It’s been a crazy few weeks, and the last week especially since the launch of our Regional Rapid Rail, which has been quickly adopted by both Labour and the Greens. I think it’s fair to say that we’ve been blown away by the level of support out in the general public for the idea. We knew it would be popular but it seems this has been another level entirely.
But with opposition parties quickly jumping on to support the idea it has meant the government has quickly shifted on to the defensive. This includes deliberately misrepresenting what is proposed and claiming it will kill rail freight. This came after being less hostile to the idea initially when he said
However, Mr Bridges said he was supportive of exploring the options.
“What it requires is a business case process that works through the numbers and the details.
This is a shame as we would have no objection to them also using the idea, or even just promising to investigate it properly.
The comment about needing a business case that stacks up is quite relevant given the new batch of Roads of National Significance announced the other day. One of those happens to be an extension of the Puhoi-Wellsford road all the way up to Whangarei. A summary of the project is provided in the “fact sheet” that accompanied the announcement:
There’s no doubt this is a really massive project. It’s around 83 km from Wellsford to Whangarei, over double the length of the 38 km Puhoi to Wellsford RoNS that has a cost that probably will probably exceed $2 billion once fully completed.
Just a two weeks ago the NZTA started discussing this very corridor as it ties in with the plans announced a while ago to four lane SH1 from Warkworth to the Marsden Point turnoff. When I first heard about that project I went looking on the NZTA website for information and found the business case they did recently on the whole corridor between Whangarei and Auckland.
There is a summary of the business case, which outlines the options analysis process that was undertaken:
All the options, other than 2 and 6, are really expensive and all the options appear to struggle to deliver value for money with a BCR above 1. The recommended programme, with a Benefit Cost Ratio that barely scrapes over 1, is a mix of upgrades – some online, some offline, some section of four-laning but other areas of more minor upgrades:
The struggle to deliver value for money, even from this targeted option, isn’t that surprising when you see that only 6 minutes is saved along the whole corridor. Compare this against the 40 minute time savings delivered by the Waikato Expressway (along a much busier corridor too!).
Yet, it seems like National’s RoNS announcement is a larger investment than the recommended programme in the business case. Probably more like the “ONRC option”. So a cost of $2.1-3.2 billion and a BCR barely reaching a 50c return for every dollar spent.
I then thought I’d dig into the business case for a bit more detail. It’s linked from the project’s main page, is the first response in a google search and was available just last week:
Mysteriously though, the document is gone. Given recent history on transparency issues, it’s hard not to see a little bit of a conspiracy on the issue, but fortunately Google cache has saved the business case (albeit without the images) so we can take a look at some of its key findings. Especially in relation to the higher investment options:
So at the early phase of options analysis it was already clear the larger scale options were struggling to provide value for money. Various levels of further refinement were undertaken, before the preferred programme was developed. Crucially, this analysis highlighted that four-lane expressway simply could not be justified within the next 30 years:
Yep, that’s NZTA’s analysis saying a four-lane expressway is not warranted within the next 30 years and cannot deliver value for money. I’m sure this conclusion has nothing to do with the business case being pulled off the NZTA website in the past week. I wonder if any of the other new RoNS are in the same position?
Given his own agency have said that what he’s proposed is not viable, I’m sure we’ll be hearing from Bridges soon to wind back the promise of four lanes to Whangarei.