Tuesday, September 15, 2009

Government's Snail-Trail Folly

Someone in the tourism industry needs to step-up and state the obvious

We seem to be the only ones that are highly skeptical about the gushing reporting in the mainstream media about the nation's cycleway project.

Don't get us wrong - we love cycling. We love the individualism, the fitness aspect and connecting with some fantastic scenery. We may even have a secret fascination with lycra ;-) However, the initial capital cost, the inflated demand predictions, optimistic economic multipliers and the ongoing funding of maintaining a proposed network of cycle tracks simply do not stack up.

It's one thing to accept that the government provides funding for generic offshore tourism promotion, but it is a whole new ball game when the government starts picking winners and diverts public resource into speculative niche tourism markets.

Here's our predictions.
  • Less than half of the government's $50 million budget will be converted into actual cycle track.
  • The costs associated with building and converting existing routes into cycle tracks will blow out by at least 25%.
  • A further substantial government injection of funds will be needed to complete the proposed network.
  • Ongoing maintenance costs are largely unknown, however could be anywhere from $5,000 - $10,000 per km.
  • Demand will be a fraction of what is predicted.
  • Cost recovery from users will be minimal.
  • Economic activity by associated tourism ventures that will be naively lured to service cycle tracks will either be unsustainable or modest at best.
  • When dubious benefits from the cycleway are finally realised there will be a call for further public money to be "invested" into promoting the cycleway.
The idea of zero emission tourists compelled to happily peddle their way around a network of publicly funded cycleways would seem to appeal with Kiwis politically correct idealism.

In reality the majority of tourists enjoy the freedom of exploring our slice of paradise by a fossil fuel burning vehicle and interacting with privately owned tourism businesses.

For the sake of our tourism industry, it is imeritive that these Kiwi businesses are not restricted with the impost of wasteful government spending.

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