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Roughan on CBD Tunnel

NZ Herald columnist John Roughan has written an interesting, if rather uninformed (he thinks we don’t yet have a Grafton Station) article on the CBD rail tunnel – and in particular on the support that it is getting among both local/regional politicians and also from Greens and Labour party politicians. In fact, the only two people in New Zealand who it seems don’t support the project are Steven Joyce and John Roughan (I’m sure there are more!) Here are some interesting parts of his article:

A gathering at Britomart railway station this week gave a hint of the damage a Super City could do. One Labour MP was there, with a couple of Greens, several Auckland local-body members and a Super City mayoral candidate, Len Brown.

They were trying to revive the idea of a railway line under the CBD.

It was the presence of Labour that worried me. The Green Party is not powerful enough to do much damage to the national economy but Labour could.

Goodness knows why he thinks that the project would “damage the national economy”. All signs are that its business case, which is due for completion later this year, will show a strong logic for constructing the project – in particular because of the significant economic boost it will give the Auckland CBD. If Roughan is really worried about a transport project doing damage to the national economy because it’s not cost-effective, I suggest he takes a good look at the holiday highway and its shoddy business case.

However, Roughan raises the interesting point that the future Super City mayor will be in a very powerful position to try to influence central government policies to the benefit of Auckland, and in particular to the benefit of projects that they support and they think Auckland needs. Roughan thinks that’s a bad thing, although I think that’s just because he doesn’t like this project (or public transport in general):

Right now Labour needs this new Auckland prize more than National. The question raised by the Britomart stunt is, have we created a terrible temptation for a major party of Government? The National Party will be in the same position one day.

It would be the easiest bribe in the world to promise a big city a glittering project at national expense. Who would turn down an underground railway if the Government was going to pay for it?

Labour deserves some credit here; at the Britomart gathering it did not, as far as I’m aware, give Brown any grounds for suggesting a vote for him could improve Auckland’s prospect of an inner-city subway.

More important – since all candidates quickly endorsed the project – Labour has not committed its next Government to the cost.

But the fearful possibility remains. The mayoralty of greater Auckland will represent one third of the population of New Zealand. Representational power always needs to be checked by the need to raise all its revenue from those it represents.

Considering that the majority of the country’s population growth is in Auckland, and that for many decades Auckland has suffered from chronic under-investment in its transport infrastructure, that fact that the Super City mayor will place great pressure on central government in their advocacy for Auckland is probably a good thing (at least from an Auckland-centric point of view). It is probably the fear of this situation that has put previous governments off amalgamating Auckland’s local government structure – a feeling that it was better to divide and rule the place.

Aside from Roughan’s ideological dislike for public transport, what seems to be worrying him is that “if this project was so good, why doesn’t Auckland pay for it?” He explains this in a bit more detail:

A rail loop from Britomart to Newmarket, with stops in Wellesley St for the universities and Grafton for the hospital, may be so well patronised that it pays for itself.

It may increase the use of all the Auckland lines and bring more people back to the CBD. Alex Swney, head of the “Heart of the City” business group, was also at Britomart on Monday.

But if we Aucklanders really believed that, we would pay for it, just as we paid for the Harbour Bridge. We would support a mayor who proposed that we borrow the money in the confidence that the loan and operating costs would easily be covered by the tolls it would collect.

If we could be convinced it would pay we would buy a first-class railway – fast, flash and so frequent we never needed to look at a timetable. But that is not the sort of railway a Government would pay for, and nor should it.

A Government is entitled to suspect that if Auckland needs national taxpayers to pay for its trains it is because not that many Aucklanders are going to use them.

The reason why this project is reliant on central government funding is because those who will benefit most from the project are actually road users (at least according to the way NZTA calculate benefits of public transport projects). As shown in the diagram below (sorry to have to post it AGAIN, but I think it’s critical that this point is driven home) for each new rail passenger at peak times, NZTA calculates that there is a $17 benefit to road users through reduced congestion: Now it would be really nice if Auckland, as a region, were able to raise money from road users to help fund improvements to the transport network. That would mean that we wouldn’t have to go begging to central government every time we want a new transport project – but unfortunately last year the regional fuel tax was cancelled, so now all funding generated by road users has to go through central government.

Of course Auckland will end up paying for some of the project. My guess is that the most likely way the funding will end up being split is that the Council (through the Transport CCO) will pay for construction of the stations, while central government (either directly or – more logically – through NZTA) will pay for the tunnel itself. The result might end up being roughly a 2/3rd (central government), 1/3rd (local government) split in the funding of the project – and that would probably be pretty fair as it seems likely that, under NZTA’s current method of calculating project benefits, the majority of the benefits will be to road users.

Roughan really should catch the train more.

24 comments to Roughan on CBD Tunnel

  • Vincent

    First I was really pissed off with his article but really this is much better than when the Herald was just ignoring the whole issue. We all have to respond and he has made it relatively easy by using such emotional language and no facts at all. I’m writing now, and not just a letter although I think they may not run my response- the more of us that write will surely help prevent them ignoring the opposing view….?

  • David

    I find it really annoying when columnists don’t bother to do even a smidgen of research. His point about the super-city and the power of the mayoralty is true even if it has been made many times before. But the rail example he uses is so completely uninformed as to be painful — it’s an insult to readers.

  • The Trickster

    What really, really annoyed me was the part about how Auckland apparently paid for the harbour bridge itself.

    Correct me if I’m wrong but absolutely nothing of the sort happened and that it was funded mostly by central government.

    • I guess his point is that the toll on the harbour bridge paid off the bridge’s construction cost, and therefore the bridge did kind of pay for itself.

      • Nick R

        And train users pay for a ticket too. The increase in ticket sales from the CBD tunnel would go a long way to offset the cost, particularly as the marginal cost of each extra person using the trains decreases as patronage increases.

        With a CBD tunnel the system might carry twice as many people as the system post electrification, with the same amount of trains and drivers.

  • Manboy

    Roughan is a total moron. What a load of rubbish – he seems to be upset Len Brown is in favour of delivering a PT solution for Auckland. As you say he misses the business case for it.

    He shows his total incompetence when he says the tunnel goes to Newmarket. No – it goes to Mt Eden. Can we have Herald columnists with a few brains please?

  • TopCat

    Whats he scared of? An election?

  • Good to see people commenting about the post, Roughan has just proved he has no clue about transport in Auckland, which does beg to differ why the herald would have him commenting on such an event.

    However to the guys credit I do believe he raised one good point, if we are so confident that the project will be successful and help solve Auckland’s transport problems, if we are confident that we will get a valid return on our investment, why doesn’t Auckland take out a loan and pay for it ourselves? I mean we will get the investment back, and it will be beneficial not only to Auckland’s but the Nations Economy so why not take the bullet and fund it?

    Don’t get me wrong, I believe the government should be fronting up the costs, as they have with the State Highway network, and I do believe they should be making the investment into the project which is benefiting the Country’s Economy, however my agreement is, with the local elections taking place soon, and the CBD loop investigation taking place, if one of the local candidates could guarantee construction start on the Loop, they would have my vote, and I’m guessing many more. If the government is not going to play ball, then Auckland could take control and help the county develop by itself.

  • James B

    Well said admin. While I have no problem with simply getting a loan and paying for it ourselves, the wider issue of getting central government to pay for PT projects is yet to be addressed. I also believe that if we can get central government to fund this then it should also help other centres to get funds for their PT projects. At the end of the day this is about making a stand and telling the government how we as Aucklanders want our money spent and if the government of the day be it National or Labour is unwilling to listen then they need to sent to opposition benches.

  • Matt L

    Perhaps then if we fund it we could also collect the tax off the increased business activity that would be generated as a result of redevelopment around the stations. It would probably be easier if Auckland was just made into its own state so all tax collected in the region could go back to the region.

  • As I noted in my post, the biggest lot of benefits will probably be, as per NZTA’s calculations, to road users. If the project provides for another 10 million rail trips a year, multiply that by around a $10 road user benefit per rail trip (peak and off-peak average as per the above table) worked out over 30 years even with a discount rate of 8% you are going to get some big numbers.

    Those will be benefits to road users, so shouldn’t they have to contribute? Shouldn’t we stack up the benefits to road users of this project against those of the holiday highway and make a logical choice over which one to fund? Plus it is not like Aucklanders don’t pay fuel tax – we would be paying for the project one way or the other, just that the NZTA funding pool actually has money in it.

  • obi

    Could part of the tunnel be funded by CBD real estate owners? Better public transport in the CBD will increase commercial rents and therefore increase the value of buildings and land. Would it be fair to levy this increase to pay for the tunnel? Maybe some low-rise areas of the CBD fringe could be rezoned to support high-rise development if this isn’t already permitted?

    I’m thinking of a model similar to where the Canary Wharf owners paid for some of the Jubilee Line extension in London.

    • Development contributions do seem to be a fairly obvious way to contribute to the project. Council collects those at the moment (in fact they’re probably too high, hence no construction in the CBD in the past few years) so in a way the part of the project paid for by council would pretty much be the developer contribution.

  • Cam

    Wow i have read some uninformed opinon on transport in the past but i think this article takes the cake.Talk about superficial analysis.

    He seems unaware that all candidates in this years super city election, both left and right, are promising to push for this project and that currently a government funded study into it is being conducted. Perhaps nobody should tell him this. After all if he’s scared now then he would be damn near soiling his y fronts if he heard that.

  • Nicholas O'Kane

    I think a one solution could simply to abolish the central government petrol tax or reuce it to a very small amount (say 5c a litre for interregional issues or redistribute money to regions experiencing high population growth or with low socio-economic status) and let regional governments set their own petrol taxes and spend it if they wish.this way the Auckland council can decide wether to spend the money on the Holiday Highway or CBD rail tunnel and voters can vote for candidates based on this preference.

    While I wholeheartedly support spending central government money on the CBD rail tunnel, Rougham does raise the valid point that the huge Auckland vote could force the central government to fund things (witness the 2007ish waterfront stadium proposal, whereas Westpac Trust stadium was funded entirely locally) in Auckland traditionally done by local government.

  • Annie L

    The money is there, but government needs to use improved reason for the basis of its decisions. The CBD Loop is a more urgent and greater priority than investmnent in the Puhoi to Wellsford which is argualy a future proofing excercise. Even with the generous discounting for the future the project wont even break even. A recent American study looking at what sort of funding got the best economc return found that public transport investment gave double the return of investment into roads.

  • LucyJH

    John Roughan is uninformed. But still, a lot of good material for letters to the Herald there! I shall sharpen my keyboard and get to it :)

  • Roughan is (willfully?) uninformed for sure, but I guess he’s at least stirred up something of a reaction. It will be interesting to see what kind of debate this prompts.

  • Jeremy Harris

    Roughan tries to definitely talk about transport without doing anything but blindly repeating road myths and mantras, it is hard to respect a guy like that…

  • Sanctuary

    You don’t understand – the target of Roughan isn’t the CDB tunnel, it is the left, or more accurately the increasing likelihood of a major defeat for the C&R and John Banks in the upcoming Supercity elections.

    His story is a bit of McCarthyist nonsense designed to whip up fears about reds under the bed. The CBD tunnel is just a victim of a rather surly loser’s tirade.

  • karl

    Meh, if they are too scared of a leftist power running Auckland, they shouldn’t have let Rodney Hide loose upon us.

    Would love to have it end thus, but I remain to be convinced. Wellington has too many ways to still fuck it up, none the least the way of, in 1-2 years, putting ANOTHER set of reforms through again, on the basis that “sadly, the performance of Auckland still isn’t satisfactory [Len Brown didn't do things the way we wanted them to be done] so we will be forced to further optimise the system…”

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