CBD Tunnel Review: my thoughts on the Council document

As I noted in yesterday’s blog post, which focused on the Ministry of Transport review of the CBD Rail Tunnel business case, Auckland Council – in conjunction with Auckland Transport and a wide variety of international consultants, also reviewed the business case. Their final document is a very interesting read – and I hope they eventually upload all the appendices that were prepared to inform their final review document. Appendix E in the MoT’s review presents a summary of the Auckland Council/Auckland Transport position as well.

As I noted in yesterday’s post, part of the way through the business case review process Auckland Council/Auckland Transport re-examined some of the assumptions that had sat behind both the original business case and the MoT’s review of that document. Just as MoT’s analysis seemed to find areas where the business case had over-estimated the benefits of the CBD Tunnel, it seems that Council’s re-examination also highlighted areas that had previously been under-estimated, or strategic policy changes that it saw as likely. These are outlined below: Most of these changed assumptions make good sense. In particular, it is completely obvious that with the CBD Rail Tunnel providing enormously increased rail capacity, and with bus capacity being very constrained, that many more bus routes would become feeder services to the rail network. Furthermore, as the CBD grows it seems inevitable that parking will become more expensive – if you exclude “EarlyBird” specials, most parking buildings already charge around $30 for a full day’s parking. If Auckland Transport’s publicly owned parking buildings stopped dragging parking costs lower by under-cutting market rates (seemingly for political reasons) then parking charges are likely to be higher than the $16 a day figure that MoT’s review used to calculate its 2041 patronage.

In fact, with these changed assumptions we can start to see the real impact of the CBD Rail Tunnel, in making rail the primary mode for people entering the city centre during peak times – on a passenger-kilometre basis. This is a huge transformation from the current situation. The changes to employment benefits probably require consideration in a fully separate way, because this seems to be where the Council’s review has undertaken some really useful work, bringing the assessment of wider economic benefits for this project completely in line with what is being done overseas for large projects like London’s CrossRail. In fact, their approach is so eerily similar to what I’ve suggested in various recent blog posts that I wonder whether they’ve been getting inspiration from me. From the table below you can see that the measurement of wider-economic benefits is starting to resemble quite closely what the United Kingdom has done for large projects such as CrossRail:

There are two figures for the AT/AC wider economic benefits because one relates to the project generating 20,000 additional jobs in the CBD while the lower figure relates to 5,000 additional jobs being generated. Unfortunately we still get some massive discrepancies between the government’s estimates of wider economic benefits, compared to that of the Council. But reading into the reasons behind the discrepancy, it seems that many of the WEBs are simply calculated as percentages of the traditional transport benefits – so obviously any difference in the transport benefits simply gets carried across and magnified by the WEBs. Perhaps one particularly positive thing to come out of this review is the fact that a methodology for calculating WEBs seems to have been relatively settled, and it seems to be consistent with what happens in the UK.

Putting this all together, we can really see the massive difference in the final numbers of the MoT and Auckland Council/Auckland Transport: Considering the time and effort that has obviously gone into the business case review process, I think some serious explaining is needed from the various parties as to why we have come out of this process with almost no more clarity compared to when we went into it. I thought the two main parties were meant to be working together on the review project, so that they would be able to come together with an agreed position on the business case, which bits of it needed refining, which bits had been overly optimistic, which bits had been missed, which policy assumptions were out of date and so forth. To be honest, it seems like something of a giant waste of time to have spent nearly six months on the review when we come out of it with this result.

Perhaps the most interesting insight comes from MoT’s own question and answer page, when it looks at the issue of why we’ve ended up with two separate review documents:

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. However, 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.

At a late stage in the assessment of the Business Case, Auckland Council and Auckland Transport presented a new policy case which estimates transport benefits between $1.2 and $1.4 billion. This compares to a Review figure of $387 million.

While an in-depth analysis of the policy case has not been possible, it is clear that some of the interventions in the policy case – particularly the additional park and ride and reconfiguration of bus routes – could be used to increase the benefits from the current rail investment as well as the City Centre Rail Link project. This issue would need to be explored and clarified in any future business case.

It seems pretty dumb for MoT to release a review of the business case that absolutely slams the merits of the project, without even bothering to take the time to undertake an in-depth analysis of the policy assumption amendments that Auckland Council and Auckland Transport proposed. After all, as I noted above they hardly seem illogical.

Ironically, while the media has generally reported the business case review as a bit setback for the project, the really important news is that Auckland Council, in conjunction with KiwiRail and Auckland Transport, will be able to proceed with designating the rail route and securing all the necessary resource consents. That, along with the necessary detailed design, is probably a couple of years work. Perhaps once that’s completed MoT might have finally got around to reviewing the new policy assumptions and we might find ourselves with an agreed position between the parties.

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