My understanding is that the review of the CBD rail tunnel project is to be released today by the Ministry of Transport. The key question is whether the Minister will allow KiwiRail to proceed with the designation protecting the tunnel’s route, with Auckland Council paying for that work at this point.

However, there will also be a lot of interest in the results of the business case review itself, and whether any agreement has been reached between the Council and central government on the project’s merit. My understanding here is that views are still very divergent, with the Ministry of Transport’s supposedly neutral review being highly politicised. Little agreement on the transportation and economic benefits of the project seems to have been reached between the parties.

A docment anonymously sent to me a few months ago indicated that much of the Ministry of Transport’s critique of the project’s transport benefits was based on the assumption that the city centre can handle 58,000 cars entering it at peak times. This is obviously nonsense, particularly as the City Centre Masterplan will reduce road capacity. I look forward to seeing if this document has been updated.

I have a pretty busy day so would appreciate it if the comments can add links and further detail once the information is released.


Government Media Release is here. Pretty much as expected – they have torn the business case to shreds wherever possible. The full documentation is here, with appendices here.

It’s particularly interesting to see how divergent the Council and Government’s views are on major things like the level of transportation benefits and wider economic benefits.

Here’s the Council’s media release:

Auckland Rail Link on track after business case review

The Mayor has announced the next steps in the construction of the Auckland Rail Link after an independent review of the business case for the project by Auckland Council and Auckland Transport concluded it would have transformative benefits to the region.

The review has been carried out in conjunction with a number of independent internationally recognised consultants and finds that the project would deliver overall benefits exceeding overall costs with the benefit cost ratio ranging from 1.1 to 2.3 (including wider economic benefits).

Auckland Council, Auckland Transport and our independent advisors are strongly of the view that the overall evaluation numbers are sufficiently robust to justify the immediate commencement of the designation process for the route.

The process needs to commence as soon as possible to minimise the potential for any cost increases or project delays.

In addition to progressing the designations, the Auckland Council needs to immediately commence the process to secure and protect the route of the Rail Link. This work is being funded in the 2011/2012 Annual Plan.

The Mayor says he will be proposing funding to commence the acquisition of properties necessary to make this project a reality in the draft Long Term Plan.

”The need for the tunnel is now urgent,” says Len Brown “Within two years most of the useable train paths in and out of Britomart will be in use, providing virtually no room to add future services at a time when public transport patronage is going through the roof.”

“The rail tunnel will unlock unused capacity across the whole rail network,” says Len Brown. “It will double the number of trains that can go through Britomart, let Aucklanders and freight more move around the region more easily, and reduce congestion on our roads.

The rail tunnel would include three stations at key locations to ensure most of the inner city is no further than 500 metres from any station and would mean more and faster services out to west and south Auckland..

“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 review was prepared with the assistance of the following international experts:
• PricewaterhouseCoopers
• Parsons Brinkerhoff
• John Bolland Consulting
• M.E Market Economics
• Beca
• Ascari
• UC Berkeley Transportation Centre

The business case review says this about Auckland Transport & Auckland Council’s views on the project’s transport benefits:

Auckland Council and Auckland Transport note that the Review has identified and corrected issues with the way that the transport benefits were estimated in the Business Case. They consider that, combined with a number of other initiatives not included in the Business Case, the benefits would be significantly greater than the Review concludes.

Towards the end of the Review, Auckland Council and Auckland Transport presented a new policy case which estimates transport benefits between $1.2 and $1.4 billion.

The Review‘s purpose was to assess the Business Case and there was insufficient time to consider the policy case as it was presented while the final report was being developed. Central government agencies note that it may make sense to apply some of the changes set out in the policy case, such as more park and rides, and reconfigured bus routes, to the future electrified network as well as the CCRL. This issue would need to be explored and clarified in any future business case.

That’s massively different to the government’s transport benefits (of around $300 odd million). There’s also huge disagreement over the wider economic benefits:

Auckland Council and Auckland Transport officers also consider that the Business Case and subsequent additional work has only partially captured the potential WEBs. This is because it has not assessed the growth in the regional economy through efficiency gains in Auckland‘s spatial economic structure as a result of the project. They estimate that this growth could result in up to $1,300 million in benefits for the project, although they note that only a component of this number is additive to other benefits.

Auckland Council and Auckland Transport have advised that combining the conventional transport benefits from their policy case, and estimating WEBs based on the policy case equates to total benefits of $1,863 million or up to $3,868 million if regional economic benefits are included. This equates to a total benefit to cost ratio of between 1.1 and 2.3.

Central government officials have considered these additional WEBs in light of best practice and conclude that due to a number of evidential and methodological issues they are not appropriate for inclusion in the economic assessment.

The main good news is that the project will proceed at least as far as designation. Hopefully by the time we’re ready to need central government funding, the disagreements over the details of its costs and benefits will have been sorted out. Surely there’s a right answer out there somewhere!

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  1. This appears to be the response we all expected, as long as Auckland Council continues to push the project forward as seems to clearly what they plan (have planned to do) and also hires the same advisors to rip the government’s report to shreds we’ll make process. We may very well have to wait until A) Labour and the Greens have a good chance of winning the election and B) they make the CBD link an election issue and a pledge, before we have any funding committments. I say this because National at present appear to be a shoe-in and are therefore unlikely to bother making any promises to win additional votes that they don’t seem to need – it’s likely we won’t see a close race until the 2014 election. However, AC and AT can easily move the project forward independently until that stage, I tend to see this govt. case study more as a way of blurring the issue than as really having an material impact on slowing it (at this point). If we’re at the same point in 3 years then I’d start to worry.

  2. I *may* have found a factual error in the review, but this needs verification.

    Appendix 1.1 states:
    “These trends have resulted in a 48 percent CBD morning peak modal share for public transport compared with 52 percent for cars (Auckland Regional Council cordon count 2010).”

    But looking your own graph taken from that report (I haven’t yet found the original yet), it looks like that 48% and 52% are the other way around:

    Josh do you have the actual percentages?

    1. Ah, I see that graph is 2009. Yet I find it hard to believe that car use went up a year later. It would be good to verify this and a number of other figures in the review.

      1. If you add in walking and cycling the modal share is much lower for cars than 48% as well, let alone 52%.

        Looks like approximately

        walking 5000
        cars 32000
        PT 34000

        which would make cars have around a 45% mode share coming into town

    1. Its becoming a tit for tat game now, good to to know the council is not just sitting back and taking it.

  3. So – keep asking until you get the answer you want, eh?

    This is shaping up to be a seminal confrontation between Auckland and Wellington – a defining moment in determining if the mayor of the super city can take on a Wellington based government totally captured by the roading lobby, or if the supercity is just a compliant vehicle for the privatisation of its assets and less democracy.

    Public transport is a very popular issue in Auckland that cuts across political boundaries. If mayor Brown can mobilise a popular political campaign against Joyce’s crony transport policies – and win – then the supercity mayor will indeed be the second most powerful politician in the land.

    1. To date Len Brown and the council have been anything but a compliant vehicle for Joyce to abuse, and the fact that AT and AC had performed their own re-analysis of the business with international experts who weren’t given the conclusion before they started, I think Joyce will have his work cut out if he thinks this project can be buried so easily.

    2. I know this may seem picky, but as a Wellingtonian I really hate the National Government being referred to as “Wellington”. The current government is a pack of idiots. And the people causing your problems (Steven Joyce and John Key) all live in Auckland. The real “Wellington” would love nothing more than for Auckland to get better public transport.

      1. Absolutely. Leave Wellington out of it! They’ve got the same atrocious government we have, which is very happy to rip up huge mountains to build multi-billion megahighways, and put a motorway over the Basin Reserve, but is almost allergic to real public transport improvement.

  4. They also continue to use 2006 as the benchmark for all their calculations – clearly a downright misleading manipulation of stats to suit their conclusion; a conclusion which I’m sure was the first thing written.

  5. What I find so frustrating about the business case review is that it appears to be a simple numbers game based on assumptions. The assumptions being open to whatever interpretation you want to put on it depending on whether you are in the SJoyce camp or the LBrown camp with regard to the WEB’s – On the one hand they are saying can’t rely on such optimist WEB’s therefore we will just ratchet this right down and make sure the total BCR starts with a 0.something (or any such other figure as long as it does not come up to 1.0 otherwise we might have to start paying for it) and on the other hand it clearly states in various sections of the report that without the CCRL the CBD will be severely constrained in its development. It is this I find most concerning. Whilst the report is quite right to seek more alignment with the spatial plan and target development sites that support PT, it is a glaring omission that there is no quantitative measure of the quality of the inner city urban environment that the CCRL is able to facilitate ( I have only skim read through things but could not find anything on this). It is a well documented fact that more people friendly quality inner city spaces attract high end businesses which in turn attract more skilled people to produce a more vibrant and productive business community, which in turn attract more business – in short the agglomeration effect.

    1. Right on the money! That standard economic appraisals don’t take account of changing land use and the self-reinforcing /multiplier effects is where everything goes wrong for traditional cost-benefit analysis.

      Please everyone, pay attention to the limitations of conventional analysis — that is: fixed land use (as in the project doesn’t change it), employment, population, economic activity, capital stock — and don’t tolerate the lack of action by central govt agencies to rectify these issues. You will note no response at all from government officials on these matters — that is not because agency’s don’t agree, but because they are yet to get their heads around it (and they’re quite happy not to, thank you very much).

      The CBD Rail Link is the first project to take these issues on. New Zealand needs strong and unrelenting public pressure to substantially improve our appraisal methods for projects like this. The public needs to call for change and make the government and its agencies listen.

  6. Also, their job growth figure is the difference between 1996 and 2006, yet 2001 was the low point at 50,823 compared to 50,907 in 1996.

    So for the 5 years between 2001 and 2006 job growth was in fact 3.6%

    Absolute f**king hacks at the MoT – the fact that they can’t even disguise that is disgusting.

    I would take it on the chin if it wasn’t such a hachet job!

  7. So I am getting a bit confused here. Are there two separate reviews released today – One by Treasury and one by Auckland Council?

  8. So the tunnel BCR is about the same as the Puhoi to Wellsford BCR? I’m in favour of building both. But if you’re one of the people criticising Puhoi to Wellsford on the basis of its low BCR then you’re going to have to oppose the tunnel on the same basis.

    I wonder if there is an opportunity for an Operation Lifesaver-style quick and cheap alternative to the tunnel? At the moment, Western Line trains stop at Newmarket then reverse in to Britomart. Why not terminate the trains at Newmarket, then send them back out west? Passengers could disembark and change to the next Britomart-bound train coming through on one of the southern lines. That would free up the current Western Line Britomart slots for a more-frequent service on other lines. There would be no need to increase Western Line services, although you could to the extent that Newmarket could handle terminations. The cost would be new train stock for the increased frequency southern services… Maybe a few tens of millions of dollars as opposed to billions. It would relieve the current capacity issues and give the council and government a while to assess Auckland’s growth patterns.

      1. Presumably (and that is a very big “presumably”) the MOT tunnel review and MOT P2W business case use a similar basis to calculate costs and benefits, and that makes them more directly comparable than P2W and tunnel business cases prepared by two groups operating according to different rules.

        I’m with your call that we need all the documentation to work out why MOT and Council came up with such wildly different BCRs. I think the flaw with the tunnel business case was the agglomeration benefits. For the agglomeration benefits to be real you had to assume that there were businesses who would like to have been based in the CBD but were unable to do so because of transport capacity constraints. The reality is that while the CBD is congested, the current rail network is not yet at full capacity. That means that businesses that choose to locate themselves outside the CBD are ones that do not see any benefits in being in the CBD, or ones where the benefits are outweighed by real estate and other higher CBD costs. That calls in to question the case for Auckland CBD doubling its employment. And the whole business case relied on this doubling of employment that was never justified, but assumed because the Council had told the business case writers to assume it.

        Personally I think there is uncertainty over the future of the CBD in NZ after Christchurch. It might be wise to wait a year or two to see if the earthquake changes our development patterns to one that is more distributed and resilient. If so, CBD employment might have peaked.

        1. I still can’t get past this simple intuitive assessment of the two projects:

          Can a road that is in addition to two existing roads and a rail line that are not anywhere near capacity [except perhaps on the morning of December 27] suddenly spark the revival of a province that is still 100 odd kilometres away? Can speeding up the delivery of some logs and some milk by 5 to 10 minutes really transform the economy of Northland? Return anything like $2billion? Can it even make up for the likely rise in delivery costs caused by fuel price rise? Is that all that is holding Northland back? Do we really need new infrastructure on this route or improvements to the existing means, where is this new capacity to come from?

          Can the Auckland CBD continue to grow in economic activity and employment using existing transport links? How can we get the most out of our recent investment in rail in AK? How can we best ensure the resilience of our biggest city against oil shocks? How can we best facilitate the growth of Auckland without causing further deterioration of quality of life on the street and maximise efficient landuse?

          Which of these projects in the Auckland region is more transformative? Which is more likely to protect our economy and wellbeing from possible uncontrollable externalities? Which has the lowest negative effect on the environment? Which is more likely to help lower carbon emissions?

          You do the math.

        2. A lot of this comes down to urban development. Auckland’s population will continue to grow with at least 500,000 more people due by the time I retire. They have to go somewhere. Some people would pack them in to the existing city boundaries. While I enjoy CBD living, most NZers don’t. Some do when they’re young and single but move out to the ‘burbs when they have children. I think that a policy of extreme urban densification is going to be a big vote loser with the NZ public, since back yards and swimming pools are about as Kiwi as the All Blacks. This also implies increasing house prices which might be popular if you already have one, but not if you want to buy one or have adult children who want to buy one. Both Ardern and Kaye were on TV3 (?… might have been Campbell) a couple of weeks ago complaining about housing affordability and pointing out that they can’t afford to buy on an MP’s salary.

          So, if Auckland is going to expand outwards then which direct will it expand? Probably all directions, but for a variety of reasons the north has been much more popular recently than the south. Rodney could soak up all 500,000 new Aucklanders and they’d all be living in suburbs. To do that Auckland will need roads to support it, and continued busway expansion (and a rail link eventually). What is the real estate value of 500,000 new Rodney residents? Say $100k per resident and you’re looking at $50billion in new real estate value and P2W looks like a bargain. So does the CBD tunnel, the harbour rail tunnel, and rail to Warkworth.

          As for Northland… if you assume that all other things stay equal and they remain relatively unproductive, you’re at least bringing them 50km closer to Auckland’s effective northern limit and that has to be worth something.

        3. Yes I am assuming that this road will not make a $2billion difference to Northland. It will make a difference to fat land merchants on Auckland’s fringe, it will further suburbanise productive farmland and [along with killing the rail line] help trucking magnates import more sportscars. It will further commit our economy dangerously to oil imports thereby increasing carbon emissions. It will make for more far flung low value suburbs that I predict will become worse than marginal as travel costs become increasingly painful. In short I am certain that it will be an expensive mistake.

          I am not certain however that many Aucklanders, new and current, won’t find value in living as they are already are at more urban densities. We are all pretty rational about living arrangements and when externalities like travel costs and social isolation increase people have always shown a fair bit of flexibility.

          The key thing about investing is to be attentive the trend forward not the past, and the trends, since 2006 [ha!] are clearly for more city, more PT, more need for protection from resource depletion. We need to build for the 21st century not the last one.

        4. You have a job on your hands if you want to persuade people to densify. What would be needed isn’t “a fair bit of flexibility”, but getting 500k new residents to live in apartments AND the people already living on the land that apartments will be built on to live in those apartments. That’s 600k or so people living in high density situations. The elderly and late middle aged will probably continue to live in detached houses, so you’d need to make a case that most young people and their children will live in high density housing. Good luck on that… logic will only go so far on an issue that appeals to emotions.

          As far as I can see, only one party is being honest about Auckland development. I’m sure National are planning horizontal expansion but don’t want to tell people because it will spook Rodney residents who think that Rodney development should have ended the minute their own home was completed. Labour seem to be policy free. They oppose the government but don’t want to face up to the consequences of that opposition. The Greens oppose sprawl but haven’t explicitly stated that it means lots of people living in apartments. Len Brown hasn’t actually opposed any road or any public transport project, either now or when he was at Manukau. The only honest party are NZ First who’d blame population increase on Asian people, state that they hate them all, and propose deportation as a solution. “Where are all the people going” should be the first question every council and Auckland MP candidate should be asked.

          “it will further suburbanise productive farmland”

          I take issue with that statement. Farming is about the least productive thing you can do with land. The space a couple of cows stand around in could house a couple of families with jobs in high value IT, health care, finance, or photography. We’ve moved on from pre-industrial revolution times and ideas and skills are more important than the number of farm animals you own.

        5. Take issue if you like, but have a look at the nation’s balance of payments, really, farming not productive!? And if all those cow cockies want to become photographers I really will have to work out which end of a cow is the productive one….

          Really there is no need for 500k people in apartments tomorrow, the good thing is that we don’t live in a command economy, no compulsory 5 year plan, we do let the market find levels, but that doesn’t mean we should be totally planless, nor pretend that policy is neutral. One thing that happens by enforcing the MUL is price some people and businesses out of all coming to AK, it will balance the population growth, if it continues. Why do we have to accept that AK should be allowed to spread like cancer North and South? Does the rest of the country really want that? of course those that prefer country living, or small town living, should pursue that, I would rather see satellite towns connected by fast transit of course, rather than endless strip development down highways, and wouldn’t that satisfy the desires of the people you so worry about in a better way? And retain the countryside for all. Not a new idea, of course, but surely better

    1. I wonder how an independent candidate that stood on the sole platform of lobbing for “Better transport links for auckland” and “preventing auckland from continuing to get a raw deal” would do against her?

      1. I’d be worried about splitting the left vote tbh.

        I can categorically say that I won’t be voting for Nikki Kaye again.

        Nikki Kaye: C-, do not trade.

      2. “preventing auckland from continuing to get a raw deal”

        Interesting question. US politics seems to emphasise “pork” where Congressfolk are judged by the amount of government spending they deliver to their electorates, regardless of whether that spending makes any sense or not. Jack Murtha Airport being a prime example of pork, and the Bridge to Nowhere being a rare example where a politician was brave enough to say “no”. That’s one of the reasons they’re running a trillion dollar a year deficit.

        My guess is that if Auckland Central elected an MP on the basis that there are enough Aucklanders to sway any national election so the rest of the country should pay for Auckland projects, then I suspect that other parts of the country will start doing the same thing. Aucklanders will get a rail tunnel, but that will be offset by Aucklanders paying for all sorts of rubbish around the country.

        1. Obi, that is potentially quite true.

          However I’m not sure how that is different from right now – we’re still paying for crap for the rest of the country (RoNS) but we’re not getting a tunnel.

        2. Over the last 10 or 15 years Auckland has had the Mt Roskill motorway extension, Manukau motorway extension, second Mangere Bridge, Waterview (committed by both National and Labour but not started, obviously), Upper Harbour motorway, northern motorway extension to Puhoi, rail electrification, new Britomart station, new Newmarket station, Manukau rail extension, Northern Busway, Victoria Park tunnel, CMJ improvements, and probably some projects I’ve forgotten. In the same time, Wellington has had a junction improvement at Petone and extension of the railway one stop to Waikanae. I think the comparison shows that Auckland isn’t doing too badly for transport improvements.

          I’m not in favour of funding allocation on a strict per-capita basis. I don’t think it is fair for West Coasters to pay for the roads I drove around on at Christmas, or for Waikato residents to pay to keep Auckland’s businesses connected with the rest of the country. It also invites per-capita allocation of funding for other government programs where people would quickly notice that Auckland’s unemployment is higher than the national average. Even so, I don’t think there is much of a case that Auckland is getting a “raw deal”.

        3. I don’t personally agree with what I said, I said it because its the kind of emotive thing that seems to win votes.

          Personally I would rather see money spent where it yields most value, regardless of fairness. I dislike “ring fencing” for the same reason.

          However that’s not the way it seems to work in politics, remember Winston getting the central government to pay for Tauranga’s duplicate harbor bridge. (disclaimer, Im from Tauranga and quite like the bridge.)

      3. Why does there need to be an independent candidate? There is already a candidate for Auckland Central that supports the tunnel- Jacinda Ardern.

        1. Right wingers will not want to vote for due to the party she stands for.

          She will be unable work in a coalition with a national lead government due to the party she stands for.

        2. I’m nominally a right winger and I’m going to vote for her. You can vote for a different local candidate from your party vote. The party vote decides who holds the power in parliament but it would be a strong message for National to see a huge swing against them in terms of seats in Auckland if they stick to this current outdated thinking on how to solve transport issues.

          And I can’t see how independent candidates with views at the other end of the spectrum from SJ on PT are going to fare any better in terms of working with a national led government if that is the issue they were voted in on.

  9. How many people use Britomart in the morning peak currently?

    I find it hard to belive that Figure 1 on page 3 of the table says that in 30 years there will only be 11,000 people travelling by train to the CBD. ISnt that already almost the case?

  10. I’d have to go back and have a look (I should be working), but I believe their own report is showing 9,500 right now.

  11. No surprise really about this “business case review”. Treasury has clearly been instructed to make any benefits as minimal as possible by using dodgy statistics. I’m not surprised by this outcome at all.

    Surely if the minimum BCR is 1.1, its worth building? If Puford has a BCR of 0.4, how can they justify one and not the other?

  12. When we are talking about the CRL project from whether we do need it or not to how to build it, one thing would be the most fundamental: The projected population growth. If we get this wrong all the figures produced to support the case would be wrong theoretically anyway. If we could not get this right how could we get so complex project right? Here I collected some projected population growth from three main source of CRL documents. They are:
    1. From APB&B report: The current population of 1.3 million is projected to increase to around 2.2 million people by 2051. Page 3
    2. From Auckland Transport Committee: Auckland is New Zealand’s largest and fastest growing urban area. 2.1 million people by 2041 (Citywide Significance)
    3. From the Mayor’s Vision for Rail in Auckland: “Population will be around 2.5 million at 2035”.
    I really like to know which one is correct and reliable.

    1. Part of the problem is probably that there isn’t one defined answer, Stats NZ list projections for 3 scenarios, a high growth, medium and low. For Auckland, high is 1.8% per year, medium is 1.4% and low 1%

      Based on their projections by 2031 Auckland would have the following population
      High – 2,154,700
      Medium – 1,944,700
      Low – 1,742,100

      Extrapolating that growth forward by 2041 we would have
      High – 2,575,518
      Medium – 2,234767
      Low – 1,924,562

      As you can see there is quite a difference depending on which projection you use.
      Note: this is based off the 2006 census data so the council/study team would likely have had access to more accurate info.

      I would say that APB&B have used a low growth figure to be conservative (the current population is estimated at 1.4-1.5m yet they used 1.3 which is the 2006 figure. The transport committee is probably using a medium figure while the Mayoral vision is probably using a high growth figure with a generous amount of rounding (probably make it easier for people to relate to.

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