “gateway to the South, by slow ferry” market).

I touched on the “wider economic benefits” and the discount rates in this post. Here are some extracts from that post:

But much the biggest issues relate to the possibility of benefits to New Zealand from additional foreign tourists buying real goods and services in New Zealand.  Sapere appear to have estimated a total for the likely increase in tourist spending in New Zealand and then subtracted an estimate for the cost of providing those services.  For that they have assumed that 45.5 per cent of the expenditure is domestic value-added (ie returns to labour and capital).  That approach doesn’t seem right and generates highly implausible estimates.

The producer surplus is the gain to the provider of a good or service over and above what he or she would have been willing to provide that service at.   The cost of providing the service includes the cost of intermediate inputs (materials etc) but also the cost of the labour and the cost of capital (a normal rate of return).  If the producer sells product at that cost, there is no producer surplus. In this context, there is no net economic benefits –  economic costs have just been covered.

Over the long haul, in reasonably competitive markets, producer surpluses should be very small (in the limit zero).  For a hotel that budgeted on 80 per cent occupancy, a surprise influx of visitors for the weekend will generate a producer surplus –  the windfall arrivals add much more to revenue than they do to costs of supplying the service.  But over the long haul –  and the airport project is evaluated over the period out to 2060 –  it is fairly implausible that there will be any material producer surplus resulting from well-foreshadowed increases in visitor numbers.  Most of what tourists spend money on in New Zealand are items such as accommodation, domestic travel, and food and beverage.  In all those sectors, capacity is scalable.  One would expect new entrants just to the point where only normal costs of capital were covered.  In the long run, supply curves for most of these sorts of services/products should almost flat.

My proposition is that there are few or no producer surpluses likely to arise from a trend increase in foreign tourism as a result of extending Wellington airport.  But even if there were, any such gains would have to be offset against the loss of producer surplus for New Zealand producer (to foreign producers instead) from New Zealanders taking more holidays abroad.  It makes little difference to the hoteliers if I take my holiday in London instead of Queenstown, while at the some time someone in Manchester takes his in Queenstown instead of taking it in London.

Even if the consultants are right that there would be more additional inward visitors than outward, any producer surpluses from either set of numbers should be small.  And the net of two small offsetting numbers is even smaller.

The safest assumption, in evaluating the WIAL proposal, is to assume that the economic benefits of the proposal all accrue to users, and that there are no material net economic benefits (or costs) to the rest of the community.  Perhaps there is a small amount in the net GST flow, but it is hardly worth focusing on given the scale of the other uncertainties.

Perhaps this point will seem counterintuitive to lay readers and city councillors.  Surely “Wellington” or “New Zealand” is better off from having more foreign visitors (assuming the numbers outweigh the increased outflow of New Zealanders)?  And if so, shouldn’t we –  Councils, government –  be willing to spend money to get those benefits?   The short answer is no.    Good and services cost real resources to provide, and in a competitive market simply providing more goods and services won’t make the city or country better off –  you need to be able to sell stuff that generates more of a return than it costs to provide (including the cost of capital).  Vanilla products and services typically don’t do that.  After all, labour that is used to provide services to tourists is labour that can’t be used for something other activity.  And over a horizon of 45 years we can’t just assume there are spare resources sitting round unused.  Spending public money to generate this economic activity will come at a cost of some other economic activity being displaced (as well as the deadweight costs of taxation, which are allowed for in the cost-benefit analysis).

If, to a first approximation, there are no “net incremental economic benefits” for the “rest of the community” then even if the WIAL/Sapere passenger number estimates are totally robust, the net benefits of the project drop from $2090 million to $954 million.

It is not as if the new visitors – even if they eventuate –  are likely to be top-end exclusive customers.  Business and government travel –  a significant part of the Wellington market –  is unlikely to be much affected, and any boost to overall visitor numbers seems likely to be mostly tourists, consuming fairly vanilla, easily replicable, goods and services.

And what of the discount rate?

It is very unlikely that any private company (or shareholder) would evaluate such a risky project using anything as low as a 7 per cent real cost of capital.  On the WIAL/Sapere numbers, even raising the discount rate to 10 per cent –  a fairly typical cost of capital for Australian companies according to a relatively recent survey by the RBA –  roughly halves the value of any net benefits from the project (even if all the other assumptions about passengers numbers, and “wider economic benefits” are in fact well-founded).  But this runway extension seems much riskier than the typical investment project –  it is location-specific, not usable for anything else, and relies on assumptions that involve transforming the nature of the business (ie there is no long haul capacity at present, and no one can know with any confidence how much demand there might be for the service).  It would be enlightening if Infratil/WIAL told us what cost of capital/discount rate assumptions they would use in evaluating such a project if all the risk were on them?  I’m sure, for such a hard-nosed bunch of operators, if would prudently be more than 10 per cent real.

The Fairfax article picks up a number of other points, including some comments from me. In some of those comments, I probably wasn’t as clear as I might have been.

A few weeks ago, Singapore Airlines –  assisted by a non-transparent Wellington City Council subsidy –  began flying several times a week between Singapore and Wellington, with a stopover in (of all places) Canberra.  No one know whether those flights will succeed (SIA reportedly wants to move to daily), and become viable without ongoing Council subsidies.  That uncertainty is reflected in the article.  Tim Brown from WIAL seems to believe that if the route succeeds, and attracts a larger proportion of foreign passengers, it would tend to support the case for the runway extension.  Justin Lester seems a bit nervous

Like the airport company, Lester also appears to concede that if the Singapore Airlines flights do not show the demand its supporters hope, it would be bad news for the runway extension.

“People are getting on and off these planes four times a week and if the demand doesn’t go up to seven times a week, you know, we won’t need to do it,” he said, quickly adding that this would be a “strong indicator” rather than proof the runway extension was not worthwhile.

I was quoted along similar lines

Would strong success of Singapore Airlines’ new route, with a high proportion of visitors, help prove the case of the missing passengers?

For a man who freely admits he is naturally sceptical about most public infrastructure projects, Reddell is surprisingly open to the idea.

“If they can make that route viable without larger public subsidies than they’ve got then I think that would be interesting”, especially given that passengers face being “stuck in Canberra for a couple of hours”.

But with several caveats.  First, even if the Wellington-Canberra-Singapore route proves viable, it only offers any insight on the long-haul issue if a material proportion of the passengers in and out of Wellington are not just Wellington-Canberra passengers (although it seems unlikely that a daily 777 flight just Wellington/Canberra would be economic).

Second, if such flights prove viable with the current runway, that is great. All involved are likely to gain.  But that is different proposition than spending  (an irreversible) $300 million on a new runway.  As I noted

However, Reddell adds, this may only prove Brown is right about the problem being a lack of marketing, without proving the airport extension itself was needed.

“I would open up the argument, [of] let’s subsidise some more flights, and if they don’t work we can shut them down, whereas with the $300m runway extension, it’s a sunk cost,” Reddell said.

“The great thing about marketing is you can shut it off. You can’t do much with a runway extension” that doesn’t work out.

In the cost-benefit analysis, one of the options they looked at was a big increase in marketing expenditure.  It produced net benefits not that much smaller than those purportedly on offer from the runway extension, and could be re-evaluated constantly, rather than being irreversible.

If central and local government do go ahead and fund the extension, it wouldn’t surprise me if 10 years hence there were a few long haul flights in and out of Wellington.  But, of itself, that would prove nothing about the economics of the project.  The financial contribution of central or local government would, no doubt, be treated as a bygone –  with no direct financial returns, and arguable and uncertain indirect ones –  and with a runway in place, and only its own capital contribution to cover, perhaps WIAL could attract a few flights.  That might leave today’s councilors feeling better, as they show the extension to their grandchildren, but is no reason to think that Wellington citizens and ratepayers will have been made better off as a result.

I’ve not touched at all on issues like the possibility that future carbon charges make long haul travel less attractive than it is today, or that rising sea levels might raise questions about Wellington airport more generally.  But they all should bring us back to Justin Lester’s point

This is a 50 year project

and

His “gut instinct” was that the case would eventually be proven, but it could be soon, or it could be decades away.

The costs of waiting simply aren’t that large.  If the proponents are right, the case will look that much more compelling  –  and less risky –  10 years from now.  If they are wrong, (lots of) real resources will have been irreversibly wasted –  and that burden will be felt not just by Wellington businesses, but by all citizens and ratepayers of Wellington.   I’d urge the incoming Council to reflect on that choice, and to take seriously what decisionmaking under uncertainty should mean.

By Michael Reddell

Link

At about 3pm, the first Singapore Airlines flight to Wellington, via Canberra of all places, lands at Wellington Airport.  Wellington-boosters, well represented on the Council and the Chamber of Commerce, talk up the first “long-haul” flight to and from Wellington.  All of which would be more impressive if it were not for the ratepayers’ money being (secretly – no information on the amounts or terms of these sweetheart deals, no robust cost-benefit analysis etc) used to make it all possible.    Were the flights financially self-supporting that would be the best evidence of them being “a good thing”.  But they aren’t.  That means (a) a presumption against them being “a good thing”, and (b) a likelihood that they won’t survive for long, at least without some permanent subsidy from the long-suffering ratepayers of Wellington. It probably isn’t a subsidy to the giant Singapore Airlines –  they’ll probably just manage a normal return on capital –  but by quite which canons of social justice ratepayers should be subsidizing government departments (probably the main purchasers of tickets on the Wellington-Canberra leg, and one of the larger sources of international passengers from Wellington) is beyond me.

But at least these sorts of subsidy deals can usually be terminated with not too much notice.  Other cities have tried this sort of thing, and the arrangements have typically fallen over before too long.  There isn’t much irreversibility about them.  The same can’t be said for the proposed Wellington Airport runway extension.  If it goes ahead, very large amounts of money will be irreversibly lost.

There was a very nice, accessible, article out a few weeks ago in City Journal by leading US economist Ed Glaeser.  In “If you build it…..” Glaeser tackles some of the “myths and realities about America’s infrastructure spending”.  There is a lot enthusiasm around, especially in centre-left circles, for more – much more –  infrastructure spending, to “take advantage” of the current very low global interest rates.  Enthusiasts, of course, rarely stop to ask why interest rates are so low, and expected to remain low, but set that caveat to one side for now.   Glaeser reports on a variety of studies on just how underwhelming most government-led infrastructure actually is: too often in regions that are declining rather than ones that are growing, all too often with low payoffs (and massive cost over-runs) at the best of times, and so on.  There are plenty of specific differences between the US situation and our own – we don’t have the Senate, steering funds to lightly-populated states, but then we have by-election promises to build bridges to anywhere –  but I don’t think we have anything to be complacent about.  His penultimate paragraph is relevant pretty much anywhere

Economics teaches two basic truths: people make wise choices when they are forced to weigh benefits against costs; and competition produces good results. Large-scale federal involvement in transportation means that the people who benefit aren’t the people who pay the costs. The result is too many white-elephant projects and too little innovation and maintenance.

Just last week we heard of the latest large cost-escalation in the hugely-expensive questionable Auckland inner-city rail loop.  “Who cares” seems to be the reaction of central (National) and local government (Labour) politicians –  ratepayers and taxpayers will pay.   In Wellington the largest regional roading projects for generations (probably ever) is underway at Transmission Gully.  The economics of the project are simply shocking, but that doesn’t seem to bother our National or Labour politicians.

And then there is the airport extension proposal.  Now, on paper, it might look like a project that might pass some of Glaeser’s tests.  After all, Wellington Airport isn’t owned by central or local government –  although Wellington City has a minority stake –  but by a company majority-owned by some fairly hard-headed infrastructure investors/operators, Infratil.

There are plenty of people around –  including commenters here on previous airport posts –  who will attack Infratil.  I’m not one of them.  Infratil is a private sector business, no doubt pursuing (as it should) the best interests of its shareholders.  And Infratil has been quite unambiguiously clear that the airport extension project simply does not stack up on commercial grounds.  In a comment on this blog six months ago, the chairman of the airport company Tim Brown put it this way:

The Airport extension is forecast to cost $300m. If airport users who get no value from it (people on smaller aircraft, people buying coffee, parking cars, etc) don’t pay anything towards it, then the estimated present value to the airport company from those who do benefit from the extension and do help pay for it may be about $100m. So on purely commercial grounds and avoiding cross subsidies the shareholders are expected to contribute that sum.
Clearly that makes it a dead duck on a purely commercial basis. Who would hand over $300m for something “worth” $100m?

Since Infratil owns 66 per cent of the airport company (WIAL) that would involve them putting up around $66m and the minority shareholder putting up $34 million.

So when people attack the idea of council or government handing over (lots of) additional money to get the project going (in addition to the millions the Council has already spent) as “corporate welfare”, they are simply wrong, at least as regards Infratil.   This project seems to be driven by the Council “boosters”, presumably why they’ve been so ready to spending large amounts of ratepayers’ money on it already.  If some branch(es) of government in fact do stump up hundreds of millions of dollars beyond what is commercially justifiable, some of it will certainly benefit some local businesses, but most of it will simply be money down the drain; spent on real resources to build an extension that simply has almost no economic value.  Other than the exercise commissioned by the airport company itself –  funded by the Council –  no one who has taken a hard look at the numbers regards the claims of large scale economic benefits as stacking up.  Of course, there are plenty of “boosters”, and others who think of (real) long-haul flights from Wellington as a nice idea, but the numbers simply don’t stack up.

Fortunately, it is local body election time.  If it weren’t, I fear the project might be rammed through with as little serious scrutiny as the cosy subsidy deal to fund a movie museum/convention centre in Wellington recently was.  (The movie industry, of course, surviving on large scale taxpayer subsidies).  At present, WIAL has a resource consent application underway.  (Of course, if the project can’t get a resource consent, the economics is irrelevant.)  Somewhat curiously, WIAL recently temporarily put the resource application on ice. This was, ostensibly, to allow them to take account of points raised in the numerous public submissions. I’m a bit skeptical of that story –  surely the submissions can’t have been much of a surprise –  and wonder if it isn’t a convenient way to minimize coverage of the issue during the local body election season.  Perhaps not, but the timing is certainly convenient.

A year ago, I assumed that the Wellington City Council – which hardly ever turns down an opportunity to waste money, and which is in the thrall of an “economic development” mindset –  would simply write the cheque, shifting large amount of ratepayers’ money into a project which  –  while fundamentally uneconomic –  it would not even secure a much-increased ownership interest in.

But as the election season has gone on, I’ve begun to be a little more hopeful that perhaps hard-headed analysis might actually play some role in the eventual decision on Council funding (or indeed, central government funding, where there is little sign of much greater discipline around capital spending).   Our mayoral race is hotly contested, and so there have been plenty of surveys asking candidates for their views on the airport extension.  Here I’m drawing mostly from a survey done by my local residents’ association.

Somewhat encouragingly, of the eight mayoral candidates not one is now unambiguously in support of spending lots of ratepayers’ money on the runway extension.

One of the mainstream candidates –  centre-right councillor Nicola Young –  is outright opposed

 Opposed. Initially I thought it should funded in line with its ownership (Infratil 66%, WCC 34%) but now I believe it would be a $300million folly. Subsidising international airlines is very costly, as Christchurch Airport discovered when it paid Air Asia X millions to get direct flights to Asia; the flights were cancelled after nine months

Another sitting councillor, this time from the left, Helene Ritchie, is also opposed

I have repeatedly opposed it and any funding towards it-including Council using rates to support an application by the Company for a  resource consent.

She further offends the elites by suggesting that voters should get to make the final decision on such an expensive proposal

The Environment Court should throw it out. If it is not thrown out, then as mayor I will call for a referendum/poll of the people, on this proposed rates funded $350 million (probably likely $500million) Airport Extension, asking residents, “Do you want to pay for the proposed airport extension? Should rates be spent on “corporate welfare”-an unnecessary airport extension?”

Another candidate –  left-wing economist Keith Johnson, campaigning (I suspect) against waste rather than to be elected –  is also clearly opposed

I am opposed to the project and have submitted a substantial paper detailing my objections to the Environment Court, covering safety, environmental, budgetary and business-case concerns.
I am absolutely opposed to the allocation of $90 million from Wellington City Council to the project, as the proposal essentially constitutes corporate welfare funded from the pockets of ratepayers.

A final minor candidate is also clearly opposed.

Unfortunately, most of the more likely candidates are somewhat more positive.

Sitting councilor Andy Foster probably isn’t going to be mayor, but despite being a typical “booster” most times when it comes to council spending, on this one he has clearly been having second thoughts.

It will depend on whether it can get over some very tough hurdles: consent, demonstrated airline commitment, robust economic case and obtain funding.  If it can, I will support it. If it doesn’t I won’t.  I suspect it won’t.

The election seems set to come down to a race between the current Labour Deputy Mayor (endorsed by the Greens) Justin Lester, the current Labour mayor of Porirua Nick Leggett, and the centrist councillor Jo Coughlan.  All three have a track record of supporting spending (lots of) public money on “economic development” projects, but I am mildly encouraged by how cautious they now seem to have become.

Here is Coughlan

I support the runway extension subject to it getting a resource consent, a business case that stacks up and appropriate funding. If the city does contribute, it should be reflected in our ownership skate. It should not be a donation

On that basis, the Council would end up owning a very large share of WIAL.  It is a middle of the road line, but it is important for Wellington voters to remember that the project is fundamentally uneconomic, and whether any money was contributed as an equity stake or as a “donation” doesn’t change that.  Central government had lots of equity stakes in Think Big projects in the 1980s.  They were all financial and economic disasters.

Here is Leggett, current mayor of Porirua

I support the idea of the runway extension. Wellington has to open itself outwards and create better connections internationally to grow jobs and investment.   I don’t support the council funding the extension beyond its 33% shareholding and if the Resource Consent is not successful – or the Government refuses to offer funding – then the project won’t proceed.

Ah yes, the “idea” sounds good.  But if it were such a good idea, users would pay for it.  That is the market test, usually a pretty sound one.  One gets the impression he doesn’t actually think the project will pass a proper cost-benefit analysis for the Council –  and $200m is a lot of money.  Leggett seems to be looking to central government –  and as he must drive past the Transmission Gully works each day on the way to the office, perhaps that is no wonder.  Wasteful capex is just par for the course –  especially when it could be dressed up in current fashionable rhetoric about advancing (with subsidies) export education and tourism.

And what of the Labour (and Greens –  even though as a party they ostensibly oppose the runway extension) candidate, Justin Lester?  He has been a strong advocate of the project, and was apparently the key figure in securing subsidies for the Singapore Airlines flights to Canberra. But now….

I have committed to seeking the resource consent for the airport extension project. It’s too early to say whether the project will proceed because the following three caveats will need to be satisfied before it proceeds: 1. Resource consent approval 2. Financial support from Central Government 3. Commitment from airlines to fly direct routes to Asia.
This is a 50 year project and needs careful consideration before any decision is made.

So even for Lester this is too big for the Council.  It can only proceed with central government funding.

Perhaps the most encouraging bit is his final sentence.  It is a long-lived project, and the option to delay must be a real one.  Perhaps in five or ten years time we will have a more secure feel for, for example, the viability of the new Singapore flights.  And –  for those more environmentally inclined than I am –  there is always the question of sea-level rise to consider, for a very low-lying airport.  Perhaps we could have another look in 20 years time?  Who knows, by then the benefits might be so overwhelming the users might even pay for the project?

In our council system, even mayors have only one vote.  Whichever of these candidates gets elected the project might still get significant additional council funding, or not.  And as central government has a terrible record of pouring money down sinkholes –  Transmission Gully, KiwiRail, probably the Auckland CRL etc – it might get funding from there even if the Council isn’t willing to stump up much.  But it is at least slightly encouraging that the mayoral candidates, reading the tea leaves of voter attitudes, have all either come out opposed to the Council paying for the project, or hedging support around with some tests that will be very hard to pass.

I’m not usually a single issue voter –  and the debacle of the Island Bay cycleway still concentrates the mind in other directions at times –  but this time I am.  There is simply too much money at stake, to allow boosters with the public cheque book to pursue their field of dreams vision for Wellington airport.

Re-blogged from Save the Basin (Tim Jones)

Up to 310 extra heavy trucks a day rumbling from quarries in Horokiwi and Ngauranga, down State Highway 1, through the Terrace Tunnel, past the Basin Reserve, through the Mt Victoria Tunnel, and on through residential streets to Wellington Airport, day and night, for up to 3 years – and then rumbling back.

That’s what Wellington International Airport Ltd wants to inflict on Wellington’s residents and ratepayers. They are seeking $90 million from Wellington City Council, and more again from other Wellington-region councils and central government, to extend Wellington Airport runway 363 metres into Lyall Bay. And their resource consent application makes it clear the scale of the disruption their plans will entail.

There are many arguments against this plan – and you will find a lot of them on the Guardians of the Bays website. But even people who may not be opposed to a runway extension per se need to pay attention to the construction traffic implications, because they are serious both for road users and for those living near the planned route who value their lifestyle – and their sleep.

If you like a long read, Technical Report 9 is the core of the matter. This shows that the airport company wants to run up to 30 trucks an hour – that’s up to one truck every two minutes – through their central Wellington route during these times:

  • 9:30am to 2:30pm weekdays; and
  • 10:00pm to 6:00am weekdays.

So, in trying to avoid peak-hour and school pickup traffic, the airport company has opted for truck movements throughout the night instead. And it’s not just on State Highway 1 – the current plan envisages those trucks rumbling down suburban streets in Kilbirnie and Rongotai as well: day after day, night after night.

Right now, Wellington City Council, Greater Wellington and the airport company are batting the resource consent application back and forth. The Councils have expressed serious concern about the airport company’s construction traffic plans, and there may yet be changes before the resource consent application is publicly notified.

But unless the airport company’s plans change radically, you might want to ask yourself: does the Wellington transport system really need another 310 heavy trucks going back and forth a day? And do I want those trucks rumbling through my suburb? And if your answer is “no”, then you might want to make a submission about that when you get the chance in a few weeks’ time.

In the meantime, you can:

Local economist, policy adviser and writer Keith Johnson says he will push for greater accountability, lower rate and debt rises, and higher levels of scrutiny for project planning and implementation.

The contest for Wellington’s mayoralty is heating up, with profesional public policy analyst and citizen journalist Keith Johnson declaring that he will enter the race as an independent. Johnson joins incumbent mayor Celia Wade-Brown, deputy mayor Justin Lester and councillors Nicola Young and Jo Coughlan in declaring their candidacies in the October election.

Reining in the Council’s sometimes massive, and apparently somewhat casual and arbitrary spending plans will be his top priority.

Like Jo Coughlan, Johnson is highly critical of the Council’s approach to transport planning, arguing that it is driven by emotion rather than objectivity. He agrees with Jo that failure to solve the Basin Reserve’s peak hour congestion has resulted in “lost years” of progress, resulting from the canning of a proposed highway flyover and a failure to promote a practical alternative.

Unlike all the other candidates who are standing, Keith is also highly critical of plans for the Council to contribute $90 million to the proposed Wellington Airport Runway Extension Project. He sees this as yet another example of Pollyanna planning that rides roughshod over good practice, involving the commissioning and application of business case analysis from tame and possibly biased consultants – in support of private profit.

Keith is also concerned that the Council’s Big Ideas spending takes insufficient account of the costs imposed on residents through rate rises and accumulating debt – and tends to favour a narrow group of interests in the tourism, hospitality, recreation and property development sectors, at the expense of local innovation and individual entrepreneurs in areas such as Information Technology, Education, Manufacturing and the Creative Arts.

Keith has been widely critical of the Council and its current mayor, and of WCC’s Chief Executive Officer Kevin Lavery, as demonstrated by numerous articles on his website ‘Keith Johnson Wellington NZ’ [ http://www.kjohnsonnz.blogspot.co.nz ]. Asked if he could work effectively with the Chief Executive and other councillors in the light of his criticisms, he was at pain to stress that he would be absolutely committed to working effectively with everyone who shared his love of Wellington:

“I have worked widely across the globe in planning and advisory roles and am dedicated to the highest standards of professional conduct. Making sure that projects are selected on the basis of sound analysis and the best principles of economy, effectiveness, efficiency, accountability and probity should create no problems. If the current crop of Big Ideas proposals passes muster, I will restrict myself to ensuring that the investments are implemented to best advantage. However, I am highly likely to oppose any further big spending, subsidy lobbying, and wish-list proposals by councillors”.

Keith was an early declaration for the 2013 Mayoralty Race but withdrew partly subsequent to a perceived lack of interest by voters [and partly due to commitments to a family of then small children].  However, he has since become conscious that many citizens were prepared to support him and that there is a widespread desire to have someone on the stage, along with the other candidates, who is prepared to argue for economy and ask tough questions about current spending plans.

“To have almost unlimited faith in Wellington’s citizens and little confidence in our existing politicians, is a view that is widely shared” he comments.

WHO IS KEITH JOHNSON?

  • Married with two boys aged 12 and 13, with two adult boys from a previous relationship
  • Holds BA and MA degrees from the University of Cambridge, UK and a PhD in Economic Geography from the Australian National University in Canberra
  • Has worked in a total of 27 countries as an academic, development economist and public policy analyst / adviser, including working as a Senior Development Policy Officer with the Asian Development Bank in Manila, Philippines
  • Is now an independent writer who is a widely read online journalist, commentator, creative writer and poet, with 800,000 – 1.5 million page views currently recorded on his website [depending on the metric], with readers from over 100 countries worldwide

ALSO IN THE MAYORAL RACE

Incumbent mayor Celia Wade-Brown

Councillor Justin Lester

Councillor Nicola Young

Councillor Jo Coughlan

It’s great to hear Labour candidate Justin Lester launching his campaign with good ol’ fashioned pork barrelling. In fact, you can view a pretty slick campaign video done by his campaign team. Or read his speech for his campaign launch.

However, lets peel back below the surface and see what he might bring for us Wellingtonians. Will he be touting his Labour values or will he turn out to be Celia II?

A quick Google search yielded the following results.

This was from 2013.

We talk, for example, about being open for business, but you still can’t submit a building consent on-line.

We have some excellent cycling proposals. But there’s currently no funding to roll them out.

We need more people coming here to invest, work, live and spend. To help encourage this I’ll be focusing on the following:

  • Creating a city cycling network by doubling our investment in cycling. We have lots of excellent cycling initiatives proposed, I want to see them put in place.

Source

This was said by Justin Lester on Newstalk ZB after the Island Bay Cycleway was approved. Joyous he was about supporting Celia Wade-Brown ramming through the controversial Island Bay “cycleway to nowhere.”

Tim Fookes: Tell me why you decided to throw your support behind the cycleway?

Justin Lester: I think its a good thing to do in a modern, progressive city, and if Wellington doesn’t, I think its going to fall behind. In Christchurch just yesterday, they struck off on a framework for better cycling… If Wellington doesn’t do it we’d fall behind nationally. We’d fall well behind internationally because we are already behind the eight ball.

So Justin Lester supports building a kerbside cycleway in Island Bay just because other cities are building cycleways. If other cities are defaulting on their loans, does this mean Justin Lester will do the same?

Gee, he must think cycleways are an indicator for economic growth!

HOW THEY VOTED

For the Island Bay cycleway: Mayor Celia Wade-Brown, Justin Lester, Andy Foster, Sarah Free, David Lee, Iona Pannett, Mark Peck, Malcolm Sparrow

Source

When Justin Lester announced he was going to stand as a mayoral candidate, he and Celia Wade-Brown were backslapping each other 

It’s important that one of us gets elected rather than someone else who doesn’t have a similar vision for the city,” he said.

“I’ll be focused on my campaign and she will be focused on hers. I won’t be criticising her.

Lester and Wade-Brown said they would give each other their number two votes.

“There are some things, like the airport extension, film museum … urban cycleways, refugee welcome and so on, that have been kicked off and need to be finished,” Wade-Brown said.

“I’m not convinced that the other announced candidates could do really well across all of those initiatives. I’m keen to see those through, but he would be my number two vote.”

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It’s not surprising many people think Justin Lester is a member of the Green Party despite running under a Labour ticket. [Ed: Please note that Celia hasn’t been a member of the Green Party for a long time now and that the Greens officially oppose the runway extension!]

Justin Lester does not care about the views of the community. Despite attending a Guardians of the Bays meeting regarding the runway extension, Justin Lester accuses opponents of the runway extension of doing Air New Zealand’s bidding and being anti-Wellington. Great. I’m anti-Wellington because I think Infratil should really commit to paying their fair share of the runway extension before it goes ahead. Cheers Justin.

With the cozy relationship between Celia and Justin, we may see Celia bow out of the race and endorse Justin Lester.

The grapevine suggests , panicked by Nick Leggett’s rumoured entry into the race, is lining up to reveal ’s endorsement, possibly at his formal launch as Labour’s Wellington Mayoral candidate due in the coming days.  To date, Wade-Brown has indicated she intends to seek re-election, although it has long been rumoured she will bolt from the race to give her loyal deputy mayor a shot at the job.  

Is the formal passing of the baton between Labour and the Greens in Wellington the kind of job-sharing Grant Robertson envisages as the “future of work”?  Problem is, polls show Celia is deeply unpopular –– many consider the notorious Island Bay cycleway the death-knell of her political career – and Lester is barely known by Wellington voters, and not especially admired among those who know him.  If it turns out that the first thing voters hear about Justin Lester is that he’s Celia’s “chosen one”, it’s hard to see how it helps.  He’s already being dismissed in the business community as “Justin Lester-Brown”, and a public pat on the back won’t do anything to downplay his association with an increasingly toxic incumbent.   And let’s not forget, Labour came a dismal third throughout Wellington at the last election, and the decision to field a Labour-endorsed candidate is exactly what Oscar Wilde had in mind when he talked of the “triumph of hope over experience”.

As an Anti Wellingtonian, I believe Mr Lester has to try harder to show he’s not going to be Celia II.

Edit – Despite the Labour Party having a “Vote Positive” as their election campaign slogan in 2014, I think what Labour MP Trevor Mallard had tweeted is not wanted nor needed. Perhaps “Vote Nasty” is a better reflection of Justin Lester and his party.

Trevor Mallard tweet
Trevor Mallard tweet

 

 

Posted some weeks back this is the submission by the Guardian’s of the Bay on the so-called Airport Extension, or otherwise known out this way as the White Elephant Project. What is interesting are the take outs from the submission. We’ve summarised them so you don’t have to read the entire thing though we suggest you do.

We’d suggest the authors have more skill and experience than the authors of the “reports” so far that have been anything but convincing in their argument to put our rates up and provide corporate welfare for a company that is not only helping contribute to emissions (Z Energy) but also has several hundred million sitting about.

Now, some of these are my notes mixed in with GotB’s notes. So that you know.

The original submission is here.

Things you didn’t know about the Wellington Airport Extension

There is still no way central government is going to pay because the Council hasn’t followed the Treasury Guidelines to apply for funding.

Despite calls for Consultation, the WCC not only has failed to do so, but it also appears that they have already made up their mind. Even Green councilors, Free, and Lee, have not made clear their stance.

When Dr. Rotmann went to speak [on the airport extension], she had the 2015 WIAL Annual Report figures open on her phone. In response to Andy Foster’s claim that the Council was getting its fair share of dividends from the airport, here are the actual numbers: WIAL made $108m in profit; has $842m in assets; $438m in equity and the Council got a measly $12m in dividends. (The WCC owns a third of the WIAL.)

Councillors have paid 50% of ratepayer money towards the airport’s resource consent reports and the Region said it would put up half of the cost of the runway extension ($150m – $90m by WCC and $60m by the other Councils, none of whom have put any money into it aside in their long-term plans, however). That is despite the (widely discredited) cost-benefit analysis by Sapere claiming that only 1/3 of the benefits would actually stay in the Region.

Most shocking, Councillors have not read the millions of dollars of reports they had commissioned. “She then asked the very pertinent question that all Councillors who had read the 27 airport reports should raise their hands. Unsurprisingly, not one hand went up.”

Two of the concerns have been a) the adverse southern end weather and its effect on the extension and b) whether they sea floor there can handle the millions of tonnes of fill. We still don’t know. “Insufficient data collection; the inability (due to ‘adverse Cook Strait conditions’) to complete even one of the seismic boreholes that needed to be undertaken to establish that the geomorphology in Lyall Bay was capable of taking the 3 million tonnes of rubble safely.”

In other words, researchers couldn’t answer that question because the conditions wouldn’t allow it.

Dr Rotmann finishes with:

So please, dear Councillors: Stop the corporate handouts (including throwing almost $10m of ratepayer money from a non-transparent slush fund at the world’s third largest airline with a Singapore head quarter) and stop calling opponents asking for transparent processes and proper facts and figures as being “Anti-Wellington” in the media. This is unbecoming of a Councillor’s job – it is hard enough to fight the spin and willful obfuscation of facts when it is coming from a billion dollar multinational. But it is an outrage when community groups looking out for the ratepayers’ interests get treated so unfairly by their elected officials. You can do better, City Council(lors)!

Unfortunately, it is my opinion that the Councillors cannot do better. We see an escalating tactic by the WCC now moving from calling opponents names such as “anti-Wellington” to accusing concerned residents of running a smear campaign.

Celia had gone on record yesterday with the opinion that public criticism of the allocation of funding from the $9.3 million Economic Initiatives Development Fund [WEID] ‘was being driven by “some people” who were simply out to smear the Council’. – Source

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It’s amazing what the Wellington City Council gets up to. Living Wage. Supporting the airport runway extension by using overly optimistic figures. Jinxing NZTA’s plan to reduce congestion in the inner city and the Eastern Suburbs. Island Bay Cycleway. Zealandia bailout. Convention centres. Selling Jack Illot Green and the Michael Fowler carpark to build high rise buildings. The list goes on and on…

I suppose the #WellingtonWay of reducing carbon emissions is to increase carbon emissions and destroy a marine reserve!

Anyway, I will focus on the rank hypocrisy of the Wellington City Council in regards to its proposed Climate Action Plan. The plan is to wage a war against the car while preaching for an airport runway extension, more long haul flights and helping their developer mates.

It is unbelievable that the Green Party is staying quiet about it [Ed: they are not. David Lee and Sarah Free have both come out in public against the extension]. Maybe only the Greens are allowed to massively increase emissions and destroy a marine reserve while saying they’ll do the opposite! Anyone else who does the same thing would get roasted by them and their supporters.

One of them (proposals) is a new plan to make Wellington a “low carbon capital” through initiatives designed to cut carbon emissions by 80 per cent by 2050, relative to 2001 levels.

Those initiatives include phasing out a rule that makes off-street parking a requirement of new developments, and re-allocating 100 car parks across the city for car-sharing and electric vehicle charging stations.

Source

What does this mean for us?

  • Those who park and ride in the suburbs will find it harder to find a parking space because residents would fill up all the parking spaces, hence the park and ride people will drive all the way to the city. This has a side effect of increasing congestion and carbon emissions.
  • Those who do drive to the city will have to do more loops around the block to find parking spaces which increases emissions even more. Up to 40% of congestion in the CBD is attributed to people looking for a parking space. This is set to increase even more if the council proposes to rip out thousands of parking spaces to make way for cycleways and electric changing stations.
  • Alternatively, if WCC increases CBD parking prices then people will drive further to suburban shopping malls like Queensgate or North City, or even Coastlands once Transmission Gully is open.
  • More congestion on our roads means more carbon emissions. A 40 minute start-stop car trip will emit more than twice the carbon emissions of a 20 minute continuously moving car trip covering the same distance . Hint, a war on cars will increase congestion and thus emissions.
  • More congestion will also affect our public transport system. Given Wellington’s narrow roads, it would be impossible to build dedicated bus and cycling lanes on all of our roads. As public transport gets slower, and less reliable, more people will switch back to the car and the cycle continues, whilst more and more carbon emissions are emitted.
  • We will be exposed to an ever increasing amount of propaganda telling us to reduce emissions, while the WCC tries to increase emissions from aviation. In 2010, 18% of our carbon emissions came from planes flying in and out of Wellington.

If elected members of the Wellington City Council wants to know how to get people onto public transport, I’ll give them a hint. Build proper public transport infrastructure, and run fast and frequent services. It does not include the transit lane/cycleway proposal for Hutt Road which would only make bus services 30 seconds quicker while cyclists still have to dodge cars going in and out of driveways. Most of the gains are from the removal of a bus stop. Again, the increase in congestion from removing two lanes for single occupant vehicles will obliterate any gains made by people shifting from cars to bicycles or buses. Not to mention people who work along Hutt Road may consider using their cars if they lose their closest bus stops.

I’ll give one more piece of sustainability advice. Moving people from walking or public transport, onto bicycles will not reduce our carbon footprint. I imagine that the Green bloc of the council is well aware of that. Either that or their party is filled with thickheads or cycling zealots.

To Celia, I strongly recommend you to get on your bike and ride a very, very long way away from Wellington. As Ian Apperley said, climate change is rather like a glass house. A dangerous place to be throwing stones. Perhaps it is time you step down and let someone else deal with climate change in a more pragmatic manner.