web analytics

Boring into the numbers 2

Written By: - Date published: 6:32 am, May 14th, 2009 - 15 comments
Categories: transport - Tags:

National has released its Waterview plan. Basically a trench rather than a tunnel, and a few hundred more homes knocked down. They reckon it will cost $1.4 billion. What’s missing from the costing?

Financing costs were included in the cost of the tunnel to inflate it to $2.77 billion but are excluded from the trench option. The excuse for that is there is enough money in the National Land Transport Programme for the cheaper option but that doesn’t stack up. The opportunity cost is still the amount the Government could reduce borrowing if it weren’t paying for the motorway, so if the tunnel needed finance costs included so does the trench. If we’re comparing apples with apples, that’s going to be another $300 million on top of the $1.4 billion before even turning a spadeful of soil.

The route uses a designated rail corridor, so there’s an opportunity cost there too. Again, unaccounted for.

Then, there’s the lost amenity value to the community. That’s isn’t just nice fuzzy stuff. It will be reflected in decreases in the value of hundreds of houses – the ones standing beside the ones that have been bulldozed. Full costings include amenity value – this one doesn’t.

Add to that the cost of delay. The community has vowed to fight this plan to the end. So we’re going to see years and years of hold ups in the Environment Court. National is planning an end run around that with its RMA reforms and roads of national significance but that’s going to end in more law suits taking even more time

$1.4 billion doesn’t such a bargain when you start to add the real costs, eh?

NZTA hopes to start bulldozing in two years. They’ll be lucky. If they start before the next oil shock they’ll be doing well. Even without another oil shock the already falling traffic volumes and improvements to Dominion Rd are easing congestion in Mt Albert.

If National is still in government when their trench is completed, they might just find they’re left with a six-lane white elephant.
-Marty G

15 comments on “Boring into the numbers 2 ”

  1. gingercrush 1

    Better than a wholly expensive tunnel.The plan is brilliant and these people in Mt. Albert are just moaners. They just want to see 2 billion+ spent on a tunnel with no regard to the cost for taxpayers. The rest of New Zealand are not going to have much sympathy for these people. Could you imagine the outrage of the left if a 2 billion+ tunnel was designed for an upmarket electorate like Epsom? You’d all be screaming the cost. Yet here most of you are defending billions spent on a tunnel. It looks silly.

    Of course this plan is already a compromise and is much better than a completely open motorway.

  2. Marty G 2

    “Better than a wholly expensive tunnel” – maybe. I’m not a big supporter of the Waterview project at all. I reckon there’s a good chance it will never be built consent delays will push out the start of construction past the next oil shock and that will be its death knell.

    “the plan is brilliant” – whoa, calm down. its a roading project and there are legitimate points for and agaisnt it ‘brilliant’ is a pretty strong word for a roading project I would have thought.

    “people in Mt ALbert are just moaners” – all of them or just the ones getting their houses knocked down? Maybe they need to step back and realsie how brilliant this plan is.

    • gingercrush 2.1

      I’m not sure there will be much delays whatsoever. I have no doubt they’ll try and get it to go through the environment court etc. But I would say there is a very good chance this project will go as scheduled.

      I take it you’re now a regular contributor here? If so welcome. Appreciate your posts thought don’t often agree with them.

  3. The inclusion of an interest charge IMHO cannot be justified.

    This is from Transit’s Auckland State Highway Plan and Forecast published in 2008:

    “Provision for completion of the Western Ring Route has been included in Transit’s State Highway Forecast, but in order to complete by 2015, as planned since August 2005, additional revenue will be needed to fund the required debt.”

    (http://www.transit.govt.nz/content_files/planning/forecast-08-09/summaries/Auckland.pdf)

    The 2008 National Land Transport Program only had $9m for investigation, nothing for construction.

    (http://www.landtransport.govt.nz/funding/nltp/2008/index.html)

    Nor will Joyce’s rejig of finances towards State Highway construction help. In his press release he said the extra $1b over 3 years would be spent on “important roading projects like the Waikato Expressway, the Christchurch Southern Motorway, State Highway 1 from Puhoi to Wellsford and Victoria Park in Auckland”.

    (http://www.beehive.govt.nz/release/1+billion+more+state+highways+0)

    The Minister should be asked to confirm how the project will be funded and what will be sacrificed.

  4. infused 4

    Oil shock? Not for awhile… we are always going to need roads matey. Cars are not going to change, the engine and fuel will.

  5. Pat 5

    Exactly infused. There was a news item in the weekend about a chinese company that have manufactured a low price electric car that can travel 100km on the battery, and be recharged in the garage at night.

    Once the collective will of the car manufacturing world focuses on electric cars, we will see massive changes very quickly.

    • Maynard J 5.1

      I agree with you and infused here. I do not buy into the Greens’ ‘we don’t need motorways’, it is the internal combustion engine that is the problem. The only way we will not need them is if the worst case scenario comes to bear: oil peaks strongly, and there is no decent replacement.

      Decent mass transit would double the life of what we already have though.

    • Draco T Bastard 5.2

      Where are they getting the charge from?

  6. Jared 6

    Clearly you dont understand how financing works. The 500 million is the cost of raising the additional capital for the project, opportunity cost is irrelevant. The financing could be in the form of bonds, or wholesale capital financing from offshore sources, which i suspect will happen considering the lack of available capital in the local market at the moment.

    • Maynard J 6.1

      As was pointed out last night on Close Up – $500 million cost to raise $800 million. maybe joyce needs a better financier.

      Key wanted 40% of kiwisaver in our economy, that would be a start for him.

    • Draco T Bastard 6.2

      Actually, from what you say, you’re the one who doesn’t understand financing. In fact, I’d go so far as to say you don’t have even a basic understanding of economics.

  7. Errors here:
    1, “The opportunity cost is still the amount the Government could reduce borrowing if it weren’t paying for the motorway” No it isn’t, the NLTF isn’t there to be pillaged to pay for other activities. Labour made no provision to pay back the debt for a PPP funded Waterview connection. Waterview is now being funded on a PAYGO basis, not debt financed through a PPP. The saving is interest and contract negotiation costs for NZ’s first ever road PPP, the saving is real.
    2. “The route uses a designated rail corridor, so there’s an opportunity cost there too. Again, unaccounted for” The corridor isn’t gone, the motorway is parallel to the rail designation for a short distance. Besides, ARTA’s rail plan says the railway wont be built till 2030, hardly a big deal.
    3. “Add to that the cost of delay” no the BCR goes up as the project is delayed, as traffic growth continues. Delay means not spending money on the project sooner, which means spending that money on something else instead.

    It wont be a white elephant, anymore than Mt Roskill, Manukau, Greenhithe or Hobsonville motorway extensions already funded will be. There will always be a need for roads, it is the most flexible mode there is. The real issue should be when this road should be built. I’d argue it should be delayed until all the other segments are completed.

  8. Scribe 8

    National has released its Waterview plan. Basically a trench rather than a tunnel, and a few hundred more homes knocked down.

    Marty G, congrats on getting to the second sentence before making false statements.

    Oh, and thanks for doing that, too. Saves me reading the rest of the post because I know it’s going to be ideological, not a worthwhile analysis of the situation.

  9. Zaphod Beeblebrox 9

    Until we see how the NLTF is affected it is still uncosted. During nine years of decisions and consultations, this option has never been explored. This means that this is still a lot of investigation to be done re the engineering and legal issues. It may be quite a long term before we know all this

Recent Comments

Recent Posts

  • Bill to transform drinking water safety passes
    The Government today passed legislation that will transform drinking water safety and improve environmental outcomes for our wastewater and stormwater networks. “The Water Services Act gives Taumata Arowai the legal authority to carry out its duties as New Zealand’s dedicated water regulator. This represents a major transformational advance for the ...
    BeehiveBy beehive.govt.nz
    3 hours ago
  • Trade and Export Growth Minister Damien O’Connor to travel to Europe and US to support economic re...
    Trade and Export Growth Minister Damien O’Connor will travel to Europe and the United States on Thursday this week to advance New Zealand’s trade and economic interests with key partners, including representing New Zealand at the G20 Trade Ministers’ Meeting in Italy. It follows recent engagement between Prime Minister Jacinda Ardern and ...
    BeehiveBy beehive.govt.nz
    6 hours ago
  • Asia New Zealand Foundation Chair and Board members announced
    Foreign Affairs Minister Nanaia Mahuta today announced the appointment of Dame Fran Wilde, DNZM, QSO, as the new Chair to the Board of the Asia New Zealand Foundation – Te Whītau Tūhono. “Dame Fran Wilde has been a trustee since 2019 and I am confident that her experience and deep ...
    BeehiveBy beehive.govt.nz
    8 hours ago
  • Latest KiwiSaver Annual Report shows promising benefits for members
    The latest KiwiSaver Annual Report from the Financial Markets Authority (FMA), highlights how Government’s recent policy tweaks have positively benefitted New Zealanders, Commerce and Consumer Affairs Dr David Clark said today. “Fourteen people so far have withdrawn their funds early thanks to a rule modification made in March this year. ...
    BeehiveBy beehive.govt.nz
    8 hours ago
  • Reasons for permitted travel across Alert Level boundary expanded
    From 11:59pm tonight additional reasons for permitted travel will be introduced for movement across the Auckland boundary, COVID-19 Response Minister Chris Hipkins says. “As this outbreak has shown Delta is highly transmissible, and in order to be confident of controlling its spread, restrictions at the Alert Level boundary have been ...
    BeehiveBy beehive.govt.nz
    8 hours ago
  • Tenancy measures introduced to further support COVID-19 impacted businesses and tenants
    The Government has introduced changes to help ease the impacts of COVID-19 restrictions on both commercial and residential tenancies. As part of the COVID-19 Response Legislation Bill introduced to Parliament, measures are being taken to help businesses resolve disputes over commercial rent, as well as provide greater certainty for landlords ...
    BeehiveBy beehive.govt.nz
    9 hours ago
  • Details of interest deductibility rules released
    The Government has released the draft legislation outlining the details of the policy limiting the deductibility of interest costs on residential property investments. Finance Minister Grant Robertson said the interest limitation proposals, announced in March, aim to stem investor demand for existing residential properties. They do not affect the main ...
    BeehiveBy beehive.govt.nz
    11 hours ago
  • GPS sets long-term direction for housing, urban development
    The Government has today laid out its long-term vision for housing and urban development in Aotearoa New Zealand, ensuring we have the infrastructure and homes needed to nurture thriving communities in the decades to come. The Housing Minister Megan Woods says the Government Policy Statement on Housing and Urban Development (GPS-HUD) ...
    BeehiveBy beehive.govt.nz
    12 hours ago
  • Government welcomes collaboration between Vector and X
    A move by Vector to form a strategic collaboration with X, (formerly Google X) to work together on the virtualisation of the Auckland electricity grid highlights the type of innovation that can help decarbonise and decentralise the electricity system, says Energy and Resources Minister Megan Woods. “The visualisation of New ...
    BeehiveBy beehive.govt.nz
    14 hours ago
  • PM farewells Governor General Dame Patsy Reddy
    The Rt Hon Dame Patsy Reddy completes her five year term as Governor-General of New Zealand today. “Today marks the end of an eventful term of office for Dame Patsy and I want to acknowledge and thank her for her tireless service to New Zealand over the last five years,” ...
    BeehiveBy beehive.govt.nz
    14 hours ago
  • Government delivers on improving health and equity outcomes for women
    ACC cover for maternal childbirth injuries Government working to improve and strengthen maternity services The Government is laying the foundations for a better future by improving equity and health outcomes for women through amending ACC legislation and an updated Maternity Action Plan. “Amongst a suite of changes, we’re proposing to ...
    BeehiveBy beehive.govt.nz
    15 hours ago
  • Speech at launch of the Dementia Economic Impact Report
    E nga mana E nga reo E nga iwi Tēna kotou katoa Ka huri ki nga mana whenua o te rohe nei. Tēna koutou. He mihi hoki ki a tatou kua tau mai nei I raro I te kaupapa o te rā. No reira tēna koutou katoa Acknowledgements Thank you ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Backing world-class innovation in New Zealand
    $12 million Government investment to support cutting-edge R&D in New Zealand by international businesses Dawn Aerospace and Merlin Labs join Innovative Partnership’s Airspace Integration Trials programme MOU signed with Air New Zealand to conduct a nationwide feasibility study into sustainable aviation fuels The Government is propelling cutting-edge innovation through a ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • One-way quarantine free travel dates confirmed for RSE scheme
    From 4 October RSE workers from Vanuatu can begin arriving into New Zealand From 12 October RSE workers Samoa and Tonga from can begin arriving into New Zealand As part of a programme of work to reopen our borders and reconnect with the world, the Government has announced quarantine free ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • More community grants to support youth mental wellbeing
    The Government continues to make more mental health and wellbeing supports available to young people to ensure services are there when and where they need them, Health Minister Andrew Little says. “More than twenty community-led projects have now received a funding boost through The Youth Mental Wellbeing Fund to keep ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Self-isolation pilot to start with 150 people
    The goal of safely re-opening our borders and developing new ways for people to travel will start with a self-isolation pilot, COVID-19 Response Minister Chris Hipkins confirmed today. “As part of the Reconnecting New Zealanders plan announced in August, the self-isolation pilot will look at self-isolation for vaccinated travellers who ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Poroporoaki: Waka Joseph Nathan
    E Waka e, kei hea ra koe, kua ngaro nei i te iwi e, E kawe nei i ngā rongo, i ngā mahara mōu, i ngā wawata i hua mai i a koe. E Waka e, haere ra, kei te tuahu koe o te ati a toa, Kei poho tonu ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Canterbury school students get hands-on with food and fibre careers
    Secondary school students in Canterbury will have the breadth of food and fibre careers showcased to them thanks to a new initiative launched today, Agriculture Minister Damien O’Connor said. Secondary School Employer Partnerships (SSEP) Canterbury is a collaboration between the Ministry for Primary Industries and SmartNZ, a charitable trust that connects ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Tuvalu language revival and COVID-19
    Te Vaiaso o te Gana Tuvalu 2021 - Tuvalu Language Week moves online due to the uncertainty around COVID-19 said the Minister for Pacific Peoples Aupito William Sio.  “However it is a timely reminder of the power of embracing both traditional and new ways of doing things. It has been ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Strengthened reporting will improve abortion and sterilisation services
    Associate Minister of Health Dr Ayesha Verrall has announced new data and reporting regulations which will help improve abortion and sterilisation services in New Zealand, by painting a clearer picture of the need in our communities. “The Government is committed to ensuring everyone who needs to access abortion services can, ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • United Nations General Assembly: 76th General Debate Statement
    E ngā Mana, e ngā Reo, Rau Rangatira mā o tēnei Whare Nui o te Ao Prestigious people, Speakers of note, Chiefs one and all of this General Assembly Ngā mihi mahana ki o koutou katoa, mai i toku Whenua o Aotearoa Warm greetings to you all from my home ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • APEC 2021 Women and the Economy Forum prioritises women’s economic empowerment
    Minister for Women Jan Tinetti today chaired the virtual APEC 2021 Women and the Economy Forum, which is working to address outstanding issues for women and girls across the region as it recovers from the COVID-19 pandemic. The forum brought together Ministers and representatives from 21 economies to discuss gender ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Government invests in restoring iconic South Canterbury river valleys
    The Government is investing up to $18.4 million over four years to create jobs and help restore braided river valleys, alpine and pastoral lands in the South Island as part of its Jobs for Nature programme Land Information Minister, Damien O’Connor announced. Toitū Te Whenua Land Information New Zealand (LINZ) ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Upper Hauraki to move to Alert Level 2
    Upper Hauraki will move to Alert Level 2 from 11:59pm tomorrow, 25 September, COVID-19 Response Minister Chris Hipkins confirmed today. After positive cases were detected in the Upper Hauraki area on Sunday, extra Alert Level restrictions were put in place to immediately prevent any wider transmission of the virus.  “We’ve ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Report into Aotearoa New Zealand’s export controls system released
    Foreign Affairs Minister Nanaia Mahuta today welcomed the findings of an independent review into Aotearoa New Zealand’s export controls system, which regulates the export of goods to foreign militaries, police forces or paramilitaries. Produced by David Smol, a former Chief Executive of the Ministry of Business, Innovation and Employment, the ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • New District Court Judge appointed
    Attorney-General David Parker has announced the appointment of Brett Crowley of Wellington as a District Court Judge.  He is currently the Wellington Public Defender and started his career as a staff solicitor working in a range of litigation including criminal defence work. He went to the bar in 1999 specialising ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Mental health stocktake shows strong progress
    The first report of the Government’s Implementation Unit has found strong progress has been made since the Mental Health and Addictions Package was announced in 2019. “The report notes most initiatives funded in the Budget 2019 package are on track to deliver what is expected by 2023/24,” Grant Robertson said. ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Working together to grow the West Coast
    A project that has been crucial in allowing businesses to continue during the tourism downturn is among a number of initiatives to receive a boost from the Government’s Jobs For Nature programme, Conservation Minister Kiri Allan says. Sustaining South Westland is an extension of an initiative set up last year ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Next steps to improve safety in wake of Whakaari White Island tragedy
    The Government is moving to improve safety in light of the Whakaari White Island tragedy and has released proposals to reinforce safety standards in registered adventure activities. The package of proposals includes: Strengthening requirements for how operators, landowners and the regulator manage natural hazard risks Improving how risks are monitored, ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • New Zealand donates more COVID-19 vaccines to COVAX and the Pacific
    Foreign Affairs Minister Hon Nanaia Mahuta and Associate Health Minister Aupito William Sio announced today that New Zealand is donating additional Pfizer vaccines to the Pacific and AstraZeneca vaccines to the COVAX Facility, to support equitable access to COVID-19 vaccines. “New Zealand is donating 708,000 doses of the AstraZeneca COVID-19 vaccine ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Speech to the Property Council of New Zealand
    Kia ora koutou katoa   Is it a pleasure to be able to speak with you today, and to be able to answer some questions you may have. I would like to acknowledge the organisers of this event, the Property Council. The theme of this year’s conference is City Shapers. Together ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Additional MIQ for Christchurch
    An additional hotel will be added to our network of managed isolation and quarantine facilities, COVID-19 Response Minister Chris Hipkins said today. “I have approved and Cabinet is in the final stages of signing off The Quality Hotel Elms in Christchurch as a new managed isolation facility,” Chris Hipkins said. ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • NZ COVID-19 response earns another major digital investment
    Minister for the Digital Economy and Communications Dr David Clark welcomes Amazon’s Web Services’ (AWS) decision to establish a Cloud Region on New Zealand shores, further boosting New Zealand’s growing digital sector, and providing a vote of confidence in the direction of New Zealand’s economic recovery. “Amazon is the second ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • New Zealand invests in cutting edge cancer R&D
    Scaling up the manufacture of CAR T-cell cancer therapy for clinical trials Advancing New Zealand’s biomedical manufacturing capability Supporting future international scientific collaborations Transforming cancer care with targeted, affordable solutions Research, Science and Innovation Minister Hon Dr Megan Woods has announced that the fight against COVID-19 will not stop the ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Expert group appointed to lead New Zealand’s future health system
    An outstanding group of people with extensive and wide-ranging governance and health experience have been appointed to lead the Māori Health Authority and Health New Zealand, Health Minister Andrew Little says. “This Government is building a truly national health system to provide consistent, high-quality health services right across the country. This ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Funding to help clean up contaminated sites
    The Government is supporting the clean-up of contaminated sites in Northland, Dunedin and Southland to reduce risk to people’s health and protect the environment. Environment Minister David Parker said the funding announced today, through the Contaminated Sites Remediation Fund, will help us turn previously hazardous sites into safe, usable public ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Predator Free apprenticeships open up new job opportunities
    The expansion of a predator free apprenticeship programme is an opportunity for more people to kick-start a conservation career, Conservation Minister Kiri Allan says. “The Predator Free Apprenticeship Programme is focused on increasing the number of skilled predator control operators in New Zealand through a two-year training programme. “The Trust ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Further NCEA support confirmed for Auckland students
    The number of Learning Recognition Credits for senior secondary school students will be increased for Auckland students, Education Minister Chris Hipkins confirmed today. This recognises the extended time these students will spend in Alert Levels 3 and 4. “It means students in Auckland will have a fair opportunity to attain ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Long-term pathway next step to better mental wellbeing for New Zealanders
    The Government is taking a new approach to support people who experience mental distress, Health Minister Andrew Little says. “Kia Manawanui Aotearoa – Long-term pathway to mental wellbeing (Kia Manawanui) is the first 10-year plan of its kind that targets the cause of mental distress and also sets out how ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Keeping our Police safe to keep our communities safe
    The Government is committed to keeping our frontline police officers safe, so they in turn can keep New Zealanders safe – with one of the largest investments in frontline safety announced by Police Minister Poto Williams at the Police College today.   The $45 million investment includes $15.496 million in ...
    BeehiveBy beehive.govt.nz
    7 days ago