Yes, the benefit to cost ratio has come back with a negative return as demonstrated in page 8 of the NZTA project summary statement (hat tip: LucyJH):

A BCR of 0.8 meaning at a cost of $2 billion dollars it will return $1.6 billion to the NZ economy. I have to say even this I find this highly dubious and think some very creative accounting has gone into the calculation, I’m looking forward to seeing a breakdown. Remember both the USA and the UK, whose BCR systems ours was based on, have changed the way they calculate BCR making less favourable to roads to reflect reality, we haven’t and this project still returns a negative BCR, makes you wonder when the press and Darren Hughes are going to wake up, doesn’t it?

The report also talks about using the new infrastructure to allow development to maximise returns on the investment, if that isn’t code word for sprawl I don’t know what is. If this is allowed to continue National can quit calling itself the party of economic sense and change it’s name to the “We Let Steven Joyce Destroy NZ’s Wealth Party”. As we’ve seen with the approval of the Transmission Gully project he isn’t afraid to write $1.1 billion dollars out of the NZ economy with one stroke of a pen, what is a paltry $400 million dollars compared to that?

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  1. Where is the official BCR for the CBD Tunnel, if we had that right now it would be become obvious to the public what a stupid option building this road actually is. Instead it we won’t see it for many months and by then it will be to late as everyone will have forgotten this road so it will be easier for the government to fob off.

  2. I think the report is hilarious, “the BCR is 0.8 but if we just change it to something that favours roads just look at what happens”… Kind of like making plans in Wonderland… CHANGE PLACES..!

  3. The BCR for the CBD Rail Tunnel is taking forever to formulate, just like anything to do with public transport here. ARTA’s 2009 “Auckland Transport Plan” suggested that the CBD Rail Tunnel would have secondary economic benefits alone to the Auckland CBD of around $2.2 billion. Add in all the other types of benefits that NZTA’s overly complex system measures and it’s hard to see anything less that 2.0.

  4. Do they usually include the 4% and 6% discount rates to make the BCR look prettier? The text seems to imply that 8% is too high. Of course the CBD rail tunnel would look even better at 4% or 6% too.

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