Brad Olsen: Infometrics Principal Economist on our roads degrading as repair costs rise

Road maintenance is becoming both more expensive, and more urgent. 

A Government briefing document —released to our newsroom under the Official Information Act— shows road repair costs have gone up 50% in six years. 

Drainage renewal costs have gone up 350%. 

Infometrics Principal Economist Brad Olsen told Mike Hosking costs have been rising at the same time roads have been degrading. 

He says weather in the past couple of years has wrecked the roading system even more. 

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Episode Transcript

Speaker 1 (00:00):
Like everything else turns out, and new numbers show the
cost of repairing our roads is rising. In the past
six years, one specific surface has gone up two hundred
thousand dollars gone up two hundred thousand up. So for
the same kilometers stretcher broade did cost f one hundred
and twenty four thousand, now it costs six hundred and twelve.
These were rents a TA figures Infometric's principle economist Brad
Olson was in bold in this working as well as
bred morning.

Speaker 2 (00:19):
To you, good morning.

Speaker 1 (00:21):
How much of its pure inflation versus you know, just
put the price up because we can.

Speaker 2 (00:27):
I think there's a few things going on. I mean,
you're right, there is some pure inflation going on there.
You look at you know, bitchmand price's price of labor,
you know, getting people to do all this work, cones
and everything else. My can have increased. But I think
as well, you look at that figure you just closed
for the sealed road pavement rehabilitation, which is a bit
of a mouthful. I think what that also highlights is

(00:47):
that that is almost like a full reconstruction, because for
resealing it's gone up that sort of not by as
much it's sort of relatively stable in the numbers, but
that rehabilitation that's basically where you're almost having to redo
the roadboo gotten to such a station. I think that
highlights that over time there hasn't sort of been enough
money in the transport budget that hasn't gone into the
right areas. Roads have degraded, and therefore when you have

(01:09):
to go and redo them, that's sort of in a
worse state, so you have to almost restart from scratch. Plus,
of course we've had much much worse whether the last
couple of years that have sort of wrecked the roading
network even more so. I think all of this is
reflective of the fact that you know, not only is
building construction infrastructure work a whole lot more expensive, there's
more of it to do, and often we're starting for

(01:31):
a worse state, which often increases the cost. So there's
sort of a doubling, trippling up effect that's coming through
here that's making everything more expensively.

Speaker 1 (01:38):
Is there a transport funding problem with politics? Is there
too much mucking around and that is that part of
the equation or not?

Speaker 2 (01:46):
Oh, I definitely don't think it helps. I mean, there's
two things that I think frustrate a lot of people.
One is that, you know, every three years we go
through the planning cycle from ZPA and they sort of
put together watch money they think needs to go on
to certain areas, and often you do have some pretty
big chopping and changing. I mean, I've looked at the
National and Transport Fund for the last sort of decade

(02:06):
or so, and you know there's every time we have
to sort of swap out one activity class swap and
another one figure out how they sort of match up
over time. So all of that does add costs and complication.
The greater worry, I think is that you for the
bigger projects, when politicians come in and you know, they
decide they want to take a different track, they often
will you know, pause on a whole bunch of work

(02:28):
while they get their other projects ready to go now.
Because those new projects aren't ready immediately. It takes you know,
a year to buy the land plan it all out,
design its scope at speck at all that before you
get shovels in the ground. It means that you often
have this sort of big hole in infrastructure activity at
the start of every government term. And it happens every
time there's a change of government. But I think more

(02:49):
broadly that the challenge here Wright is that we've got
a lot of infrastructure that we need to continue to
progress with some of the cost increases that have come through.
Even if Wetahi's saying, look, we've been providing a huge
bunch more money into the transport list, so that might
be true, you're getting listening for bucks, you're actually probably
doing less actual volume work and paying more for it.
That's the challenge that we continue to get bitten on

(03:11):
price and cost escalation, which means we've got to be
a lot smarter with how much infrastructure we're doing what's
the most urgent and right work, because otherwise we're going
to continue to see those numbers go up.

Speaker 1 (03:21):
Stop it, Brad, you're making too much sense. Bred Olsen
Infometrics principal economists with us this morning. For more from
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