No light at the end of this tunnel - reflecting on failed infrastructure

The big risk and high cost of thinking big.
I flagged a concern in the last post about the fiscal and productivity impacts of projects that don’t stack up economically. The risk is that the post-Covid recovery leads to indiscriminate infrastructure spending which would compound the already severe fiscal effect of essential deficit spending on public health, household incomes, and business support .

Given their dismal track record here and overseas, it is likely that large infrastructure and especially transport projects will dig the fiscal hole deeper without delivering the benefits that might help the country climb out of it. We know that the Think Big energy projects of the early 1980s precipitated a foreign exchange crisis.  Had they been economically sound the ten hard years of economic restructuring that followed may have been moderated. 

Looking back to go forward
There is no sense in trying to replicate the past.  But it does make sense to learn from it.

In this case, it seems the lesson was not learned. I posted several critiques of Auckland’s Central Rail project back in 2011 and 2012. Today we can see just how big a cost ignoring past infrastructure failures has imposed - so far - in the case of the CRL if only to temper a new found enthusiasm for thinking big.

Auckland’s Central Rail Link, 25c in the dollar?
How ever long it takes to finish and however much it gets used, Auckland's CRL is an economic disaster.

The first cost estimate for the tunnel was $2.3bn, released by Auckland Council in 2011. That did not account for the prior expenditure of $500m on electrification to make the tunnel environmentally acceptable, or the consequential costs of purchasing new rolling stock, extending and updating existing stations, and compensating business owners badly impacted by prolonged civil engineering works. 

Even with those omissions, though, the project was deemed unworthy of government support by Transport Minister Brownlee, with “a decidedly weak benefit:cost ratio of just 44 cents in the dollar”. 

In any case, the estimated tunnel benefit:cost ratio turns out to have been on the high side.  That the project was under-specified is evident in the 2018 announcement that platforms had to be lengthened, adding around $250m to the costs. 

And it was under-costed.  By April 2019 the cost estimate was up to $4.4bn.  This covered construction cost increases of $327m, “non-direct costs” of $130m, and a new provision for escalation and contingencies of $310m.

Converting the original budget and additional costs to December 2019 dollars (using the price index for construction inputs) reveals an over-run of around $1.7bn, 70% ahead of the original budget after accounting for inflation.  Given that there has been no suggestion that the projected benefits will increase, the potential economic return now sits at around 25c in the dollar.

We can expect further cost escalation given that completion date (prior to Covid19) was pushed out from 2021 to 2024. This is likely to be extended further by pandemic-related constraints including disruption to contractors, labour, and supply chains, and by increased competition from local and international “shovel-ready projects”. That's more bad news for those central city businesses that have seen revenues plummet in the face of ongoing disruption by the prolonged street works.

Strong growth rates are misleading
Let's consider potential benefits in light of the past ten years' public transport performance.  The introduction of electric units in 2014 and station and service improvements across the network saw strong relative growth in rail patronage. It seems the benefits of improved service levels on the network are already being reaped without the $4.4+bn CRL.

However, this needs to be kept put in perspective. While rail boardings almost tripled over the ten years to February 2020, the real gains were in bus use (70% of the total):

     Source: https://at.govt.nz/about-us/reports-publications/at-metro-patronage-report/

Significantly, 87% of gains in bus patronage were in “frequent, connector, local, targeted” services according to Auckland Transport.  This strengthens the argument for flexible bus services rather than high cost, fixed route rail. 

It is also likely that gains to rail included a transfer of some passengers from buses so that the impact on car use and the increase in public transport use will be less than indicated by increased trips by rail. 

How important is rail to central city commuting?
According to the 2018 Census, a relatively low 55% of work trips by the 159,000 people working in the Waitemata Local Board Area were by private or company vehicle. Of those, 6% of were made by passengers.  Company vehicles accounted for 11% of the total. As these vehicles are most likely required for work purposes their occupants are unlikely to transfer to PT. 

This means that the market for improved rail and bus services is just 46% of possible commuter trips .  Public transport already has a high penetration rate of 29% of commuters working in Waitemata.  However, less than a third of these were by rail, despite the relative growth in numbers. The prospects of getting many of the remaining private car users to shift to rail are low. Rail patronage may have to grow mainly through trips transferring from buses.

Narrowing the focus , there were 18,000 commuters to the inner city in 2018. Only 19% relied on a private or company vehicle (between 3,100 and 3,200 vehicles) in 2018. The likelihood of getting a significant reduction in this number is slim. 

A surprisingly high 50% said they walked to work, while 22% used public transport (only a fifth of those by rail).  The strategy of getting more inner city workers living there seems to be working. Ironically, it’s a success that raises questions over expectations that investment in the CRL will influence travel in the inner city. 

Will CRL even deliver a significant mode shift?
The Council wants people out of cars.  Whether or not that's achievable - or even reasonable  - was the CRL the way to achieve it?

Apart from the fact that the project is uneconomic and fiscally damaging, the fact is that over three quarters of Auckland’s labour force works outside Waitemata Local Board area, with 77% of them relying on private or company vehicles to get to work.  

Even if the billions invested into the CRL were to effect a significant lift in public transport patronage, it is a spend that could have been much more effectively directed towards offering  more flexible bus-based transit serving the wider urban area.

And that was before Covid19.
Today, the lack of flexibility of rail comes into even sharper focus in light of the potential changes in working practices, the diminished appeal of high density living, commuting, and working, possible land use changes, and the imposition of social distancing for the foreseeable future. These prospects, along with post-Covid19 delays in constriction, mean that the CRL is likely to fall even further short of helping to achieve “Government’s plans for higher economic productivity and the Auckland Plan vision of being the world’s most liveable city” (City Rail Link, Business Case 2015).

Spending $4.4bn (and climbing) on lifting the capacity of rail patronage by building the  CRL tunnel looks like an economic and and fiscal fail. It is also looking like a major policy fail.

Which brings us to the even bigger white elephant in the room, Auckland's proposed light rail. This is the subject of my next post.

Hardening Arteries: Intensification and Inner City Congestion

Apartment creep
One tool in the compact cities toolbox is boosting residential densities along arterial roads. It’s a tool that should be used sparingly.

According to a report by Bernard Orsman in the New Zealand Herald, it’s a tool giving rise to mixed reactions along Great North Road, Grey Lynn, as planners apparently exercise their discretion to rise above the proposed Auckland Unitary Plan by allowing apartment buildings higher than originally planned.

This raises questions over the rights (or otherwise) of current residents to sunshine and views and over the impact of new bulky structures on heritage areas and buildings in the inner city (Figure 1). To be fair, the car yards along Great North Road hardly merit preservation, although adjoining and nearby villas may do. The trouble is, though, this is not an isolated example.

The other issue worrying residents is simply the impact of so many more people – and their cars. Allowing six storeys where the original intention was four (something that some local residents could apparently live with) makes for a substantial increase.

Do inner city apartments stack up?
I questioned the economics of higher density inner city dwellings in Auckland some time ago. These concerns are confirmed by developer Brady Nixon in the Herald article. 

He cited costs of $8,000 to $10,000 per sqm to build apartments in Auckland. Evidently a single bedroom 54sqm apartment at North Apartments on Great North Road cost $11,462/sqm. Brady compares this with $3,150/sqm for a 238sqm house at Flatbush.

Figure 1: Planned North Apartments, Great North Rd
Before

    Source: Google Earth

 After

    Source: http://www.northapartments.co.nz/

Good for some

There is no doubt that inner city[1] living suits particular markets, primarily the 20 to 30 age group, people in tertiary education, starting jobs, building careers, yet to develop permanent relationships. This is demonstrated in my last post.

 

But that will account for well under 20% of population growth over the next 15 years [2]. How many of this group and recent immigrants (40% of inner city residents lived overseas five years ago) will be able to afford well designed apartments?

What can we deliver?

The push for higher buildings is necessary so that high inner city land and development costs can be spread across more apartments. Adding storeys is one approach to achieving commercial returns. Sacrificing quality is another, an approach apparently adopted for a number of projects in the past. While that may suit a transient inner city population, it does little for the quality of urban design and may well contribute to social problems in the long term.

Can boomers give apartments a lift?

Another way forward if intensification is the objective might be to produce apartments that appeal to more mature households, and simply leave Gen Y to their own devices (not a happy prospect).   Apparently there has been a surge in demand for apartment living among older people in Brisbane. But, they are looking for well-appointed three-bedroom apartments where they can sustain – and afford – a lifestyle similar to the one they are used to. Given the economics of apartment development it’s difficult to see a similar standard and style in Auckland being affordable among those ageing boomers who might favour inner city living.

As it is, they are not likely to account for a lot of demand. Only 1.2% of Aucklanders aged over 50 lived in the inner city in 2013 (compared with 5.2% of Aucklanders aged between 15 and 39). So what is the likelihood that inner city apartments might appeal to more of them?

 Not great. Members of the boomer demographic in Auckland are suburban dwellers, used to space and privacy. Retirement villages offer a suburban alternative that does not require their withdrawal from the communities where they currently live if they choose to trade down. They still receive the benefits of low maintenance and security while retaining access to a little space and privacy. 

Congestion - the elephant in the apartment

That might be just as well because mindlessly boosting residential development on arterial roads promises simply to compound Auckland’s congestion problems.

We know higher densities are associated with higher congestion. Auckland’s geography means it already performs poorly on this count. The Tom Tom Congestion Index confirms this.  

When the 2013 congestion index for 65 American and Australasian cities is plotted against population density (sourced from the Demographia website) Auckland sits among the worst performers – Vancouver, Sydney, Los Angeles, and San Francisco (Figure 2).

 

Figure 2: Population Density and Congestion

 
Inner city dwellers still use cars
Intensifying housing on arterial roads can only make that worse. While proponents of inner city living might cite a reduction in car use as a result of proximity to work and cafes to justify it, the reality is that people use cars for more than commuting and dining.

 In 2013 inner city households owned over 10,000 cars (0.7 per household or 43/ha). Doubling or tripling the number of residents by promoting inner city apartments will lead to increasing congestion, especially when that takes place on arterial roads. 

Given that households in the inner suburbs (the rest of the Isthmus) focus their travel on those roads and owned nearly 200,000 cars in 2013 (1.6/household and 14/ha), Auckland’s main arterials could well resemble parking lots rather than roads in the future. 

Gilding the lily

This makes the before and after images in Figure 1 somewhat misleading given that there is no sign of additional activity in the second image despite the prospect that the North Apartments alone will house another 40 to 60 inhabitants.

This omission reminds me of a pitch for intensifying dwellings around arterial roads in Melbourne. The before and after images in Figure 3 were intended to illustrate how Australian cities might be transformed. Detached houses are replaced by continuous four to six storey apartments, all achieved, if we are to accept the rendering,  with no more people on the footpath, no more rubbish bins to sidestep, no more tram stops and no more cars .
 

Figure 3: Half a transformation: packed apartments, quiet street

 

Less haste, more thought

Oh that it were so easy: that with the stroke of a pen and perhaps a little airbrushing planners could solve our housing problems and retain a pleasant, uncongested inner city environment.

The reality is that it is hard to make apartment living work in the inner city, and short-sighted simply dumping it onto arterial roads.  Unthinkingly reaching for the sky is a risky response to the need for more housing, especially affordable housing. A lot more thought needs to go into this particular planning tool before it is applied in such a cavalier manner.

[1] The CBD and “outer central city” as defined in my previous post
[2] This estimate is based on the Statistics New Zealand age-specific Auckland population projections (2006 base). This groups 15 to 39 year olds together, a group projected to account for 27% of growth from 2016 to 2031, compared with 61% among the over 40s.

Living in the CBD - or Simply Passing Through?

Liveability on a pinhead
The CBD accounts for under 0.1% of Auckland’s land area.  Yet Auckland Council is boosting it as a key to its ambition of making Auckland the world’s most liveable city.  Spatial and transport planning and infrastructure investment are all geared towards this. Among other things, plans include tripling the CBD population based on promoting medium to high density apartment living.

It has to be asked who this benefits?  Sure, the notion of laid-back café culture in the CBD may work for middle class Aucklanders. It may encourage people to visit more often, and stay longer.  But who wants to live there?  And who lives there now? 

The Data
I addressed these questions with a little number crunching using the 2013 Census. I divided Auckland into four areas for illustrative purposes: the CBD itself, the surrounding inner city Census Area Units (CAU); the Rest of the Auckland Isthmus (the city’s central and longest-established suburbs); and the Rest of Auckland.  The latter takes in suburbs to the north, west, and south, and rural areas.  It encompasses diverse, growing communities also worthy of analysis if plans are to be sensitive to local circumstance.  However, they are not the focus here.

The CBD is booming (in a small way)
At 26,300 people the CBD accounted for 6.6% of Auckland’s population in 2013.  It grew at a high 5.8% a year from 2006 (albeit from a low base) and accounted for 7.5% of Auckland’s growth. The “outer central city” grew at 2.6%/year, and housed another 10,000 residents.

The Rest of Isthmus grew pretty slowly (0.7%/year), but still accounted for 18% of Auckland’s growth. 

Even at a modest 1.1%/year the Rest of Auckland, however, accounted for 73% of growth, confirming that suburban living remains the popular and practical choice for most Aucklanders.

A transient population
So, in residential terms the CBD is a bit player.  Its residents are also distinctive: Census statistics show just how unlike the rest of Auckland it is. 

The CBD may be a great place to visit, but living there appears temporary.  Only 11% of residents were at the same address five years ago. 46% were overseas and 41% elsewhere in New Zealand (Figure 1).  73% were born overseas, with 53% of 2013 residents Asian (Figure 2), compared with 23% across the city as a whole.

Figure 1: Years Living at Current (2013) Address

 

      Note: In this and following graphs percentages sum to100% within each of the four areas

 

Figure 2: Ethnicity

 

Packing them in
The CBD is densely settled with 31 dwellings/ha compared with just 15/ha in the outer parts of the Central City and 8/ha across rest of the Isthmus. 

The heart of the CBD, Central Auckland East and Central Auckland West CAUs, is the most intensively settled area in the city, with 50 dwellings/ha and between 100 and 109 residents/ha.  These compare with medians of nine dwellings and 30 people/ha across the 298 predominantly residential CAUs in Auckland (defined to exclude CAUs with under 5 houses/ha, thereby omitting predominantly rural, commercial, and industrial areas).

The dwellings
CBD housing is dominated by small units and rentals.  Only 26% of residents own the homes they occupy (in part or whole, privately or through a trust).  This compares with 58% elsewhere on the Isthmus and 67% beyond the Isthmus.

The majority of dwellings in the CBD are apartments, units, or townhouses (Figure 4). And they are generally small, with only 10% having more than two bedrooms. A high 47% have only one bedroom (Figure 3). 

Figure 3: Dwelling Type

 

Figure 4: Number of Bedrooms per Dwelling

 

The People

Not surprisingly the CBD population is dominated by young adults (Figure 5).  35% are aged 15 to 24 (the age of tertiary education) and another 35% are aged 35 to 34, the family formation/career development age group.  The all-Auckland figures are 15% and 14%.  Only 12% of CBD residents are aged over 50, compared with 29% city-wide.

Figure 5: Age Structure

 

A youthful population is distinctive in a number of ways.  32%of CBD residents study fulltime compared with 13% across Auckland.  Fewer are in long-term relationships, with 41% partnered compared with 59% city-wide. 

There are fewer family households than in other parts of the city (Figure 6), and fewer of those families include children (Figure 7).

Figure 6: Household Composition

 

Figure 7: Family Status

The list goes on

CBD residents are different. They generally fall into lower income groups; they are more likely to be unemployed; they are less likely to hold senior management or professional positions than residents of other parts of the Isthmus; they are more likely to be in sales or service occupations.

The lessons are clear
The residents of the CBD (and surrounding areas) do not represent Aucklanders.  Recent CBD growth does not indicate a switch in housing preferences.  The CBD population is transient, people passing through: migrants arriving, students studying, young people commencing their working careers, relatively few settled relationships, and so forth.  It is not a place of families and children, of people settled in their jobs and housing, or of retirees.

For those people, the preferences remain for three or four bedroom dwellings, a little space, and suburban living. 

If Auckland's plans continue to elevate the high density living options tuned to the youthful, the transient, and the less well-off, they will fail the majority of Aucklanders.

The consequences
The message is not new, but the 2013 data reinforces it.  Plans and policy must front up to who wants to live where in Auckland, rather than imposing a narrow model of urbanism based on an unrepresentative demographic profile that overrides the city’s physical and social realities. 

New housing would ideally be directed to more expansive areas throughout and beyond the city, areas that offer the best opportunities for community amenities, employment, recreation, and connection without congestion. 

An obsession with increasing densities in and around the CBD and on ageing arterials won’t deliver that.  It will instead undermine rather than lift the city’s liveability. 

Another Middle Class City Vision

Roads or cafes? That is not the question.

Dr Joel Cayford says that we are throwing away money when we invest in roads but creating value when we invest in downtown infrastructure (New Zealand Herald, 17 September 2012).  It’s a mistake to think state highways are not a critical part of our urban infrastructure, a mistake too many central road planners make – failing to appreciate that the highway's main role in and around Auckland is in the provision of urban arterials, the roads that keep the city itself connected and working.

And while I share Dr Cayford’s concern over the shaky rationale behind some current over-the-top  inter-city road projects, I cannot accept the idea that throwing a lot public money into the CBD is a rational alternative.  Nor do I accept that we should persist in a cargo cult mentality, demonstrated in his suggestion that the taxpayer should deliver more central city goodies to Aucklanders.

Creating a central city sink

Dr Cayford’s vision is one of even more public spending in an area already at risk from over-investment in public amenities.  This simply means that the city’s ratepayers will have to cough up even more because of over-optimistic – or plain misleading - extrapolations of demand and dollars and a contrived vision of what a central city might be.  Except that he would also have the taxpayers help pay for the party.  

At least he is in good company: Auckland’s spatial plan promotes the CBD as a sink for the city’s rates.

Even the occupants of the latest flagship quarter, the Wynyard Wharf, are said to require further rental subsidies from the city.   And while it was great to have Wynyard set up  for the Rugby World Cup – and we were lucky enough to have fair weather most of the time – it is more often echoing and empty than thriving and buzzing. 

The CBD is doing fine

Dr Cayford suggests that the problem is that the city centre is not a great place to visit.  I disagree, and I doubt that never-ending spending on me-too inner city infrastructure will drag more tourists down to New Zealand as he suggests. Incomes and exchange rates drive tourist numbers, as years of analysis for the tourism sector have demonstrated, topped up a little by awareness campaigns and airfare promotions. Having a city that bears a vague resemblance to the Mediterranean won't make any difference.

(He is right to diss a new convention centre, though: there is good reason not to gamble too many public dollars on a sunset industry).

Anyway, things  already look pretty good.  To quote Dr Cayford, :

Go down and sit at a table outside the old netshed on North Wharf about 5pm on a balmy, sunny afternoon, Saturday, Sunday, Friday - whenever - and watch the promenading that's happening here in Auckland. You could be on the Mediterranean. Kiwis have style and they like to show it, given an opportunity.

One problem is that the promenaders that Joel likes to watch are spread ever more thinly spread through fashionable quarters, and therein lies the risk. 

There has been a string of such initiatives, local nodes promoted by public investment in the built environment.  And they are all great places to be on their day, but they are also struggling to retain tenants and stay that way.   Princess Wharf, Queens Wharf, High Street and Vulcan Lane, the Chancery Quarter, Britomart, the Vector Centre, the University precinct, the Viaduct Basin: they are all worthy destinations, great spots to kick back in on a sunny day.

They are  nodes that, as long as they  retain some vibrancy, create the frame of a great CBD. Individually and collectively they contribute to a city centre that’s well worth a visit.  But we need to be thinking strategically now about how much more we can sustain, and how we are going to keep what we already have buoyant.

Time for fine-tuning and coming out

For a start, when it’s wet and blustery, winter or spring, the Mediterranean idyll goes out the window. 

There are things we can do to reduce dependence on our uncooperative  elements, and they needn’t cost a lot.  Wellington has created sheltered pedestrian ways in a climate  less comfortable (if somewhat drier) than Auckland’s.  We certainly do not need new tracts of paving, new collections of cafes, and over-capitalising infrastructure to get our CBD working better.  The new rail loop that Joel cites, for example, might make it easier for a few more residents from outer suburbs to visit the CBD, but it won’t do anything for the ambience and quality of places within it.  

Much current thinking seems simply to pander to the café set and an image of our climate that is only true some of the time.  Queen Street appears to have bucked the trendy trend, though.  It caters increasingly to the take-away crowd and night owls.  While this perhaps reflect some of our much-touted diversity it seems to be a source of middle class angst.

Democratise the CBD

We need to consolidate what we have and to do so within a budget that reflects our means.  We should ideally aim to make the CBD relevant to citizens other than just the coffee set.

Maybe we could pursue initiatives that will democratise it: improve pedestrian links among existing nodes; open up  hidden spaces (St Patricks Square, Myers Park come to mind); create more places for kids to play; promote more informal gardens and greening; provide capacity for people to perform and not simply promenade in public places; provide for street art, street theatre, and street life; and  promote places where our local cultures can inject new life, all the time recognising the need for sheltered places and paths. 

These are the sorts of things that might put a little flesh on the CBD bones without relying on the begging bowl or  pandering to middle class conceits.  And they just might turn it into an asset for more Aucklanders.

No more LBF

If we need to do more, let’s do it within our means and in a way that is relevant to our citizens. Focus on what we’ve got and who we are.  And get off the me-too middle class spending bandwagon that seems to be driving Auckland’s civic leaders and planners, and amounts to little more than rates (and taxes?) being treated as some sort of central city Landlords’ Benevolent Fund. 

Irresponsible inner city behaviour

The latest in urban design - new public spaces for the dispossessed

In my last blog I raised the question of whether purchasing land for a possible rail link through the city would reduce the attractiveness of the inner city living by laying waste to a corridor cutting through it – shades of the motorway madness of the 1950s and 60s.  I suggested that this will increase the anti-social behaviour after dark that so worries CBD residents and visitors.

So it was interesting to see in the New Zealand Herald today the concern over the use of vacant city sites as places of refuge for people deemed anti-social and particularly as sites for binge drinking.  These are, of course, informal public spaces, simply being used as such.  And with the purchase of 280 properties in the central city for construction works or sites for rail-related development in support of our “sometime-maybe-never?” underground rail link, we are creating more of the same.  This will no doubt make inner Auckland more liveable for the homeless, dispossessed, impoverished, and underemployed.  Paradoxically, we could claim from this that laying waste to inner city sites contributes to the vision of increasing inner city living.

Getting rail up and overrunning

By the way, the $240 million set aside for acquisition of 280 properties sounds just a little light.  I haven’t searched the records, but I suspect few of those properties would be valued at under $1million.  And what about the compensation for relocation and loss of revenue and goodwill among the  many businesses that currently occupy them, and of course the relocation costs of displaced households?  

To me it looks suspiciously like we have taken the first step down the budget blow-out track.  But then, that tends to be the way of big civic projects utilising public funds, which are almost inevitably subject to optimism bias and waste, partly resulting from confused accountability.

(On accountability, it is not quite clear whether the train driver is the Council, the Mayor, or Auckland Transport.  And any expectation that the Government should shoulder much of the cost or should legislate to tax motorists points to further potential confusion in accountability, in this case between central and local government.  This is particularly significant for a project destined to make  a big a hole in public finances).

Of course, many of the properties to be acquired will be sold once the link is completed.  But assuming that the holding costs are based on $240m expenditure, any over-run will boost them.

So will delays to the project as a result of unresolved funding problems, continuing economic uncertainty, and likely fiscal constraints.  These are likely outcomes: a Benefit Cost Ratio of 0.4 doesn’t justify going ahead, and the strategic benefits remain decidedly unclear. But that’s another story. 

Suffice to observe that like alcohol bingeing among people with too much time on their hands, it seems that playing the train game is a difficult habit for politicians and other enthusiasts to break.

Passing the bucks

Even if  we do get to spend all this hard earned (or borrowed) money down the track, over-optimistic passenger and revenue projections and pie in the sky proposals for station-based office and residential developments will mean under-recovery of capital and operating costs.  A BCR of 0.4 looks a bit optimistic. 

Of course, we can continue  to behave badly by excessive, wasteful spending  and leave someone else to clean up the mess.  In this case another generation will be left to foot the bill while today’s decision-makers slip – or slope -- off into retirement (most likely in suburbia or their coastal retreats).  How responsible is that?

Tunnel Vision: thin edge of the rail wedge

Digging in

There is an interesting if depressing narrative emerging in a number of independent stories about Auckland's passenger rail aspirations, city centre hopes, and spatial plans.   This posting aims to string together just some of the bits - with links.   

The recent announcement that Auckland Transport is going to acquire 210 inner Auckland properties (or is that 280?) to preserve the route for a rail tunnel with no assured funding suggests that politicians and planners in this city – and their plans – are a couple of steps removed from reality, committed to an inner city rail tunnel at almost any cost.. 

At what cost?

It’s noteable that when councillors start lambasting officials for their tunnel costing, or propose a tax on motorists to pay for the project, they say nothing about and the history of over-runs associated with Think Big projects and the contingencies – including delays – that history tells us have the capacity to double the costs of large civil engineering projects. 

And they seem fixated on a tunnel without addressing how ongoing rail operating losses after completion will be met, or the costs attendant on the ancillary road works, the parking facilities, and  other above-ground spending on existing and proposed stations necessary to get people on board.  There is also the cost of the electrification  ($500m already advanced  by taxpayers for electric units, quite apart from line costs) required simply so that we can run trains underground. 


So far, then, it has been difficult to get a picture of the  total costs of this project.  Arcane debates between politicians and officials about how to factor in the impact of inflation over a project which it is conceded will take some time to get underway, let alone completed, seem rather incidental in the bigger picture.

Why is this city – today's and tomorrow's ratepayers – going along with a high risk, low return - and somewhat opaque - gamble?  The risks are all on the downside.  For a start, incremental investment decisions based on broad  estimates are bound to escalate the costs of a project of already doubtful merit. 

The reasons, we are told, lie in the benefits of better access to and promotion of the CBD, reduced road congestion, better connectivity between the south and the west of the region.  Let's revisit those reasons.

Cross-regional connection - L

Dealing  with the last first:  journey to work figures from  2006  show that only around 1.3% of all motorised commuting trips (a total of 4,700 by bus, car, rail, or motorcycle) were between the west and south of the region. So cross-regional connectivity hardly goes any distance towards justifying the tunnel. 

In 2006, 7% of commuting trips from the west to the Inner City were by train – around 560.  Let’s say that increases 5-fold or thereabouts as a result of a more direct route (putting aside, for the moment, the time associated with  additional stops at new stations).  That’s perhaps 2,500-3,000 trips.  Again, the marginal cost of these additional trips looks pretty high.

And with recent investment in road and industrial land  developments in the west of Auckland a much more sustainable strategy would be one that fostered more investment and greater work opportunities closer to home.  This is consistent with the expectation in the business case that many of the additional workers in and around the CBD will also live there.

So cross-regional commuting hardly makes a compelling case for the rail link.

Reduced congestion L

There is an expectation that even making a marginal difference to car traffic will reduce congestion.  That ignores the experience: road capacity gained by transferring commuters from bus or car to rail is simply absorbed by the reinstatement of trips that would otherwise have been deferred by peak capacity constraints. 

More than that, we are now seeing the benefits of considerable spending on roads in the past by way of reduced congestion anyway, something that could easily undermine  rail patronage forecasts. 

 And we can look forward to even more gains on that front as more people work from home, an ageing population reduces its use of cars, and long-term increases in fuel prices lead to more rationing of car use by households.  These benefits come at virtually no public cost – and are likely to be collectively a lot more beneficial than a costly (but still limited) increase in the capacity of the passenger rail system.

All the big boys have one L

Of more immediate interest is why we would be expecting to generate greater demand for rail transport to the CBD.  Several reasons have been advanced. One is the old  Me Too chestnut.  The big cities we are familiar with – Paris, London, New York, Sydney  –  have metro rail serving the CBD using underground systems.  We want to be one of the big boys.  


Of course, we start well  behind the eight ball.  Cities with "successful" metro rail transit also have populations many times that of Auckland. 

Even so,  metropolitan rail in large cities still runs at a loss despite long-sunk capital costs, higher population densities, and vastly more employees in the central city. Take New York’s Metropolitan Transport Authority, for example. 43% of revenue comes from taxes and subsidies, another 12% from tolls; and just 43% from fares. Railcorp, responsible for passenger rail transport in New South Wales, including Sydney’s CityRail, lost $2.5bn prior to state government contributions in 2010-11.   Travel for London reported an improvement as a result of increasing trips numbers: to 1.2bn from a loss of £626mn in 2010 to £100mn in 2011/12, or close to £3.60- for each of its estimated 28milion passengers on the London rail and underground. And on top of these losses are substantial ongoing capital costs. 

It’s hard to understand why we should emulate these systems.

Boosting the CBD L

The Auckland Plan makes much of the CBD as  the key to Auckland's international standing.  The new rail loop is seen as a critical part of that.  

This is based in part on the expectation that many more people would live and work in and around a series of new stations to  be built on the proposed inner link. As I have suggested previously, there is very little we might see in the development of future labour markets or even housing preferences that suggests that the inner city will hold a lot of appeal or achieve the sort of growth proposed in the Auckland Spatial Plan. The business case for the rail (and the spatial plan) presents outcomes underpinned by implausible drivers.

Laying Waste

In the meantime, let’s think about the impact of acquiring 210 to 280 properties on the possibility that they are  required for tunnel construction. We know how the acquisition of land for motorway construction in the 1950s and 1960s laid waste to swathes of inner-city land for decades, here and overseas. We can look forward to that on a putative rail corridor from Britomart to Mt Eden for who knows how long.

Proposed Inner City Rail Link - Planned Corridor

      Source: Auckland Transport

And the disruption this will cause goes beyond the cost and inconvenience to current owners who have invested in inner-city businesses and inner-city living.  This will be no doubt lead to a long and contested consultation programme. 

But what will happen when  this land  is acquired?  One possibility might  be a range of quirky, interesting, temporary activities occupying low rental ageing properties. But that's not likely when we are dealing with a corridor.

Another - more likely - is that it simply goes to waste, becoming a  ribbon of vacant, deteriorating buildings cutting through the inner city.   Already Aucklanders are wringing their hands over the booze-ridden late night culture, and “a deluge of rubbish” hitting inner city streets. Creating a corridor of waste land will not help.    

The real and immediate problem faced by Auckland's  inner city is not one of enhancing access. It is a problem of credibility; of maintaining the quality in a place where its appeal as a place to visit (at least after dark) and live is already under threat.  Locking the city into the rail tunnel is not the way to tackle the long-term prosperity of the CBD and surrounds.  This is a much bigger issue – and not one that should be obscured by desperate defence of a flawed project.

... to be continued ..