Breaking news courtesy of the CBD rail tunnel has a positive cost-benefit ratio, ranging from 1.1 at the most stringent criteria, through to an amazing 6.6 when including Wider Economic Benefits and a low discount rate.

It seems that much of these results are in line with what was expected, with large direct benefits plus huge secondary benefits related to land use and development.  Also interesting to note the conclusion that without the tunnel the CBD will need multiple bus lanes on most road leading into the city, the same conclusion we reached not long ago.

EDIT: The buisiness case is available here:

Auckland Mayor Len Brown says a report on a proposed $2 billion rail tunnel through central Auckland shows the business case for it is “compelling”.

The tunnel, which would link Britomart with Mt Eden station and create an inner-city rail loop, was one of Mr Brown’s primary election campaigning points and the business case was released today.

The report says that the standard benefit-cost ratio (BCR) for the project is equal or higher than that of two of the Government’s Roads of National Significance.

Mr Brown said the tunnel was vital as it would turn Britomart from a dead-end station to a through station, thus making it possible to run many more trains in Auckland.

“The link would double the number of trains that can go through Britomart, let Aucklanders get around the region more easily, and reduce congestion on our roads. The report can’t be ignored,” Mr Brown said.

“The potential urban redevelopment and additional growth derived from investment in this infrastructure would make the project transformational not just for Auckland, but for New Zealand as a whole.”

The tunnel would include new stations near Aotea Square (which could become busier than Britomart), Karangahape Road and Newton.

Mr Brown said the report suggests there is a strong case for proceeding immediately with protecting the route, funding the protection process and further investigation of funding the tunnel.

The report suggests that without the link, the central business district would require twin or triple bus lanes in both directions on most road corridors, Mr Brown said.

“The rail link is quite possibly the most critical element in Auckland’s transformation into a globally competitive urban centre, and this report confirms that.”

The standard BCR of 1.1, worked out on the 8 percent discount rate, is higher than the 0.8 BCR for the proposed Puhoi-Wellsford motorway and equal to that for the Wellington northern corridor, which includes Transmission Gully.

At the 6 percent discount rate the BCR is 1.6, and at the 4 percent discount rate the BCR is 2.4.

With wider economic transformation benefits, such as improved land use, urban regeneration and transformation and economic development, the BCR at the 8 percent rate is 3.5. It is 4.7 at the 6 percent discount rate and 6.6 at the 4 percent discount rate.

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  1. Hopefully this is enough to finally get the government serious about this critical issue. It really irks me that steven joyce is letting his personal preference for his holiday highway get in the way of making a decision on what to fund out of puhoi to wellsford or the CBD tunnel, and refusing to accept that the puhoi highway has no actual benefits to the country whereas this project has such massive potentials. I just wish construction would start tomorrow.

    1. There is no linkage between the two projects. If one is scrapped then the money won’t automatically be allocated to the other. On the other hand, government could fund both if they wanted to. There is a myth going around that there is a fixed pot of money for transport in the top end of the North Island. Government budgeting doesn’t work that way… If P2W is scrapped then the budget allocation will go back in to the consolidated fund to be used for whatever priority the government determines, or to reduce borrowing.

      As far as I can see the holdups in getting on with the tunnel are due to deciding to what extent the Super City will pay for it. The Council would obviously prefer the Government to pay for most of it. The Government disagrees. The Council has the ability to fund the tunnel itself and that would remove any need for Government involvement or approval. But the Council currently has higher priorities, such as investing in Australian airports and Auckland parking buildings.

      1. They are both transport infrastructure projects, they are both being considered for commencement and completion over a similar period, they both cost about the same, they both have an effect on the Auckland region and both have had project reports released recently. This is not to say that only one can or will be done or that funding will come from the same source but it suggests they are linked, at least politically.

        There is not a fixed pot of money but neither is there an unlimited pot — if the govt can be convinced to drop expensive, uneconomic roading projects, that frees up money to go elsewhere and a badly needed, strongly supported project like this one would be a good candidate.

      2. There’s clearly a linkage between the two projects – in that we quite probably can’t support funding both in the next 10 years. You forget that the country’s books aren’t in the best shape, it’s not like we can afford to spend masses of money on projects that don’t make economic sense. If you read the business case you’ll see that dedicating 2% of the entire rates take will only pay for a portion of the project.

  2. It’s a good case and a good project for a variety of reasons. But I don’t understand “Without the loop, he said Britomart would reach capacity in three years and the bus routes within a decade”. Which presumably would require “twin or triple bus lanes in both directions on most road corridors”. These aren’t required at the moment or the council would be setting them up at minimal cost. Are we really expecting to increase the amount of business being done in the CBD over the next 10 years to such an extent that we could exhaust the CBDs ability to manage bus traffic except by devoting every lane of every road to buses? I just don’t see that amount of growth around town.

    1. The short answer is yes Obi, massive growth is predicted for teh CBD and ten years of growth would exhaust the existing bus routes into the CBD. Further growth would require increased conversion of general traffic capacity to bus lanes. Do note that the comment about twin or triple bus lanes refers to some point after the next ten years.

      The council doesn’t need to be setting them up now because they have around ten years of growth left in the ones they have just set up (i.e. the new Central Connector and Fanshawe St bus lanes).

      See here for my analysis on the topic:

  3. Holy shit, BCR of 6.6 when including Wider Economic Benefits and a low discount rate. F*** Me!

    Compare the Holiday highway BCR of 0.8 when including Wider Economic Benefits and a low discount rate and I know were I want my money invested!

    Someone, put Stephen down!

  4. It is only a natural thing that Steven Joyce and Bill English get fully behind this project given this report, and the fact Auckland wants it. It would be unnatural not to support it given these results.

  5. Pretty bad timing for the release of the report given the unforeseen events of today at the Pike River mine. Hopefully it gets the coverage it deserves.

    1. There wasn’t much choice about the timing. The business case will be considered at the Transport Committee meeting tomorrow which is open to the public so it had to be today.

      1. I realise that, I’m just saying it is bad luck from a media point of view — news bulletins and papers are going to be full of more tragic happening s than this over the next few days.

  6. After this report, National has to support this. I doubt National would want to lose the votes of the biggest city in NZ. To not support it would be hugely damaging to their Auckland vote.

  7. I wonder how long it will be till the government comment? They would have known what it was and that it was coming so should had have something ready. Skimming through the report it seems clear much of it was targeted at overcoming government objections (which is a good thing)

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