Next week John Key is expected to announce the government’s support for starting the main works of the City Rail Link in 2018, at least two years ahead of what he said in 2013. He is expected to announce this at a luncheon being held by the Auckland Chamber of Commerce and it’s expected the announcement will cover not just the CRL but likely a package of projects. Many have suggested that they think he’ll also announce details about the Additional Waitemata Harbour Crossing and the East-West Link, both of which the NZTA and Auckland Transport are expected to progress getting consent for this year. In the NBR’s article on Key’s announcement they included some thoughts from Chamber of Commerce Chief Executive Michael Barnett.
Auckland Chamber of Commerce chief executive Michael Barnett said Key’s address would cover the issue of infrastructure funding for the region, similar to the June 2013 speech to the chamber’s membership in which he confirmed joint funding for CRL.
“I’m expecting a significant funding package similar to what Key gave in June 2013 and that he will use this occasion to say ‘ok, we can give more certainty to some projects’. What we have at the moment is so conditional, it’s difficult for plans to be put in place,” Barnett said.
Barnett said the other projects he expected Key to comment on include the East/West Connections project which would improve connections between Onehunga and Mt Wellington which is heavily used by industry, the $380 million Penlink arterial route between Whangaparoa Road and State Highway 1 which is touted as a potential public-private partnership business model, and a second harbour crossing.
It’s the middle of those three projects in the last paragraph – Penlink – that raised my eyebrows. There are a few reasons for this.
Auckland Transport recently applied for and obtained approval to widen the existing designation to create a 4-lane divided expressway. Perhaps Auckland Transport have been looking longingly at the NZTA and really want a motorway they can call their own. We also know that the NZTA had been pushing for Auckland Transport to progress the project as a PPP tied in with the one they are planning for Puhoi to Warkworth – however they’ve already short-listed contractors for that project.
The council and government are deep in the middle of the Auckland Transport Alignment Project (ATAP) which is meant to be reviewing options and timings for future transport projects in Auckland. Projects already underway or with funding confirmed for the near future are excluded, as are projects such as the City Rail Link but based on the timing as far as I’m aware that doesn’t include Penlink (I also believe AWHC is included within the ATAP scope). If Key was to come out and accelerate these projects or make funding announcements, it would undermine one of the key reasons for undertaking the alignment process in the first place.
Even putting aside ATAP, the councils recent Long Term Plan doesn’t have the project starting till the decade starting in 2025 (page 11). It did include the project in it’s everything including the kitchen sink funding package paid for by tolls or increased fuel costs but that wasn’t passed. Interestingly Auckland Transport’s website lists the project starting construction in 2021. What do they know that the council don’t.
The biggest reason for concern is the project itself and what AT claim it will achieve. They say the key objectives are:
- Improve travel times and reliability.
- Improve network performance and resilience.
- Facilitate economic activity, planned growth and transport mode choice.
So let’s look at Penlink does based on information AT provide.
The project is about enabling more growth in the North however critically there is actually very little growth that is expected to occur on the Peninsula itself, most of the growth is around Silverdale or west of the motorway. A summary of the residential and business growth expected is below.
There’s also almost no growth in employment on the peninsula
Developments in Orewa have access to the motorway at Grand Dr and at Millwater a new set of motorway ramps have been built at Wainui Rd so the main argument seems to be that Penlink is needed to get cars from the Peninsula off the Hibiscus Coast Highway where more business growth is expected. Given how much of a pet project Penlink was to the former Rodney District Council it makes me wonder how much the growth there was part of a deliberate strategy to help justify Penlink in the future.
Looking at the issue of travel time and reliability as well as network performance AT include a number of outputs from their modelling and they present some very odd results. The show the predicted travel times both with and without Penlink to three destinations, to Grand Dr, to Silverdale Township and to Beverly Dr which is where Penlink joins into Whangaparoa Rd. They’ve also broken down the journey into three parts. From Oteha Valley Rd to Redvale where the Penlink Interchange would be, from Redvale to Silverdale interchange and from Silverdale to the final locations.
Here are the results for all three and they seem completely not believable or based on any kind of plausible reality. The first thing that strikes me about them are the claimed travel times in 2041 both with and without Penlink. At more than an hour just to get from Oteha Valley Rd they seem to be assuming that traffic is going to merrily just pile up and no one will attempt to change their travel time, mode or both. It’s worth noting that the base case for both options also assumes the NZTA will widen SH1 between Oteha Valley Rd and Silverdale to three lanes each way at around 2031.
What I also find odd is that within none of the documents AT have published is there any mention of the impact of the traffic volumes on SH1 south of Oteha Valley Rd. If they’re this bad north of there it must require SH1 pumping a ton of traffic north or alternatively a lot joining at Oteha Valley Rd to head north. If traffic is this bad then as some readers like to frequently suggest, perhaps some road pricing to better manage demand is needed – and before we embark on spending $380 million on this motorway.
Speaking of road pricing the documents do talk a lot about Penlink being tolled. They say it would use the same system as used on the Northern Gateway motorway north of Orewa and the cost would match that toll road – at the time $2.20 for light vehicles and $4.40 for heavy vehicles. By 2041 the predicted 16,600 vehicles a day crossing the Weiti Bridge (where the toll gantry will be) will be paying about $13.5 million a year in toll revenue. Interestingly the modelling suggests that without a toll, traffic volumes would be 23k-24k per day across the bridge.
Over 30 years they say the estimated toll revenue is $321 million which has a net present value of $112 million. Toll collection costs over that period are $77 million with a NPV of $28 million so at NPV that leaves around $84 million to go towards paying for the project. Of course the project is expected to cost around $380 million so the tolls won’t cover all that much.
Despite the cost of project roughly doubling over the last few years AT claim the project is positive economically. They actually list two Benefit Cost Ratio’s, a National BCR of 2.5 and a Government BCR of 3.1. Please correct me economists but as I understand it the Government BCR counts all benefits but only accounts for the net financial cost i.e. project costs minus toll revenue while the National BCR accounts for the full cost of the project.
Based on the language in the Business Case it seems almost certain that Penlink will be built as a Public Private Partnership where they finance, build and operate the road while AT pay for it to be open. This is the same as is happening with Transmission Gully in Wellington and will happen with Puhoi to Warkworth.
On the final objective facilitating transport mode choice. It seems to me there’s a very high chance that if built AT would leave buses to go the long way via Silverdale and Whangaparoa Rd which will only serve to further reinforce driving. The business case talking about buses seems boil down to a “buses can use roads too” argument and the only thing excluded from the project scope is:
Whilst facilitating and providing opportunities for improved public transport is part of the Project, the provision of public transport services and prioritised bus lanes on Whangaparaoa Road is not part of the Project.
Back then widening Whangaparoa Rd was seen as a better option as the $20-26 million cost delayed the need for the hugely expensive Penlink. They now say that option isn’t viable as they’ll eventually need Penlink anyway.
So overall it seems like Penlink stacks up but that’s on the back of some very odd figures around travel times. The business case suggests that in the absence of funding constraints the project could have started in July this year – although that would be unlikely given the lead in time needed to procure it through a PPP. So perhaps John Key will kick that process off next week.