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Economists discuss the impact of transport in cities

Two economists recently addressed a seminar on urban transport organised by Auckland Transport and hosted by Ernst and Young.    

International transport economist Paul Buchanan told Auckland businesses that the development of rail in modern successful cities is not so much about transport as it is about economic growth.

He pointed out that more than 50% of the world's population lived in cities and this would only increase. He said how cities dealt with that growth was the key to their future and  transport had a key role to play.

Paul Buchanan

In his presentation, Mr Buchanan told Auckland businesses that road and rail had very different effects; roads created low density sprawling development while rail resulted in high density development around stations. Rail provided very large capacity to a single point  which was required to grow city centres and was permanent which removed some of the risks for property developers and investors. 

He added that rail let cities cater for their transport demands without the centre being dominated by traffic. Mr Buchanan explained that greater accessibility meant denser employment growth and cities grew because of the benefits of density, larger employers needing cities to provide labour and economies of scale. 

Paul Buchanan has considerable experience in the planning, economic and financial appraisal of public and private sector transport investments and policies with particular expertise in the appraisal of urban rail systems. He is currently working on the Transport in Cities project aimed at informing long term transport strategies for cities taking account of links between transport, planning, economic development and environmental impacts.

Auckland economist John Williamson told the seminar that the concentration of high value services and the knowledge economy is driving city growth rather than manufacturing and the trend toward a service economy aligns with other developed countries.   

 John Williamson

In his slides, he said this change is more dominant in Auckland where a quarter of all employment is in the advanced business services sector, 50% more than the rest of New Zealand, and the vast majority is in the city centre. 

Productivity per person was up to 50% higher in Auckland than other regions and 20% higher in the city centre than the rest of Auckland. He said Auckland was not yet achieving significant intensification of the city centre and this would be crucial to raising productivity. 

Mr Williamson said private vehicle use was declining and improving transport to move people rather than goods was the key to Auckland's future economic growth.