The City Rail Link is probably the most intensely scrutinised transport project New Zealand has ever seen thanks to the government’s earlier outright opposition to it. Over the last six years we’ve seen a number of studies, reports and business cases examining the project and often one sided and deeply flawed reviews of all of these. In 2013 when the government finally came to the party and agreed with the project although they wanted to delay it till 2020. In January they agreed the project could start earlier (although their funding may still only start in 2020) which would allow Auckland Transport to get on with the project including negotiating contracts.
AT already had approval and was/is well underway with the first stage of the CRL up to Wyndham St. Late last year they started the process of sounding out the market on the rest of the project. As part of that they’ve produced an internal business case looking at the project taking into account the all of the changes to the project and improvements in their understanding of it.
AT have now released a glossy summary of this business case – one issue with the document is that many of the graphics are of quite low quality and in some cases impossible to read. They are quick to point out right on the front cover:
This document is AT’s internal business case to facilitate the Gateway Review process prior to letting contracts for enabling works construction.
It is not a joint business case with government.
As I understand it, the Gateway Review process is related to the market sounding and working out the best way of sequencing and contracting out the project. As AT Chairman Lester Levy says at the end of his opening message.
The business case summarised here will continue to evolve. This version is suitable for the AT Board’s decision on letting Enabling Works contracts. As the project is further developed the costs (and benefits) will be refined and the business case advanced.
On to the interesting stuff.
AT say their detailed economic assessment shows the project will return benefits of $2.96 – $3.2 billion in Net Present Value using the NZTA standard 40-year assessment with a 6% discount ratio. When assessed against the costs including operational ones (also in NPV terms) it has a BCR of 1.6-1.7. That’s much better than the 0.4 in the hatchet job that was the Ministry’s initial review or the 0.9 in the City Centre Future Access Study which wasn’t a full detailed assessment. It’s also better that most of the government’s big RoNS projects
A breakdown of the benefits is shown in the graphic below.
Travel time savings are obviously the biggest single benefit and the document gives some information on the project’s impact on transport use. The results were modelled by the joint modelling group that is made up of the council, AT and the NZTA. They say that in 2046 during the two-hour morning peak there will be 50,000 people using rail if the CRL is built compared with 32,000 using rail if the CRL wasn’t built and 12,000 in the AM peak in 2014. Aotea Station will surpass Britomart and see 13,000 people pass through in the morning while Britomart will still be busier than it is today and have 12,000 during that time.
The modelling also looks at difference in mode share for the city centre across the entire day between 2010 and 2041. As you can see private vehicle usage remains unchanged at 34,000 – about the same as it also was 2001. Bus use and ferry use both increases slightly but the big changes come from rail, light rail and active modes which grow significantly. Based on those figures, by 2041 only 26% of people will enter the city centre in a car. It also must be remembered that so far we’ve had a history of underestimating public transport usage.
Interestingly in the section that briefly talks about capital and operating costs it says AT may not need new trains initially.
As the CRL allows a major productivity benefit from shortening the route from the west to Britomart, additional EMUs may not be required for the immediate post-CRL opening services. The shorter route means that the overall operating cost for the rail services will reduce.
This seems hard to believe given how fast patronage is growing. Yes the CRL will speed services up and combined with improvements that need to be made before then, it will help get more out of the fleet we have but in my view, the CRL will be so popular that not having additional services sounds like a recipe for very busy trains.
One of the big things our economic assessments aren’t able to grasp – especially with projects like the CRL – is just how transformational they can be, especially when it comes to land use. For the West in particular it will be like the whole area has been lifted and moved 10 minutes+ closer to the city. Even within the project area it opens up some significant development potential.
They say that just the CRL footprint includes 4.9ha of developable land with a potential floor space of 210,000m² to 250,000m². That could be enough space for thousands of jobs and thousands of new resident. The estimated value of this potential new development is $1.2-$1.4 billion and of course that won’t have been included in the business case. Some of the options for redevelopment are shown below.
The project, while disruptive to build, will be fantastic for Auckland and it’s good that over the last few years AT have been able to get on with it despite the initial government opposition. We’ve already seen the disruption start with bus and traffic changes and as underground services get shifted. Within weeks diggers will be on the ground to actually start working on the tunnels themselves.