Something seems to be adrift in the domestic oil market and sufficiently so as to warrant some form of investigation by the Commerce Commission. An excess margin of around 10 cents per litre represents a transfer from consumers to oil companies in the region of $600m each year.
Over the next ten years, the increase in infrastructure spending in the top half of the North Island is projected to be larger than the lift in infrastructure spending nationwide. This outcome is one of the key findings of our recently launched Infrastructure Pipeline Profile.
Infometrics’ construction forecasts have long been the first port of call for those with an interest in the outlook for construction. We have been working hard on making our insights more accessible and come to life, and with a richer array of regional data to boot
Wellington City Council has recently approved the construction of a 1,200-seat convention centre in Wellington, which the Council will lease on a long-term basis from the developer at a cost of $4m per year. The aspect of this deal that has unsettled residents and ratepayers is the projection that revenue from the convention centre is only expected to average $2m per year, leaving a $2m shortfall. The fact that the Council is embarking on this project knowing, ahead of time, that it will be a loss-making venture, provides an obvious reason as to why we haven’t seen private sector investment in this space in the past, and has led some people to question the business acumen of the Council.
The Roads of National Significance (RONS) entail an investment of some $10 billion over a decade or so. One of these RONS is in the Wellington region and in essence involves having four lane roads over the entire distance between the airport and Levin. Analysis done for the New Zealand Transport Agency estimates that the benefits of the project will barely outweigh its costs.
One of the marks of a good night out is that the conversation ends up discussing life changing moments. I’ll spare you the details of my epiphanies, but suffice to say a major one happened while cycle-touring across the Spanish meseta – the arid highland plateau of the Spanish interior. Cycle-touring is a healthy, eco-friendly and (for me) life-changing form of tourism, but that doesn’t mean I am not skeptical about a National Cycleway.
For a mere $708m (or about $165 each) we all took proud ownership this week of one slightly used rail and ferry network. Add to this cheque, the money needed for track maintenance and upgrades of rolling stock and the public investment will be well in excess of $1 bn.
The cost of propping up rail over the past fifty years can probably be totted up but it would be a disheartening job. Whatever the result the message is likely to be that rail, in its present form, is not a viable business in New Zealand. There may well be a case for subsidising urban passenger rail services and it’s not the focus of this article. But it’s well past time to take a hard-nosed look at the rail freight business in this country.