This page originally comes from an August 2010 post and will be updated over time.
The Puhoi-Wellsford Road of National Significance is a 38 kilometre “off-line” motorway between Puhoi and Wellsford announced by the government in March 2009. The project is estimated to cost around $1.7 billion. Many people have questioned whether the project ‘makes sense’. This is a question that requires further analysis – something which cannot be done without a proper assessment of possible alternatives to the current proposal. A number of people have quite rightly stated “but the current road isn’t up to scratch, surely we must do something!” and that is a fair point which led to the development of an alternative set of solutions. These are solutions that could be implemented much quicker and therefore save lives – hence the “Operation Lifesaver” tag-line.
The whole report on Operation Lifesaver can be read here.
Essentially, what the “Operation Lifesaver” report does is analyse the problems faced by State Highway 1 between Puhoi and Wellsford. It then makes a critical analysis of NZTA’s current proposal – with particular emphasis on how poor value-for-money the full off-line motorway would be and also on how long the current proposal would take to implement. Two alternatives are suggested: one with a price tag of approximately $160 million (just under 10% of the cost of the full proposal) and one with a price of around $320 million.
As noted above, the existing road does suffer from some serious deficiencies at the moment. The biggest problem is its safety record, with a horrific 41 fatalities along SH1 between Puhoi and Wellsford from 2000 to 2009. There is also a severe congestion problem around Warkworth, mainly during holiday periods and at weekends, but certainly not only at those times.
The next slide talks more about the current NZTA proposal, which is the 38 kilometre motorway/expressway from Puhoi to Wellsford. The high cost of the project, its low cost-benefit ratio and the very long timeframes for actually implementing and constructing the project are key problems with it in my opinion. In particular, as noted previously, the fact that the Puhoi-Warkworth section won’t be finished until 2019 and the Warkworth-Wellsford section until 2022 means that, on current safety records, potentially another 50 people would die on the road before the upgrade was finally completed. So what would be a better solution for this problem than what NZTA have come up with? Well there seem to be two key problems that need resolving: the safety problems first and foremost, and then the congestion problems.
As noted above, we came up with two possible alternatives: for around 10% and 20% of the cost of NZTA’s proposal. These are outlined in the two slides below: We also undertook a bit of an economic analysis of the two alternatives and compared them with the NZTA proposal. The amount of benefit each of the alternatives were given was based on what I think is a conservative comparison to the amount of benefit the 2009 Business Case estimated. For example, with time savings benefits it was estimated that Option 1 would generate 30% of the benefits of the NZTA proposal, with Option 2 providing 40% of the time savings benefits. For safety, Option 1 was considered to provide 70% of the benefits, and Option 2 90%.
The results of the comparison between costs and benefits of the two suggested alternatives and the NZTA proposal are outlined in the table below: This analysis was done without discounting the cost of the project for net present value, hence the slight confusion over BCRs. However, it is clear that either of the CBT’s suggested alternatives are far more cost effective than what NZTA is currently proposing.