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Joyce’s disappointing response to CBD Tunnel business case

The NZ Herald today reports on the CBD rail tunnel business case, giving a particular focus to Steven Joyce’s very disappointing response to it. Over recent months it had seemed as though Joyce has warmed to the project, often describing it as something that did seem to ‘stack up’. But I really do need to wonder how genuine he has actually been with regards to the CBD Rail Tunnel. It seems like his comments reported in today’s paper perhaps highlight his true feelings:

But Transport Minister Steven Joyce says a report from a $5 million study commissioned by KiwiRail and the former Auckland Regional Transport Authority raises many questions to be worked through before the Government can consider contributing to such a costly endeavour…

…But Mr Joyce last night described the inclusion of transformational benefits to calculate a return of $3.50c for each dollar invested as “webs [wider economic benefits] on steroids” and said it was the first time he had seen such an approach in a business case.

He said an estimated $1.99 billion cost for the tunnel did not include $340 million for extra tracks and trains needed to run through it, making a total of $2.3 billion.

“It would be the biggest thing that would suck up all the money in Auckland for quite some time.”

The frustrating thing is that he’s just plain wrong on all the excuses he’s now using to delay his support of the project.

Let’s first looks at his claim that rolling stock isn’t included in the proposed cost of the project – that’s clearly wrong:

Under the summary of capital costs it’s clearly shown that $240 million has been dedicated to the purchase of 24 new three car EMUs. The study has clearly compared the economic efficiency of two options – the base option which includes the $240 million spent on additional rolling stock or a more ‘bare basics option’ which includes only a small amount spent on extra rolling stock. The graph below shows that the cost-effectiveness of both options is the same:
On the other matter, that this is supposedly the first project to use the urban regeneration benefits that he unfairly calls “WEBs on steroids” – once again he is clearly wrong. The recent report undertaken by SAHA international to peer review the cost-effectiveness of the various Roads of National Significance looked at this very issue – and undertook a number of studies to analyse various types of wider economic benefits, including induced employment growth, which is what the CBD Rail Tunnel business case looks at.

To illustrate this point, I’ve taken the graph from SAHA’s report that highlights the level of various benefits from the seven roads of national significance and inserted the transport (green), basic wider-economic (purple) and ‘employment’ (blue) benefits that the CBD Rail Tunnel will provide. My figures have come from page 5 of the business case’s executive summary: (It is probably necessary for me to note that the reason Victoria Park Tunnel doesn’t have wider-economic benefits is not because they don’t exist, but rather because its funding was approved without looking at these benefits – therefore they’ve never been calculated).

I must say I really did think Steven Joyce was coming around to supporting the CBD Rail Tunnel project. It’s very disappointing that he’s now dismissing it based on matters that aren’t even true – particularly when he has a business case in front of him that spells out a compelling economic argument for proceeding with the project. I thought the government wanted to boost the country’s productivity and international economic competitiveness?

42 comments to Joyce’s disappointing response to CBD Tunnel business case

  • Swan

    “He said an estimated $1.99 billion cost for the tunnel did not include $340 million for extra tracks and trains needed to run through it, making a total of $2.3 billion.”

    This is another case of Joyce being deceptive with what he says, without outright lying. The sad part is the journalist seems to be complicit.

    It is true that $1.99b doesn’t include $340m tracks and trains, as the table clearly shows. He didn’t say the extra $340m wasnt included in the analysis, but just left that as something implied. Why the journalist reports it this was I do not know.

  • Chris Harris

    “As a dog returns to its vomit, so a fool repeats his folly” (Proverbs 26:11). In other words National is going to Sir-Humphreyfy this generation’s well thought out rapid rail proposal, just like the time before (‘Robbie’s Rapid Rail’, 1970s) and the time before that (the 1949/1950 Halcrow-Thomas scheme). That is so even though it will probably be electoral suicide for National once the public in Auckland wise up to the fact that this has happened for the third time. Those whom the gods wish to destroy, etc. A pity that Auckland will keep sliding toward the status of Australasia’s largest and most congested hick town in the meantime. Just got back from Perth and Brisbane, the contrast couldn’t be greater, especially with Perth.

  • LucyJH

    hmmm, I think John Key might fund out of his burning need to be popular. But then they may just freak out at the cost. Heaven forbid, of course, they should just shift $2 billion from the motorway budget

  • frank

    Unbelievable really. I really hope Auckland voters take notice of this and make National pay at the next election

  • Peter

    So it sounds like all of Joyce’s “we’d better wait for the business case” was complete and utter tosh. It seems like he has never had time for the project and even if the cost-benefit ratio was 20 he wouldn’t give a stuff.

  • max

    Of course not – he never liked this. He’s not going to be convinced, he has to be told (and the only one who can really tell him to is John Key AND/OR an electoral whipping).

    It is horrifying that the most important transport (not rail, TRANSPORT) project of the country in several decades has to find a way to be worked around the Minister of Transport, but that’s the case.

  • rtc

    “Thought the government wanted to boost the country’s productivity and international economic competitiveness?”

    It’s become blatantly clear that they want to build roads because they want to buiid roads and that’s the only basis they have – I think it has nothing to do with economics. In the end his attitude just further proves what people have said all along which is that he’s opposed to PT, not matter what the benefits of it are.

  • Matthew

    So when do we march down Queen street?! :P

  • rtc

    The Herald still fails to point out that puford scores 0.4 without the WEB c.f. 1.1 for the CBD link, the 1.1 for puford is only once it inclue a lot of pretty spurious WEBs.

  • Andrew Cozens

    Interesting in that Herald article that there is also a poll:

    Should the Govt contribute to the central Auckland rail tunnel?
    75% yes at the moment with approx 1400 votes..

  • Seamonkey Madness

    Joyce needs a bloody wake up call. And it is extremely disengenuous of him to be saying “webs [wider economic benefits] on steroids” and said it was the first time he had seen such an approach in a business case.” as this is the exact same (or similar?) approach that is used to the PuWell Highway!!

    He is almost becoming what Labour was in it’s final term: National knows best – now shut up and move on!

    The evidence & business case produced for the CBDRT is FAR more compelling than the shonkiness of the PuWell highway. How can a National Government ignore the money factor? Bill English needs to get involved and place his size 7 up Joyce’s jacksy!

  • Sting

    What does the MP for Central Auckland, Nikki Kaye think about this? I think she is critical to this debate. Although National, from what I have heard from her, she is very forward thinking in terms of transforming Auckland and I would be amazed if she did not agree with the CBD rail tunnel, but probably cannot say it. Can we get a comment from her?

  • Sanctuary

    Remember the so-called “trucking strike?” That made no sense whatsoever unless you consider it was staged to help engineer a National victory in the 2008 election. That is some serious political ownage by the trucking lobby right there, and they hate anything that runs on a track. The rural rump (who love National) and the likes of Federated Farmers (CEO: Connor English, brother of Bill, join the dots folks!) hate Auckland and hate the idea of spending a cent on the “parasites” who live there.

    National is owned by powerful lobby groups that are all opposed for their own reasons to Auckland getting any decent public transport. Even if Stephen Joyce did support PT (rather than just being Tony Friedlander’s bitch) there is nothing he would be able to do about it without upsetting some big financial backers of the National Party.

    The battle lines are now clear. The question is, is public transport a big enough election issue to make people in Auckland want to change their vote? Because if it isn’t, then nothing will change.

  • Jeremy Harris

    Ha ha, so all those who have been talking about how resonable Joyce is and how he is only interested in the economic good, shown to be demonstrably wrong today…

    He is a monument builders of the most grandiose kind…

  • A march would be a good idea. The point has been made before that the Nats primary opposition to major PT projects has never been about the business case or even the budgetary implications, it is a hard-wired ideological objection.

    In their gut they object to the kind of centralised planning that such a project involves, prefering to leave it ‘to the market’. Similarly the idea of people moving about the city in shared spaces sends a shiver up their collective spines – they would far rather we each sit in atomised metal boxes.

    The only way that this and the other big PT projects we need will occur is through massive public pressure on the govt, or by voting them out.

    • Matthew

      What a great way to christen the super-city! Aucklanders marching for a better auckland. Perhaps it would establish a precedent in which Auckland says to the gov, “enough of your decision making on our behalf, we want to be masters of our own destiny”.

      Wishful thinking?

  • Brent C

    I find it amuzing that National/Acts plan for Auckland is heading out of control. It stated with the election of Len Brown who came pushing for rail. National/Act have no control over local government in Auckland.

    Now National/Act have brought us to where we are, no one can still make any decisions about whats to happen in Auckland. Has anything changed?

  • karl

    “A march would be a good idea.”

    A march right now would not get many people. People need to be angry before you get big numbers. Pro-something protests are very hard to organise, because most people go “Yeah, great idea. Oh, no, actually I was meeting friends that day and – look, there’s my bus!”

    This is very much in the hands of the local government and the lobby groups in favour of the tunnel for now. Now if Joyce blocks the designation process (after all, KiwiRail is under his control), THEN we could have a protest march.

  • How about we make up some faux directional signs saying “Aotea Underground Station 50m >>” and put them up around the CBD in the place where the entrances would be if it were built. Then underneath just a little spiel about support and a website address.

    That would stir up a lot of interest among CBD workers and residents.

  • KLK

    Please – marches are so 1980s.

    Joyce is not being stupid, he’s being political. While 1.5m Aucklanders think its a no brainer that it should go ahead, 2.5+m NZers south of the Bombay Hills – including everyone in the far north – will be aghast at so much money being spent on the Jaffas in the “Auckland CBD” when the roads in their street/town/city haven’t been upgraded under 9yrs of labour.

    You can talk “transformational effects” for the country all you like, but Joe and Jane blogs in Thames, Taupo and Timaru won’t have a bar of it. Push a regional project – and include a region which everyone would agree is underperforming – and you win alot more friends – or you at least gain a lot less enemies.

    I hear people whingeing all the time here that National only supports “big business” – well 2.5m+ NZers consider the Auckland CBD to be the epitomy of “big business” in NZ. Thats would certainly be the national impression if Joyce rolled over at the first request.

    Now that’s not to say I don’t think it should go ahead – it should – its a no brainer and the report supports that. But if you think Joyce is being stupid, then take the intellectual high ground. Go public with his distortion of facts, reveal the basis of the analysis and the true comparison with the Holiday Highway in an article with the herald, take the pros of rail and the cons of the HH to the airwaves. Expose the hypocrisy publicly – and loud.

    Labour is as pathetic in opposition as they were in government. A few token words from Darren Hughes? (who???). They are stuck between wanting to expose National’s ignorance of the electorate while not wanting to champion the United Auckland Council – the very reforms they called “botched”, but actually look like they have promise less than a month into their existence.

    The NZ press – and scarily, the Auckland ones – don’t seem to really grasp the importance of the project. So its really going to be up to you.

    • Tom Semmens

      How many of that “aghast” subset of 2.5 million New Zealanders (some of them will recognise the need for PT in Auckland and support it) would make their voting decision based on whether or not the government puts money into Auckland public transport? I would suggest that PT for Auckland isn’t going to be the sort of issue that is going to make a voter in Karori or Taupo or Cashmere decide to vote one way or the other in 2011.

      However, amongst the 1.5 million Aucklanders the recent local body elections show that PT is a vote changing issue. An Aucklander is much more likely to decide who they will vote based on the PT policy of a particular party than anyone else.

      National is therefore very vulnerable on this issue politically, because funding PT for Auckland probably won’t lose you votes in Invercargill, but not funding PT for Auckland will certainly lose you votes in Pt. Chev.

    • David

      KLK, you might have a point in there somewhere but note that Labour invested massively in roads and motorways during their tenure. Neither did Labour oppose the super city — they would have brought it in themselves. They clearly did oppose the handling of the transfer, as many non-ACT supporters did.

      I’d also suggest that most people in the country view Puhoi and Wellsford as parts of Auckland (or near enough) so to swap out the HH for the CBDT wouldn’t make a jot of difference to most.

  • Complexity is difficult to communicate. Discount rates, agglomeration, 2041 seems too far away….. whereas blank misleading statements like ‘HH is fully funded CBDRL is not’ will win every time. Still we need to get the press to hear other voices because they just repeat what he says without any question: the BCRs for these two projects are not the same, they are not even similar. If he takes the WEBs of one he can’t leave them on the other. The only difference between the funding of these two projects is that he has decided to fund one and not the other. Whim, and like a toddler, it appears he has a whim of steel.

  • KLK

    Tom: “funding PT for Auckland probably won’t lose you votes in Invercargill, but not funding PT for Auckland will certainly lose you votes in Pt. Chev.”

    Again – it goes back to the perception of National being in bed with “big business” – for many NZers, thats Auckland. Don’t understimate the disdain for Auckland in the provinces, however unjustified. If you don’t believe me, take a look at the readers comments from outside Auckland, the next time someone advocates central government funding of rail in the CBD on the Herald website. Its ugly.

    And besides, it goes both ways. If you ditch the HH, you’ll lose alot of votes in that northern region.

    For what its worth, I think its definitely going ahead, its just the dance of the desperate at the moment about who pays for what.

  • Matt L

    Just doing a search of some websites I found this

    Joyce said the report talked about journey kilometres, but not about the number of vehicle trips into the city that would be saved.

    “It’s difficult to ascertain the actual effect of what is a very expensive project,” he said.

    “It’s equivalent, on the roading side, to the Waterview Connection, plus an extra lane in each direction on the North-Western Motorway, plus the Victoria Park tunnel, plus the Manukau Harbour crossing, and at least half the Newmarket Viaduct.”

    Joyce said the report talked about congestion but didn’t get into the detail of how that would be addressed in terms of actual numbers.

    He took issue with the report’s statement that the standard benefit-cost ratio (BCR) for the project was equal to or higher than that of two of the Government’s Roads of National Significance.

    “They have released a BCR with Webs (wider economic benefits) and they’ve been a bit naughty because they’ve called it a BCR,” he said.

    “Then they’ve gone out beyond the NZTA evaluation manual and said `by the way, we’ve got a new way of calculating it which improves it even more’.

    “What they’ve tried to do is compare the BCRs, including Webs, on the tunnel project with the plain BCRs of the two other projects.”

    Joyce said the actual comparisons, at the level of BCRs including Webs, were identical.

    http://tvnz.co.nz/national-news/akld-cbd-rail-project-may-take-seven-years-3911278

  • Patrick Davis

    ^^ WTF! What planet is this moron on! Is he stuck in that movie Pleasantville or something!

  • Doloras

    Gareth Hughes needs to know that Joycey is deliberately or recklessly misrepresenting the contents of the business case, AND FAST.

  • patrick davis

    I have already emailed Gareth!

  • Luke

    another issue is Joyce has the speaker on his side. Anytime a question is asked regarding Puford, Lockwood Smith shows his obvious bias and is really acting improperly by showing this, when he is supposed to be an independent speaker,

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