So it has been confirmed: the Transmission Gully Motorway will not even come close to providing benefits that match its cost. An interesting article from the Dominion Post on it:

The cost of upgrading the coastal highway north of Wellington could have ballooned to nearly $2 billion, almost twice the cost of building Transmission Gully.

However, documents obtained by The Dominion Post through the Official Information Act show that neither project is economically viable and would never be built under old funding criteria.

Transport Minister Steven Joyce announced last month that the $1.025 billion Transmission Gully highway would be built as part of a $2.3b roading project from Levin to Wellington Airport.

The Gully was chosen over upgrading the coastal highway, which was deemed to be more expensive, prone to earthquakes and would take longer to build.

A report by New Zealand Transport Agency officials to Mr Joyce said the coastal highway could cost $1.227b to upgrade. However, that could escalate significantly to “mitigate impacts”, with the worst-case scenario costing $1.813b.

That would leave little change from the $2.3b set aside for the entire state highway upgrade from Levin to Wellington Airport.

“Transmission Gully represents a more affordable option to progress than the coastal highway upgrade,” the report said.

However, a separate Transport Agency report into the two options shows neither comes close to meeting the Government’s own benefit-cost ratio guidelines.

The Gully route has a benefit-cost ratio of 0.6, meaning the costs would significantly outweigh the benefits. The coastal highway, however, has a benefit-cost ratio of just 0.35 at best. That cost analysis was considered by the Transport Agency board when it decided in late October to give Transmission Gully the green light.

Mr Joyce said the benefit-cost ratio of the entire Levin to Wellington project was higher, taking into consideration the overall benefit to the wider community.

“You’ve got to look at it longer term,” he said. “I wouldn’t want to see us just do one part without the other part. On that basis, it stacks up OK.”

The briefing documents also found that Transmission Gully would improve amenity values at Mana, Plimmerton, Pukerua Bay and Paekakariki through reduced traffic noise and improved air quality. It would also provide a better connection to the Hutt Valley and Wairarapa.

Transmission Gully would be more resilient in the event of an earthquake, because the section of the highway that crosses the Ohariu Fault has been designed so it could be quickly reinstated.
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“The construction of the Transmission Gully route when combined with the existing coastal route would provide enhanced route security during both major and minor events,” the report said.

Green Party transport spokeswoman Sue Kedgley said the low benefit-cost ratios for both highway options offered further evidence that neither should be built.

“They are so low that really they can’t be justified. If motorways worked, Auckland would be one of the most efficient cities to get around in the world.

“All over the world, nobody is building huge motorways into cities. They have come to realise that the only solution is a mass transit system.”

While I probably agree that Transmission Gully is a better option than the coast route, it seems crazy to flush $400 million down the toilet in the way that building a motorway with a BCR of 0.6 does. I’m guessing this will set a precedent for whether the Puhoi-Wellsford “holiday highway” goes ahead.

Steven Joyce has demanded that public transport projects offer good value for money, and “stack up” in a business sense. One has to wonder why the double-standard when it comes to these massively expensive motorway projects. Furthermore, what’s the point of undertaking cost-benefit analyses when you’re just going to ignore them anyway?

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25 comments

  1. If that’s the case then I don’t see much that will stop the Puhoi to Wellsford rd, I have said before that if Steven Joyce just ignores his own advisers (transit) then what is the point of having them. We might as well save the country some money and stop paying them. How can this not be an abuse of ministerial power?

    The only advantage I can see is it sets a standard that a BCR of 0.6 is good and should be done and therefore one could argue many PT projects would now be across that line (sadly I don’t think this will change the outcome for them unless the mainstream media really start to hammer him on this on a regular basis)

  2. Someone needs to ask the question is BCR=0.6 for any project acceptable or just TG? This makes a mockery of fiscal responsibility, tho at around BCR=1 the CBD rail loop must surely now be a certainty..

  3. Yes it does make a mockery of fiscal responsibility. The problem is that Darren Hughes, the Labour spokesman for transport, is a massive fan of Transmission Gully. Which means that it ends up being only the Greens opposing it, and they come across a bit looney unfortunately.

    I don’t necessarily think that this gives us any hints about the CBD Rail Tunnel. In fact, one could say that all it tells us is that what matters is not the cost-benefit ratio of a project, but whether the Minister likes it. CBD Rail Tunnel could have a BCR of 10, but if Joyce doesn’t like it (which he doesn’t seem to) then I doubt it’ll be built while he’s transport minister.

  4. One day you read an article about how the government is throwing money away by building the gully, then the next day you read and article about how the capital connection service is at risk.

    Is surely tough time for those wanting better transport!

  5. You all talk about the CBA as if it really matters to those traveling public either local or those transiting to the South Is as if the CBA matters to them when they are stuck in traffic somewhere on the kapati Coast.
    If neither Transmission Gully or upgrading the current main highway into wellington is not cost effective, then what is the solution. I have not driven into Wellington for several years now but well remember how pathetic the road in and out of Wellington is.
    What is the solution??

  6. John – I don’t think the arguement is really about the need for the link but the priority given to the link, why when public transport projects which the benefit cost ratio calculation that is actually slanted to benefit roading projects, totally outweigh the cost benefit ratio of a roading project, (not by a small margin either), and the roading project is still given the priority of funding?

    That is the main issue, the money will gain greater benefits spent on alternative projects, so these alternative projects should be completed before we even think about it.

    Unfortunately the minister shows great bias, when really he should be focusing on fast tracking the projects with the greater wider benefits.

  7. One would surely imagine that if the road out of Wellington was terrible gridlock all the time, and a new route could “fix that”, it would show up as having pretty huge benefits in the analysis.

    Is congestion along the route an every day problem or just a holiday period problem?

  8. @John, the answer in Wellington is to improve on the excellent rail system by extension of electrification, light rail up the Te Aro Valley and to the Airport from the Wellington Station, feeder buses to train stations, better frequencies of buses and trains and a full Snapper rollout and integration…

    $2.3 billion would acheive all of that with plenty to spare…

    The MOT report from half a year or so ago IIRC stated TG would actually take LONGER to re-open in the event of an eathquake than the Coastal Route and would INCREASE congestion in Central Wellington…

  9. Of course it will increase congestion. Instead of the one highway’s worth of traffic you’ll have a highway’s worth and a motorway’s worth dumping into Wellington. They people who honestly think that traffic will shift from the old to the new route rather than expand to fill both routes need to ditch their bell bottoms and step out of the ’60s.

    1. At a briefing on the Wellington RoNS before Christmas, NZTA basically said that the BCR didn’t matter, so they wouldn’t be debating the issue.

      And as for current congestion, it is a holiday/weekend issue along the Coastal Route and north, but peak-hour congestion is Tawa-Johnsonville and in Wellington city, where there are no RoNS capacity increases slated. A question about where the induced traffic was going to go got a vague answer.

  10. I think “induced traffic” is a pretty dirty term in road engineering circles.

    I must say I kind of understand why BCRs shouldn’t be the only thing considered when analysing transport projects. The way they’re put together is very much a “reactive” process, where you’ll only get a good BCR if you’re fixing a big problem, rather than trying to be “proactive” and stop that problem happening in the first place.

    However, the thing that really annoys me is that public transport projects are being subject to incredibly strict “cost-effectiveness” tests, while these RoNS are simply bypassing that process. It’s that hypocrisy that annoys the heck out of me.

  11. Darren Hughes. I think that Labour Party deserve a huge amount of condemnation for this monstrosity which will soak up billions and destroy the fabric of inner-city Wellington.

  12. WCC’s answer to TGM should be to install congestion charging in the city. Seriously, this would be the common sense response for a city at the end of an ever widening motorway, with nowhere for the arriving cars to go. They can then use this money to build LRT through the city. But I doubt it’ll happen. Too contentious for some reason.

  13. great idea erentz, I think Wellington is the ideal first place to trial congestion charging in NZ, due to the already high number of people using PT to get to the CBD. I think it could work if people could be persuaded that any revenue would be used to improve PT services. Maybe a fare decrease (10-20% maybe) on the same day it came into effect.

  14. I would also support the congestion charging idea. It would be a fair way to retrieve the money and limit traffic into the CBD. People just drive into the CBD because they can (heading into town to pick people or things up), even though its rush hour and they shouldn’t be there. However if congestion charging was to be established, integrated ticketing would be handy!

  15. I think the idea erentz is getting at is if a congestion charge was added into the city, then transmission gully would not need to have a toll.

    One of the big issues is where the extra traffic will end up. A congestion charge in the CBD could help elevate part of this problem. This is something that a toll road cannot achieve as there will be more road space, with an alternative route which are less congested at free to use. But all this will have to work with WCC spatial plans.

    I wonder what Steven Joyce thinks about the congestion charging idea?

  16. It would be interesting to know what Joyce thinks of congestion charging. It often appeals to right-wingers as it’s all about “pricing to overcome a scarcity of a resource”. Libertyscott’s a big fan of congestion charging, for example, and he’s a nutty libertarian.

  17. Oh I know that, I’m just making the point that right-wingers tend to favour price-based or market-based solutions, which actually fits fairly well with the idea of congestion charging.

  18. Setting aside the “nutty” comment, the right answer to SH1 north of Wellington is to proceed with upgrading the existing road, except the coastal section between Paekakariki and Pukerua Bay. All the rest of it has a positive BCR.

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