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

  • Government support screen industry with funding for sound stages in West Auckland
    Auckland Film Studios in West Auckland has received funding for a major expansion through the Government’s Infrastructure Reference Group’s (IRG) COVID-19 Response Fund. The Government is investing $30 million of a total $35 million project to construct two 2,000sqm sound stages and development of further workshops and offices, to expand ...
    BeehiveBy beehive.govt.nz
    10 hours ago
  • Protecting unique land for generation next
    The Government is boosting legal protection for critically important natural habitats on private land, Minister of Conservation Kiri Allan says. “An $8 million investment over four years will see Queen Elizabeth II National Trust Ngā Kairauhī Papa (QEII) work with government agencies, councils and others to provide legal protection of ...
    BeehiveBy beehive.govt.nz
    11 hours ago
  • New Zealand’s support for Fiji’s COVID-19 response continues with vaccine delivery, operational ...
    Foreign Minister Nanaia Mahuta has announced further support for Fiji, including funding support for nursing staff and 100,000 doses of vaccines due to arrive in country today. “Our thoughts remain with Fiji during this incredibly challenging period,” Nanaia Mahuta said. “New Zealand has funded 100,000 doses of the AstraZeneca vaccine ...
    BeehiveBy beehive.govt.nz
    12 hours ago
  • Poroporoaki: Dr Hōhepa (Joe) Mason
    Ko koe tēnā e te hurumanu e Hōhepa, te tōwenetanga a te iti, te māpihi herenga mahara o te tini, ka tauawhi tonuhia koe e to iwi ki te uma pupuri ai. Me pēhea he kupu kia koutou kua puta i nga ākinga a nga tau kua hori, kua waia ...
    BeehiveBy beehive.govt.nz
    16 hours ago
  • Finance Minister and RBNZ Governor agree to update MOU on macro-prudential policy
    Finance Minister Grant Robertson and Reserve Bank Governor Adrian Orr have updated the Memorandum of Understanding (MoU) on macro-prudential policy to further protect the financial system and support the Government’s housing objectives. “This change will ensure that the Reserve Bank has the flexibility to respond to emerging financial stability risks ...
    BeehiveBy beehive.govt.nz
    16 hours ago
  • Government commits further assistance for drought and flood-affected rural communities
    Farmers and growers affected by this year’s drought or floods in Marlborough, Tasman, West Coat, Canterbury, Otago and the Chatham Islands will have access to Rural Assistance Payments (RAPs) from today, Social Development and Employment Minister Carmel Sepuloni has announced. “The Government is committed to easing the financial pressures on ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Cook Islands youth lead Language Week
    The Cook Islands Language Week theme for 2021 highlights the vital role language plays in maintaining young people’s links to their Pacific home, said Minister for Pacific Peoples Aupito William Sio.  “The Epetoma o te reo Māori Kūki ‘Āirani – Cook Islands Language Week – theme is ‘Ātuitui’ia au ki ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Government offers formal apology for Dawn Raids
    A formal and unreserved apology for the Dawn Raids The Government will offer education scholarships as part of the apology Manaaki New Zealand Short Term Scholarship Training courses Support Pacific artists and historians to develop a comprehensive written and oral account of the Dawn Raids Prime Minister Jacinda Ardern has ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Speech to Dawn Raids Apology
    Tēnā koutou katoa, Kia orana kotou katoatoa, Fakaalofa lahi atu ki mutolu oti, Tālofa nī, Mālō nī koutou, Ni sa bula vinaka, Fakatalofa atu, Noa'ia 'e mauri, Kam na mauri, Malo e lelei, Sioto'ofa, Mālō lava le lagi e mamā ma le soifua maua, Oue tulou, tulou atu, tulouna lava ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Bridging the gap – last piece of Northcote Safe Cycle Route now complete
    The opening of two bridges over Auckland’s Northern Motorway is the last link of a cycling and walking route which provides a safe, active alternative for students and commuters, Transport Minister Michael Wood said today. Michael Wood cut the ribbon for the completion of the Northcote Safe Cycle Route, at ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Progress in establishment of Aged Care Commissioner
    Recruitment for an Aged Care Commissioner will start next month, to ensure greater oversight of New Zealand’s aged care sector. “This sector is responsible for supporting a large and often vulnerable population. While most people are able to access quality care, there have been cases where that care has fallen ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • New record number of homes consented
    In the year ended June 2021, the actual number of new dwellings consented was 44,299, up 18 percent from the June 2020 year. In June 2021, the seasonally adjusted number of new dwellings consented rose 3.8 percent. In June 2021, 4,310 new dwellings were consented, an increase of 3.8 per ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Communities backed to tackle wilding pines
    Twelve community projects across New Zealand will receive a share of $2 million to carry out wilding pine control, Biosecurity Minister Damien O’Connor announced as part of Biosecurity Week. “Wilding pines are a serious problem that threaten many of the unique landscapes that New Zealanders value. Community groups and trusts ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Health Minister Andrew Little responding to the New Zealand Nurses Organisation's rejection of ...
    I was advised last night that the result of the ballot of Tōpūtanga Tapuhi Kaitiaki o Aotearoa New Zealand Nurses Organisation members have rejected the latest proposal to settle their collective agreement. Let me be clear: the proposal was one they put to the Government. The Nurses Organisation rejected their ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Conversion Practices Prohibition Legislation introduced to Parliament
    Legislation has been introduced to Parliament to protect against practices intended to change or suppress someone’s sexual orientation, gender identity, or gender expression. Introducing the Conversion Practices Prohibition Legislation Bill, Minister of Justice, Kris Faafoi, said the measures proposed were aimed at ending conversion practices which don’t work, are widely ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • New kaupapa Māori mental health and addiction services to support people in central North Island
    New mental health and addiction services rolling out across the central North Island will improve outcomes and equity for Māori, Associate Minister of Health (Māori Health) Peeni Henare says. Today the Minister met with providers of the new kaupapa Māori primary mental health and addiction service, Poutama Ora, which will ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • New school site for booming West Auckland
    The Government will build on a new school site in West Auckland to cope with rapid population growth in the area, Education Minister Chris Hipkins says. The Ministry is working with existing local schools to determine how the 1.5-hectare site at 279 Hobsonville Point Road will be used to support ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Trans-Tasman travel window to close at midnight tomorrow
    A further 500 MIQ rooms released for managed returnees from NSW Further Government actions announced today are balanced to provide more certainty for Kiwis wanting to return from Australia, while continuing to protect New Zealand from COVID-19, acting Minister for COVID-19 Response Ayesha Verrall says. The actions were foreshadowed last ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Govt investing millions in Hawke's Bay and Tairāwhiti schools
    Napier Boys’ and Girls’ High Schools are among those set to benefit from a $16.5 million investment in the Hawke's Bay and Tairāwhiti region, Economic and Regional Development Minister Stuart Nash announced today. The Government has set aside money in Budget 2021 to accelerate five projects in Napier, Hastings, Havelock North ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Game changing Jobs for Nature investment for Northland
    Conservation Minister Kiri Allan has announced Jobs for Nature funding for a portfolio of projects that will create ‘game changing’ gains for nature and communities across Northland/Te Tai Tokerau as part of the Government’s acceleration of the economic recovery from COVID. “This portfolio of 12 projects will see over $20 ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Third COVID-19 vaccine receives provisional approval
    New Zealand’s regulatory authority Medsafe has granted provisional approval of the AstraZeneca COVID-19 vaccine for individuals 18 years of age and older, Acting Minister for COVID-19 Response Dr Ayesha Verrall announced today. New Zealand secured 7.6 million doses (enough for 3.8 million people) of the AstraZeneca COVID-19 vaccine through an ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Bowel-cancer screening programme is saving lives
    More than 1000 New Zealanders have had bowel cancer – New Zealand’s second-most-common cause of death from cancer - detected under the Government’s National Bowel Screening Programme, Health Minister Andrew Little said today. More than 1200 New Zealanders died from bowel cancer in 2017. The screening programme aims to save ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Govt welcomes draft report on the retail grocery sector
    The Commerce Commission’s draft report into the retail grocery sector is being welcomed by Government as a major milestone. “I asked the Commerce Commission to look at whether this sector is as competitive as it could be and today it has released its draft report for consultation,” Commerce and Consumer ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Christchurch’s Youth Hub ‘set to go’ thanks to further Government funding
    Construction of New Zealand’s first, purpose-built centre for youth well-being is ready to get underway thanks to an extra $2.5 million of COVID-19 response funding, Housing Minister and Associate Minister of Finance, Megan Woods announced today.  “The Christchurch Youth Hub is about bringing together all the things young people need ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Next step to protect Milford Sound Piopiotahi
    Expert group lays out plan to better protect iconic UNESCO World Heritage site Milford Sound Piopiotahi and its surrounds Funding confirmed for dedicated unit and Establishment Board to assess the recommendations and provide oversight of the process from here Milford Opportunities Project a test case for transformational change in tourism ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Funding for projects to reduce waste from construction and demolition
    The Government has announced funding for projects in Auckland and the lower North Island to help reduce construction and demolition waste. “Construction is the main source of waste sent to landfill, and much of this could be reduced, reused and recovered,” Environment Minister David Parker said. “The Government is funding ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Speech at the launch of the National Hepatitis C Action Plan
    Tēnā koutou katoa. Thank you Anglesea Pharmacy and Te Manawa Taki for hosting this event. As a doctor, I saw first hand the impact of hepatitis C. I met Moana in 2019; she came to the infectious diseases outpatient clinic at Wellington Hospital having tested positive for hepatitis C. Like ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Plan to eliminate hepatitis C as a major health threat by 2030
    A plan to eliminate hepatitis C in New Zealand, reducing liver cancer and the need for liver transplants, has been released today by Associate Minister of Health Dr Ayesha Verrall. “Around 45,000 New Zealanders have hepatitis C, but only around half know they have it,” said Ayesha Verrall. “Symptoms often ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • School upgrades and new classrooms for West Coast, Tasman and Canterbury
    A funding injection from Budget 2021 to complete four shovel ready projects and new classrooms at six schools and kura will provide a real boost to local communities, Minister Dr Megan Woods announced today. “This Government has committed to providing quality fit for purpose learning environments and 100,000 new student ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Warmer Kiwi Homes smashes annual target
    The Government's highly successful insulation and heating programme, Warmer Kiwi Homes, is celebrating a key milestone with the completion of more than 38,000 insulation and efficient heater installs in the year to the end of June, smashing its target of 25,000 installs for the year. “The Warmer Kiwi Homes scheme ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Exemption granted for Wallabies to enter NZ
    Bledisloe Cup rugby will be played in New Zealand after the Australian rugby team received an economic exemption to enter New Zealand. Travel between Australia and New Zealand was suspended on Friday for at least eight weeks following the worsening of the COVID outbreak across the Tasman. New Zealanders have ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Minister of Foreign Affairs makes three diplomatic appointments
    Foreign Affairs Minister Nanaia Mahuta today announced three New Zealand Head of Mission appointments. They are: Mike Walsh as Ambassador to Iran Michael Upton as Ambassador to Ethiopia and the African Union Kevin Burnett as Ambassador to Indonesia Iran “Aotearoa New Zealand has a long-standing and constructive relationship with Iran, despite a ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Enhanced Task Force Green Approved for West Coast and Marlborough
    The Government has activated Enhanced Task Force Green (ETFG) in response to the West Coast and Marlborough floods, Social Development and Employment Minister Carmel Sepuloni announced today. “To assist with the clean-up, up to $500,000 will be made available to support the recovery in Buller and Marlborough which has experienced ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Govt support for upgrade of Eden Park players facilities
    Minister for Sport and Recreation Hon Grant Robertson has announced funding to upgrade the players facilities at Eden Park ahead of upcoming Women’s World Cup events. Eden Park is a confirmed venue for the Rugby World Cup 2021, the ICC Women’s Cricket World Cup 2022, and a proposed venue for matches of ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • More jobs and quicker public transport motoring towards West Auckland
    Work to improve public transport for West Aucklanders and support the region’s economic recovery by creating hundreds of jobs has officially kicked off, Transport Minister Michael Wood announced today. Michael Wood and Auckland Mayor Phil Goff this morning marked the start of construction on the Northwestern Bus Improvements project. It ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Government backs critical health research
    Research into some of New Zealanders’ biggest health concerns including cancer, diabetes, and heart disease is getting crucial support in the latest round of health research funding, Health Minister Andrew Little announced today. The funding, awarded through the Health Research Council of New Zealand, covers 31 General Project grants ($36.64 ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • New Bay of Islands hospital facilities to bring services closer to home
    Prime Minister Jacinda Ardern and Health Minister Andrew Little have joined a ceremony to bless the site and workers for Phase Two of the redevelopment of the Bay of Islands Hospital in Kawakawa today. The new building will house outpatients and primary care facilities, as well as expanded renal care ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Raukokore re-imagined with ‘smart’ relocatable rent to own housing
    Iwi, Crown Partnership Relocatable, fully insulated housing, connected to a new solar plant Provides a pathway to home ownership New housing in the remote eastern Bay of Plenty community of Raukokore shows how iwi and Crown agencies can work together effectively to provide warm, dry, energy efficient homes in a ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Cabinet accepts Turkish authorities’ request for the managed return of three NZ citizens
    Cabinet has agreed to the managed return of a New Zealand citizen and her two young children from Turkey, Prime Minister Jacinda Ardern announced today. The three have been in immigration detention in Turkey since crossing the border from Syria earlier this year. Turkey has requested that New Zealand repatriate ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Govt delivers more classrooms so children can focus on learning
    Extra Government investment in classrooms and school building projects will enable students and teachers to focus on education rather than overcrowding as school rolls grow across the country, Prime Minister Jacinda Ardern and Associate Education Minister Kelvin Davis say. The pair visited Ruakākā School in Whangārei today to announce $100 ...
    BeehiveBy beehive.govt.nz
    1 week ago