Counting cost of forestry

‘That cannot come from ratepayers’ — Wharehinga

‘That cannot come from ratepayers’ — Wharehinga

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A review of revenue and financing policy might not show the forestry industry in a good light, Gisborne District Council was told.

Councillor Brian Wilson was speaking to a report on road maintenance costs and affordable funding prepared for the council by Maven Consulting Ltd. The report will be used to inform a revenue and financing policy review under way.

Mr Wilson likened the situation to when the council got regional roading funds for the “wall of wood” when the late Jim Anderton was the Minister of regional development.

“To me this seems to be the same scenario,” he said. “We are getting a large amount of money to fix up our roads.

“But in the long term we are going to be faced with exactly the same problem that we have had since we got that funding all those years ago. We are going to have the huge cost in maintaining those roads.

“We are going to have to be a bit more on to it and make sure that we have ongoing extra funding all the way through for the next 15 years so that we don’t fix up the roads, get them up to a good standard, everybody is happy, then slowly over time we cannot maintain them.”

The other interesting thing was that the report was investigating how efficient the forestry industry was in helping to develop the region, what it generated in income, jobs and so on and the associated costs.

“That is going to be a tough one because I suspect that it is not going to show forestry in a tremendously good light.

“The cost of having forestry in our region is going to outweigh the benefits of it. Of course that is going to be very controversial.

“Of course there are more things than just creating GDP, there are the jobs created and the flow-on effect.

If more funding was needed that would show if the ratepayers could afford it.

At least the council would be able to go to central government to say, for the forestry industry to carry on, “we can’t have ratepayers paying the maintenance of our roads long term. We need help from central government”.

Josh Wharehinga said some of the roads that were part of the network were never established to take heavy traffic. The money for that needed to come out of the central pot associated with road user charges.

“That cannot come from ratepayers,” he said.

“We have a vast roading network and a very small population that cannot sustain the running of it.”

Pat Seymour said who paid for the roads was always controversial.

The council needed to be clear, the ratepayer was not paying all the maintenance, the government share was 68 percent and was going up.

The report did talk about the economic benefits of forestry.

She was aware the forestry industry would really like to work with the council and felt shut out.

“We should encourage them to be in there,” she said.

“We need to make use of the offer they made to us to be a part of the discussion and pay a fair sum to participate in the cost of roading maintenance.”

Chief executive Nedine Thatcher Swann said the information from the report had been sent to the industry. This was the first step of a journey the council needed to go on, “so let’s talk about it.”

Meredith Akuhata-Brown said there had to be a massive discussion about the impact of this huge industry. That should have been held 30 years ago when it was identified that forestry would be so huge in this district.

The impacts also included social, emotional and spiritual aspects. More people were asking for these to be noted. The impacts were going to continue.

Bill Burdett said this was the first opportunity the council had to look at the value of forestry. With the “buckets of money” that were coming it was time to do that.

This was an insightful report, said Amber Dunn.

The two big contributors to the local economy were agriculture and horticulture. If forestry had an impact on those the district would go backward.

A review of revenue and financing policy might not show the forestry industry in a good light, Gisborne District Council was told.

Councillor Brian Wilson was speaking to a report on road maintenance costs and affordable funding prepared for the council by Maven Consulting Ltd. The report will be used to inform a revenue and financing policy review under way.

Mr Wilson likened the situation to when the council got regional roading funds for the “wall of wood” when the late Jim Anderton was the Minister of regional development.

“To me this seems to be the same scenario,” he said. “We are getting a large amount of money to fix up our roads.

“But in the long term we are going to be faced with exactly the same problem that we have had since we got that funding all those years ago. We are going to have the huge cost in maintaining those roads.

“We are going to have to be a bit more on to it and make sure that we have ongoing extra funding all the way through for the next 15 years so that we don’t fix up the roads, get them up to a good standard, everybody is happy, then slowly over time we cannot maintain them.”

The other interesting thing was that the report was investigating how efficient the forestry industry was in helping to develop the region, what it generated in income, jobs and so on and the associated costs.

“That is going to be a tough one because I suspect that it is not going to show forestry in a tremendously good light.

“The cost of having forestry in our region is going to outweigh the benefits of it. Of course that is going to be very controversial.

“Of course there are more things than just creating GDP, there are the jobs created and the flow-on effect.

If more funding was needed that would show if the ratepayers could afford it.

At least the council would be able to go to central government to say, for the forestry industry to carry on, “we can’t have ratepayers paying the maintenance of our roads long term. We need help from central government”.

Josh Wharehinga said some of the roads that were part of the network were never established to take heavy traffic. The money for that needed to come out of the central pot associated with road user charges.

“That cannot come from ratepayers,” he said.

“We have a vast roading network and a very small population that cannot sustain the running of it.”

Pat Seymour said who paid for the roads was always controversial.

The council needed to be clear, the ratepayer was not paying all the maintenance, the government share was 68 percent and was going up.

The report did talk about the economic benefits of forestry.

She was aware the forestry industry would really like to work with the council and felt shut out.

“We should encourage them to be in there,” she said.

“We need to make use of the offer they made to us to be a part of the discussion and pay a fair sum to participate in the cost of roading maintenance.”

Chief executive Nedine Thatcher Swann said the information from the report had been sent to the industry. This was the first step of a journey the council needed to go on, “so let’s talk about it.”

Meredith Akuhata-Brown said there had to be a massive discussion about the impact of this huge industry. That should have been held 30 years ago when it was identified that forestry would be so huge in this district.

The impacts also included social, emotional and spiritual aspects. More people were asking for these to be noted. The impacts were going to continue.

Bill Burdett said this was the first opportunity the council had to look at the value of forestry. With the “buckets of money” that were coming it was time to do that.

This was an insightful report, said Amber Dunn.

The two big contributors to the local economy were agriculture and horticulture. If forestry had an impact on those the district would go backward.

Logging trucks do damage

Heavy vehicles are the reason for the significant maintenance work required on Gisborne District Council’s roads, says a report from Maven Consulting.

The consulting company had been asked to review road maintenance costs and equitable funding.

Its report was before the council at last week’s meeting.

Council strategic planning manager Joanna Noble told the meeting the consultants could not draw a firm view on equitability due to the difficulties in assessing the wider benefits of the forestry industry to ratepayers throughout the region.

The Maven report says the wear and tear damage is largely attributable to an increase in forestry activity and logging truck volumes on known forestry routes.

It says 67 percent of these routes are access and low volume roads which make up 85 percent of the local road network.

Other general traffic does not appear to have an impact on the pavement and performance of the road to the same degree as logging trucks.

Based solely on revenue versus expenditure it appears that urban ratepayers are subsidising the rural network, says the report.

They contribute 48 percent of the local roading share but only 25 percent of the expenditure is on urban roads.

However this does not account for the benefits that urban ratepayers accrue from the rural network and industries it supports, says the Maven report.

In order to accurately determine the equitability of the current funding model, a detailed economic analysis of the benefits to the region is required.

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winston moreton - 6 months ago
Three pages and an editorial about HPMV log-truck damage and road deaths yet not a single peep out of the main beneficiary. The sacred cow (ECT) controls Gisborne Port which is making profits in the millions and gearing up to double its load-out rate with a second log-ship berth. Not a single word about the readily fixable rail link to Wairoa and Napier.

Owen Springford, Christchurch - 6 months ago
Some approximate numbers.
Road user charges (RUC) for a log truck are $347/1000km and $206/1000km for a trailer. Empty trailers are normally carried on the truck. The average RUC is therefore $450/1000km or $0.45/km. A truck carries 28 tonnes of logs so the RUC amount to $0.02/tonne km.
For a load 100km from the port this is a round journey of 200km so the RUC to get one tonne of logs to port is $3.21/tonne.
The port is currently handling around 3 million tonnes of log/year so the RUCs generated are around $9.6m/year.
The GDC roading plan is for expenditure of around $24m/year so forestry RUCs cover 40 percent of that amount.
The problem for the GDC is prying all of that money out of the sticky fingers of the NZTA.

Derek, Bangor - 6 months ago
You can't just target the forestry companies for the damage to the roads. Transport trucks hauling goods and moving machinery weigh just as much if not more most times, and there are lots more of them travelling through our state. Our state also feels the need to waste time filling pot holes before the snows have ended, so the ploughs just rip up and damage more of what they did such a great job doing. This all sounds like a stab at the forestry industry more than a concern for upkeep of roads.

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