After waiting months and months for the business case of the CBD Rail Tunnel to be released, it’s quite weird to now have literally so much information on the project at my fingertrips I don’t quite know what to do with it all. As I noted in my quick post earlier, my general feeling is that an exceptionally sound and detailed business case has been undertaken here which provides a very good argument for moving forwards on the project.
As I had expected, the real benefits of the project relate to what might be called its secondary benefits – the way in which it enables Auckland’s CBD to be transformed and the level of ‘agglomeration’ that it provides for. The argument that this is key to Auckland’s – and New Zealand’s future economic growth – is very sound. This is shown in the level of benefits – as outlined in the table below: Effectively, the transport benefits of the project (faster rail travel times, reduced congestion and so forth) cover the cost of the project with the “net value added from CBD increased productivity” providing the real benefits – and to a highly significant extent.
What the business case points out quite well is the relationship between this project and Auckland’s future economic development - this is the basis of the increased productivity measure that provides the bulk of the project’s benefits. This is summarised in the following few paragraphs from the business case’s executive summary:The business case goes through a variety of “alternatives” to the CBD Rail Tunnel – masses of bus lanes on every CBD street, an underground busway tunnel that turns out to be much more expensive than this current proposal and – perhaps the most likely outcome should the project not proceed in the desired timeframe – that the poor access to Auckland’s CBD will incentivise businesses to locate elsewhere in the region (or elsewhere in the country, or somewhere overseas) and the result will be a loss of agglomeration benefits, a loss of productivity and in the long run a loss of economic growth and development for the region and country as a whole. Therefore I think the business case is highly justified in saying that the project is critical to Auckland’s transformation into a globally competitive urban centre.
In fact, if I was to criticise the business case I would do so on the basis that it’s a bit too conservative. A large chunk of the benefits come from the project “making possible” employment growth in the Auckland CBD – but this is dependent upon what modelling system you use to calculate likely future levels of employment in the central city. The business case uses the model that informed the Regional Land Transport Strategy, but more recent ARC studies suggest this might under-estimate employment level quite significantly (this is true for both sprawl and compact land-use patterns). This is shown in the graph below:
Faster rates of employment growth (and this is dependent upon the speed of economic recovery in Auckland) will increase the requirement for the CBD Rail Tunnel project, and therefore increase its cost-effectiveness.
If we look at the transport benefits of the project, it’s interesting to get an idea about how much quicker it will become to travel on the rail network from various parts of Auckland to the CBD. This is outlined in the table below: Some of the time improvements are truly spectacular. New Lynn to Aotea (midtown) goes from 45 minutes to 23 minutes. Morningside to Aotea decreases from nearly half an hour to only eight minutes! The project is going to make these places particularly attractive propositions to live in – if I were a property investor I’d start land-banking now.
There’s plenty of further interesting stuff in the business case, which I’m sure I’ll dig up over the next few days (or commenter may wish to draw attention to particular things they think are worth noting). I must say overall the robustness, the detail and the effort that has gone into this business case is very impressive. It definitely puts the Puhoi-Wellsford business case to shame.