Sensible to wait until 2020

November 3rd, 2014 at 10:11 am by David Farrar

The Herald reports:

The $2.4 billion City Rail Link could be deferred until 2020 because of mounting concerns by councillors about its impact on rates, debt and big cuts to community services.

A number of councillors are having second thoughts about an early start on the rail project and support deferring work until the Government comes on board with funding in 2020.

Auckland Mayor Len Brown has locked $2.2 billion into a new 10-year budget to begin work on the 3.5km underground rail link in 2016 and completed by 2021.

On Wednesday, all 20 councillors and the mayor will debate the budget and make decisions on the rail project for public consultation.

The Government has agreed to fund half the project, but will not make a financial commitment until 2020, unless the council meets rail patronage and downtown employment targets.

If the Government funding only comes on board in 2020 (and even a change of Government in late 2017 wouldn’t see funding until 2019 probably), why cripple the Council with debt by insisting on a 2017 commencement.

Hundreds of millions of dollars are proposed to be cut from community projects, parks and local works; one-in-four households are up for double-digit rates increases; and motorway tolls and regional petrol taxes have been announced to plug a $12 billion transport funding gap over the next 30 years.

No wonder Councillors are getting queasy. They realise a vote for Len’s Budget may see them out in 2016.

The first option is for an overall rates rise of 2.5 per cent next year and 3.5 per cent for the next nine years.

The second option is for a 3.5 per cent rates rise every year and an additional $3000 charge for new houses. Mr Brown’s rating policy was for rates increases of 2.5 per cent for the first two years, and 3.5 per cent thereafter.

That will help with affordable housing!

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What’s the actual rail growth?

July 30th, 2014 at 2:00 pm by David Farrar

The Herald reports:

Hefty patronage growth on Auckland trains is making the city’s transport authority bullish about meeting the Government’s conditions for an early start on the $2.86 billion underground rail project.

“We think it’s highly realistic,” Auckland Transport chairman Lester Levy said yesterday of the organisation’s prospects of persuading the Government to let it start digging twin rail tunnels between Britomart and Mt Eden before 2020.

He was commenting on a report to his board of a 13.9 per cent increase in rail patronage for the year to June 30, to 11.4 million passenger trips.

That sounds like a big increase.

That was 1.4 million trips more than last year, when patronage fell in the wake of the 2011 Rugby World Cup, interrupting a steady upward trajectory since Britomart opened in 2003 handling 2.5 million passengers.

So 2011 and 2012 figures are skewed by the World Cup. So let’s go back to 2010. That was 10 million trips a year. This year it is 11.5 million trips a year. But how many is that in terms of annual commuters? Let’s assume 250 working days and two trips a day.

In 2010 that was 20,000 Aucklanders using rail daily and and in 2014 it is 23,000 Aucklanders using rail daily. That is growth of 750 Aucklanders a year. It is 15% growth over four years which is just under 4% a year.

To make the target of 20 million trips to bring the CRL forward, you need over 12% growth a year.

Personally I think it will be a good thing if they do achieve ongoing 12% growth, and the CRL does happen earlier rather than later. But I’m somewhat doubtful that you assume growth based on the change over one year only. Let’s see what happens in the next 12 months.

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CBD rail loop to start construction in 2020

June 26th, 2013 at 2:22 pm by David Farrar

John Key has confirmed the Government will make a contribution to the Auckland CBD rail loop, with construction starting in 2020.

The details will be released on Friday, and it seems there will be some other announcements also. What will be of interest is how much the Government is contributing.

I first blogged on the CBD rail loop in 2009, and commented:

The key thing is, it is not a choice between improving roads and public transport. They are not substitutes, but complementary.

Labour and Greens have been trying to say that it is one or the other – that one must cancel the Puhoi to Wellsford motorway extension to fund the rail loop.

I also noted at the time:

If it can be done for that much money, the economic argument really stacks up.

But the cost has grown from that initial $1.5 billion.

In 2010 I blogged:

I think it is the most sensible of the proposed rail projects for Auckland.

And said:

Let’s assume ratepayers will pay 3/4. Work out how much that is, and consult Aucklanders on whether they are happy with that investment. Then you can talk to the Government about its contribution.

The details of the cost split is critical. I have said people outside Auckland should not be significantly funding the Auckland rail loop. However if the Govt’s contribution can be funded from the approx Auckland share of the National Land Transport Fund (ie through petrol tax paid by Aucklanders), then that is fine with me.

I suspect that is why the start date is 2020. Up until 2020 the NLTF is funding the various road of national significance, and as they get completed, my guess is the CBD rail loop will be the next priority.

Incidentally as far as I know, the Government has never refused to fund the CBD rail loop. They have always been careful with their language, saying there is not currently enough money in the NLTF for it. Unless I have missed something, they have never said never (to paraphrase James Bond).

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Will China fund Len’s rail loop?

April 19th, 2012 at 12:00 pm by David Farrar

Fiona Rotherham at Stuff reports:

Chinese investors have shown encouraging interest towards the Auckland Council’s planned $10.8 billion worth of infrastructure projects and other trade and investment opportunities, Auckland Mayor Len Brown says. …

But the council has also been touting for early stage interest in three of its own major projects: the inner city rail link that central government has rejected funding for; a second harbour crossing; and for the new Innovation precinct in the Wynard Quarter on Auckland’s waterfront. …

China, as our second largest trading partner, was one of the few countries with significant capital to invest offshore and was particularly interested in tourism investment, Brown said.

The first project off the block will be the $2.4b inner city rail loop and Brown favours a PPP (public/private/partnership) deal over borrowing, issuing infrastructure bonds, or raising rates and taxes in order to fund it.

An excellent idea. I look froward to the local Labour MPs supporting an innovative PPP such as this.

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Len’s Auckland taxes

February 13th, 2012 at 9:41 am by David Farrar

After having failed to get the residents of Oamaru, Christchurch, Wellington and Napier to pay for Auckland’s CBD rail loop, Len Brown has proposed half a dozen new taxes as possible ways to pay for the loop.

The proposed taxes include:

  • Regional income tax – new income tax paid only by Aucklanders.
  • Regional payroll tax – new income tax paid by Auckland employers.
  • Regional GST – raising GST in Auckland.
  • Regional fuel tax – raising petrol and diesel taxes across Auckland.
  • Visitor taxes – nightly charge for hotel and motel rooms.
How novel to have a Mayor who is a member of the Labour Party propose to increase GST (in Auckland). I don’t recall that one being in the manifesto in 2010.
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