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Is Penlink worth it?

As the Council puts together its 10 year budget over the coming months there will be some really big questions that need to be addressed in the area of transport. When to start City Rail Link? How fast to build AMETI? How much to spend on cycling? Which “legacy” arterial roading projects to delay or cancel? Over the past couple of days Luke has outlined how challenging this task will be if the Council wants a lower level of rates increase than had previously been anticipated.

Our long-running criticism of the current transport plans is that they haven’t made any tough calls – the push for improving public transport is simply on top of all the grandiose roading projects earlier “legacy” Councils had come up with over the years. In an ideal world where money wasn’t an issue, then maybe this would be an OK approach – but that’s simply not the reality and the time is coming in the near future when Council and Auckland Transport will need to face up to this issue and properly confront it.

One project that came up a lot in yesterday’s discussion and certainly deserves significant scrutiny through the upcoming budgeting process is Penlink. The map below shows the proposed route of this connection – which was pushed hard by the previous Rodney District Council:

The Auckland Transport website describes the project’s benefits as being:

  • 7km of new road, including a new bridge across Weiti River
  • Four lane toll road (two in each direction)
  • Provisions for pedestrians and cyclists
  • 100km/hr speed limit
  • Five minute saving for commuters using old route
  • 12-18 minutes savings for commuters using toll road
  • 5.8km shorter route

Essentially it’s a short-cut between the Whangaparaoa Peninsula and the rest of Auckland – with the main benefits being faster trips for those who use the new road as well as less congestion through Silverdale for those who continue to use the existing road. I’ve highlighted my concerns with the project in the past – particularly because the Whangaparaoa Peninsula that it largely benefits is not expected to grow much in the future – so the transport system may not get much worse than it is now, especially if a number of other smaller-scale improvements proceed.

While there are clearly benefits from Penlink, especially for freeing up the Silverdale area and hopefully down-scaling the horrible semi-motorway that cuts right through the heart of Silverdale. Penlink is potentially a hugely expensive project – the ITP has its cost at just over $200 million but for a 7km four lane motorway with a long bridge that seems extremely conservative. As a comparison recently completed new motorway projects have cost between $25m and $50m per kilometre not including any bridges, meaning the actual cost of Penlink could be as high as $350 million or more. Because of this, we need to look at it very strategically from a regional perspective and ask it a few key questions:

  • Is the project in an area that’s a regional priority for major growth?
  • Is the project of critical significance in enabling a shift to better public transport?
  • Will the project benefit a significant proportion of Aucklanders?
  • Does the project clearly provide value for money and are there no cheaper alternatives?

In terms of the first question, the answer is a bit mixed. There’s not much growth on the Whangaparaoa Peninsula enabled in the Unitary Plan, but there is quite a lot of growth happening at Millwater and Silverdale at the moment. Part of the Millwater area was denoted a Special Housing Area, but is still only zoned Single Housing so will only allow pretty low density development. None of the “strategic” SHAs are located anywhere near Silverdale and certainly when compared to growth pressures in the South and the Northwest, Penlink doesn’t seem to be as critical for enabling growth as other key projects (like the Northwest Busway or Pukekohe electrification). Reinforcing this position is the ability to undertake a variety of alternative projects to “unlock” Silverdale.

On the second question, while it’s likely some buses will use Penlink, the major focus for the public transport service in this part of Auckland is feeding into Silverdale and eventually connecting to an extended Northern Busway right up the motorway to where the current Silverdale park and ride is located. Penlink is unlikely to significantly undermine public transport providing some buses use it, but generally is fairly unrelated to Auckland’s key effort of making a step change to public transport quality and use.

On the third question, obviously not every project can and should benefit all parts of the region, but for a major project that requires a very high level of investment it does seem that Penlink is particularly limited in the area it directly benefits – being mainly the eastern half of the Whangaparaoa Peninsula which all up is about 24,000 people which is less than 0.2% of the regional population

Penlink Population Location

There are indirect benefits for other areas – like Silverdale, assuming a significant proportion of traffic is willing to pay a toll and divert away – but we’re still talking a pretty small part of the region well away from where the vast majority of Aucklanders live and work.

Finally, in terms of whether Penlink is value for money this obviously connects to the earlier three questions (in terms of defining ‘value’) and what the project actually ends up costing. As noted above, we’re a bit sceptical whether such a long four lane semi-motorway with a huge bridge can be built for $200m – a much higher total would certainly raise additional questions about its value for money. Also as mentioned earlier, a key point in value for money is making sure a cheaper alternative couldn’t adequately do the job, and there remain a number of very real questions about whether that’s true for Penlink.

Perhaps a bit of a wildcard for Penlink is its potential to be tolled and therefore “pay for itself” to a reasonable extent. Some careful analysis of projected use and different levels of tolling could mean tolls contributing to a fairly large part of construction cost – perhaps one of the reasons why the project has been considered as a PPP possibility. Of course tolling doesn’t come without its own challenges and the we’ve seen many toll roads overseas as well as Route K in Tauranga continually fail to perform to the levels originally expected.

Overall, I remain unconvinced that Penlink is a major regional priority to fund in the immediate future – it just doesn’t contribute strongly enough to the main objectives for Auckland at the moment. I’m also very unconvinced of the need for the project to be four lanes – I thought it was just a two-lane road due to the toll suppressing demand to some extent. The potential for the road to be tolled and pay its way is a relevant consideration though, therefore as a two lane road perhaps this is something worth starting on towards the end of the next budgeting period.

37 comments to Is Penlink worth it?

  • Linz

    Politics trumps rational analysis every time. Len supports Penlink in return for Penny’s support of CRL. A perfect outcome would be if AT drops this costly and unnecessary project and Penny supports them.

  • Greg N

    “A boondoggle” if ever there was one… to steal a quote from Councillor Quax.

  • Foreigner

    As a Whangaparaoa resident for 24 yrs, I experience the existing road 7 days a week. There is a burst of congestion from 7.30am until 8.30am toward Silverdale, which not surprising, is not as bad during the school holidays.Likewise outbound on the Peninsula between 4.30 and 6.00 in the afternoon.
    Neither time periods have significant congestion and certainly not enough to warrant the cost. As you point out the growth on the Hibiscus Coast is to occur at Silverdale and Millwater, neither of which will really benefit from Penlink.
    The extension of the Busway to Silverdale and some improvements to the local area network will suffice.

    • Bryce P

      The are some improvements that could be made on Whangaparoa Rd and also at the Whangaparoa Rd / Hibiscus Coast Hwy intersection. The cluster of lights and intersections at the mall create a bottleneck and HCH towards Orewa does not need to be 4 lanes. Change the intersection to favour Whangaparoa.

  • John Watson and Wayne Walker (councillors for Albany) also strongly support Penlink. Their election powerbase is definitely more Hibiscus than Bays. The problem for me as a voter in their ward is that they’re also really strong on preserving bush areas in the region and also improving stormwater runoff into the gulf. Politics, eh? It’s hard to pick a winner.

  • Stu Donovan

    Premise 1: Whangaparoa is not expected to grow very much.
    Premise 2: Auckland’s transport budget is highly constrained.
    Premise 3: PenLink does not align with AC’s strategic direction.

    Conclusion: PenLink is not a priority and should not be included in AC’s 10-year plan. If ever there was a test of Len’s mettle then this is it.

    • Nik

      Is this where BCR are supposed to help with the prioritisation of projects?

      With the catchment being relatively small, won’t the wider economic benefits be comparatively smaller than other projects of a similar cost?

      • George D

        What is the BCR of this project? For $200-350m, we should have a comprehensive business case. Most organisations are required to accumulate strong evidence before going ahead with project one thousandth of the cost.

        If this project was to become more useful, could it gain an onramp and offramp on the Stillwater side? This would probably require a speed reduction to 80km/h, but that would not affect times significantly.

      • Stuart Donovan

        Yes, wider economic benefits will be very small. Pen link is basically a glorified and oversized driveway. Not a priority IMO.

  • Wow crunching those numbers a bit – at least $200 million, 24,000 residents, that’s at least $8,333 per head. My rates bill was about $2100 – if they pay the same, for a family of four that’s $33k or 15.9 years’ worth of rates if they were 100% spent on that road and nothing else. For just one road. Minimum. With little if any growth potential. Wow.

    • Stuart Donovan

      Good analysis – and raises the question of why not use a targeted rate applied to those properties that benefit, rather than general rates. Many cbd improvements funded from targeted ratio on cbd properties. Good for goose is good for gander.

    • Building on that.
      – there are approx 9,900 dwellings in that area of which ~800 are unoccupied.
      – $10k dwellings means the project costs $20k -$35k per dwelling.
      – even if govt paid half like other local projects it would still mean a cost to locals of $10k-$17.5k per household

      • I’d like to see what happens when these figures are presented to local residents.

      • Dan

        Surely house prices would rise by at least $20k given those projected time savings. Could well be worth it for the residents.

        • Matt’s figures show an 8% vacancy rate while Auckland is in a housing crisis, I doubt house prices will rise much if at all from this. Additionally the council does not build infrastructure for the purpose of raising the cost of housing, it used primarily to support population growth and often to stimulate economic growth as well.

          • Dan

            Sure, but if a house is suddenly a 25 min drive from the CBD rather than a 35 min drive, it becomes worth more all else held constant. So the claim that the residents would reject this plan based on economic factors is probably wrong.

          • Glen

            This situation is a classic example of where a targeted rate would work, because the benefits would be to such a clearly limited area (i.e. not system-wide like the CRL.
            It would be interesting if the residents were asked if they would pay a targeted rate a la LA’s ballot initiatives for public transport. Would they poney up? I somehow doubt it…

  • Thaddeus J Bilgewater

    Step 1 – Choose to live somewhere where geography dictates that commuting by PV will be impractical.
    Step 2 – Complain about commute, lobby for expensive new road.

    Seems the normal modus operandi for many Aucklanders!

    • Greg N

      Missing a step,

      Step 3 – current council blames the previous council/administration for lack of forethought in ensuring growth expectations and residents demands are matched

  • Glenys T

    Good luck, to all negative commentators. Penlink could be built overnight, by many building consortiums paid for by overseas interests. The surveys have indicated that 70 percent that completed the surveys are happy to pay a toll. Good luck to the future of businesses in Whangaparaoa, and good luck to anyone suffering a heart attack, stroke or major car accident on Whangaparaoa road at any time. The population on the peninsula is now 30,0000 and increasing, no one will ever be able to reach the motorway in 2 year’s time. Any forward thinking person can see that the future for the Whangaparaoa Peninsula is Penlink.

    • Sailor Boy

      Lets just ignore all of the points against raised above aye.

    • Perhaps more accurate to conclude that choosing to live on a giant cul-de-sac limits your access to just about every service that urban dwellers expect. Any forward thinking person can see there are better choices for where to live, or where to spend Council money.

    • Bob Scott

      I made the choice some years ago not to live there because of access issues. However, building Penlink would make sense, but ONLY on a “user pays” basis. ie any further development done on the peninsular should have a surcharge applied to pay for the infrastructure and the road should be constructed and run on a PPP basis.

    • conan

      Did the poll ask the level of acceptable toll? To pay back $200m at 5% over 30 years would cost around $12m a year. If by some miracle 10,000 trips were made on the road each day that is a toll of $3.29 just to cover repayments on the loan. You’d need to add in toll admin costs and road maintenance.

  • Anthony

    Weymouth-Kingseat ticks more boxes and there’s no publicity.
    Penlink is purely political. Where’s the BCR?

  • Karl

    1. Its not as easy to simply ‘choose’ to live somewhere else. If it were, everyone in Christchurch would have left. There are a myriad of factors that determine where someone lives (financial, family obligations, social frameworks, employment etc). To suggest people should just ‘up and move’ is not a strong argument.
    2. There are a myriad of examples where public spending is used to benefit only those in a local geography or a select number of people. It isn’t just about the cost vs the number of people impacted, it’s also the level of severity of that impact. Should society stop spending considerable resources rescuing a stranded boatie?
    3. There is not much future growth potential in the area. A) A significant proportion of Auckland’s building consents continue to be in the Rodney area – it is a growth area. There continues to be development in Gulf Harbour, Arkles Bay, Red Beach and Millwater. However B) regardless of this, the question is less about handling future growth, it is more about releasing the pressure of the growth that’s already happened., The Whangaparaoa/Silverdale area has seen exponential growth over the last 20-30 years all of which has had to be absorbed using inadequate infrastructure. The roading along Whangaparaoa was designed to handle sleepy village traffic and some weekend holiday traffic, not to support what has become the size of a city in it’s own right. To suggest that there is not much future growth potential and therefore requires no additional investment would be like suggesting the fire isn’t going to get much hotter so there is no need to put it out. The councils over the years have allowed immense development under the promise that if residents were to handle the significant strain this development has placed on the area in the short term, that there would be investment made to relieve it. There is a moral obligation to provide that relief.
    4. Lastly, clearly there still needs to be a sound financial business case. As someone has already said, we are not a big country and we do not have a limitless pool of money. Is there economic benefit in this roading project? The answer is yes. The business case has already shown this time and time again. Additionally, under a PPP the size of the outlay and therefore risk is significantly less than other projects of this size. Surveys have already indicated the local support around tolling. Would more people move out to Whangaparaoa if the commute was shorter? Yes. Would filling vacant houses relieve some pressure around Auckland’s housing shortage? Yes. Is there lost productivity to Auckland’s wider economy because of lost man-hours due to an area of Auckland being grid-locked? Yes. It is a fact that more and more professionals from the North Shore are moving out to Whangaparaoa and Silverdale. The numbers of commuters is increasing rapidly and it is undeniable that this is a very real economic risk.
    I’d be interested to understand where the majority of the contributors to this thread live. Could put an interesting light on things.

    • Bryce P

      The vast majority of local consents are from Millwater. An area that has zero need for PENLINK. Stop using spurious data to try an make a case for something.

      • jim

        Bryce P, do you have any evidence to back up your claim, I doubt it as you are wrong? The staging of millwater is heavily dependent on the capacity and operation of the local network particularly hbc highway. Penlink would have a large impact on that. I also think the upgrading of the local network is a requirement of millwater.

  • Dom

    Who is this Stu Donovan? obviously a Stillwater resident with a bias opinion. Basically national govt. and ack transport are a pack of wimps. Penlink has been talked about for 25 years, it’s needed, its wanted and its going to happen!!! Just little bridge and NZ can,t even get it done, Nz is an embarrassment to the rest of the world!!

    • Bryce P

      Just a little $300M bridge. Land prices on Whangaparoa were less than Orewa for a reason. The peninsula is that reason. None of the business cases to date have even given a financial model on proposed tolls, length of repayment etc. If this is demanded of a $30M skypath project that is merely underwritten by Council then a $300M bridge and road should surely go through the same scrutiny.

    • Yes was thought a good idea in the past. It isn’t thought of as a good idea now. Not much point wasting $300m+ on it for so few residents when there are cheaper and just as effective alternatives available (upgrading Whangaparaoa Rd)

  • Dom

    For a start the peninsula is a lot more beautiful than orewa. If you want to live in an ugly 2 bedroom brick and tile house with no sea views then live in orewa. The future is the peninsula, for tourism and lifestyle. What should every decision in people’s lives be down to a stupid business case? Not for any other reason ? how sad I feel for your narrow way of thinking obviously you’ve been brain washed by national govt. way of thinking.

    • hahaha the last thing the National government base decisions on is a business case which is why so many RoNS are being built and why many national MPs support Penlink. The reason we need a business case is that it’s over $300 million in public money that would be spent to build it. That’s about $12,500 for every person that might benefit from the project.

  • Dom

    That’s why it would be a PPP so a lot less public money would be spent.

    • Bryce P

      Have you bothered to ask anyone what the toll would be? Based on the price to build the Northern Gateway toll road (only a bit more than PENLINK) I would peg the toll at $2 to $2.50 each way. That doesn’t include extra rates pressure.

      • Nick R

        I know locals love to gripe about traffic and everyone thinks their neighborhood has some special transport crisis, but this bridge just wouldn’t serve enough people. And if you charge $5 a day then hardly anyone uses it, so it will fail as a PPP. A road that doesn’t stack up alone won’t suddenly make sense if you throw a toll on it.

  • Linz

    No Dom it does not stack up as a PPP either. This little short cut is worth $300 million (not $3m; not $30m). The cost of capital alone is unsustainable: a minimum of $15m every year. This can’t be justified in any way. Unless, of course, the peninsula is hugely up-zoned for high density housing, but the locals don’t appear keen.

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