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Low Traffic Forecast For Costly Warkworth Toll Road

This is the fourth in a series of posts based on the Campaign for Better Transport’s submission to the Puhoi to Warkworth Board of Inquiry. The full presentation is over at bettertransport.org.nz

Previously I pointed out that the NZTA produced Traffic Assessment Report for the Puhoi to North Warkworth Toll Road (PNWTR) is not realistic in a number of areas:

It is very hard to appreciate the significant combined effect of these erroneous assumptions, so I’ve modelled the outcome in this table:

Projected Puhoi To North Warkworth Toll Road Traffic Volumes for 2026

Projected Puhoi To North Warkworth Toll Road Traffic Volumes for 2026

The more realistic input assumptions mean the result is 56% less traffic on the toll road, and 50% more on the existing SH1 than NZTA’s forecast.

This is significant, not just because 6,031 really is a pitiful amount of traffic for a $760m toll road, but because one of the objectives of the toll road is to reduce congestion at Warkworth.  Current AADT volumes are about 17,400 veh/day, so traffic volumes of 21,788 represent an increase in traffic volumes of 25% by 2026 on the existing SH1.  Without improvements to Hill St, delays will get far worse after the project is completed. It also means the claimed safety benefits are doubtful. There aren’t any safety improvements proposed for the existing SH1, so the number of accidents will be higher than NZTA’s report also. I’ll be talking more about this in a subsequent post.

The assumptions that I have used are laid out here:

assumptions

Stepping through each assumption:

  • Project scenario straight line growth.  Although the NZTA’s own Economic Evaluation Manual stipulates a zero default growth rate should be used, I have based growth on the historic trend of 2.1%. Incidentally if you use a higher growth rate than this, more traffic results on SH1.
  • Toll route % traffic: This is the split of traffic assumed without a toll. I’ve simply used the same split identified in the original report.
  • Warkworth Plan Increase in SH1: The 2,800 increase in traffic on SH1 comes from Test B of the original report.  I’m assuming this because most new growth is currently planned to be in the west and south of Warkworth. Obviously if there is an increase in traffic on SH1, there must also be a reduction in traffic from the toll road.
  • Matakana straight line growth: The original report assumed virtually nil growth, but here I’ve assumed the same growth for Matakana Road as for Sandspit Rd.  I’ve assumed 50% of the additional Matakana traffic will take the toll road. The 50/50 split is roughly the split the original report claimed. Although NZTA have since retracted this split, I’ll run with this for now.
  • Toll diversion: The effect of any toll is to divert traffic on to the free alternative. I haven’t modelled a toll tariff amount, I’ve simply assumed that the NZTA will set a toll that will divert about 15% of the “further north” traffic and 80% of traffic to Warkworth and the eastern beaches.  There is a greater diversion of traffic for these destinations as the existing SH1 is already forecast to be quicker.  I’m just assuming 20% of these trips will be on the toll road because of the increased safety and comfort of the toll road, even though the trip will take longer. (Off memory, about 25% of trips on the Northern Gateway corridor takes the free the Hibiscus Coast route.)

So there you have it. You can test your own assumptions by downloading the spreadsheet.

NZTA Predict No Growth For Matakana

This is the third in a series of posts based on the Campaign for Better Transport’s submission to the Puhoi to Warkworth Board of Inquiry. The full presentation is over at bettertransport.org.nz

Previously I pointed out that the NZTA produced Traffic Assessment Report hasn’t factored in a toll for the Puhoi to North Warkworth Toll Road (PNWTR), thus overstating expected volumes on the proposed route. Before that I made the case that traffic growth assumptions for the corridor aren’t based on current trends, and that the forecast number of trips “further north” was overstated in the report to the Board of Inquiry.

In this post I examine NZTA’s forecast growth in traffic for the Matakana region and Warkworth.  Matakana Road is the route to the Omaha, Leigh, Goat Island and numerous other coastal destinations. These destinations are very popular during weekends and holiday periods.

Here’s the 2009 Base Case traffic counts taken from figure 11 of the report:

Base Case 2009 AADT volumes

Base Case 2009 AADT volumes

And here are the 2026 traffic volumes predicted by NZTA’s model:

2026 AADT Volumes

2026 AADT Volumes

As you can see, the model predicts Matakana traffic volumes to increase by only 500 for the Base Case in 2026, and by 700 for the Project Case.

In my view this is highly unlikely.  The model even predicts south bound traffic volumes to decrease by 20 trips a day for the “Holiday End” periods for the Base Case, and remain the same for the Project Case.  In my experience, the ends of long weekends and holidays are the busiest times on Matakana Road.  The implied growth of 0.3% per annum in AADT traffic volumes does not make sense, especially when you consider the number of new dwellings that will probably be built in the Matakana region in the next 17 years by 2026.   If this is the same assumption used to model the Hill Street intersection, then delays are likely going to be far greater in reality than forecast.

It is even more odd when you compare the Matakana Road growth assumption with that used for Sandspit Road, which connects to Snell’s beach and the Mahurangi peninsula.  Those figures work out to be a linear growth of 2.9% for the Base Case and 3.0% for the Project Case, which is more in line with what one would expect.

The land use assumptions are on pages 8,  13 and 14 of the report. For the Base Case and Project Case, this includes land-use changes (growth) in Warkworth.  For the Project Case, the following adjustment was made:

landuse

So even though it isn’t in the Warkworth Structure Plan (or the Unitary Plan?), the growth has been modelled to take place near the northern junction of the PNWTR. To the author’s credit there was a sensitivity test done on this assumption:

test b

So 20% more traffic on the existing SH1 for the more likely growth scenario, than shown in the main body of the report!  So instead of 14,500 veh/day, traffic volumes on the existing SH1 are more likely 17,300. And presumably 2,800 veh/day less on the toll road.   No wonder it is buried at the end of the report.

My next post will cover one final traffic modelling issue, before moving on to the topics of economics, safety and consideration of alternative routes.

NZTA’s Traffic Assessment for Puhoi to Warkworth

This is the first in a series of posts based on the Campaign for Better Transport’s submission to the Puhoi to Warkworth Board of Inquiry. The full presentation can be found over at bettertransport.org.nz

In this post we take a closer look at the Transportation and Traffic Assessment Report which the NZTA have supplied in support of their application for a $760m toll road from Puhoi to north Warkworth. In particular, we will examine the forecast traffic growth and volumes “further north”.

NZTA have modelled traffic growth at a rate of 4.4% per annum (straight line) until 2026. This is the forecast growth without the toll road, explained on p.27:

base-volumes

 

As you can see, NZTA claim that the 4.4% growth figure is “consistent with the growth rate observed over the last five years which has averaged 4.1%.”

Footnote 21 says the 4.1% figure is based on NZTA’s TMS count site south of McKinney Road, which is just south of central Warkworth. Looking at the data from the NZTA State Highway Traffic Volumes, a growth rate of 4% does indeed appear to be not a bad fit.  The figures quoted are two way traffic counts.

mckinney2

However, the report does not explain why this particular count site has been chosen. Traffic counts at McKinney Road will reflect the growth of trips in and around Warkworth itself – trips that aren’t necessarily travelling long distances at all.

It would therefore make more sense to consider the number of vehicles that currently travel the whole distance from Puhoi to Wellsford and beyond every day, and vice versa – what I will refer to as “further north” trips. We can get an idea of the trend in this traffic by looking at Kaipara Flats road, which is just north of the northern junction of the project.

kaiparaflats

As you can see, this chart tells a very different story – no long term growth whatsoever for the period 2008 to 2012.  Other traffic counters like the one at Waipu show a similar “flatline” trend.  

But at this point we still don’t know what proportion of these trips are “further north”. I asked NZTA if they had modelled “further north” trips and it turns out they had, but hadn’t included it in the report.

The 2009 Base Case model comes out at just 4,460 trips a day. The 2026 Project model, 5 years after the project is complete, has 5,930 trips travelling to or from “further north”.

This seems like an astonishingly small number of trips for which to build a four lane toll road. NZTA claim that a number of toll road users will have origins or destinations in Warkworth and Matakana, despite the fact that it will be quicker to use the existing SH1.

NZTA originally provided a projected split of toll road traffic at the northern junction as 10,500 travelling to/from the north and 12,100 travelling to/from Warkworth, as shown in the following diagram:

Northern-Intersection-Original-cropped

However, along with supplying the “further north” figures, they have also supplied a new diagram for the toll road split, which looks like this:

Northern Intersection Revised Cropped

Go figure. Apparently NZTA are no longer sure what the split in traffic will be.  Without this, trying to get a handle on expected traffic flows becomes hard.  If we know only 5,930 trips are travelling to / from “further north”, then this represents only 31% of the traffic north of Kaipara Flats (19,200).  Where are all the other vehicles coming from, and what impact will the proposed toll road have on their travel times? I’m hoping NZTA will be providing the revised split of traffic or, ideally, the whole report will be subject to an independent review.

In the next post I will discuss NZTA’s forecast traffic volumes for Matakana, and why the forecast of 14,000 vehicles a day for the new toll road may be way overstated. (Hint: it is to do with the toll.)

Update:

Thanks to mfwic in the comments below, we have an extended series of data for McKinney Rd.  With a base line of 2003, linear growth of just 2.1% is observed. Which makes NZTA’s modelling look even more overstated.

extendedMcKinney

Hill Street Blues

We’ve discussed Warkworth’s notorious Hill St intersection previously, but it seems timely to revisit again with the Board of Inquiry underway on the Puhoi – Warkworth toll road and NZTA’s recent press release on the subject:

The NZ Transport Agency says its priority to improve traffic flows in the Warkworth area is to first construct a new highway between Puhoi and Warkworth before it upgrades the community’s Hill Street intersection.

“I acknowledge that many in the community want Hill Street upgraded as soon as possible, but it is important that we have a reliable alternative route in place first for people before we tackle Hill Street,” says the Transport Agency’s State Highway Manager, Tommy Parker.

Mr Parker says upgrading the intersection and the state highway and five local roads that feed into it will be a complex task that will take some time to complete.

“There’s not a lot of room at the intersection and we will need to keep all those roads open during the upgrade. We estimate construction could take two summers to complete and that will mean considerable disruption for everyone – children from the nearby school, residents, local businesses and road users.

“Upgrading Hill Street, either in isolation or ahead of the new highway, will not provide substantial relief from congestion. It makes sense to construct the highway first to help us manage the disruption from that work and divert traffic away from the intersection.”

Before analysing NZTA’s announcement in more detail, here is a map of the current intersection:

Hill St Map

And the GIS view:

Hill St GIS

As you can imagine, the intersection turns into a real bottleneck at peak times, particularly in the summer months.

Traffic from Warkworth village heading to Matakana must turn right at a give way sign, across a lane of queued traffic, giving way to traffic from a number of directions concurrently. Traffic queues across the intersection can often block other traffic movements in other directions. In summary, it is a real mess.

Further down in their press release, NZTA mention a couple of other projects:

Mr Parker says the Transport Agency is working with Auckland Transport – Auckland Council’s transport body – to progress other options including the Matakana Link, which will connect with the new highway and bypass Hill Street to the region’s eastern beaches, the Western Collector in the town and the SH1/McKinney Road intersection south of the township.

Firstly, looking at the Western Collector:

western-collector

This is an AT sponsored project which is a complete bypass around Hill Street and central Warkworth. It starts at opposite McKinney Road in the south and ends at Hudson Road north of Hill Street. Anyone heading to or from the north on the existing SH1 will certainly use this, reducing pressure on Hill St. A number of intersections that make up the bypass have already been completed, but I can’t find any information via Google on when the missing links will be completed. It is supposed to happen before the Puhoi – Warkworth toll road, however.

Secondly, the Matakana Link is mentioned, crudely highlighted in blue on the map below. At this stage this is unfunded and does not form part of the Puhoi – Warkworth toll road project. However, without it the toll road will be useless for people wanting to travel to or from the Matakana area.

As currently scoped, the toll road will join 1.8 km north of the Hill Street intersection. Anyone travelling to Matakana on the new toll road will have to cover an extra 3 km at least to get to Hill Street, compared to using the existing SH1.

Puhoi Warkworth Northern Junction

So are NZTA right in delaying Hill Street by at least another 10 years? On the one hand, the scale of any new intersection could be reduced because of the Western Collector and the possibility of the Matakana link.

On the other hand, for Warkworth residents this is a long time to wait, so why not start now? Remember also that Warkworth residents won’t directly benefit from the new toll road either, as the fastest route south will still be the existing SH1, so they seem to be getting a rough deal from the announcement.

Photo of the day – Alpurt

A few questions:

Does this motorway really need to be extended all the way to Warkworth?

Does anyone ever drive at the speed limit on this stretch of motorway?

 

Photo is credited to oh.yes.melbourne

Right on Queue

Right on queue we get a full page spread from the Herald about traffic queues.

Wet weather, a serious crash and the post-Christmas rush combined to bring bumper-to-bumper congestion on long sections of highways and travel misery to holidaymakers.

Police described some traffic as a “rolling carpark” and urged calm as queues of up to 20km yesterday greeted motorists escaping Auckland, in the holiday hot-spot of the Coromandel Peninsula and north of Wellington.

and

Highways north and south of Auckland were crowded as thousands left the city for their New Year holiday.

Auckland Arts Festival Trust chairwoman Victoria Carter was among those caught driving north. A frequent user of the road, she said she had never known the queue to Warkworth to be as long.

“We got to the (Johnstones Hill) tunnel at 11am and there was a queue coming out of the tunnel as we arrived at it and we were hoping it was not the queue for Warkworth … and it was.

“We crawled to Warkworth at an average speed of 15-20km/h … It looks like the congestion stemmed from the traffic lights in Warkworth.”

Transport Agency spokesman Anthony Frith said a 20km northbound queue formed on State Highway 1 to Warkworth from 10am.

Last month, the Government approved a fast-track consent process for a $760 million extension of the Northern Motorway to Warkworth.

The Transport Agency has not set a start date for the 18.5km four-lane extension from the Johnstones Hill tunnels, but construction is expected to start between 2015 and 2019 and end between 2020 and 2025.

The traffic lights at at Warkworth are definitely a problem need to be addressed but that doesn’t mean it needs a full offline motorway to do it. The most prudent thing to do would be to build the bypass part of the project first by way of a small section of road from the existing SH1 to the P2W route as shown below. An additional small section of road to link where the bypass joins back to SH1 across to Matakana Rd would eliminate almost all through traffic out of Warkworth.

warkworth-bypass

After those two pieces of work have been completed, we could then see just what impact they would have on traffic patterns and congestion and allow us to see if a full motorway connection between Puhoi and Warkworth is really needed. If that motorway still stacks up (which I doubt it would) then very little has been lost as only the blue section in the map above (about 1.3km) would have been surplus to requirements. However depending on how it was designed, that blue link could eventually be used as a link to another interchange which would mean the project would actually be of some benefit to locals as what is currently proposed would actually be longer for locals to use than the existing road.

I’m almost certain the only reason this isn’t being pursued is that those in support of the project know it would kill what little justification there is for the rest of the project.

BTW – to someone who has a physical copy of the paper, what’s that rubbish in the top right corner with flying cars. If there were about to come on stream then wouldn’t that kill the need for many of the upgrades even more?

Overkill

We know that Auckland’s transport plans are completely unaffordable, a more interesting question is “why?” Much of the answer to that questions comes from what I refer to as “overkill”. Essentially, a solution that’s vastly oversized compared to the problem it’s trying to solve. There are a large number of examples of “overkill” when it comes to transport projects currently being planned:

  • The East West Link is perhaps the most obvious example, where somehow a bit of congestion around a couple of intersections at each end of Neilson Street somehow led to NZTA and AT proposing a gigantic and enormously destructive motorway through one of the most densely populated and deprived parts of Auckland. Yeah there are certainly some transport problems in the area but the jump to a huge motorway solution is a classic example of overkill.
  • The proposed motorway to motorway connection between SH1 and SH18 at Constellation Drive. The problem here appears to be a pinch point northbound on SH1 between SH18 and Greville Road and constraints around the interchanges themselves. Yet again the solution is to jump to a gigantic motorway-to-motorway mini-spaghetti junction that likely to cost upwards of half a billion dollars. What about just adding another lane northbound, extending the Northern Busway to Albany and then seeing whether anything else is actually necessary?
  • Puhoi-Wellsford is another classic example of overkill. Yes there are congestion problems around Warkworth, yes there are major safety issues in the Dome Valley and at specific points south of Warkworth, but it’s quite a jump to suggest the only solution to those problems is a massive new motorway that’ll cost close to $2 billion. Operation Lifesaver highlights how most of the benefits from the motorway can be achieved at a fraction of the cost by truly focusing on the problem at hand.
  • The recently proposed Lincoln Road widening project once again responds to legitimate problems like a lack of priority for buses, localised congestion and safety issues. Yet the respond is again overblown – massively wide intersections, slip lanes everywhere, extra lanes all over the place etc. The outcome is not just an overly expensive project, but a corridor that gets wider and wider – further degrading the urban form around it.
  • Penlink is a massive project to satisfy locals when the real problem is further north at Silverdale and can be solved with other smaller alternatives.

It seems like good transport planning should flush out what projects are overkill and what projects aren’t. An interesting comparison against the above projects is the process that the City Rail Link has gone through over the past few years – especially in the form of the City Centre Future Access Study, which looked in detail at a range of “smaller options” for resolving issues with access to the city centre – outlining which of these would be necessary anyway, which could occur prior to CRL being built but also the point at which the ‘small scale’ interventions need to become so significant you might as well do the job properly – in this case by building CRL.

Throughout the ITP there are a vast number of projects which are obviously “overkill”. Examples include $665m on Albany Highway (surely a typo?), around $800m on a section of Great South Road, a $150m motorway bypass of Kumeu, the $240m Mill Road corridor project and many others. Strip back these overkill projects so they really focus on the problems they’re designed to resolve and we’ve probably gone a long way towards solving our future funding shortfalls.

ITP Major Projects

Puhoi to Warkworth Board of Inquiry submissions close soon

I realise it might seem like fairly late notice however if you intend to make a submission about Puhoi to Warkworth then you only have a few days left as submissions close at 5pm on Friday. The details for how to make a submission are on the Environmental Protection Authority (EPA) website while the detailed documents from the NZTA to support the proposal can be found here.

This video shows the route being proposed.

I haven’t yet put together my submission (that will be a task for the next few days) however with this post I’m going to highlight some of the areas I will be focussing on.

Like so many other projects that are going on at the moment, I do agree that some improvements need to be made to the route between Puhoi and Warkworth however I disagree with the scale of the solution. There seems to be a prevailing attitude from the government and transport agencies that if we’re going to build something, then instead of small and targeted upgrades we should just bite the bullet and build the long term solution that we might not 30 years. It may sound like a good idea to effectively “build once” but the downside is it sucks up transport funding for other projects that might provide a better return on investment, even if just in the short term.

There is some evidence of this when we compare some of the information in the executive summary with some older reports/studies of the project. This part is from the executive summary although I have cut out a section between the two paragraphs:

Over the decade to 2012, the NZTA carried out a series of studies on the State highway network connecting the Auckland and Northland regions. These studies considered the role of the State highway network in relation to the wider transport system between Auckland and Northland.

The studies concluded that an off-line four-lane motorway alternative to the existing SH1 will achieve the strategic objectives of supporting economic development in northland, will address transport constraints imposed by the existing alignment of SH1, and will address traffic congestion and safety issues on SH1 .

While it is true that the previous studies had recommended an offline motorway as the best long term option, they also said that the only part worth doing was a bypass around Warkworth. Other sections of the road from Puhoi to Warkworth were expensive and provided little economic benefit as it was considered that there was little opportunity for substantial economic growth in Northland. In other words while a motorway might be the ideal situation, it doesn’t make sense. Of course that all changed after the current government were elected in 2008 and quickly declared the route a road of national significance.

Some people may think that this part is not that important – at least for the consenting process which is mainly about how to mitigate the negative impacts caused by the construction and operation of this road. However I think it is critically important. If we don’t need to build the road at all then we can not only save ourselves a huge amount of money that can go towards upgrades to the existing route and other projects, but we can avoid completely damaging the environment where the new road will go through.

And those environmental impacts are going to be huge with massive amounts of earthworks needed to get the route to motorway standard. To give you an idea of the amount of change to the landscape that is proposed, there will be some embankments up to 46.5m high and some cuts into hills up to 45.8m deep. In total over 8 million m³ of fill will be needed, that’s 6-7 times what is being taken out of Waterview. In addition there are 7 major viaducts, 5 bridges with the highest being 46m high – that’s similar in height to driving over the Harbour Bridge.

Now it might be possible to mitigate the impacts of building and operating the road however the big issue is the cost of doing so. As a result of what is already proposed the project is expected to cost $760 million which means the road needs to deliver a lot of benefits to be viable and that is where things start to get shaky. As mentioned previous economic assessment ranked everything but a bypass of Warkworth uneconomic. There isn’t a whole lot of information about the current business case with the only economic information talking about the high level economic effects of the project. The NZTA should be releasing the full business case for this project, not just an 8 page letter.

Of course many of the economic benefits are meant to accrue to the users of the road through travels savings along with safety improvements. The traffic assessment report provides information about this but the thing that catches me is that all through the report it comments that the project is primarily an issue during holiday times while that at other times of the year the road is relatively free.

P2W Transport Assessment - Traffic Volumes

P2W Transport Assessment - Traffic Volumes Graph

 

And shortly after

P2W Transport Assessment - Holiday Makers

To sum all of that up, the problems on the road that cause congestion happen during the summer months when heaps of people are going away on holiday to the beaches primarily to the east of Warkworth. The rest of the time it handles less traffic than many single lane arterials in Auckland. Spending hundreds of millions (latest estimate I saw was $760m) just so that some people going on holiday can get to their baches a few minutes quicker hardly seems like a good use our money.

I think a really useful outcome from this process would be to get a fully independent assessment of the transport and economic reports, much like we saw come out recently about the Basin Bridge. If you are going to submit then perhaps consider adding that to your submission.

Lastly if you are an expert in any of the fields that want to help with a submission then please let me know.

Portugal’s Ghost Roads

In the comments, “Handlebars Matt” provided a link to this video about how nobody is using Portugal’s motorway system – which was built at vast cost over the past decade:

I often fear that this is the future for many of the Roads of National Significance that are either under construction or due to begin construction in the next few years. Particular candidates for incredibly low levels of use seem to be:

  • Puhoi-Warkworth. Due to the new road not being much faster than what’s currently there, the Puhoi ramps providing a link between the existing Northern Gateway Road (which does provide a significant time saving) and the existing SH1 likely to be faster and cheaper for most people compared to a toll road that doesn’t even connect well to Warkworth and requires people to double back through the messy Hill Street intersection to get to the eastern beaches.
  • Tauranga Eastern Link. We all know the history of toll roads in Tauranga and I struggle to see how this won’t be another empty toll road offering drivers little incentive to use it rather than the existing route.
  • Hamilton bypass. Current projections only see 7,000 vehicles using a section of this $890 million section of the Waikato Expressway by 2021. This route seems unlikely to be tolled but will still be something of a “ghost road” even if the notoriously optimistic projections are correct.

The same might be true of many parts of the Wellington RoNS, although if they are “successful” and attract traffic the main impact will be worse congestion in downtown Wellington and reduced use of the railway line.

A shame we won’t be able to learn from Portugal until many billions of dollars of taxpayers’ money has been wasted.

The financial impacts of the CRL – At the margin

“At the margin” is one of my favourite economic expressions.

Recently I’ve been thinking about how the City Rail Link (CRL) affects the financial performance of Auckland’s rail network “at the margin”.
Specifically:

  1. What is the impact of the CRL on patronage?
  2. What is the impact of the CRL on fare revenue?
  3. What is the impact of the CRL on rail operating costs?
  4. What is the impact of the CRL on cost recovery?

Now I don’t want to send the wrong message: Financial performance is not as important as economic performance.

But financial performance is important to some degree; as it defines how a given project impacts on the National Land Transport Fund (NLTF). And where a project’s operating costs exceed its revenues, then it will require on-going operating subsidies.

By extension investing in projects now that require on-going subsidies will reduce our ability to fund future projects. So if we invest in transport projects that require large on-going operating subsidies, then we are effectively making a decision to reduce the funding that is available to fund other projects in the future.

That’s why I think financial impacts are important.

It’s interesting how quickly political biases enter the discussion as soon as one mentions the words “financial performance”.

Many people on the right presume that roads are associated with good financial performance, whereas public transport – especially rail – is not. On the other hand, many people on the left presume that anyone who is concerned with financial performance is guilty of short-term “roads first” thinking. Both are presumptuous.

And I think the CRL provides a good example to challenge some of these biases. First let’s quickly make some guess-estimates in response to the questions posed earlier:

  1. Patronage impacts = The CRL is ultimately expected to generate ~20 million additional rail boardings p.a. (possibly more)
  2. Revenue impacts = 20 million x $4 per boarding = $80 million p.a. in additional rail fare revenue,
  3. Rail operating costs = let’s say we double service levels for circa $70 million p.a. in additional rail operating costs
  4. Cost recovery = Revenues / Operating costs = 114% (in a marginal sense).

Now I’m the first to admit that the numbers are a bit rubbery. While we won’t gain 20m boardings overnight, the same holds for the operating costs: We’re not going to need to double rail frequencies straight away either. We’re also ignoring capital costs of course, but that’s a different question.

Hidden in the numbers above is an interesting assumption that I’d like to discuss in more detail: That is the average fare of $4 per boarding. Why is that interesting? Well according to NZTA documents Matt has received in the past, the average fare on the rail network is currently around $2.70 per trip. So why have I assumed $4 per boarding?

This is a situation where I think it’s important to think “at the margin”. Or to put it another way, the CRL is not your “average” rail project.

Simply put, the CRL opens up vast swathes of the city centre. It seems fairly clear that the marginal passenger attracted to the rail network by the CRL is more likely to be paying a higher fare than the current network average, which is essentially dragged down by a relatively high proportion of concessionary travellers, which in turn is a function of the rail network’s extremely limited coverage of the city centre.

In contrast, trips to the city centre are far more likely to pay an adult fare. One way to get an idea of how much higher the marginal fare might be would be analyse average fares for people boarding/alighting rail services at Britomart. But I’ll leave that to AT …

Figures obtained in the past from Auckland Transport says that the average journey length on the rail network in excess of 15km. That means on average most people are travelling from outside of isthmus and based on the current fare structure would equate to a 3 or 4 stage fare depending on the line. Current adult HOP fares $4.05 for a three stages or $5.04 for a four stages. As such an average fare of $4 for passengers attracted to the network by the CRL seems about right.

On the operating cost side, it currently costs something like $90 million a year to run the rail network. A decent proportion of those cost are somewhat fixed or at least exhibit some economies of scale. One of the big advantages of electrification is that it should reduce the cost of running individual services and that means Auckland Transport will be able to run more of them than they do now for little incremental cost.

As such a doubling of future services due to the CRL should not result in a doubling of the total operating costs (please correct me if I am wrong on this).

For the purposes of this exercise I’m going to assume that the future electrified rail network costs $100 million a year to run and that adding services as part of the CRL will increase costs by $70 million per year.

Assumptions about average fare and operating costs aside, it seems the CRL actually performs relatively well from a financial perspective. In the long run it may even pay its way operationally, especially if AT can generate additional revenue from leasing space within/around the stations.

If this is the case then not only would we have significantly boosted rail patronage and accessibility across the city, but we would have done so while also improving the relative operational performance of the overall rail network.

The table below summarises these assumption in the context of the overall rail network, where farebox recovery improves by ~25% to what is a relatively high 79%.

CRL Financial Performance

To provide a point of comparison I have also crunched some numbers on cost recovery for Puhoi-Wellsford. These suggest that “cost recovery” for Puhoi to Wellsford is circa 50% (NB: This number is even more rubbery – I might do a separate post on this if people are interested in how the concept of cost recovery might be applied to roads).

Not that this is a post about the issues with that project, but it’s worth keeping in mind whenever anyone tries to convince you that new highways “pay for themselves” more so than new railways. While that may be true “on average” the story could be quite different “at the margin”. And it’s the performance at the margin that matters most.

The general message, however, is that the financial performance of the CRL is not too bad. To cut a long story long ;).