A few weeks ago I wrote a brief post talking about how the CBD employment targets the government has set for the City Rail Link and how they will be basically impossible to achieve due to a shortage of office space. I’ve also talked about both the office target and patronage targets a number of time in the past.

Last week Jason Krupp from the NZ Initiative wrote an opinion piece for Stuff talking about us and how the targets are justified and questioning the need for the CRL.

Recently, Transportblog.co.nz bemoaned the fact that Auckland CBD was running out of office space.

The pro-transit and compact city advocacy group is concerned because central government is insisting that certain rail usage and CBD employment targets be met before it co-funds the $2.9 billion City Rail Project.

These targets include the doubling of rail patronage to 20 million trips a year, and lifting the number of people employed in the CBD by 25 per cent (or 22,000 jobs) if the city wants the project to start in 2020.

The problem is that while the first target might just be achievable (there were 11.4 million rail passenger trips for the year ending June 2014, up from 10 million in the previous year), the second is more doubtful.

Transportblog.co.nz (and Auckland Council) seem to be suggesting the employment target is unreachable without the City Rail Link. After all, who would want to construct an office building if you can’t fill it with productive workers?

It is a persuasive argument, but it doesn’t quite stack up when you look at the complexities of transit investments and the track record of transit projects.

It goes on discuss some of these points and a few others in more detail. Seeing as he was specifically addressing us with his op-ed piece we felt we deserved a right of reply which Stuff have published. The piece was put together by our three musketeers economists John, Peter and Stu. Due to word limits on Stuff it’s difficult to even get half of what we want to say in an op-ed but what we did say is below.

At TransportBlog, we want Auckland to be a more connected, vibrant, and prosperous city.

So it came as a surprise when Jason Krupp of the New Zealand Initiative authored an opinion piece criticising our analysis of the need for the City Rail Link (CRL).

Mr Krupp suggests that Auckland should delay or perhaps even cancel the CRL. We disagree: the CRL is critical infrastructure which has already been subjected to considerable scrutiny, especially when compared to most other major transport projects in New Zealand’s history.

Construction on the CRL needs to get underway in 2016 lest Auckland’s growth is stifled.

Auckland’s transport future will be rather different to its past.

Auckland is competing for human and monetary capital with cities that benefit from efficient public transport networks.

The four largest cities across the ditch – Melbourne, Sydney, Perth, and Brisbane – all built CRL equivalents decades ago.

Because those cities unlocked more capacity from their rail networks, they can move more passengers free of congestion.

Rail networks in Perth and Brisbane – cities less dense and not much larger than Auckland – each carry more than 50 million passengers a year.

We should take a lead from what’s worked in Australian cities, which benefit from better mobility and easier access to jobs and services.

Mr Krupp incorrectly suggests that there is a debate over whether the CRL should happen at all. Fortunately, all major parties now agree that the CRL is necessary – but they disagree on the start date. Auckland Council and the major opposition parties have publicly committed to a 2016 start for construction.

A National-led government, on the other hand, would fund the CRL no earlier than 2020 unless two targets are achieved first.

The Government proposes to delay the CRL unless rail patronage reaches 20 million trips a year by 2018 and employment in Auckland’s city centre grows by 25 per cent by 2017.

We are concerned about the arbitrary nature of these targets. The employment target, for example, ignores the role the city centre plays in meeting growth in residents, tertiary students, and visitors.

It’s also unclear why targets have been set for the CRL but not for other major transport projects.

The Government’s criteria also seem to avoid more obvious “value-for-money” targets, such as the benefit-cost ratio.

Nonetheless, we believe that Auckland is capable of achieving the Government’s patronage target, although it’s a stretch.

Since the development of Britomart, Auckland’s rail patronage has grown at double-digit rates, rising from around 2 million annual trips to almost 12 million in a little over a decade.

There’s no reason we can’t meet or exceed that performance over the next decade given the ongoing introduction of electric trains; a better, more frequent bus network; and integrated ticketing.

Auckland’s revitalisation of public transport has been one of its major success stories over the last decade.

Investments in new infrastructure and services have paid off: Britomart, the Northern Busway, the Onehunga Line, and the new Panmure station have all outstripped initial projections. Britomart surpassed its forecasts more than a decade early.

The CRL is a sensible response to proven demand for rail services.

Without completing the “missing link” between Britomart and the Western Line, we will soon hit a capacity constraint – full trains, too many buses in the city centre, increasingly congested roads and reduced economic development.

On the other hand, the Government’s employment target for the CRL is unrealistic to the point of being nonsensical. Simply put, a 25 per cent increase in city centre employment by 2017 is physically impossible.

A recent independent report by PwC found that the central city won’t have enough office space to house these extra employees, given current low office vacancy rates and the time lag in developing new offices.

Moreover, much of the development required to get close to this target is contingent on the CRL. The redevelopment of the Downtown Mall, for example, won’t proceed without it.

Which begs the question: is this target reasonable, or is it simply a delaying tactic?

The Government’s targets and much of the media coverage on the CRL give the impression that the project will only benefit the central city. That’s patently not the case.

Auckland has 120 kilometres of rail lines that move people to and from Manukau, Newmarket, New Lynn, Middlemore, and many other stations as well as to Britomart.

Building the CRL will enable Auckland Transport to increase the speed and frequency of services across the entire network, and possibly expand rail to the North Shore and the Airport.

Carrying on without the CRL would be like building the motorway network without the Central Motorway Junction. It just wouldn’t make sense.

As firm believers in evidence-based policy, we welcome the degree of scrutiny on the CRL. The evidence compiled by Auckland Council, Auckland Transport, and central government is not only comprehensive, but also unprecedented when compared with other transport projects such as the expensive Roads of National Significance programme.

But now, the facts are in: it’s time to build the City Rail Link.

I know Jason has some more thoughts in reply to our piece and I’ve encouraged him make those thoughts known in the comments on this post so everyone can see them and join in the discussion.

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  1. It all comes down to whether we should view CRL as simply a transport project which responds to resolve problems, or more or an urban shaping economic development project.

    What’s strange is that govt is happy to argue the proactive economic development case for motorways in the countryside but not for massively increasing capacity into the heart of, and throughout the country’s biggest city.

    1. Quite honestly I don’t think the current government can comprehend that moving large numbers of people to their place of work adds value to the economy, but somehow trucking a container filled with flat screen TVs to a warehouse on the shore 5 mins quicker does.

  2. Nicely written piece… Just a matter of time, just a shame theres no political party that could push National into fast tracking this project as they’re currently able to Govern alone according to the latest stuff poll… Even though NZ First has a great transport policy, who says that the pensioner gold card or some improvement for Tauranga won’t get preferance over the CRL should he form a coalition with National…

  3. The NZ Initiative has produced some very, very interesting papers on various issues and I also like how they are non-partisan. But I havent read into this particular issue and how Jason justifies his postion on the track record of transit projects.

    Totally off topic, but I very interested in their report comparing how Germany/Switzerland have just as much strict housing regulations as NZ/UK, but are able to build far more houses and at a lower cost and with lower house price inflation. Essentially their houses cost the same as they did decades ago, adjusted for inflation. NZI say the key difference is that in NZ/UK local government is funded by land rates, but in Germany/Switzerland local government is funded by income tax that comes from the residents in the area. Thus council wants as many people in their boundaries as possible.

  4. It baffles me that there’s even an argument about whether the CRL is needed. Clearly these people have never taken the train (at least not from the West). I have to say, I find the patronage targets a bit funny too, given that the CRL is what would up patronage. “If you build it, they will come.”

    Lastly, you briefly mentioned a better bus network. I have to say, I’ve been MORE disappointed with the bus network recently, at least where I live. In the past two weeks, not one single bus I’ve taken on New North Road has been on time, and in fact the other day it was so bad FOUR buses between 8:55 and 9:20 didn’t come, then three showed up at the same time at around 9:22. Not to mention even on the schedule two buses were scheduled for the exact same time when earlier there was no bus scheduled for about 15 minutes. How does that make any sense?

    1. The new bus network has yet to be rolled out, so your problems are unfortunately what’s normal for buses at present i.e. never on time, bunched, poor frequency.

      1. AT recently retimed the Great North Road buses aiming to improve the reliability of those services. It has been a failure because the reliability of those services is still pretty variable during the peak. One service in particular I catch each morning was always 10-20mins late under the old timetable. Under the new one, they added several minutes to the run time so it now usually arrives “only” 5-10mins late (although to their credit it has arrived within 5mins on a few occassions). I’m hoping AT figures out a better way to develop reliable timetables in time for the new network otherwise the reliability issues will continue to plague the bus network.

  5. No doubt a dead end trail line is a barrier to competitiveness and there is a need for a connecting network link through Britomart west and potentially north. Have not seen compelling evidence to suggest the proposed route and extent of tunneling in cbd is the right approach. Can anyone point me to where the research and evidence base exists that promoted current route as the right one?

    1. “Have not seen compelling evidence to suggest the proposed route and extent of tunneling in cbd is the right approach.”

      Have a read through here


      There’s the full document here
      and here

      Also on the tabs above you’ll find ‘Our analysis’ and then City Rail Link. Read through all the information there.

  6. “There is also no consistent evidence to show that if you invest heavily in a transit network, people will use it.”

    You only need to look to the last two big public transport investments in Auckland; Britomart and the Northern Busway, to see that investment in infrastructure has paid off. Both of these projects were criticized by detractors such as Krupp who were certain that they would become white elephants. Yet both of them easily surpassed their patronage targets after construction.

    It is almost incomprehensible that anyone who understands the facts could be against the CRL – Auckland is growing rapidly, which will bring more demand for transport. We need to invest in infrastructure to meet this demand. The CRL is by far the best option we have to increase transport capacity in Auckland. It’s such an effective project because it unlocks the full potential of an existing asset, the rail network. There is no alternative that is anywhere near as effective.

  7. I want to reply to a few of the issues Jason has raised, which I’ll put into different comments so it’s less of a wall of text. Firstly, around BCRs and costs.

    There’s still a lot of confusion about the CRL costs, because Auckland Transport have had a somewhat awkward approach to releasing figures. But the often-quoted $2.86 billion cost (which Jason rounds up to $2.9 billion) was a bit of a “worst case” cost. It included inflation (which is generally removed from these kinds of figures, but not for the CRL for some reason), extra train purchases (perhaps beyond what was necessary, and now accordingly being scaled back), and the cost of property acquisitions (but nothing written for those on the benefits side of the ledger, i.e. ignoring that many sites could be resold after completion).

    Furthermore, the council’s announcement at the start of August has reduced the expected cost quite significantly. We understand that the new non-inflated cost of the CRL is $2.069 billion, which still includes the full cost of property acquisitions. We haven’t seen a breakdown of that figure, but it will presumably come over the next few months.

    Now to BCRs. The standard calculation of BCRs has changed since the CRL was assessed in 2010. The discount rate has been changed from 8% to 6%, and the evaluation period has been changed from 30 years to 40. It could be argued that this is still on the low side (http://greaterakl.wpengine.com/2013/07/25/nzta-makes-positive-changes-to-economic-assessment-criteria/)

    Jason has mentioned via email that the average BCR of the RoNS programme is 1.8. There’s rather a lot of uncertainty about what the actual BCRs are (see http://greaterakl.wpengine.com/2011/03/30/top-economist-questions-rons/), but even if the average is 1.8, there are projects within the programme with BCRs well above and below that, and the better-performing ones (Victoria Park Tunnel, Western Ring Route) are already well underway or complete. In fact, the Victoria Park Tunnel was already underway when the RoNS project was announced! Some of the RoNS have very poor BCRs.

    WEBs can be a bit amorphous and hard to quantify, but it’s very clear from the CCFAS that the CRL removes a major impediment to growth of the city centre. We can debate how valuable this is in dollar terms, but it’s certainly a benefit of the project. At any rate, I assume the government’s evaluations of their RoNS would include WEBs too – can anyone confirm this?

  8. “There is also no consistent evidence to show that if you invest heavily in a transit network, people will use it.”

    This is just nonsense, the world is also full of totally unused and failed roading projects , from Clem7 in Aus, to all the huge highways in Portugal. And it is also full of Transit projects and systems that having been bursting at the seams from day one.

    This attitude is simply a confession of mode bias. The writer can’t even start to look at the project intelligently because he has started with the prejudice that no-one [read himself] uses Transit.

    Clearly whole classes of public investment include the whole range of outcomes from huge success to abject failure, so to understand any project by comparison it is important to bring a little more precision to the analysis.

    In a follow up letter he refers to a Light Rail project in the US as evidence that people don’t want Transit. Well if he cannot distinguish the difference between streetcars in traffic and an underground rail line connecting to 120 Kms of an existing system well frankly he should stick to writing about something he does understand.

    A much closer comparison to the CRL project is the city of Perth, the technology is similar, the situation is similar, the culture is similar, the demographics are similar [slightly bigger population but more dispersed], and the outcome is very clear:

    1. Additionally a point observable in Perth’s rail ridership record above is that the huge accelerations all occur after major cpaital investments in the network. This can hardly be a surprise as no one can choose to ride a train that isn’t there. To point to current modeshare as evidence of people’s permanent preference is extraordinarily facile. Ridership rates reflect what is on offer.

      What we build people will use. If congestion is your concern then building more roads and failing to offer any quality alternatives is investing in congestion; spending to get more of. What we feed will grow.

      There are much smarter questions to ask anyway. What sort of city do we want? Do we want people to have choice in how they move, where they locate for business, living, playing? How can we best exploit our abundance of homegrown electricity in the vital transportation sector? Do we want more resilience in our only city of scale? How can we ensure that city improves its competitiveness we other asia pacific cities? How do we improve the quality of the urban realm, the air, the water, in this city?

      And of course: how can we most efficiently accommodate 1m extra people on this narrow isthmus without sacrificing other qualities?

  9. I found your reply more compelling that Jason’s original article but I look forward to reading his response to your response.

  10. Secondly, around the use of overseas examples or case studies. Jason’s original article refers to Portland, Oregon and Seoul, South Korea. I don’t see these two examples as having any particular relevance to the CRL. Yes, major infrastructure projects can fail to meet their goals, whether they are road or PT-oriented. We can minimise the risk of this through proper evaluation before the project begins. Writing on the Otaki Expressway last year, Mr Krupp noted that benefit cost ratios “are the best tools we have when it comes to trying to make informed decisions on major infrastructure spending”. I agree with him, and the government’s CRL targets have nothing to do with BCRs.

    In our reply, we’ve mentioned the four largest Australian cities, which all have CRL equivalents, and we’ve only mentioned heavy rail. Perth and Brisbane are fairly reasonable comparisons to Auckland, although Sydney and Melbourne are much larger. I’ll do a post showing these cities’ rail patronage sometime in the next couple of weeks.

  11. Thirdly, around the exact nature of the government’s CRL targets. Peter can give more detail on these, but because the targets have been poorly explained (see http://greaterakl.wpengine.com/2014/02/17/what-is-employment-in-the-cbd-anyway/), it’s not widely understood that the government is requiring CBD employment to increase by 25% between 2012 and 2017. In fact, I didn’t even realise that when I wrote the linked blog post – I thought the end date was 2020, and I continue to hold that 2006 was a more appropriate start date (and even that would be a stretch to achieve 25% growth). And, red tape or no, it’s clearly impossible to build enough office space for 25,000 extra employees by 2017. To be more precise, we’re talking about February 2017, 2.5 years from now. The government has set a target that could never have been achieved.

  12. As per Matt’s email earlier today, here is my response to the article above. I will also post the report the TransportBlog team. I think that where we appear to be deadlocked, there is actually agreement in the need for appropriate targets on projects like the CRL and RoNS.

    Dear TransportBlog

    I thought I would take the opportunity to reply to this article (http://www.stuff.co.nz/marlborough-express/business/national/10379924/City-Rail-Link-is-key-to-Aucklands-future), your response to an earlier article I penned on the City Rail Link (http://www.stuff.co.nz/business/opinion-analysis/10354075/Targets-prudent-on-Auckland-train-project), as you seem to have missed the point I was trying to make. I hope you publish this response on your blog in the hopes of fostering dialogue around transport investment.

    First, though, let me say that I have no firm position on the City Rail Link or preference for a particular mode of transport. Cities that want to thrive need to ensure that they maximise the mobility of their labour force through a mix of transport options – but it is wise to ensure that these investments are made on an efficient basis and with an appreciation of what can and cannot be achieved by various transit networks (more on this later).

    A cost-benefit analysis is certainly a good place to start as you have noted. The CRL project as a CBA of 1.0 to 1, which increases to 1.1 to 2.3 once you include the wider economic benefits to the Auckland and regional economy as a whole (Source: Auckland City Rail Link: Updated Economic Valuation 2011). Ignoring a SAHA International report for NZTA questioning the double counting of wider economic benefits (Roads of National Significance: Economic Assessments review 2009) the CBA suggests we will get more benefit from the CRL than what we spend – this is obviously a good thing albeit barely on the low end. But the range is concerning because it makes comparison to other transport projects more difficult. It could be both a better and worse investment than the Roads of National Significance, (which carry an overall CBR of 1.8) but we have no way of knowing which it will be.

    Furthermore, there are major uncertainties surrounding rail patronage take up once the project is complete. This is where I think targets are prudent as it provides better insight into whether the investment is a sound one, and to assess the success of the project after the investment has been made. The Portland light-rail example cited in my earlier article is a case in point, but let me be more explicit and quote from The Vanishing Automobile and Other Myths (Randal O’Toole):

    When originally proposed, planners projected that Portland’s first light-rail line would carry more than 42,000 passengers a day five years after it opened, and in another five years it would carry 57,000 passengers a day. Actual ridership proved to be less than half of this amount. In 1987, the line’s first full year of operation, it carried just 19,500 riders per weekday. Overall, the region’s transit system gained about 4,700 riders per weekday, so thee out of four light-rail riders must have been former bus riders. Ten years later, rail ridership had increased by less than 10,000 rides per weekday.

    The same could happen in Auckland. A literature review conducted by J Holtzclaw (Using residential patterns and transit to decrease auto dependence and costs) suggests that you need a built up population density of about 50 people per hectare to support rail infrastructure investments. Looking at Auckland’s built up population density profile (see below, supplied by Alain Bertaud), we see that only the area within 1km from the CBD has this density, and the rest falls significantly short of that:

    According to Bertaud, density is not the only factor, but that the spatial concentration of jobs also needs to be considered. Looking at an analysis of Auckland transport data by Richard Paling Consulting using the latest census data (Journey to work patterns in the Auckland region), the CBD only accounts for 14% of all commuting destinations (in New York it is closer to 25%). Furthermore, rail patronage grew at a slower rate between 2006 and 2013 than it did between 2001 and 2006.

    That is not to say that the CRL investment may not pay off down the line. My point is that there are significant uncertainties surrounding this project and rail in general, this is where indicators that the investment is worthwhile are needed. You can argue that the government’s targets are unfair or arbitrary, but I believe the metrics (employment and transit usage) are appropriate.

    There is also the opportunity cost to be factored in. To invest in CRL we defer investment in another project that may be equally worthwhile, or indeed generate higher returns. Pushing for an early CRL start without answering the questions raised above invites poor allocation of limited transport capital. For example, the Richard Paling Consulting report noted that although rail patronage had risen quickly between 2001 and 2013, buses accounted for the majority of public transport trip growth. Furthermore, only 1.6% of all commuting trips were by rail compared to 5.8% for bus. Couldn’t an argument be made that we should focus our attention for where we get the biggest bang for buck?

    Your critique also neglected to address any of the other constraints on office supply: red tape, access to funding and the missing mezzanine finance tier, inner-city land supply etc. One could even make the argument that high prices for limited office space, not transport networks, are the catalyst for new building construction, and this is already in place. Additionally, even if the project were given the green light today, I suspect it would be impossible to break ground by 2016 because the council is likely to find itself engaged in a legal battle with building owners disadvantaged by the 5-year works programme.

    Lastly, but very importantly, your point that public transit is the cure for congestion is a popular misconception. I recommend you read this study (http://reason.org/files/transit_utilization_traffic_congestion.pdf) by the Reason Foundation, which quantitatively analysed congestion and transit across 74 of the biggest metros in the US over a 26 year period, and found no statistically significant correlation between major public transport investments and decreases in traffic congestion (the roading investment analysis is also very interesting).

    In conclusion, the picture is far more complicated than is suggested by the simplistic argument that we need an underground rail link in order for Auckland’s economy to thrive. Rail infrastructure is a massive investment, and any number of factors can go wrong (not least that these projects tend to have huge cost blowouts). If we as a country are to make this commitment, then we need every indication that it will be a success. This is why targets are appropriate, and “trust us” is not.

    Happy to keep the conversation going



    1. Grouping the RONS together and getting a BCR average doesn’t give us a very accurate picture of the value of the projects. I know it can be hard to find to BCRs as for some reason they aren’t prominent in NZTA’s project related sites. Some projects have great BCRs and drive this average up. Mainly these are the built ones. I certainly hope you will be pushing for examination and revisting of those that are not providing at least a net return.

    2. New York’s CBD can refer to either Midtown or the entire lower half of Manhattan (everything south of Central Park), given the scale of the five boroughs i doubt Midtown alone would count for 25% of commuter destinations and wider definition of their CBD is equivalent to a much larger area of Auckland strictly defined CBD (see Matt’s central city definition in the email you quoted below).

      Your argument also focuses far to much on benefits to the CBD where it is located with out considering the effects on the entire transport network in the metropolitan area. This would be like using only the benefits to New Windsor and Mt Albert from the Waterview Tunnel to claim that the Western Ring Route will be a white elephant.

      I’ve seen almost no one claim that public transport (PT) will stop congestion (usually political candidates such as John Minto hopping on a bandwagon with limited understanding of the issues or concepts). What is frequently argued is that PT can enable a city to shift a lot more people without congestion getting worse. Given Auckland’s projected growth rate, even at the medium rate, this is something our city needs improved desperately. The CRL is only part of Auckland Transports stratergy, with a major revamp of our bus routes being worked on currently. This new bus network has been designed to improve coverage of frequent buses significantly while maintaining current OPEX by relieying on a greater number of short routes that connect to interchanges – particularly at train stations hence the need for a quicker, more frequent train service.

    3. “Lastly, but very importantly, your point that public transit is the cure for congestion is a popular misconception.”

      I think the misconception is a misconception, given that Matt nor anyone else actually claimed that public transit was a cure for traffic congestion. What the CRL rail network, and other such non-road public transport, is are transport systems where traffic congestion is avoided and therefore irrelevant.

      Sure public transport doesn’t reduce congestion, it just lets more and more people travel free of congestion. The city centre of Auckland will always have as much peak time traffic congestion as we allow road space for, more or less. If we build the CRL we could however get another 50,000 or so peak time commuters into the central city each day without going on the roads. So indeed, no change in congestion on the road but another 50k people moved at the same time regardless.

      So yes, the cited papers are perfectly correct, yet irrelevant.

  13. Response from Matt:

    Hi Jason

    As Peter said in his email it’s probably best to try and discuss these face to face rather than over email as it’s easy for things to get lost in translation. Also it’s difficult to fully explain the situation in 800 words hence why you might not have fully appreciated our thoughts on the CRL and issues with your analysis about the targets. I don’t have time to reply fully but here are some quick comments in response. I encourage you to comment in the post we will run about this tomorrow.

    Agree that the key is to increase mobility and that investments need to be made efficiently. The question is how to do that. The reality as I/we see it is that have exhausted all the easy options for large scale road development and as such any future developments are going to be increasingly costly for what is likely to be little or even no gain. The PT network and in particular the rail network offers additional unused capacity that just needs to be unlocked.

    There are a lot of known issues with the original BCR for the CRL and I won’t go into them in this email but a couple of issues that exist include the modelling, operating patterns and additional CAPEX.
    • Modelling rail patronage in particular has historically contained many built in flaws fixing these will have a massive impact on the benefits provided while the recent announcement also brings down the cost slightly.
    • Opex costs are based on super inefficient operating patterns.
    • There’s extra CAPEX in the form of upgrading the Onehunga Line, grade separation and extra trains that wouldn’t be needed so soon with a more efficient operating pattern.
    I would also note that there have historically been inherent biases in the economic evaluation manual which are now starting to be fixed. These changes are likely to benefit the CRL much more than many other projects. I can’t remember the exact figure but I had it said that even with the other issues still in effect, the changes see the BCR rise quite a bit.

    With the RoNS the issue isn’t that all the projects or parts of projects are bad. Some parts of some of them do perform well and are needed but other parts not so much. Within projects good parts are being used to subsidise poor ones and the same goes at a programme level. If we just focused on the value for money parts then things would be very different.

    One big criticism I have on the NZ Initiative (and others) is that in questioning the need, projections and timing of CRL you are being extremely hypocritical. If you took the same stance you do with the CRL you would be examining and criticising the benefits of the RoNS in much more detail. You would also be calling for targets to be met before we build these. This is especially the case as many of these road have had flat or declining traffic volumes for close to a decade.

    It’s all very well looking at the results of rail patronage in the US however in NZ we have tended to be overly conservative and as mentioned earlier the transport models don’t really account for rail all that well. This is something even admitted by the MoT in response to the CCFAS. We have our own local examples with Britomart where daily patronage in 2011 was 40% higher than the model predicted and 15% over the predictions for 2021. Patronage has grown sine then too. The other closest comparison is the Northern Busway patronage which is also tracking higher than the models predicted.

    Yes density is a factor but it’s not the only one. I suggest you look at some of the work by the late Paul Mees, in particular his book Transport for Suburbia. With a well designed and integrated network – like Auckland is getting with the new bus network – issues arising from low density can be addressed. Also note that many of the Australian and Canadian cities with high PT usage also suffer from the same density and low CBD employment we do yet they outperform us considerably.

    Be careful of just using the census data as a comparison. It doesn’t include trips students make to Uni which make up a large proportion of trips to the CBD. Also the CBD employment size might be a small percentage but it is still represents a large number of workers and significantly more than any other part of Auckland. Personally I think the central city definition which includes Grafton, Newmarket, Eden Terrace, Parnell etc. as is a better area to use in which case it’s ~25% of all jobs. Also note that CBD employment % in Vancouver is lower than in Auckland yet rail use to it is much higher due to that integrated network connecting to stations. Also there are other significant factors that will impact the need for the CRL other than employment, for example changes in car parking supply and costs which could happen separate of employment changes.

    Yes opportunity cost is an issue however I would challenge you to look at what is on the current plans and to suggest which projects should/could be moved ahead of the CRL.

    The project, or at least the northern part of has to break ground in 2016 due to the Precinct tower which will go on top of the site. Most of the issues with construction disruption have been dealt with through the resource consent and there are only a handful of appeals which will be dealt with in time.

    If you look through the blog we don’t say that PT is a cure for congestion as we know induced demand takes care of any benefit from mode shift. The only proven way to solve congestion is through road pricing. What PT can do though is move people free of congestion, effectively giving people the choice to opt out of it.

    I guess that ended up being longer than I thought but as mentioned. Probably best to actually discuss this in person.


    1. Hi Jason, thanks for posting the emails and for stopping by the blog. As Matt mentioned, we’d certainly be keen to have a catchup sometime when you’re in Auckland. Let us know 🙂

  14. Some good arguments and points raised by Jason and nice to see a skeptic who actually refers to evidence.

    I must say I take anything written by Randal O’Toole or Wendell Cox with a massive grain of salt as they have been shown again and again to twist facts to what they want to prove (cars = good, transit = bad – cities = bad, suburbs/exurbs = good) and make huge leaps in assigning causative links. It does for me weaken any argument that refers to them.

    I think picking on Portland at grade light rail and assuming failures there will be the same as for grade separated heavy rail is a bit of a red herring. That would be like me comparing an arterial road upgrade to a full 4 lane motorway. I do also wonder how much the growing cycle culture and mode share in Portland undermines transit – it must often be quicker to cycle than take the light rail – as it is usually faster to cycle than take at grade buses in Auckland.

    There is no doubt that Auckland needs some roading projects, but we have done so much roading that there is a seriously diminishing return. Auckland has a huge amount to gain from grade separated transit as we have seen over the last few years. I personally think BRT has a much better future for Auckland than LRT – especially after seeing how it works in Brisbane. Once ridership is high enough, those can be replaced by LRT or a Vancouver-like SkyTrain system to handle greater volumes.

    Anyone still arguing that public transport/cycling will relieve congestion overall are living in the past. However, the point is that for the person on grade separated PT or cycling on a cycle path, the congestion is irrelevant. It is about choice of how we travel – something I would have though a neoliberal biased policy group (which clearly NZEI is, I don’t care what claims of neutrality are made) would appreciate.

    Jason, why are you not writing opinion pieces comparing the RoNS to the massive failed tolled PPP highway projects (just like Transmission Gully, Kapiti Expressway, Holiday Highway) in Australia? That is much closer to home and much more relevant to NZ than talking about a completely different kind of transit project on the other side of the world. When I see that kind of robust analysis of a neoliberal favourite project, I will be much more likely to believe your “neutral” claims.

  15. Thanks for posting your response Jason. This is a site that I think appreciates anyone who is willing argue their case with evidence, even when it goes against prevailing opinion.

    I think one of the frustrations this site has with the current government is the apparent double-standard with the funding of road and non-road transport projects. For rail projects, growth must occur before spending, and then the project will be built to meet demand. For road projects, spending occurs in order to generate growth. Claiming that the Roads of National Signficance “as a whole” have a BCR of 1.8 can easily obscure that some projects (such as the already completed Victoria Park tunnel) has BCRs that were quite high, while many of the remaining projects have BCRs that are extremely low.

    I don’t think TransportBlog has ever claimed a causative link between office space development and the city rail link – except in the specific cases of the towers proposed for the downtown mall site and Elliot Street, where construction will occcur either right next to, or on top of the City Rail Link, and the developers are clearly interested in coordinating construction. The city centre employment growth target seems to be a completely arbitrary number drawn out of thin air by the government as a smokescreen. For all of the reasons you cited, there is almost no way for available office space in the CBD to expand fast enough to accomodate the 25% growth in employment that the government claims is needed to justify an early start to the CRL.

    While overseas examples teach us to always be wary of ridership projections, the experience in Auckland has been that when people are given the option of convenient congestion-free travel options (such as rail or the Northern Busway), ridership has been far higher than anticipated.

  16. US examples may not be good comparables but my experience in anaylysing them goes against what Jason is saying. Most LRT systems that have been built recently – with the past 30 years, say – have typically exceeded ridership projections. Since one of the key criteria the Feds use to evaluate a rail project for funding is ridership, you might expect those projections to be inflated by project proponents. The opposite seems to be the case. Of course, while under-sell and over-deliver may be a good strategy to promote a system, the funding criteria are pretty tough to meet so under-selling would be a dangerous gamble on rail planners’ part. Fact is, while demand can be estimated based on models, induced demand from the mere fact of the system being there and working well, is harder to estimate. That induced demand is the real measure of success and many systems in the US can point to that data.

      1. Yes, I was involved in the early stages of that project in an economic development capacity. It turned out really well.

  17. Jason,

    As one of the three contributing authors to the TB response I take a “harder line” on your articles and subsequent responses.

    Frankly, you clearly don’t know your subject matter very well. You also seem to be very duplicitious: How can you suggest that you don’t take a hard position on the CRL, after you’ve been out there writing op-ed articles in newspapers arguing the project should be delayed or possibly not built? That sounds like a pretty hard line to me! I respect people who take the time to research the issues and put their views out there relatively sensitively and carefully; as we aspire to do on this blog (NB: I accept not perfectly, but nonetheless we try). You, however, do not seem to take such a cautious approach, and for this reason have lost considerable credibility, not just for yourself by the NZI itself.

    Here’s seven examples of why your article and (and subsequent responses) lead me to conclude that you don’t know what you’re talking about:

    – Why do you you talk about the BCRs of the “RONs programme? The remaining RoNs are 1) individual projects which are not contingent on each other and 2) have BCRs that are much lower than the ones that have been built. No economist with any independence would talk about the BCR of the RoNs programme. Indeed, recent RoNs projects haven’t even had BCRs published.
    – Why do you suggest demand estimates for PT projects are over-estimated without mentioning other transport modes? The evidence I have seen suggests demand estimates for all manner of transport projects, including roads, are affected by a positive bias. This bias is through to relate to either 1) analytical optimism or 2) perverse incentives. One could just as easily point to major highway projects that have failed to meet targets, e.g. Clem 7 and Lane Cove tunnels, where consultants involved are currently getting sued.
    – How likely is it that demand for the CRL has been over-estimated? Well, recent experience is that demand for rail in Auckland has exceeded forecasts. The potential reasons for this are many and varied, but one potential reason identified by the MoT in their review of the CRL noes the model’s treatment of car-parking supply/price was likely to be relatively conservative and that more realistic assumptions on the price paid by marginal visitors to the city centre would likely lead to much higher patronage.
    – Have you head the expression “past performance is not an indication of future returns”? If not then look it up. Your comment that “rail patronage grew at a slower rate between 2006 and 2013 than it did between 2001 and 2006” is not at all surprising given 1) there’s been a rolling stock capacity constraint on service levels and 2) growth was starting from an incredibly low base. Indeed, if the CRL is not built then patronage growth is very likely to flatline, but in no way does this provide an indication of the project’s relative value.
    – Why do you support targets and BCRs? Consider this: Let’s say the next BCR for the CRL is around two. Does this not suggest the project is worth doing regardless of the employment levels and patronage at the time? Of course we can use such targets as “triggers” for starting construction, but they should not be used to define the case for funding: That is indeed the role of the BCR.
    – Why do you talk of BCRs being important and then talk about “opportunity costs”? The opportunity cost of capital is why we do BCR’s incorporate a discount rate. And your question is far more relevant to the RoNs programme, which dwarfs the CRL in scale and timing, while delivering much lower BCRs.
    – Why do you continue to misrepresent data on congestion? PT investment *does* reduce people’s exposure to congestion. You cannot, I repeat, you *cannot* talk about relative levels of congestion between cities using measures of road travel-time. That’s like measuring the price of food by looking at the price of dairy products alone. This was discussed at length in an earlier post on your NZI work and the fact you continue to talk in this way suggests you haven’t taken the time to school yourself.

    Ultimately, the fundamental and pervasive nature of these errors leads me to the conclusion that your opinions on these matters are simply not credible.

    Yours sincerely,

  18. I am wondering has there been any assessment of the potential impact on public transport demands of Auckland University building the Grafton Campus for the engineering School and TCol? Is just looking at CBD employment figures a good way of evaluating potential growth of patronage in the rail network? The current rail network serves Newmarket very well and surely between Newmarket/Parnell and Grafton Stations that rail system must catch more that 14 % of employment. Is there any information about how much of the employment (incl. students) catchment the entire rail network serves? Surely because the CRL benefits the entire network can it not be said that the CRL unlocks potential benefits for xx% of the workforce in the Auckland area. It seems that a lot of critics only focus on the CBD effects of the CRL (or lack of) but surely there are wider benefits to Auckland Region. Given the comments of Precedent Properties that 10,000 new jobs in the CBD and running out of office space plus the development of the Viaduct area, isn’t there going to a lot more of the workforce in the CBD (whatever you define it to be).

    1. UoA’s re-development of the Grafton campus is a very good example of why previous patronage forecasts for the CRL may be on the low side.

    2. Absolutely. If you overlay the map of major employment centres on the map of the rail network, I think the only one excluded was East Tamaki – which is a PT black hole having been developed by the auto-obsessed Manukau City Council.

      If anything the post-CRL network will be far less CBD focused than the rail system now.

      The NZI also seems to be have taken a leaf out of Cameron Brewer’s play book by only criticising projects. Considering where the CCFAS study said buses and average speeds would be at without CRL, what are they suggesting as an alternative to Auckland’s transport problems?

      Just repeating the same strategies of the last 60 years?

      Do they have other PT projects that they think are more worthy of the money? Do thye think the RoNS will (I can’t think how) fix problems with transport in Auckland?

      I know it is much easier to just shoot down other people’s ideas but it is not very productive or show much intelligence or creativity.

  19. “Considering where the CCFAS study said buses and average speeds would be at without CRL, what are they suggesting as an alternative to Auckland’s transport problems? ”

    Precisely. And Jason has not considered what the city will look like when we have another million people living here. In fact long before we reach that point, without the CRL every road will be jammed. Forget driving to the airport. It’ll be quicker to walk.

  20. Portland light rail competing with cars vs an underground link unlocking an entire, 120k right of way network.

    Apples? Oranges?

    If that is your best rebuttal to the CRL – a completely incomparable comparison – it must be be such a winner that it scares you immensely.

    Next neo-lib, please…

  21. The very real reason that the CBD link, being built is being ignored. The councillors decision not too build the Newton station is a massive mistake as they are missing an opportunity to redevelop the whole area and instead upgrade Mount Eden station which is surrounded by heritage buildings that should be preserved as it’s a part of Auckland’s old history. Something tells me that the council is yet again undergoing cost cutting methods like they did with the Manukau rail link and even in a way that makes it almost impossible to build it in the future.

    I think someone should write ot the auckland council and complain about how unacceptable this is and how that we have to comprise everything critical and important transport project and yet the roading projects don’t even get their costs cut, just because our useless road building government says so.!

    1. While it’s a pity we don’t get a brand new station set in the middle of the area, it is worth noting that the upgraded Mt Eden station with it’s improved access to the north means the entire business area between the Southern Motorway, the CMJ and Dominion Rd is within a 950m walk and the furthest ones are also within 800m of the K Rd station. If this level of accessibility won’t spur on redevelopment of the area then i doubt the Newton Station would have either.

    2. Newton is a loss, but I don’t think it is a massive loss. The most important new station will be Aotea.
      Also, you keep the massive capacity improvements to the wider rail network that spans the whole city, not just the CBD. Admittedly the delay in the purchase of new trains means realisation of those capacity improvements won’t happen as soon as originally planned, but that is just a matter of “add more trains” and some time.
      (Actually, latest rumor is some of the diesel fleet will be retained to service the train route(s) that will stay surface-level to boost capacity).

      1. ‘Actually, latest rumor is some of the diesel fleet will be retained to service the train route(s) that will stay surface-level to boost capacity).’

        That’s appalling, and simply a sign of the absurd financial pressure is being put on the growing mode simply because of government prejudice. Motorways funded decades in advance of when they may be needed, and the clean and efficient future starved of investment.

        The old diesels are expensive, polluting, and inefficient to run over one unified fleet. I see they are now fully aware of their huge mistake in ever allowing Auckland to electrify and and improve the network; more and more bloody people want to use the trains. Note that they aren’t letting that foot in the door in ChCh. Give people a chance and they drive less- making their extreme motorway only policy look like the dog it is.

        Cynics and vandals.

  22. The dropping of Newton is a bad idea because every time cost cutting methods are made they end up being catastrophic and they also make it impossible to be built in the future. The National government won’t fund the CBD rail link with or with cost cutting it will just end up making the CBD rail link less attractive. With all this technology we have it makes you wonder why NZ politicians still have their minds in the 20th century

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