Govt saves taxpayers $1.7 billion
May 12th, 2009 at 12:01 pm by David FarrarSteven Joyce has just announced a new preferred route for the Waterview connection – one that is $1.4 billion cheaper than Labour’s tunnel. Labour are campaigning now to spend $1.4 billion just so they can win a by-election, or as ACT calls it a buy-election.
The tunnel will cost:
The $2.77 billion figure was made up of $1.98 billion for construction of the tunnels, $240 million for associated work on State Highway 16 and $550 million for finance costs during the project construction period.
And the new preferred route:
“The NZ Transport Agency has reviewed all options and has found that the Waterview Connection, together with the same amount of associated work on State Highway 16, can be built for considerably less, at an expected cost of between $1 billion and $1.4 billion, depending which of the options is taken,” says Mr Joyce.
And the cost savings get better:
“In addition, all of the options being considered by the NZ Transport Agency would be built with wide enough shoulders to allow for easy widening to three lanes in each direction.
“An appropriate comparison, therefore, is between the top cost of $1.4 billion and the $3.16 billion price of the previous government’s twin three lane tunnel option.
People will quibble over the numbers, but there is such a huge gulf between them, it is clear Labour’s tunnel is a vote buying extravagance that would cost every household around $2,000.
Also from the Q&A:
This review identified several options that are cost effective, allow for future growth and balance the strategic need to complete the Western Ring Route with concerns about local impacts. As well as costing significantly less, they could also be built 12-18 months earlier than the twin tunnel option.
And the route:
“The NZ Transport Agency’s Board is meeting today to consider the three alternative options and will announce its preference tomorrow, once it has had the opportunity to make first contact with those directly affected.
“A thorough consultation process on the form of the selected option will then commence before a final decision is made.”
I’m looking forward for Labour to keep campaigning for their pet tunnel. They may win the by-election but it will make great campaign ads in 2011.
May 12th, 2009 at 12:11 pm
Absolutely the right decision.
Vote:And time to get into Russel Normal who prefers to provide more public transport than complete the bypass.
Could he please explain how public transport can move freight from one part of the country to another?
May 12th, 2009 at 12:13 pm
It wasn’t labours tunnel, it was Helens. UNDER her electorate not through screw the expense.
Vote:May 12th, 2009 at 12:17 pm
Labour’s tunnel is one of the most dishonest things the Labour Party has ever promised. The cost gap is so massive that even the Labour Party would NOT build it. It is a non issue. But let the Labour Party try.
Vote:May 12th, 2009 at 12:26 pm
So $290 million for the SH16 upgrade is a set amount, which means that Joyce’s proposal has a cost of between $710 million and $1.11 billion.
Well there certainly ain’t going to be any tunnel in that!
Vote:May 12th, 2009 at 12:28 pm
I am not sure you are correct to say the govt has “saved” $1.7 billion, they are just planning to spend less than had been possibly expected.
But I understand that there is still the question of how this road will be funded, it is not currently in the 10 year transport plan funding.
Vote:May 12th, 2009 at 12:34 pm
“Labour are campaigning now to spend $1.4 billion just so they can win a by-election…”
IIRC John Banks’ highway through Meadowbank met with bitter opposition from residents in 2003-4, to the point where any thought of pursuing it was abandoned.
So PERHAPS the Labour proposal is for a project that they believe could realistically get planning consent to proceed?
Vote:May 12th, 2009 at 12:38 pm
The Herald’s reponse?
“Government slashes Waterview fund”
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10571849
That caused me to blog about media balance
Vote:May 12th, 2009 at 12:52 pm
When will this outbreak of common sense end ? I can’t stand it !
Vote:May 12th, 2009 at 12:55 pm
It will be interesting to see how they intend to fund this road. I assume they will either need to fund it by borrowing it (not sure that Wall St banks can give it to us at the moment), doing a toll road PPS (like city link in Melbourne, terms would need to be very favourable to the partner ) or have very high tolls on the new or even existing motorway. I also assume SH16 through Te Atatu will need considerable upgrading, not too mention the local access roads.
Vote:The rationale for this road is the fact that spaghetti junction-SH1 has reached its limit. If this were the case surely we could look at encouraging people to live closer to where they live (more jobs out West, more houses down South) and encouraging public transport (rail to airport). Either way given the huge dislocation taking out 600 houses, turning 1/2 of Mt Albert/Avondale into a urban black hole, not to mention stuffing up local traffic along New North and Great North roads, I find it extremely hard to believe that this road won’t need huge sponsorship from Wellington.
May 12th, 2009 at 1:05 pm
So roll out the billboard Melissa.
Vote:May 12th, 2009 at 1:05 pm
Taking Jarbury’s assumption that the cost estimate falls between $710million and $1.1billion we also have to factor in an allowance for the aquisition of property either compulsorily or voluntarily of approximately of say 462 x $800k plus mandatory compensatory payments pursuant to the PWA of say $400million which equates to construction costs inclusive of design fees of say between $310million and $700million. This in my opinion is still excessive. Given the actual completion costs of the Mt Roskill Ext incl design fees but excluding property purchases of approx $224million or $48.7million per kilometre which was ostensibly “greenfields development” then the completion of the Waterview connection should have a cost amortized into 2015 values of approximately $280 to $320million. ACT I believe have a professionally engineered option which is going to be unveiled tomorrow night at Unitec of approximately $500million which is a six lane expressway with interchanges at Hendon Ave, Springleigh Ave and New North Road and only requires the acquisition of approximately 30 homes, 50% of which are already owned by the Crown. Subject to the credibility of ACT”s proposal this is a saving of
Vote:approximately $400million on Nationals proposal but gives added value of an extra two lanes plus interchanges. ACT’s
proposal appears to create a rational distribution of lateral arterial transport systems which has been missing in the latest Transit and LTA proposals. I proffer this information as a Civil Engineer who has been involved in the SH 20 project for the last 15 years and hope that this issue has rid itself of the self serving interests of Local Body Politicians, MP’s and Beauracrats which has permeated this project for the last twenty years.
May 12th, 2009 at 1:06 pm
Well they’re saying they’ll fund it out of the National Land Transport Programme. Somehow.
Vote:May 12th, 2009 at 1:11 pm
Toad -
I would have thought a ***lot*** less energy would be required to demo 240 houses, than to excavate a tunnel of equivalent length.
Not to mention having to dump all of the spoil from tunnel excavations somewhere.
Not to mention savings on (concrete?) tunnel linings, 24-hour-a-day electric lighting in the tunnel, forced electric ventilation, etc.
Surely a surface route through what is developed urban land already is a more ecologically-sound option than a tunnel?
Vote:May 12th, 2009 at 1:11 pm
$710 million and bowling over 600 homes- they must be planning on getting a good deal on cheap asphalt! I know so homes have been purchased but it can’t be many
Vote:May 12th, 2009 at 1:12 pm
“Could he please explain how public transport can move freight from one part of the country to another?”
They’re called trains, Owen.
Vote:May 12th, 2009 at 1:14 pm
bchapman – 240 homes are affected according to NZPA:
http://nz.news.yahoo.com/a/-/top-stories/5560595
Vote:May 12th, 2009 at 1:15 pm
bchapman – too much smoke. Stick to the facts
Vote:SH16 needs upgrading whichever option is chosen. This is included in both budgets.
600 houses? The number gets bigger each time it gets reported. Somewhere between 250 and 500 in fact.
Why will 1/2 the suburb be turned into a black hole? There are no existing major roads crossing the corridor that will be removed, so no change there. The route largely follows open land that has been earmarked for a motorway for decades.
Traffic on New North and Gt North Rds won’t be stuffed up at all. The motorway will reduce the volume of traffic.
Apart from that, a good post (not)
May 12th, 2009 at 1:17 pm
Hey, Ratbiter. I’m not supporting any motorway option – not even the tunnel. I favour completing the Britomart-Mt Eden rail tunnel and the Avondale-Onehunga-Airport-Manukau rail link. Then we can see how much traffic reduction results, and whether a major highway through Mt Albert is necessary at all.
Vote:May 12th, 2009 at 1:24 pm
Owen:“Could he please explain how public transport can move freight from one part of the country to another?”
Have a look at the Draft Auckland Transport Plan 09 – this includes the long planned Southdown to Avondale rail link for passengers and freight. An advantage would be that trains travelling north would not have to go through central Auckland.
If NZTA are building roads in rail corridors the least they could do is maintain the corridor for the future – in my last post I questioned whether the SH20 extension may already prevent valuable rail options for the future. Given the enthusiasm of Joyce for a surface option as it makes it easier to add lanes to motorways I fear maintaining the rail corridor is not even being considered. Thus when growth demands that the rail line become a priority – it will end up costing a lot more than it should have.
Vote:May 12th, 2009 at 1:32 pm
The problem Toad is that unless using public transport is easier than jumping in a car, people won’t use it in significant numbers. Most people who are not ideologically driven (95% of the real world) have an unchangeable utility function for avoiding hassles created by even the best public transport systems. The real problem in NZ is a lack of population density. If I could walk to a bus or train station at both ends of my destination I’d be the first person on the bus. Instead, if I want to use the fancy new northern bus way I have to drive to the bus station, invariably to be met by a sign in the car park (any time after 730AM) “Sorry Car Park Full”. I don’t bother trying anymore.
And lets assume we are going to the airport by train. How does one get to the train station (probably after being on a bus) with luggage and skis for say a weekend in Queenstown? Always going to be easier to jump in the car or hire a shuttle.
Full marks to the integrity of the govt (one doesnt say that very often) for announcing the preferred option prior to the Mt Albert election rather than after it.
Vote:May 12th, 2009 at 1:32 pm
For $710m-$1.1 billion for construction costs I doubt we’ll get anything.
Here’s a (very rough) map of the two possible routes: http://jarbury.files.wordpress.com/2009/05/waterview-options.jpg
Gomango, density isn’t essential for better public transport use. Brisbane and Perth are far less dense than Auckland yet have far higher public transport use. It’s all about creating a good system – which Auckland does not have and will never have under this government.
Vote:May 12th, 2009 at 1:38 pm
Is it amazing what you get when you have professional business people at the helm governing instead of ex university lecturers
Is really does sort the wheat from the chaff
Vote:May 12th, 2009 at 1:39 pm
” I favour completing the Britomart-Mt Eden rail tunnel and the Avondale-Onehunga-Airport-Manukau rail link.”
And once again the people of NZ look to the heavens and thank their various gods that we do not have a Green party government.
Vote:May 12th, 2009 at 1:43 pm
Ratbaiter, I guess we have to take NZTA at their word. The original purchase estimates for a tunnel were 150 properties. The 600 estimate I saw was based on 500m wide corridor. This will be controversial given the effect it will have on property values.
Vote:May 12th, 2009 at 1:45 pm
gomango said – Full marks to the integrity of the govt (one doesnt say that very often) for announcing the preferred option prior to the Mt Albert election rather than after it.
Odd that no one told Lee (who? Oh, the candidate!)
Vote:May 12th, 2009 at 2:00 pm
I’ve never been to Perth, but hows Brisbane so good? Just because you see a fancy elevated train track at the airport (cue Simpsons Monorail episode)? I’d be interested in seeing the numbers you have contrasting Brisbane usage with Auckland usage. My anecdotal experience is that it seems little different to Auckland though happy to be corrected. The geography of the Brisbane area is however more sympathetic to public transport – lots of clusters of population spread down a coastline, nothing much inland.
And village idiot (i thought people usually used aliases on this site?) given how Melissa Lee hummed and haahed rather badly thru the interviews when asked about the tunnel, I’m sure she did know ahead of time. At least she can now convincingly give Mt Albert people the answer they don’t want to hear.
Vote:May 12th, 2009 at 2:07 pm
Hopefully the road will plow straight through helens house.
Not that i’m bitter
Vote:May 12th, 2009 at 2:17 pm
gomango 2.00pm
“…but hows Brisbane so good?…..”
Have a look at these links for SE QLD public transport
On the translink homepage you will something that beggars belief – its called integrated ticketing!!
“Electronic travel card which can be used on TransLink bus, train and ferry services. Discounted fare on every single journey made, with extra ‘frequent user’ discount if used more than 10 trips per week.”
Wow, who’d have thought it.
http://www.translink.com.au/
Check out coverage of Brisbane:
http://www.translink.com.au/qt/translin.nsf/ReferenceLookup/081010_map_network_qrbusway.pdf/$file/081010_map_network_qrbusway.pdf
So if any ARC / council trips go elsewhere to investigate this issue – it will be a crime
Vote:May 12th, 2009 at 2:25 pm
David, you were taking great umbrage this morning about being described as part of your party’s PR wing. I’m not sure you have much of a case after the above post.
Never mind the community impact or the crapping on a long consultative process — if a Labour government had tried to sell the numbers offered by Joyce today, you would have been screaming blue murder.
I trust Joshua won’t mind me re-posting his nice, clear summary of today’s creative accounting:
See the problem there?
If only we could all “save” money like this …
[DPF: First of all are you really saying that the change *only* saves $1 billion!!! It is only *half* the cost. Secondly Joyce has said the reduced cost means it can be financed from current budgets rather than a specific borrowing. That is what happens when you save a billion dollars. But even if you decided to calculate financing costs for both options the finance costs for non tunnel would be under half of the tunnel, so again you're still talking a saving of $1.3 billion or so.
As I said I can't wait for Labour to campaign for the tunnel as Hughes already has. Makes 2011 all the easier for National]
Vote:May 12th, 2009 at 2:29 pm
So Labour will go into this by-election promising to save 100 $14 million houses
Oh and Jarbury my estimate of a 2 billion dollar saving was much closer to the mark than your few hundred million dollar saving estimate.
Vote:May 12th, 2009 at 2:55 pm
You know, if the government kept saving $1.7 billion hear and $1.7 billion there, it would soon add up. Then we could have big tax cuts without huge debt.
Vote:May 12th, 2009 at 3:05 pm
It is difficult to argue for a tunnel when that option will spend several million a house it tries to save.
Vote:Besides, the money saved could be spent on other projects, or simply used to reduce debt or even given back as tax cuts. We voted for more responsible government spending and we got it. The Labour option of tunnels is essentially an option for no action as costings will mean that funding for the project will never happen.
May 12th, 2009 at 3:08 pm
If the government already owns several hundred houses, and is going to demolish and destroy them (thus rendering what are currently assets valueless) then shouldn’t those be taken into account. While I think I actually support an over ground option for this route, I think the government is completely dressing it up and obscuring the truth. And what the hell is with this:
““In addition, all of the options being considered by the NZ Transport Agency would be built with wide enough shoulders to allow for easy widening to three lanes in each direction.
“An appropriate comparison, therefore, is between the top cost of $1.4 billion and the $3.16 billion price of the previous government’s twin three lane tunnel option.”
No such comparisons are appropriate. It is only appropriate to compare like with like.
Vote:May 12th, 2009 at 3:14 pm
Taking construction cost v construction cost my point was that a surface option was $600 million cheaper than a tunnel. This option seems to somehow slice another $300-700 million off construction costs. Makes one wonder where that money will be saved.
Vote:May 12th, 2009 at 3:30 pm
If rail was more efficient that trucks and vans then all freight would be moved by Rail.
Vote:Rail is only efficient for long haul trips with bulk loads and where either the origin or destination is concentrated as with a port or an inland port.
Passenger rail never reduces congestion on roads. It takes most of its riders from buses. And the numbers carried cannot keep up with growth in travel. See my column on Seattle where the analysis showed transit could not compete in providing extra daily rides per dollar.
I have done the sums for the airport passenger rail and it is just a joke. Why do you think the Sydney airport rail made such massive losses. We cannot afford to build infrastructure which does not pay its cost of capital – such schemes destroy what little savings we have.
May 12th, 2009 at 3:31 pm
Owen, what would the state of London’s roads be like without its rail system?
Vote:May 12th, 2009 at 3:32 pm
Many of those houses will be relocated.
Vote:Some will be demolished.
If the government buys the land around the interchanges and holds on to it then when construction is complete the land can be zoned for commercial industrial and sold and everyone is better off. Waitaker will not have to export so many workers, and jobs will move out west as will activity generally thus removing loading on the bridge.
This should have been done decades ago and the western route would now be the main highway north.
May 12th, 2009 at 3:37 pm
Own is correct on the economics of rail.
In general, rail only becomes economic when you move a lot of one product from Point A to Point B. Such as the trains moving coal from Us coalfields to steel works (assuming these plants are still operational)- or timber down from Siberia into Northern China (doesn’t pay to go deeper into China than that).
Pretty much anything else needs subsidies to stay in business.
Vote:In NZ the economics of rail are even worse, because coastal shipping is a more efficient competitor for a lot of goods.
May 12th, 2009 at 3:43 pm
Donboy, the problem with these mega motorway projects is they tend to push our traffic bottlenecks around the city. Three lanes of SH16 (West) plus three lanes of SH20 (West) mean that SH16 beyond Waterview will need to be a lot wider than it is at the moment.
Vote:If you go to Chicago, LA, Melbourne anywhere really it is worth taking note of the neighbourhoods adjacent to large (especially above ground) motorways. The barrier effect of these roads (not to mention the noise and health hazards) and lack of urban amenity mean these areas pretty quickly become ghettoes- ask any real estate agent how houses will be selling in Waterview from now on.
The resultant SH16-20-Gt North Rd interchange will become the new spaghetti junction is a nightmare waiting to happen, take a look at the roads surrounding the offramps at Te Atatu, Lincoln and Gt North about 8AM every morning and multiply the problem by about ten.
Funny how no one has priced in the social costs (yes people do live in this area) for this proposal.
May 12th, 2009 at 6:03 pm
I am not a Labour voter (and Hell… I don’t even live in the electorate, but I live nearby), but I honstly think that putting the motorway underground is a MUCH better option than running it above ground, if there is the engineering possibility to do so. This thing is not just a 10 minute wonder…. it will be in existence for 50 years or more, so better to do the very best right now and do it properly.
bchapman, you make some very good points… and what is the benefit in simply spending all this money to just fill up the already-full motorway west of Waterview anyway?
Vote:May 12th, 2009 at 9:38 pm
Congratulations to National for making the sensible choice. About time the extravagance of Government was reduced. That’s what the “time for change” was all about last November.
Vote:May 12th, 2009 at 10:50 pm
I voted labour twice before, cant believe I did.
Mallard,when will you learn ,once a liar always a liar.
Vote: