While Auckland remains waiting on the government to commit to its share of funding for the most transformative transport project since the Harbour Bridge – the City Rail Link – the NZTA have just announced that they’ve shortlisted three groups of companies to build the Puhoi to Warkworth motorway as Public Private Partnership.
In the past the NZTA have said the project could cost around $760 million however as PPPs are just glorified hire purchase arrangements it means that over the course of the loan it will cost us considerably more than that. As an example the Transmission Gully project in Wellington costs around $1 billion however after the interest accrued during construction is capitalised it pushes up the cost to about $1.3 billion. That cost is then paid off back to the private companies which the NZTA say will likely be $120-$130 million annually.
That cost might be justified if the current road was heavily used however it isn’t and even the NZTA’s own analysis during the consent hearings admitted it was only really busy a few times over summer. Neither is it the economic saviour of Northland like the government and some other politicians claim. For starters it finishes just north of Warkworth and from there north traffic is normally around 10,000 vehicles per day. Also if this new road was really going to make a difference in connecting Northland with the rest of the country then why hasn’t the existing toll road done that, or even the extension that got the motorway to Orewa/Silverdale in the early 1990’s.
Unfortunately we’ve not been allowed to see the business case for the project as in the past when asked the NZTA they’re keeping if secret until after they’ve awarded the tender.
Here’s the press release:
The NZ Transport Agency has today taken another step towards building the new Pūhoi to Warkworth motorway by announcing the consortia shortlisted to progress to the next stage of the project.
Transport Agency Chief Executive Geoff Dangerfield says the building of the motorway is a significant step towards improving the safety, reliability and resilience of State Highway 1 between Northland and the upper North Island freight triangle of Auckland, Waikato and Tauranga.
In September 2014, a Board of Inquiry confirmed approval of the Transport Agency’s application for designation and resource consents for the project. This was followed, in May 2015, by the Cabinet approving an application by the Transport Agency to procure the motorway through a Public Private Partnership (PPP).
The Cabinet approval came after the Transport Agency determined, following an extensive business case analysis, that the project met the Treasury’s criteria to be procured as a PPP.
The consortia shortlisted to receive a Request for Proposal (RFP) for the financing, design, construction, management and maintenance of the Pūhoi to Warkworth project under a PPP are:
- Northlink – made up of Cintra Developments Australia Pty Ltd, InfraRed Infrastructure III General Partner Ltd, John Laing Investments Ltd, Ferrovial Agroman Ltd, Fulton Hogan Ltd.
- Northern Express Group – Made up of Accident Compensation Corporation, HRL Morrison & Co Public Infrastructure Partners, Acciona Concesiones S.L., Fletcher Building Ltd, Macquarie Group Holdings New Zealand Ltd, Acciona Infrastructure Australia Pty Ltd, The Fletcher Construction Company Ltd, Higgins Contractors Ltd.
- Pacific Connect – made up of Pacific Partnerships Pty Ltd, VINCI Concessions S.A.S., ACS Infrastructure Australia Pty Ltd, Aberdeen Infrastructure Investments (No.4) Ltd, Leighton Contractors Pty Ltd, HEB Construction Ltd.
Mr Dangerfield says the announcement of the shortlisted consortia comes after a rigorous evaluation and selection process.
“We are very fortunate to have such high-quality companies and organisations showing an interest in the Pūhoi to Warkworth project. All of these companies and organisations have sound experience in delivering large infrastructure projects.
“I’m confident that any of these consortia can deliver a high-quality motorway which will provide greater resilience, improved road safety and journey time reliability, and a better connection for freight, tourism and motorists.”
Mr Dangerfield says the RFP will be issued to the shortlisted consortia later this month and the Transport Agency expects to announce a Preferred Bidder by mid-2016.
Subject to successful contract negotiations with the Preferred Bidder, the PPP contract for the project is expected to be awarded in October 2016.
He says the Pūhoi to Warkworth project seeks to procure a PPP contract that would deliver a value-for-money motorway which will assist economic growth in Northland.
“A PPP contract will likely see the PPP consortium manage and maintain the motorway for the 25 years that will follow the anticipated six-year period to build it.”
“PPPs are a particularly suitable procurement method for delivering great results for large-scale and complex infrastructure.
“Using a PPP for key infrastructure projects will open the door for private sector innovations that are not always achievable under traditional public sector procurement methods.
“PPPs allow specific outcomes to be established and measured – and for risks to be identified and transferred to the private sector.
“An outcomes-based PPP for the Pūhoi to Warkworth project will also allow great flexibility within the designation to achieve optimised innovative outcomes.”
Mr Dangerfield says that under a PPP, full ownership of the motorway will always remain with the public sector.
“The nature of the contract to be used will provide a strong incentive for the successful PPP consortium to deliver the best possible results for road users.”
Tentatively, construction of the Pūhoi to Warkworth motorway, under a PPP arrangement, could possibly start in late 2016 with the road completed and open by 2022.
Mr Dangerfield says no decision has been made on tolling for the Pūhoi to Warkworth route but should the motorway be tolled, the Transport Agency would retain responsibility for tolling.
“The public would be fully consulted on any tolling proposal which must also obtain Ministerial approval,” he said.
He says the Transport Agency will continue to consider PPPs for other large-scale and complex infrastructure projects which could potentially benefit from the innovation and value-for-money that can be achieved through a PPP approach.
The first state highway in New Zealand to be delivered through a PPP is the Transmission Gully (MacKays to Linden) project in Wellington.
In July 2014, the Transport Agency signed a PPP contract with the Wellington Gateway Partnership (WGP). Work on Transmission Gully began in September last year, and the motorway will be open for traffic by 2020.
In the third in my series of posts wrapping up the year I will look at what’s happened with roads this year.
Roads of National Significance
The RoNS have continued as they did last year with one notable exception.
Western Ring Route
The Western Ring Route works are in full flight now as will be evidenced to anyone who drives along SH16 with roadworks in place from east of Western Springs all the way through Northwest of Lincoln Rd from 5 separate projects.
- St Lukes Interchange
- Waterview Connection
- Causeway upgrade
- Te Atatu Interchange
- Lincoln Rd Interchange
The TBM working on the Waterview connection has broken through with the first tunnel and in December made a start on the second one. At the same time the most visible part of the project has been the large yellow gantry has been building towering ramps that will connect the tunnels to SH16 in each direction.
Over the next year we should finally see the Lincoln Rd section completed and I imagine significant progress on the other projects – although they are still a few years from completion.
Puhoi to Wellsford
In 2014 the NZTA were issued with consent to build the Puhoi to Warkworth motorway – a road even the NZTA’s analysis says is only really busy during holiday periods. Amazingly we’re still yet to see any real economic analysis for the project which is likely because it’s terrible based on the work we saw before the government named it a priority. The government of course continue to claim it’s all about the economic development of Northland despite the existing toll road – which saved more time than this motorway will – not making any difference.
Over 2015 we’re likely to see the NZTA working towards a PPP to get this project built however it’s not likely we’ll see any construction start.
Basin Reserve Flyover
Perhaps the biggest surprise of 2014 was the Board of Inquiry declining the NZTA’s application to build a flyover around the edge of the Basin Reserve. In the end the commissioners hearing the case concluded the impact on the local community from having a massive flyover was just too much after it was able to be shown that most of the benefits the NZTA claimed the road would provide were actually attributable to other projects. The decision was embarrassing for the NZTA and the government seeing as it was using the governments new fast track process which means the decision can only be appealed on points of law – which the NZTA are doing.
I’m not aware if a date has yet been set for the appeal but it is likely to be later next year.
Also in Wellington, the first transport PPP was signed in July for the construction and operation of Transmission Gully, another project with a horrific business case. Initial works should have started by now however won’t really ramp up till next year. The PPP will see the NZTA paying $125 million a year for 25 years once the project has been completed. Unlike many PPPs that failed overseas, for the consortium building the road there is little risk as all the demand risk sits with the NZTA, in other words we pay providing the road is open – and if it is damaged from a something like an earthquake we have to pay at least some of the costs of that too.
The other RoNS projects in the Waikato, Bay of Plenty and Christchurch have continued along. I’m not sure of the progress of all of them however the Tauranga Eastern Link is meant to be completed in 2015.
Auckland Motorway Projects
In 2013 the government announced a series of additional motorway projects for Auckland. The widening of the Northern Motorway between Upper Harbour and Greville Dr has just been completed and in November started consultation on ideas for further changes to that section including a motorway to motorway interchange between SH1 and SH18. Some of the ideas are absolutely massive in scale such as concept 3.
Of the other projects, works to grade separate Kirkbride Rd moved ahead and earlier this month the NZTA announced the contract had been signed with construction starting in January
We haven’t heard much about the other accelerated project which will see the southern motorway from Manukau to Papakura widened but I would expect we will do in 2015.
In addition to the accelerated projects the NZTA has now made a start on widening SH1 Northbound between Ellerslie-Panmure Highway and Greenlane – a project that’s been on the cards for a while and for which the Ellerslie Station platform was narrowed a few years ago to accommodate.
Accelerated Regional Roads
In addition to the RoNS, and to shore up their support from some rural communities, this year the government announced a spend up of over $200 million on a number of regional state highway projects that can’t get funding due to it being sucked up by the RoNS. The Funding for these projects is coming from the proceeds of asset sales the government has undertaken. Some of the projects appear to be of low value however not all are.
Auckland Transport started the year with the opening of the new Panmure station and in November they opened Te Horeta Rd which is the new road running alongside the rail line and Panmure station from Mt Wellington Highway to Morrin Rd.
In October both AT and the NZTA launched consultation on ideas for the East West Link after calling off a proposal for a motorway through Mangere right at the beginning of the year. They haven’t announced the results yet but I’m fairly certain either option C or D has been picked as the option they are proceeding with.
In November AT announced they have come up with a route for the Mill Rd corridor and will be working towards securing a designation for it. The most disappointing aspect for me about the project – other than some of the case for it has likely been destroyed by the fast tracking of the SH1 widening – is that even with a brand new corridor, AT are still designing a crap outcome with features like unprotected cycle lanes or shared paths and pedestrian/cycle unfriendly roundabouts.
We’re still driving less
One positive trend I have started to notice is our transport institutions are starting to take notice of is that we’re driving less. In the last few months in particular it’s started to be mentioned in publications such as the Briefing to the Incoming Minister and in research papers.
What have I missed?
In some respects Saturday night’s election result changes nothing from a transport perspective. It seems as though the government that will be formed over the next three years will be remarkably similar to that we’ve had for the past three years and there’s certainly no indication of a change in direction for transport policy from what we’ve had over the past six years. However, this has some important implications:
- It’s almost certain that Puhoi-Warkworth will be built, with construction likely to start before the 2017 election and the project built/funded as a PPP.
- There will continue to be a lot of discussion around the timing of City Rail Link and whether the Council or Government budges from their preferred start date.
- Progress on any alternative funding mechanisms to close the so called “funding gap” for transport seems pretty unlikely. This is despite the fact some government departments have also being doing their own investigations on alternative funding sources due to lower than expected revenues into the National Land Transport Fund.
- There is likely to be more money for cycling projects thanks to the $100 million for urban cycleways around the country over four years
Cam discussed Puhoi-Warkworth in his post yesterday, so in this post I’m going to focus on the CRL and alternative funding, particularly what the election results means for these two key (although not necessarily connected) issues.
Starting with the CRL, a start on the project as a whole anytime in the next three years now seems fairly unlikely. This means hopes of completing the project by 2021 are probably slim unless the Council can talk government into a very big change of position. The Council is keen to progress talks with government about the timing and funding of CRL, but it seems likely that these talks will focus on funding of the section underneath the downtown shopping centre:
Although the council wants to start CRL by 2016, the previous Government indicated no funding before 2020 unless certain rail patronage and employment targets were met. But [Penny] Hulse remains confident of middle ground.
“We’ve been working well with the Government over the last three years and we don’t expect that to change. The start time and funding are things we need to talk to the Government about,” she said.
This section is particularly important as it is key to delivering not just the redevelopment of the downtown shopping centre site but also a whole raft of projects that are part of the Downtown Framework including making things better for buses on Customs St.
I’m still confident the rail patronage targets set by the government – that patronage will track towards hitting 20 million journeys per year by 2020 – will be met or even exceeded, plus of course there’s still another election in 2017 between now and the government’s current preferred start date. But it seems prudent, for now at least, for the Council to just get on with building the section under the downtown shopping mall – like I said in this previous post. Once CRL is started, it will be much easier to “complete” and the section underneath the downtown shopping centre will make constructing the rest of the project much easier – especially if they can get the bit under Customs Street built as part of this first stage:
So I don’t really think Saturday’s election results change things much for the CRL. I would imagine that the main focus to negotiations over CRL between government and the Council is likely to be around whether the government stumps up with half the cost of the first stage of the project or whether they force Council to fund the whole thing – like has happened so far. I think it would be quite a good look for the government to provide CRL with some financial support for the first stage, to show that it’s serious about believing in the CRL project and to show that it values redevelopment of the city centre.
In relation to alternative transport funding, this might be a bigger hurdle to resolve as the government has been pretty clear on its position previously – no congestion charging and no additional tolls on existing motorways. To some extent this may not be an issue, as I highlighted a few weeks back the “baseline transport programme” (what can be afforded without additional funding with 2.5-3.5% rates increases over the next decade) doesn’t actually look too bad, at least in terms of what big projects are in (CRL, AMETI, new bus network stuff etc.) and out (Penlink). The devil may come in the details of what projects can be afforded when and how much additional walking and cycling funding is available, but at least for now it doesn’t seem like the end of the world if there’s no progress on alternative funding schemes in the next three years. Unless you’re a Penlink supporter, of course!
In saying that it also seems government agencies are becoming increasingly interesting in the issue of alternative funding as a way to provide certainty to the revenues flowing into the National Land Transport Fund (the account that collects all of the transport taxes). It may be a few years away yet but I get the feeling the noise surrounding alternative funding sources is just going to get louder and louder so we’re likely on a course to needing a nationwide discussion about them. When this happens the work put in by the council on the matter is likely to come in quite handy.
The last main issue relates to cycling improvements. From a transport point of view this was one of the highlights of election campaign as every major party (and most of the minor ones) all agreed on the need to spend considerably more on walking and cycling than currently happens. For their part National promised to spend $100 million over four years on urban cycleways. Based on Auckland’s share of the urban population that could see it receiving over $40 million over the four years which would represent an approximate doubling in spending. In saying that a lot will hinge on just how much the council agree to in the Long Term Plan. With the government now seemingly on board with cycling there is a risk the council will try to use the enlarged cycling pot as a chance to cut back on some of the council’s spend. Instead the opposite needs to happen and they need to at least double funding to go on top of whatever the government plan to provide.
So overall, aside from the fact we’re near certain to waste three-quarters of the billion dollars plus whatever the PPP costs on Puhoi to Warkworth, I don’t think the election results is too much of an issue for advancing key transport issues in the next few years. It does mean the slower delivery of CRL, but that’s not unexpected and may help ensure key bus infrastructure for the new network can be completed in time. There’s a certain irony that the government’s dislike for alternative transport funding options probably means a delay to Penlink, a project I understand the local National MP has pushed strongly for, but that project’s a waste of money anyway.
Lastly it was disappointing that despite many requests the first time we got to meet transport minister Gerry Brownlee was at the election debate night. I will also be keeping an eye out to see if we get a new transport minister and whoever it is, I hope they become open to meeting with us this term.
The final decision from the Board of Inquiry confirming the Puhoi to Warkworth toll road was published on 12th September but, what with one thing and another, I’m only now getting round to writing about it. The final report is largely unchanged from the draft version.
Here’s a reminder of the route, which runs from Puhoi to a point 2km north of Warkworth:
Puhoi to Warkworth toll road
The toll road will be just 700m shorter than the existing SH1 and reduce travel time to the north of Warkworth by just three minutes compared to the current journey time. Most Warkworth residents will find the new toll road won’t be quicker (and in some cases slower) than the existing SH1.
Probably the most perplexing thing about the BOI Report is the complete absence of any consideration of the economic impacts on the community.
Section 8.5 of the report is headed “Economics” and starts off promisingly, but it is only three paragraphs and really just sets the scene for the Board’s consideration of economic impacts:
 It is necessary to consider the economic impacts of the Project in the context of the Act. These impacts are particularly relevant to the Part 2 assessment that the Board conducts later in this Report.
 The purpose of the Act is to promote the sustainable management of natural and physical resources in a manner which enables people and communities to provide for their social, economic and cultural wellbeing (s 5). Under s 7 of the Act it is necessary to have particular regard to certain matters
including the efficient use and development of natural and physical resources.
 A number of representations and submissions questioned the adequacy of NZTA’s consideration of alternatives. Also questioned were the wisdom of the use of public monies on the motorway Project and whether or not there had been an adequate cost-benefit analysis. These issues are dealt with in another section of this Report.
Regular readers will recall that the toll road hasn’t been subject to any economic analysis (even the standard Economic Evaluation Manual), however the Board discusses this in section 10.5, para 374:
 One of the difficulties with which these submissions posed the Board is that no expert evidence was called to challenge the economic and cost benefit assumptions on which NZTA’s applications were based. Nonetheless, the submissions generally, and the statutory status of “alternatives” in particular, require the Board to deal briefly with these issues.
In comments to the Board, CBT responded by pointing out that “no economic evidence in chief was supplied by the applicant in support of the project, so there was no evidence to challenge.” CBT sought an amendment to the report, asking for some commentary from the Board as to why it considers an economic analysis of the Project’s impact on the community is not necessary, but none was forthcoming in the final version of the report.
Further on, the Board states in paragraph 379:
…Section 7 “alternatives” in the AEE sets out in detail the process whereby NZTA considered the various options and alternatives open to it.The Board is satisfied that the consideration of alternatives to the proposed route and designations by NZTA was conscientious and comprehensive. Many evaluation criteria were deployed, including a “value for money” criterion.
Again, in comments to the Board, the CBT pointed out the “value for money” criterion on p.144 of the AEE refers to the “ability of the option to be tolled”. In this context, “value for money” refers to value for money for the applicant, and not to the value to the community. Value to the community, alongside possible negative economic impacts to the community should be the primary consideration of the Board.
Neither of these and other comments resulted in any changes to the draft report. Instead, in a separate document, the Board notes the following with regard to the CBT and Generation Zero’s comments on the draft report in section 1.6
 There may, in respect of any proposal, be positive or adverse economic effects. These positive or negative economic effects may impact on entire communities or on individuals. It is also clear law that the financial viability of a proposal is not an appropriate matter for a consent authority to consider.
 It was against that background that the Board’s Draft Decision contained the various passages which the Campaign for Better Transport and Generation Zero seek to be further justified. But it is not for the Board to scrutinise the economic viability of the Project (regardless of whether the proposed highway is a toll highway or not).
 There were many representations from territorial authorities in Northland and transport groups that the Project would bring significant regional economic benefits and cost savings.
 Consent authorities and Boards established under the Act are required to make planning judgments which inevitably (as is the case with all decision makers) engage the common sense and life-experience of Board members. The effects of a heavy truck and trailer unit moving slowly up a steep hill, with other traffic stretching out behind it, on fuel consumption and journey times is self evident and need not be a matter for direct evidence.
 Whether or not improved highways designed for vehicular transport of goods and private motorists, with the resulting consumption of fuel, is desirable (economically, socially, or otherwise), or whether motor vehicle use should be discouraged and public transport enhanced, are indeed “high policy” matters and cannot properly be dictated or influenced by this Board.
 The Board accepts that Mr Pitches’ cross-examination of NZTA’s Traffic Report as it related to traffic flows in and around Warkworth5 indeed challenged some of the information provided by NZTA. But it was not, in the circumstances, necessary for the Board to make further factual findings beyond those which it did relating to Warkworth traffic generally and the Hill Street intersection in particular.
 As stated, the Board has noted the comments of the Campaign for Better Transport and Generation Zero. It is unnecessary, however, for the Board to do anything further. The economic concerns of both organisations were, to the extent that they can be, carefully considered. Those concerns certainly cannot be described as minor or technical.
And that’s it. So the Board hasn’t considered any evidence about the economic impacts on the community at all, as they set out to do in section 8.5. Instead they conflate the economic viability of the project (which they don’t have to consider) with the economic impact on the community (which they do). It is also worth pointing out that the representations referred to in para 20 didn’t contain any economic evidence either. The Northland territorial authorities simply asserted that the toll road would be good for Northland’s economy.
So, all in all, a disappointing decision that doesn’t really address economic impacts on the community, other than accepting the assertions of the applicant which aren’t based on any hard economic studies. I’m not an RMA lawyer, but potentially I see this as setting a precedent for all future infrastructure projects whereby economic benefit cost studies need not be supplied at all.
The decision is also in stark contrast to the Basin Bridge decision, which declined the Basin Reserve flyover. In that decision, the Board carefully discusses economic effects in the context of a cost benefit framework. In the consideration of alternatives, the Board appointed its own peer reviewer and found that consideration had been inadequate.
NB: Any appeal would need to be lodged by the 3rd October, however the CBT decided at its last Committee meeting that we will not be pursing this option. The cost and effort would be prohibitive and the result of an appeal would simply direct the Board to reconsider their decision.
Yesterday the Board of Inquiry announced their draft decision for the Puhoi – Warkworth motorway. Disappointingly they approved the Notices of Requirements and other related consents. This of course was in sharp contrast to the decision of another Board of Enquiry to reject the Basin Reserve flyover, which was announced earlier in the week.
Many serious concerns were raised about the proposal during the hearings stage. Cameron Pitches from the Campaign for Better Transport raised a number of concerns about the traffic modelling, alternatives and economic analysis of the projects. These were covered in series of posts back in April and May
Generation Zero (who I submitted for) also raised similar concerns about economics and alternatives.
Unfortunately all these serious concerns were dismissed by the Board of Inquiry. These are excerpts from the draft decision which can be found on the EPA website here.
379. The application documents filed by NZTA are comprehensive. Consultation with interested and affected groups has been extensive, spanning in some cases several years. Section 7 “alternatives” in the AEE sets out in detail the process whereby NZTA considered the various options and alternatives open to it. The Board is satisfied that the consideration of alternatives to the proposed route and designations by NZTA was conscientious and comprehensive. Many evaluation criteria were deployed, including a “value for money” criterion. Seven broad corridor options were evaluated. Inside the various sectors of the proposed motorway short-listed route options were considered and assessed.
385. The ‘do nothing’ option and alternatives proposed by some submitters of upgrading the current SH1 also merits a brief comment. The benefits (assuming appropriate mitigation) of the proposed motorway over the current SH1 route are compelling in terms of road safety, travel times and more efficient fuel consumption. Schedewys Hill features large. The effect of slow heavy vehicles travelling north up this hill on speed, travel time and fuel consumption of other traffic is considerable. The cost of converting the current SH1 alignment on the hill to three or four lanes would be significant, requiring cantilevering over the edge of the hill feature, quite apart from considerations of gradient.
Both of these comments are frustrating. On the first point, the NZTA provided no rationale for the four lane RoNS standard. No reason was stated for the requirement that the road should be tollable, thus ruling out an upgrade of the existing alignment.
On the second point, the Board claims the benefits of the toll road are compelling, however NZTA never quantified the benefits of the toll road in the form of a Cost Benefit Analysis that complies with their own economic evaluation manual. Similarly a Cost Benefit Analysis was not performed on any alternative.
Another part of decision is interesting in that it highlights the need for submitters to bring along experts to ensure their points can be accessed. This of course usually requires substantial sums of money to be raised by these groups, which can be very difficult unless there are wealthy local residents who are locally affected. This was the case with the Kapiti Expressway and Basin Reserve, but not the case with the Puhoi – Warkworth highway. It is also extremely difficult to find an expert willing to go up against the NZTA.
One of the difficulties with which these submissions posed the Board is that no expert evidence was called to challenge the economic and cost- benefit assumptions on which NZTA’s applications were based.
The Board does have the power to appoint their own experts, however they chose not to. The proposed highway would also have substantial negative environmental effects from earthworks, sedimentation of streams and harbours. These effects were said to be covered by the conditions, most of which were written by NZTA and presented to the board. However some stricter conditions on sedimentation and monitoring were put in place.
Especially contentious during the hearing was the removal of several stands of native bush, including a 0.44ha grove of kauri trees. However the BOI found they were unable to require the designation to be shifted away from the kauri trees!
362. As discussed in Chapter 8.3, the Board considered whether it had the power to shift the designation further east to avoid the kauri stand, in response to submissions received and their own concerns. The Board considered that it did not have the power to modify the designation boundary to an extent sufficient to achieve that outcome.
The news to grant the decision was obviously welcomed by the Government and NZTA, who both are determined to push on with the highway. However the consent of course does not mean that the highway has to go ahead. The claimed $760 million cost (nowhere in the application documents is the cost stated, this is the most recent figure from 2012) is totally out of proportion to the benefits that result, and the Campaign for Better Transport alternative would ensure that the safety blackspots are fixed. The NZTA release noted that the highway won’t be finished until 2019 at the earliest. That means that no progress would have been made of fixing existing safety issues for over a decade. A focus on safety could have eliminated these blackspots already.
Of course there is sure to be excitement from Northland leaders who have been seduced by the highway. However this highway will cost about twice as much as the NZTA have spent on both existing and new state highways in Northland over the last decade! Northland leaders should really think again about the link between Roads of National Significance and the cuts to regional and rural roading budgets.
Few seem to realise that the new toll road will be just 700m shorter than the existing route, shaving just three minutes from current travel times outside of the holiday period. Reaction from Warkworth locals suggests that they have no idea that they won’t actually benefit from the toll road. Because the northern junction lies two km north of Hill Street, any Warkworth resident using the toll road will travel about four km further for trips south than if they just use SH1.
Here is a simple proposal highlighting what could be done for the same amount of money.
- $240 million – Operation Lifesaver including Warkworth bypass and safety upgrades
- $350 million – One third of the government contribution to the City Rail Link
- $160 million – Special boost for funding of Northland transport infrastructure. Could cover safety upgrades needed on the Brynderwyns (which has been closed for the last week) and other key routes, as well as major upgrades to the rail network which could carry substantially more freight. This would double the amount of funding spent in Norhtland over the next decade.
Splitting the the funding along these lines would deliver much greater benefits to Aucklanders, Northland and users of the existing road. The funding of the road will be the next step of the project. Given the current stress of the transport budget, and the hundreds of millions in loans required for Auckland projects hard to see how the National Land Transport Fund can cover this. Their have been rumors of a Public-Private Partnership approach for this, but of course that would mean this would be an even bigger drain on the budget, just spread out over several decades instead.
There’s been quite a bit of discussion in the last week about roads in Northland following storm damage that saw part of State Highway 1 closed due to large washout. The severity of the slip saw traffic diverted on lengthy detours on roads clearly not designed to handle more than a handful of cars per day. Another series of slips have happened in the last few days, this time closing SH1 over the Brynderwyn Hills.
Understandably it’s led to people in Northland saying that their roads simply aren’t up to the same quality as roads in other regions. Oddly though it also led to Labour’s Kelvin Davis saying he supported the the Puhoi to Wellsford Road of National Significance.
“They want a safe and solid highway that’s going to get our people and goods in and out and that’s not at the whim of Mother Nature.
“This weather event has shown how vulnerable and susceptible the North is and it’s really important that we have a road where emergency services and whatever can get through, but also we’ve got to have a road that’s going to be able to export our produce outside of Northland and one that’s not going to be washed away in the next storm or flood.”
If the statement above was to be a blanket statement and not referring to P2W then I would be in complete agreement however I say it’s odd for him to bring up P2W as doesn’t even leave Auckland and would not have done anything to help with the slips that have occurred. In fact in many ways P2W is actually likely to be working against Northland as it will suck up funding that could be being used for widespread upgrades to address issues that exist in the roading network.
All up P2W is said to cost ~$1.6 billion with the first section to Warkworth estimated at $760 million. If the goal is truly about helping the Northland economy as the government love to claim then we need to be asking what else we could do with the money. What if we spent ~$300m on operation lifesaver to address the key issues with the existing road. We could then spend about $500 million on actual roads in Northland while still leaving up to $800 million which could be used for other projects – like part of the governments share of the City Rail Link.
But how would $500 million compare to what’s currently spent in the region and is it a significant enough amount of money?
Data from the NZTA can help to answer that question. Unfortunately the 2013/14 data isn’t available yet but this is for the 10 years to 30 June 2013.
|Transport Spending in Northland 2003/04 to 2012/13
|State Highways – New and Improved
|State Highways – Maintenance, Operations & Renewals
|Local Roads – New and Improved
|Local Roads – Maintenance, Operations & Renewals
|Walking & cycling
And here’s the new and improved road spending over that 10 year period
So spending $500 million (on top of what would normally be spent) would be more than all the money that was spent on new and improved state highways and local roads for over a decade.
That seems like it could deliver more game changing outcomes for transport in Northland than a motorway to Warkworth/Wellsford ever would. As an example of what might be able to be delivered, the governments Accelerated Regional Roading Package named two projects that would see road realignments happen. One was on State Highway 73 near Arthurs Pass and the other was just south where the large slip occurred the other week with the project known as the Akerama Curves Realignment and Passing Lane. The latter is a 3km section of road that will be upgraded and have an additional passing lane added for a cost of $10-13.5 million. Comparing the costs for each project it suggests that for $500 million we could probably get 100-150km of upgraded state highway which is a substantial amount.
I guess the big problem with this suggestion is that small scale projects like road realignment and passing lanes aren’t the types of projects that get politicians in the national media cutting turning a first sod or cutting a ribbon.
This is the seventh in a series of posts based on the Campaign for Better Transport’s submission to the Puhoi to Warkworth Board of Inquiry.
The Board of Inquiry Hearing into the Puhoi Warkworth toll road was meant to finish last week, however NZTA are giving their closing submission today (Thursday 5th June) at Courtroom 2.01, Level 2 Chorus Building, 42 Federal St, from 10am.
The CBT was permitted to submit a written closing submission, which we did so on Wednesday of last week.
On Friday of the previous week, we were given permission to cross examine the NZTA’s traffic expert on the significant issues we have raised here in previous posts. You can read the full transcript yourself, but in general all of the points made in previous posts on the blog were confirmed, including traffic modelling being based on no toll tariff for the toll road. Of course, in spite of all the inconsistencies with the traffic evidence, the NZTA still conclude that “No expert traffic evidence has been called to dispute the evidence”, and the Board haven’t been of a mind to appoint any experts of their own to advise them, as has been the case in the Basin Reserve Board of Inquiry.
To help with the legal aspects of our submission, the CBT engaged the services of Rob Enright, a former RMA solicitor now acting as a barrister, to write a closing legal submission. Rob had recent success on behalf of the Environmental Defence Society in the Supreme Court. There is a lot for the Board to consider in the legal submission, but as Rob says:
Perhaps CBT’s strongest point is that the NZTA has failed to undertake a cost-benefit analysis of the relative merits of the proposed designation, despite this being commonplace for NZTA projects.
Remember, the proposed toll road is just 700m shorter than the existing route. At most, just 3 minutes will be shaved off current journey times. For trips to Warkworth and the Matakana beaches, travel time savings are likely to be zero. It will be interesting to see how the Board and NZTA respond to the legal points Rob has made.
So the following issues remain in contention for the CBT:
1. Whether projected traffic volumes for the Project route and existing SH1 are realistic
2. Whether a supporting economic analysis consistent with the NZTA’s Economic Evaluation Manual should be supplied
3. Whether alternatives have been adequately considered
4. Whether unsafe sections of the existing SH1 require mitigation
We’ve covered all but the last of these issues in previous posts , so the remainder of this post focuses on the safety of the existing SH1, and comes from our closing submission.
The Traffic Report 2026 Project case forecasts that the existing SH1 will remain three times as dangerous as the toll road, as illustrated here with the 3rd and 4th columns of this bar chart:
The overall forecast reduction in accidents (23%) is only achieved if the forecast reduction in traffic on the existing SH1 eventuates.
In Section 2.4 Effect of Traffic Report Assumptions of our closing submission, we identified the potential for an increase in traffic on the 2026 existing SH1 of between 5,089 and 7,027 vehicles a day, primarily due to the effect of tolling.
Since accident rates are assumed to be in proportion to traffic, the forecast reduction in accidents will not occur if more traffic is on the relatively unsafe SH1.
In addition, we believe this could mean that the overall accident rate on the corridor between Puhoi and Wellsford will not improve as a result of the Project, as with current modelling there is only a small improvement in annual injury accidents forecast. More traffic on SH1 would potentially eliminate this slight improvement.
The Traffic Report considers future accident rates on the Project toll road and the existing SH1, and states :
The average annual number of injury crashes in the corridor is forecast to decrease by five (23%) in the year 2026 in comparison to the future traffic volumes on the existing SH1 route.
Modelling crash rates in the entire corridor, including the existing SH1, is the correct approach.
But it is unclear why a 23% improvement is an acceptable figure. It should not become a defacto target. Accident rates could be lower if further improvements to the existing SH1 were undertaken.
The Traffic Report identifies a number of accident black spots. For instance :
The 1.6km section of road between Valerie Close and McKinney Road has had the most serious and fatal crashes. The one fatal pedestrian crash was within this section approximately 160m north of the SH1 and Toovey Road intersection.
To remedy this is estimated to cost $2.9m, with a BCR of 2.1. (Costs and BCRs come from this OIA document.)
Schedewys Hill has a particularly poor horizontal and vertical alignment with two passing lanes on curves that terminate near bends. This geometry has resulted in a large number of minor injury accidents on this relatively short section of SH1.
To remedy this was estimated to cost between $25.8m and $70m in 2002, with a BCR of between 1.3 and 1.4.
Similarly, the Pohuehue Viaduct can be made safer for a cost of just $4.7m (2006), with a high BCR of 3.2.
It seems perverse that the NZTA will entertain spending millions of dollars in order to minimise the removal of the Kauri trees across the project area , and yet will not spend any money to provide for the additional health and safety of people and communities. Environmental mitigation is important, but the safety of people and communities should be even more so.
The fact that the NZTA has chosen a Project alignment outside of the current SH1 alignment should not exonerate the NZTA from making these safety improvements, particularly as positive BCRs have already been calculated.
A draft decision from the Board is due in late July
This is the sixth 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
In this post we take a look at what alternatives to the NZ Transport Agency’s $760m Puhoi to North Warkworth toll road have been considered.
It should come as no surprise to regular readers that our preferred solution is Operation Lifesaver, which is a bypass of Warkworth and upgrades of the existing route.
Design, construction and cost estimates for this were based on the NZTA’s own cost estimates. Right up until 2008, the NZTA’s preferred option was to upgrade the existing alignment. Luke Christensen discovered that the 2008 NLTP had $3.6m set aside for investigations into a Schedewys Hill deviation, of which $500k was actually spent.
Originally the scope of Operation Lifesaver included improvements to the Warkworth to Wellsford section of the highway, but the key improvements for the Puhoi to Warkworth section are:
- A bypass of Warkworth
- Pohuehue Viaduct widening and safety improvements
- Schedewys Hill
- Safety upgrades
A bypass of Warkworth could be built largely within the northern part of the proposed designation:
Warkworth Bypass. NZTA proposed designation shown in red.
Construction of the Warkworth bypass would avoid the significant environmental damage that will occur south of Perry Road if the toll road proceeds. The blue line is a new link road, and its exact position would need to be determined in consultation with residents. (Significant growth is planned for the southern part of Warkworth around Valerie Close, which is the side road north of Perry Rd on the map.)
The green line is the Matakana link road. Without this link road, congestion at Warkworth will get significantly worse as all traffic to or from Matakana or Snells beach is forced through the Hill Street intersection. NZTA’s proposed toll road does not include this link road.
The cost of this bypass would be similar to the 7 Km Mangatawhiri Bypass, which involved over 2,000m of culverts and ended up costing $43m all up.
Pohuehue Viaduct widening and a deviation of Schedeways Hill was covered in a 2010 response to an OIA request made by the CBT.
- The preferred option for the Pohuehue Viaduct in 2006 was to widen it to two southbound lanes and one northbound lane, as well as upgrade the edge protection to a barrier that complies with NZTA’s standards. This was costed at $4.7m in 2006 and had a BCR of 3.2
- Three options were investigated in 2002 for a deviation at Schedeways Hill, ranging in cost from $25.8m to $70m, with BCRs of 1.3 or 1.4. All of these options involved a direct alignment that would cut through the ridge. (No word on the outcome of the $500k spent in 2008.)
- In the same OIA response, a passing lane just south of Warkworth was also investigated and costed at $2.9m with a BCR of 2.1. The NZTA say this option was taken through to scheme assessment stage but was terminated following opposition from the then Rodney district council.
So all up the cost of these changes comes to $120.6m, but to be on the safe side we could double the estimate to $240m, and it would still be $520m cheaper than the NZTA’s toll road option.
To recap, this is a better alternative because:
- Environmental impacts are minimised. There is no risk of damage to the Puhoi estuary from sediment flows, and hundreds of kauri trees will be saved. Land owners south of Perry Road get to keep their farms intact and can continue to live in their houses.
- At least half a billion dollars can be saved, meaning either less petrol and RUC taxes, or spending the money on more worthwhile projects such as safety upgrades in the Dome Valley or further north.
- Construction traffic will be far less than that predicted for NZTA’s toll road
- Work can be staged and will most likely be completed before NZTA’s forecast completion date for the toll road of 2021.
- All users of the corridor benefit from SH1 alignment and safety upgrades. Remember at the completion of the toll road, traffic volumes on the existing SH1 will be similar, if not more, than they are today.
In their rebuttal evidence, this is what the NZTA had to say on the Puhoi to Warkworth components of OperationLifesaver:
My assessment of the CBT options from a design and construction perspective is that they have not been adequately scoped and CBT has not considered appropriately the practical difficulties of their construction (and hence their cost).
By way of example, the route through Schedewys Hill is narrow and winding. Introducing a central median barrier would require additional road width for the barrier and an appropriate central median. Similarly, a side protection barrier would require additional shoulder width in front of the barrier in order to provide for traffic to pass stopped/ broken down vehicles. Creating this extra carriageway width would be extremely expensive and difficult to achieve, with the likelihood that extensive retaining wall construction and slope protection works would be needed in geologically unstable terrain. Additionally, the difficulties of achieving such construction in a safe manner, for both the construction workforce and motorists, would be immense. As a consequence, the cost of implementing these suggested works would in my opinion be many times that suggested in the CBT document.
The CBT document also advocates the SHl upgrade alternatives as being able to be delivered much sooner than the Project. However, the options for such works would need appropriate assessment, particularly in respect of a Warkworth bypass and any realignment at Schedewys Hill. The Transport Agency would need to obtain a new and/or widened designation and appropriate resource consent. Construction, particularly of the ‘on line’ works, would be extremely disruptive to existing traffic flows, would require multiple phase-traffic management measures and would result in a very inefficient (ie slow and costly) construction methodology and programme. From experience, I would anticipate that the necessary time period from inception of the assessment process, through to completion of the works could easily be of the order of 6-7 years.
Upon completion of the proposed upgrades,SHl would continue to suffer many of the issues currently associated with its operation, and its ability to address future traffic growth and assist economic development would be little changed. It would remain the only through route between Puhoi and Warkworth and, as such, the resilience of the State highway network to major natural events or accidents would be unchanged.
Having considered the above, it is my opinion that the CBT SHl upgrade proposals overall, as an alternative to the Project, are ill conceived and do not represent a viable option. Moreover, CBT’s assessments of the likely cost of such works are at best questionable, and I would expect actual costs to be many multiples of the CBT estimates. This expenditure would then need to be considered in light of the extent to which these upgrades meet the Project objectives. In this respect, it is my view that the overall performance of the SHl upgrades as proposed by CBT, is significantly inferior to that achieved by the Project.
At no point do the NZTA define what is meant by “overall performance”. NZTA have not carried out a benefit cost analysis for any option, including their own, let alone one that does not involve a four lane RoNS motorway standard. As discussed above, NZTA could get a very accurate handle on costs if they wanted to – they would just need to bring the costings that they have already done up to date.
The argument that construction will be disruptive to existing traffic flows understates NZTA’s recent successes. The inline upgrade of the Newmarket viaduct, one of New Zealand’s busiest motorway sections, was achieved while being kept open, for the most part, to traffic.
Below the fold, I provide a bit of legal context to the consideration of alternatives.
Continue reading A Better Alternative for Puhoi to Warkworth (And How to Save Half a Billion Dollars)
This is the fifth 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
In this post we look at the economic justification for the Puhoi to North Warkworth Toll Road (PNWTR).
In the executive summary of the Assessment of Environmental Effects (AEE), the NZ Transport Agency has provided the following table of economic effects:
Economic Summary from the AEE executive summary
While the NZTA assert that there are positive economic effects from the project, the only evidence supplied is a letter providing a high level assessment. The letter contains general assertions such as “there will be improvements in the economic welfare for Auckland and Northland businesses and residents”, but no quantitative analysis is undertaken.
NZTA claim that the Project will lead to reductions in vehicle operating costs, yet travel time savings for many in the Warkworth and Matakana regions will be in the order of one or two minutes. Tolls will add significantly to vehicle operating costs, so claiming vehicle operating costs will reduce is unsubstantiated.
No evidence-in-chief has been supplied to back up any of the positive economic effects claimed in the Executive Summary.
At the Board of Inquiry, NZTA’s Tommy Parker said the idea of the PNWTR is to stimulate the economy in the north:
It is also important for the Board to know that this is seen as a lead infrastructure so the nature of the policy is to provide infrastructure that will stimulate economic growth in areas of economic potential, and that you will be aware that the two regions that will be affected by this project is New Zealand’s most prosperous region in Auckland and one of its least prosperous regions in Northland. So the idea is to connect the two, get greater connectivity between the two to stimulate the economy in the north.
The reality is there is no correlation between travel time savings and economic growth in Northland. In March of this year, Statistics NZ published regional GDP figures. Here is the chart for Northland:
Northland GDP (source Statistics NZ)
On 25th January 2009, the Northern Gateway Toll Road (NGTR) opened, offering a travel time saving of up to 9 minutes. This is a far greater travel time saving than that offered by the PNWTR, so you would expect to see a corresponding increase in GDP for Northland if there is a linkage between road building and GDP.
You can see that immediately after opening, GDP in Northland dropped, before rebounding to the 2009 level. There was clearly no correlation for the NGTR, so it is likely that the PNWTR, with smaller travel time savings, will also have no correlation with economic growth.
NZTA have not quantified how project travel time savings equate to economic benefit. Table 7 of the Traffic Assessment Report shows Northbound travel time savings:
Table 7: Northbound travel times in minutes
The third column is headed up “2026 Project using fastest route”, because in the bottom three scenarios the fastest route is via SH1, not the toll road. The use of percentage figures gives the impression that travel time savings are significant. However, the travel time savings for the Warkworth, Woodcocks and Eastern Beaches routes are miniscule – just one or two minutes at most times of the day. (Ignorning HS and HE which stand for Holiday Start and Holiday End). It is unlikely that these travel time savings will equate to any meaningful economic benefits.
Here are the Southbound trips from Table 8:
Travel time savings are claimed to be greater, but the odd thing here is that this is because the base case travel times are so much more than for the north bound trips. No reason is given in the report for this.
It may be related, but there is a bit of an anomaly with the routes used determine travel times. The report says the 2026 Base Case assumes that the Western Collector will be completed. This is shown on the map below.
Warkworth Western Collector, forecast to be complete by 2021
The Western Collector should offer travel time savings to Woodcocks and possibly to the North for trips on the existing SH1. However, looking at the travel time routes used for the 2026 scenarios, the Western Collector clearly isn’t used to determine the base case numbers above.
Figure 15: 2026 Travel time routes of the Transportation Assessment Report
Instead of turning opposite McKinney Rd, trips to and from Woodcocks are modelled to take the long route. This will be overstating the Base Case travel times for trips to the Woodcocks area and possibly to / from the North as well.
Contrast the complete lack of economic evidence for the PNWTR with the evidence-in-chief supplied for the Basin Reserve Board of Inquiry. Here is what NZTA’s economist has to say about that project:
From Basin Reserve BOI Evidence In Chief
NZTA acknowledge that economics are relevant considerations under the RMA for the Basin Reserve Flyover, but apparently this is not the case for the PNWTR. You could argue that a Benefit Cost Ratio of 1.2 is hardly a ringing endorsement of the economic worth of the Basin Reserve flyover, but at least NZTA have bothered to carry out some kind of calculation of the benefits of travel time savings, vehicle operating cost savings and so on against the cost of the project. Presumably the economics of the PNWTR are so bad that NZTA would rather not provide an economic assessment at all. NZTA should not be able to pick and choose which projects they provide an economic business case for, and which they do not.
Bear in mind that the discussion of economics at the Board of Inquiry takes place in the context of the Resource Management Act. Commissioner Chandler made the following comment at the hearing on the 10th April:
MR CHANDLER: Perhaps I’ll just mention, Mr Pitches, talking about cost benefit ratios, the Board of course cannot take cost benefit ratios into account in its decision making.
MR PITCHES: All right. So just to respond to that. Benefit cost ratios generally are an indicator of the economic worth of the project, which is why I included it in my presentation. I still stand by my statement that the Resource Management Act place weight upon the economic value of the proposed project and should be considered.
To me it seems ludicrous that the Board should not consider the economic worth of the project, as measured through a benefit cost ratio. If the NZTA were proposing a 32 lane motorway then surely a Board of Inquiry would be obliged to test the economic rationale. But then again I’m not an RMA lawyer.
Perhaps it comes down to how adequately the NZTA have considered alternatives. I will be covering this in my next post.
To date there has been limited media coverage on the Puhoi Warkworth Board of Inquiry.
Fortunately Karyn Scherer, from the local Warkworth newspaper Mahurangi Matters, is one of the few reporters attending the BoI. She writes in her opinion piece:
As someone who lives not too far north of where the Puhoi to Warkworth motorway is likely to terminate (or originate), I should be eagerly awaiting its completion. I travel to Auckland fairly regularly and I have to confess I rather enjoy slipping my sedan into cruise control once I hit the Northern Gateway, and cranking up the stereo.
This is the thinking of most of the general public I think. Perhaps it explains why there hasn’t been much media coverage – the promise of the freedom of the open road, unimpeded by others means that few are able to conceive the construction of the toll road will be anything but a good thing. Others may buy into the NZTA argument that this is “lead infrastructure”, and even though the capacity isn’t required now, there will come a time when it is. Ms Scherer continues:
But even before this month’s public hearing into the motorway extension began, I was starting to have doubts about whether it was a good idea.
Meeting some of the people whose lives have already been destroyed by the proposal because they live along the route was more than just food for thought. Sure, you need to crack a few eggs in order to make an omelette, but shouldn’t we also consider whether too many omelettes will give us a heart attack one day?
The most sense I have heard so far in the hearing was from the Campaign for Better Transport, a voluntary organisation of about 50 people that has won some important battles over transport issues. The elephant in the room at the country lodge in Silverdale where the hearing is taking place is the economic rationale for the project. Basically, there isn’t one. It’s a political decision, driven largely, I suspect, by the Government’s desire to spend up on infrastructure to help stimulate the economy in the wake of the GFC.
Bingo! Ms Scherer is a former business reporter at the Herald.
The problem with such Keynesian responses is that there is a long-term price to be paid.
I’m well aware that most people in this area want the new motorway – but few seem to have given much thought as to who will pay for it, and whether it is worth it. There is no such thing as a free motorway, so ultimately it will be taxpayers who fit the bill, and those who pay the tolls.
Those who can’t afford the tolls will miss out on its benefits. Ironically, they are likely to be commuters who travel to Auckland for work, and could do with a decent motorway. For much less than $760 million, says the CBT, we could upgrade the existing highway and everyone would benefit.
Read what the CBT has to say in this transcript. It starts at page 382.
At last, some commentary on the fact that this will be a toll road, and the fact that there is no economic business case behind it. Because the northern junction of the project is almost two kilometres to the north of Warkworth’s main intersection, there is a high probability that many Warkworth and Matakana residents aren’t actually going to use the new route, especially if it is tolled.
The transcript linked to in the editorial relates to the presentation I gave to the Board on the 9th of April. My appearance was supposed to be at 11:00am, however I wasn’t called until 4:30pm by which time any media had gone home.
The following day I was sworn in and cross-examined by the NZTA and the Board for 40 minutes. I think this transcript (from page 412) is more revealing of the Board’s thinking. I’ve put the highlights below the fold to stop this post from getting too lengthy.
Continue reading Mahurangi Matters on the Puhoi Warkworth Board of Inquiry