Today’s “On This Day” post comes from 2009:

Well there has been a very interesting/horrifying (depending on your point of view) report that has come out today on the Waterview Connection, which points towards the cost of the tunnels being $2.77 billion rather than the $1.89 billion estimated a year or so back when the tunnel was first decided upon as the best option. As the reports says:

Funding the project through the Crown account would create a liability on the Crown balance sheet. The cost of the Waterview Connection would increase the Crown’s gross debt by a little less than one percent of GDP. Given that gross debt is already forecast to exceed the Government’s target of 20 percent of GDP, Ministers need to consider whether this project is affordable, given its relatively modest net economic benefits if built now

Now I’m feeling quite mixed about this. For a start, I’m fairly mixed on the Waterview Connection project altogether as I’m against building more motorways in Auckland, I’m against a roading project eating up THAT much transport funding; yet at the same time if the project is to be built I absolutely want it to be a tunnel and not a surface motorway. Also the idea of a 5km long tunnel in Auckland is pretty cool from a pure engineering feat kind of perspective. It’s definitely something I would have found hugely exciting a few years ago.

The Waterview Connection is considered by a lot of people to be a pretty critical link in Auckland’s motorway network. Yes, it is the last unbuilt part of the “Western Ring Route”, which is supposed to be a viable alternative to State Highway 1 and therefore ease congestion through the central part of the motorway system significantly once it’s complete. I’m a little dubious about the expected traffic benefits, as traffic engineers have a really nasty habit of ignoring “induced demand” and just expect that if 100,000 cars a day are removed from the Central Motorway Junction by the Waterview Connection, that roadspace will remain free and clear and congestion on Auckland’s motorways will be a thing of the past. In my view that’s total rubbish. For a start, a four-lane tunnel would struggle to cope with 100,000 cars a day: Victoria Park’s viaduct has about 90,000 a day and is one of Auckland’s worst motorway bottlenecks. Furthermore, the Waterview Connection is actually a heck of a long way away from State Highway 1 and I imagine that a lot of the trips it would attract are made by people who currently use parts of the Northwest motorway or local roads to join in with Hillsborough Road and State Highway 20. In summary, I reckon the motorway’s time-saving and congestion-easing benefits have probably been hugely over-stated. And when one considers that a cost-benefit ratio of 1.15 is totally dependent on time-saving and congestion-easing it’s pretty easy to see how it could turn into a pointless project.

It is true that I am not a traffic engineer and I might be wrong in the above analysis. That’s why I have been looking forward to reading the traffic report for this project for a very long time. I’ll get hold of it…. one day.

So, if a $2.77 billion price-tag does make the project a non-starter, which seems very likely from what the transport minister is saying, where to from here? Obviously there are two options: either forget about the project altogther or find a way to build it cheaper. The first I’m OK with, as even a small proportion of those funds (whether it’s $1.89 billion or $2.77 billion) invested in Auckland’s public transport system could have a much greater benefit than building a 5km stretch of road, in my opinion.  The CBD rail loop has been (perhaps conservatively) costed at around $1 billion. The long-term benefits of this project, in nudging our rail system significantly along the path to being world-class, would surely be greater than a shortish stretch of new motorway. You could also have enough spare change left over to build a railway line to the airport. So I’m fine with the project being indefinitely delayed or cancelled. With the effects of peak oil just around the corner if the project is pushed back ten years or so it’ll be a complete non-starter.

What I am truly worried about is if the government starts looking at options for a surface route, which I am sure they will be doing. This is despite the fact that surface-route options have been analysed over and over again throughout the past 5-10 years and always found to have unacceptable effects on the environment and the local community. One of the main justifications for the tunnel proposed was that compared to a surface level road the cost difference wasn’t actually that great, largely because a significant amount of property acquisition could be avoided. Furthermore, along a potential surface route there are some enormous questions to be answered: how to get around the Auckland urban area’s largest waterfall? How to not completely destroy Waterview? How to not destroy Oakley Creek? How to compensate for an enormous loss of public open space? How to work within the rail designation where it exists to make sure a future Avondale-Southdown rail route is not compromised? And how to actually successfully designate the area northwest of New North Road that has never been ‘set aside’ for a motorway project.  The last time NZTA tried to designate land in Auckland City, for the Manukau Harbour Crossing Project, they got criticised hugely by the Onehunga community and eventually withdrew their notice of requirement and agreed to abandon upgrading the Onehunga interchange.

I was already thinking about making a submission against the Waterview Connection – on the grounds of it not being justified and also because of worries about air pollution from the ventilation towers. If a surface route is proposed I’ll be rather widening my opposition I think.

No matter what happens, we’ve just added at least another couple of years to the timeline of the Waterview Connection being completed. All the consenting documentation for the tunnel had been completed just before Christmas (after close to two years of work on the design of the tunnels) so if all that work is now pointless it’s going to lead to a huge delay in this project happening. Which, as I said before, is not necessarily a bad thing.


Six years later and the project is now over half constructed. It’s tunnel portion is only marginally shorter than what in 2009 they said would cost $2.77 billion yet interestingly, the cost is almost exactly half this number: $1.4 billion. Furthermore, the tunnel is now being built as a six-lane motorway rather than a four-lane one.

Waterview Ramps Aug 14

The lesson in this story is that prices for major projects come down, and we should expect this trend to continue for the City Rail Link as more is understood about what’s actually needed and what’s just sitting in a huge contingency fund.

Lastly I’m looking forward to when the project is completed. The slogan that we need to “complete the motorway network” has been around for a few decades now and this project should represent it’s completion. As such it means we should be able to really focus all future investment on delivering a complete public transport network (dreams are free).

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  1. “and this project should represent it’s completion” Except for the SH18 Upper Harbour Drive to SH1 link, they pushed that bit out to do at the end.

    1. The Sh18/SH1 interchange just isn’t needed at this time. Especially in the configuration that has been suggested.

    1. Ha! Good one.

      A year ago a real-estate agent tried to sell me a house near the end of Alberta Street (Point Chev side of the interchange). I asked him “Aren’t they building a massive motorway interchange there?”. He said “Really? Are they…?”

  2. Why is it that they can built a 6 lane wide motorway underground for cars (with all that expensive ventilation as well) for what $500K per metre?
    When Brownlee during his 6 years as MoT was routinely saying in Parliament and everywhere else that hecould, that CRL would cost at least $1 million a metre to construct and refused to accept it could be done any cheaper. And used that cost per metre to justify why it couldn’t work.

    And yet, here is NZTA doing in Auckland, just down the road, a pair of bored tunnels each 3 times bigger in “lanes” than our CRL tunnels ever would be (and 4 times the “volume” of the CRL tunnels)
    – yet the Government still believes and maintains it will cost at least $1m a metre for CRL – hence their stubborn refusal to fund it anytime soon on the basis that they have more pressing need for that spending?

    Wheres the reality check on the CRL costs, yes we know the CRL tunnels at 1/2 the diameter of Waterview will be cheap as – relative to both the Waterview tunnels and also the CRL station fit out (we’re told).
    But we only have 2 new underground stations now that Newton has been dropped.

    So could we not say, that the 2 CRL TBM tunnels will be bored and fitted out for rail and signalling and ventilation etc for well under $1B “completed costs”,
    Leaving what $300m per station to construct and fit out? for a total of $1.9B?

    Heck $300 got us a 1.5km 7 lane Newmarket viaduct replacement – so would K’Rd underground station [the only true underground one left] really cost the same amount as a complete Newmarket viaduct to build and fitout?

    And would the Aotea and Mt Eden Stations which are now basically cut and cover jobs not full/deep underground stations really cost that same amount each as K’Rd?

    Something simply doesn’t add up here.

    And the other question, is if the Waterview was budgeted at $2.7B and the actual cost is now half that – and they made it 1/3rd bigger all round with 6 lanes not 4.
    So whats happened to the other $1.3B or so thats not spent on Waterview? Why could that not be put into other valuable projects (like say the Governments half of CRL)?

    Or has NZTA sqaundered it at the Governments insistence on yet more low BCR RoNS?

    1. ‘Something simply doesn’t add up here.’

      That is because, from the government’s point of view, there is no requirement that anything related to rail should add up.

      We have an administration that is ideologically opposed to railed transport in all it’s forms so they will make whatever statements they please, regardless of the facts. They can be confident that most of the electorate will only hear big numbers and will then dismiss PT rail proposals as unaffordable without bothering to delve deeper into the figures and costings.

      1. Its way more than that Gary,
        Its not the Governments fault on CRL cost estimates as far as I can tell.

        Its the whole construction/engineering industry, why is it that the estimations are so woefully inaccurate compared to reality?
        How come road projects cost half the estimate yet a similar rail project is given no leeway for the same type of benefits and cost reductions?

        Estimates that are produced by experienced design, engineering, and construction companies, who do this stuff everyday.

        Yet is seems everyone pads the estimates, then the project manager adds another 20% on top for contingency, then suddenly its doubled in price.

        Thats the problem in a nutshell.

        You have to wonder if this isn’t the flip side of the same coin – the coin that sees construction prices for houses in Auckland at $3000+ per square metre with no sign of ending their continual increase.
        So many people putting inflated bids for the work, that when they land it, they are simply creaming it (while being creamed by their subbies who all do the same thing).

        And who pays for both types of problems – we all do. Either as rate payers/tax payers or house renters or owners.

        1. From what I can tell is everyone is now so scared of the “there are always cost overruns” that they’ve deliberately gone the other way. Start with costs that include every contingency so that as time goes on you can say it’s getting cheaper and no negative storeys about it. Of course that means it seems so expensive people then think it’s a bad idea and question it.

    2. Greg, I suspect that the cost of building in the city, digging amongst the foundations and basements of multi-story inner-city buildings, will involve masses more work than the relatively free-flowing TBM cutting through virgin ground at Waterview. Massively more expensive to do, unless you want towers slowly leaning into the street. We had a similar issue in London with the Jubilee Line extension, where we opted to dig solely under the existing railway lines, to avoid having to interact with thousands of individual property owners claiming subsidence. Lots of compensatory grouting, and slow digging, equals big money.

  3. What a horrid eyesore in the landscape, we could of had the crl with newton station for less than that and to much better affect on the citys congestion for far longer.

  4. On completion road projects are always reported as having come in under time and budget these days. whoevers responsible for estimation should be fired as surely a responsible organisation would never deliberately overcommit precious resources just to get a good sound bite /s

  5. IIRC even John Banks was trumpeting SH20/Waterview as “the completion of Auckland’s motorway network”. We should hold him and everyone else who said so to that.

    I wonder what the total cost of all of SH18, SH20 and associated SH16 upgrades, a-la the entire western ring route, is in present-day inflation-adjusted dollars?

    1. Actually it would be fantastic to source their actual QUOTES, so they can be fired right back at them, + the media + the general public.

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