Interesting article on the CBD Rail Tunnel in the NZ Herald today. A few excerpts:

Auckland has been told to meet a claimed $30 million annual funding gap for keeping its trains running before the Government will seriously consider a $2 billion inner-city railtunnel.

That is on top of $24 million Aucklanders now pay towards running the trains, against Government subsidies of about $43 million…

…The Super City’s Transport Auckland agency confirmed yesterday that the tunnel’s cost was likely to be “approximately $2 billion” – up from an early estimate of $1 billion to $1.5 billion.

Agency spokeswoman Sharon Hunter said the business case, part of a $5 million investigation commissioned by the former Auckland Regional Transport Authority and KiwiRail, should be ready by next month.

A couple of weird things here:

  1. Where on earth has this bizarre $30 million deficit emerged from?
  2. Why on earth is the Rail Tunnel business case taking so long? First it was meant to be ready in September, then October, then November and now December.

The article continues:

Mr Joyce said Auckland faced a rail operating shortfall of about $30 million for each of the next three years, as diesel trains tried to cope with rising patronage before the arrival of a $500 million electric fleet in 2013.

That includes an extra $11 million which the Government wants Auckland to pay KiwiRail in track access charges to meet maintenance and replacement costs now subsidised from Wellington.

The rest is the extra cost of running new and more frequent rail services introduced this year to cope with annual patronage growth to more than nine million passenger trips – up from 2.5 million since Britomart opened in 2003.

Auckland receives $3 million from the Government’s Transport Agency towards track charges of $5 million which it pays KiwiRail, which will rise to at least $16 million next year.

Yikes, so KiwiRail’s track access fees are going up from $5 million to at least $16 million in the space of a year! The sooner we bring the track part of KiwiRail under the umbrella of NZTA the better I think. Auckland commuters shouldn’t be required to help a glorified freight company make a profit.

Which makes me wonder, where’s NZTA is helping meeting this random deficit?

Despite an existing 60 per cent subsidy from the Transport Agency for Auckland’s rail operating costs, the rest of which are met by passengers and ratepayers, the minister said funds to cover the shortfall were not in that organisation’s budget.

“We can push them in that direction but we need Auckland to sit down and say we agree with these numbers, and we are going to fund them, and we want NZTA [the Transport Agency] to fund those [the balance].”

Oh that’s right, NZTA can’t find a few millions for rail because it’s spending billions on uneconomic motorways.

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  1. Len has to line up several hundred Aucklanders behind him and start playing hardball with Joyce and Binglish.

    Clearly they are being very obstructive and nasty. This is petty childish nasty behaviour, to be expected from these two.

  2. NZTA can’t find a few millions for rail because it’s being forced into spending billions on uneconomic motorways.

    There, fixed that for you 😉

    1. I remember in the interview on The Nation a few weeks ago SJ said that Wellington hadn’t been paying anything at all which is why things go so run down which caused all the faults over the last few years, Auckland has at least been paying something.

      Also Auckland will be paying the loan for the new EMU’s yet I believe Wellingtons were paid in full by the government. As is usual there is a case of double standards when Wellington is involved, something to do with the fact the government and all of its agencies are based there I think.

      1. Not quite nothing, but pretty close. From memory central government funded 90 or 95% of WLG’s new EMUs, whereas Auckland’s having to stump up at least half.
        You’re right, it is totally a double standard, and I certainly hope that Joyce will be instructing KR to start billing MetroRail the same rates for track access and usage as he’s requiring for Auckland. Will be a good way for National to ensure that they lose every swing seat in the region.

        1. Its costing about $1 bil to electrify Auckland, half of it is the actual infrastructure cost which the government is paying for and the other half is the trains as well as facilities to service them, that is a loan to Kiwirail which Auckland will have to pay the interest on. So while it is correct in a way that Auckland is paying half, it is not 100% correct as we will actually be paying fully for our trains and supporting facilities compared with only a fraction in Wellington

  3. “Clearly they are being very obstructive and nasty. This is petty childish nasty behaviour, to be expected from these two” – Totally agree, but i think they are deluding themslves if they think they can stop this public opinion is well behind it and Len Brown to his credit is keeping the pressure on. Let’s hope it costs them some votes in Auckland, that’s what will wake them up.

  4. It seems to me this is just plain bad politics from National, let alone bad policy. It is going to be a piece of cake for Len Brown – and an ideal issue to unite the new SuperCity around – to give the government an object lesson in the awesome power of provincialism in New Zealand.

    If Wellington is looking for a precedent to re-assert control of Auckland, this is a poor issue to do it on, because public transport is seen as something whose time has come in Auckland.

    1. give the government an object lesson in the awesome power of provincialism in New Zealand

      The problem, Tom, is that provincialism is a much greater force in the boonies of the Mainland than it ever will be in Auckland. Aucklanders just can’t get themselves worked up about funding going to other places in NZ, whereas the rest of NZ is more than capable of getting ridiculously shirty about funding going to Auckland. Look at the responses from the South Island mayors to the rise of Megatropolis, for example.
      Whether or not it’s fair, or equitable, or even something whose time has come, the rest of the country gets very, very uppity if money is publicly allocated to expensive projects in Auckland. B’linglish et al mostly represent “the rest of the country”, especially B’linglish who is the prototypical Southern Man (except for his never having had a “real job”, and his tertiary education), what with his multi-generational farming roots and solid conservative family appearance. And, sadly, there’re more people in the provinces than in Auckland, which means that their provincialism can easily outweigh ours, if we ever get of the mind to try and exercise it.

    2. give the government an object lesson in the awesome power of provincialism in New Zealand

      But, Tom, which provinces are more, well, provincial? Aucklanders just don’t get worked up about money being spent elsewhere, whereas money being spent on Auckland gets lots of people very riled. Look at the public reaction from the South Island mayors to the rise of Megatropolis, and suggestions that Auckland might actually get a fair suck at the sav for funding from central government.
      Forget not, too, that B’linglish represents everything that is mean-spirited about provincial mindsets in relation to Auckland, and represents the prototypical provincial Southern Man (ignoring his never having had a “real job”, and his extensive tertiary education). His electoral mandate is to look after Dipton farmers, not after Aucklanders, and even his position as Minister of I’m Not Financing That! hasn’t changed how he views spending on Auckland.

  5. With the track access charges the question I have is, how much does it cost to maintain the Auckland network? After the electrification the network should surely be up to an almost brand new standard and is it really going to cost $15+ mil to keep it maintained to that level.

    My understanding is that effectively the same level of maintenance is needed to support both freight and passenger rail operations. If that is the case then how much is Kiwirail freight paying towards the costs and if it is not the same then Auckland does seem to be being used to subsidise freight operations.

    (upgrades like signalling and electrification are obviously funded separately)

  6. They keep crowing that Auckland should pay. They should be slapped about their heads for that comment – Auckland WAS willing to pay. Then they stopped the regional fuel tax. Hypocrites.

  7. If we are having to pay for these higher charges for track access and to run the diesel trains, can we charge Kiwirail when they break down?

    Another thing, it is quite likely that SJ has seen the outcome or a draft of the CBD tunnel business case. Regardless of the cost if this had a bad BCR then we can be guaranteed that he would have made an announcement by now about not funding it. The fact he hasn’t is positive in itself. Also is the $2 bil the total cost to construct it after the land that is required to build it is then sold off again?

  8. I think that Kiwirail does have a valid point (if you accept that they should be run like a separate business unit which I don’t) that they should be reimbursed for the cost of maintaining tracks in urban areas.

    But that’s a good question as to whether they are just pushing all the costs of also maintaining the tracks for freight onto Auckland Council.

    1. That is a valid point, but a 320% increase in a year seems a bit, shall we say, extreme… Can’t blame it all on GST…

      I’d also expect the NZTA to stump up at least 50% as they do for or local roads or 100% for SHways…

  9. I have always thought that if I was steven Joyce and could control the timing of it’s release I would drop the business case on the 22nd of December just as everybody in the country goes on holiday. But then, another explanation for why the deadline keeps getting pushed back is that maybe ARTA/Kiwirail have just been busy with the electrification, EMUs etc while at the same time having to deal with the amalgamation process which has presumably been both disruptive and demotivating for a lot of key staff.

  10. Years ago I used to be the business analyst for Tranz Metro. Even in the days when the Auckland suburban railway was directly part of Kiwirail, there was an internal transfer in the accounts which provided a virtual track access charge, though I don’t recall how high it was. This was also the case in Wellington when I left (2005), and it was done to give us a more realistic idea of how much money the business actually made.

    The problem, though, is that track maintenance costs are more or less fixed w.r.t the weight of traffic the line carries. If you are going to run a train, you need to maintain a line to a given standard, which is generally higher for passenger than for freight operation. But once that is done, the cost base is more or less fixed, unless you have very heavy axle loads, and you generally only get that on the coal traffics. To answer Lucy’s point, my guess is that the costs of the network which are truly marginal to the freight business, are quite small. However, signalling staff costs are more or less proportional to the number of trains run, and are generally allocated by train-hour.

    But the $16m a year seems far too high, and – having worked for Kiwirail – I would not be surprised if there was something funny going on in the accounts. Since Kiwirail is publicly-owned, there should be no issue in publishing the numbers.

    Another good strategy would be to point out the number of good road projects which are being crowded out because of the emphasis on the RoNS. Seal extensions in rural areas, and the general standard of road maintenance – because it does affect what it costs you to run your car – are both a case in point.

    1. On reflection you’d have to OIA (and LGOIA) both the NZTA and the Auckland Council and ask how much they spent, not Kiwirail as they’d use commercial sensitivity protections in the OIA… I’m not sure how you’d find out the passenger/freight maintanance split…

      Not sure if draft reports can be OIA’d, I don’t see why not…

  11. So Auckland has to find $30m pa for railways, but strangely not for motorways…

    Railways myst not be allowed to cost the taxpayer money. But motorways can cost billions to build and maintain but mysteriously are not required to break even.

  12. This is obviously a CBD tunnel delaying tac-tick. I think the funding gap is a pathetic excuse. The government has allocated billions of dollars on motorway construction designed to make our country even more car dependant than it really is. The public transport projects that have occured in recent times should have happened years ago. Its obvious and not a surprise that National don’t want to commit funding to this project, but all that we need to keep doing is applying the pressure on the government to come up with the funding and then maybe there is some hope of the CBD construction starting in the near future.

    The good thing about this is that its on the media, more people are starting to see this now and hopefully this will enable the project to start soon. My only concern about the project being delayed is that Britomart will struggle to cope, after electrification and when the new Manukau railway station is up an running as the existing railway tunnel is only 2 tracks wide and should have been built wider at the time. Britomart is struggling now god knows how it will cope in the future if nothing is being done about it now.

    Time for change I say, get the project built now, and keep up the pressure guys!!!!

    1. BD, if you think about it overflowing trains and an over-capacity Britomart is perhaps the strongest argument in favour of the CBD Rail Tunnel. So the patronage boost that electrification, integrated ticketing and so forth will provide will actually help the cause.

  13. Not such a coincidence this announcement immediately following English’s admission yesterday of large shortfall in tax take. Last (grudging) cab on the rank first to go. No word on deferring spend on the holiday highway though unless I’ve missed something. We’ve become inured to delaying tactics. I just hope the new council is strong and bolshy enough to stand up to it.
    1. All support to Len and the new council to push forward, whatever it takes
    2. Pricing and funding really should be transparent and even-handed across the board. There is a suspicion of monopoly advantage/pricing and/or manipulation of costs and margins to favoured projects. I support getting as much data as possible via OIA to find the molehills and get some profile.
    3. Offers opportunities to opposition parties to pick up votes here – in time for the next general election. Auckland transport was a key plank in Len’s favour and could be translated up a notch.

  14. Are NZTA going to charge Aucklanders mantainence costs for the motorways? If so do we need to pay the motorway funding gaps before they can start Waterview?

  15. I’m advised we should not refer to the Puhoi-Wellsford construction as the Holiday Highway. Apparently the term used now is Puford.

  16. why does this have to be a competition between Auckland and the rest of the country? aren’t we in the same country? As i’ve posted earlier, is there another example where there is such a primate city economy (where one city is so much larger than the next largest) but is not the capital (as opposed to cities like Dublin, Helsinki etc). Someone commented that Australia was the same – but its not. it has several large cities of not too dis-similar size. and even at state level, although each state has a primate city in state terms, again that large city is the state capital and so gets the attention it deserves.
    I’m wondering if there is another example of a country (not state) where the largest city by a country mile is not the capital and is therefore treated so ridiculously by the rest of the country.

    1. I’m wondering if there is another example of a country (not state) where the largest city by a country mile is not the capital and is therefore treated so ridiculously by the rest of the country.

      Here’s one: the US. Washington D.C. isn’t even in the top 10, whereas at least Wellington makes it into our top 5. And that’s a city that really has problems, in part because it’s not part of a state and thus has no empowerment to pass its own revenue legislation.

  17. Just about every federation has a capital that isn’t it’s primate city, for example the USA, Australia, Canada, Brazil, the UAE, South Africa, India, Switzerland, Pakistan.
    Plus there are plenty of others that, like New Zealand, moved their capital away from the main centre for political or logistic reasons e.g: Turkey, Chile, Bolivia, Equador, Vietnam, Burma, Morocco.
    There are also a few like Scotland and China where the capital is still based in the old monarchal seat rather then in the largest modern city.

  18. Good try, but not the same problem as Auckland faces. the US is not a primate city economy, it has a number of very large cities of not too dis-similar size. Whilst this might create problems for Washington, the big cities do not suffer from resource allocation, also helped by the state / federal system.
    I’m looking for a relevant example of a country with just ONE city way bigger than the rest, but not the capital. Countries with one city way larger than the next include Ireland, Sweden, Thailand, Greece, Denmark, Finland, Norway etc., but they are all capital cities.
    One i have found is Nigeria – Abuja is the capital (700k) but Lagos has 7.9 million. But I’m not sure its an example to look to for ideas in terms of government resource allocation!

  19. It all comes down to this. The US Government wants us using Buses, not trains. Why? Steel, Rubber & Oil.
    Remember, Labour was in power for 9 years afterall

  20. Sting, wouldn’t it apply at state level in the US though?

    For instance I’m pretty sure I’ve read on Streetsblog the issues of funding for New York Subways getting nicked by the state capital in Albany.

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