There is widespread support for the Auckland CBD Rail Tunnel project – including both candidates for mayor of Auckland’s super city: John Banks and Len Brown. ARC Chairman Mike Lee is obviously a significant advocate for the project, as are many local MPs, perhaps most notably Auckland Central National MP Nikki Kaye. The reasons for this support are pretty obvious:
- The CBD Rail Tunnel, by providing a railway link between Britomart and Mt Eden Stations, will turn Britomart into a through-station and dramatically increase its capacity.
- Without the tunnel, Auckland’s railway system is likely to reach capacity by around 2016. No more trains will be able to be run at peak hour, so trains will become much much more crowded.
- By having two additional stations serving the Midtown and Karangahape Road areas of the CBD, a far greater proportion of the CBD (including the university to some extent) will be within easy access of the rail system.
- By bringing much more of the CBD within easy access of the rail system, it is likely that development around Midtown and Karangahape Road stations will occur, leading to significant economic benefits (just look at all the development that’s happened around Britomart).
- By increasing the capacity of Britomart, it will be possible to expand the rail network in the future. On the flip-side, without a CBD Rail Tunnel there’s no chance of having rail to the airport, rail out east to Botany Town Centre or Flat Bush, and so on.
The map below shows the most likely alignment of the tunnel. It is from ARTA’s website. 
Now of course a project like this is going to be rather expensive. Rail tunnels of this length are never cheap, and underground stations (quite far underground in the case of the K Road station) are also very tricky (and therefore expensive) to build. A 2004 study in the project came up with an estimated cost of $515 million, but that is regarded as being extremely conservative. A more likely cost is between $1-2 billion. Which leaves the obvious question of “how the heck are we going to pay for this?”
One of the big problems with funding transport projects in Auckland (and the rest of the country for that matter) is that different types of projects have different funding mechanisms. For a project like this, under the current system we would probably expect ARTA to contribute to the funding of the stations (perhaps with some assistance from NZTA) and KiwiRail having to fund the trackwork itself – which I would expect to constitute the majority of the project’s cost.
And this is the problem, that I don’t think KiwiRail is the right organisation to have to do the trackwork funding. For a start, KiwiRail is largely a freight shifting company – and its success or failure seems very dependent on whether it can make enough money out of its freight shifting business to cover its cost. A project like this has absolutely nothing to do with that. The other problem is that capital works for rail are now funded directly by the government – by way of a Crown Grant – rather than from the pool of funds that NZTA uses to build state highways or help contribute to other roading projects. This means that instead of the CBD Rail Tunnel competing against other transport projects for funding (such as the Puhoi-Wellsford “holiday highway” or a future Harbour Crossing) it will be competing against tax cuts or the health budget. I somehow doubt that it’s going to win favour against those other spending options. Rail projects weren’t always funded this way.
It was the May 2009 Government Policy Statement on transport that seems to have shifted funding for capital funding (new projects) of rail from the “National Land Transport Fund” (NLTF) to being simply from the general government slush-fund. The argument for doing so was that the NLTF is funded by road activities (petrol taxes, road-user charges etc.), so therefore money from it should go to road activities only. This is outlined in the two paragraphs below – which come from the May 2009 GPS:
Now I must say I simply do not get the logic used here. It would seem as though the “principle” of hypothecation (meaning that all money from roads should be spent on roads) has been used to justify the removal of funding rail infrastructure from the NLTF. But then the first paragraph says that NLTF funding should also be used for projects where road users will benefit, and therefore it is justifiable to use this money for “public transport services”, which basically means subsidies for public transport – including rail services. I agree with the logic that NLTF money should be used for public transport services, because road users benefit from a good public transport system. It is quite obvious that should all public transport cease to operate, the roads would be pretty damn clogged with traffic – so therefore even people who drive rather than take public transport benefit from it operating. There are also other benefits, such as reduced environmental effects, and influences on land-use patterns (among others), which everyone benefits from.
However, what I don’t get is what the GPS seems to be arguing: that road users won’t benefit from “rail infrastructure” development – which I take to mean things such as building the CBD Rail Tunnel. Surely the same logic that applied to operating costs for rail applies to capital costs for rail projects? Surely by building this important project, and increasing the capacity of the rail system, we will see more of the future growth in trips be accommodated by the rail system – thereby reducing future congestion and greatly benefitting road-users? I would think that you can either make the argument that investment in rail does benefit road-users, or it doesn’t (I would obviously argue that it does). I don’t see how you can make a viable argument that some rail investment (in operating costs) benefits road-users, while other investment (in capital costs) doesn’t benefit road-users.
It may seems as though I am labouring on this point a bit, but it’s absolutely critical in terms of whether the CBD Rail Tunnel goes ahead or not. Under the current funding system, its $1.5 billion will be competing directly against the health budget and tax cuts for funding. It quite simply will not happen if that situation continues. Funding for this project has to come from the pool of funds for transport projects – so that we can work out whether it or the Puhoi-Wellsford “holiday highway” will provide a greater benefit for the money spent on them (or any other transport project that it’s competing against). There is already a big pool of money set aside for transport projects of one kind or another over the next decade (which is the timeframe we must be looking at to build the CBD Rail Tunnel), and I think the only possible way we will ever see the rail tunnel built, is if its funding comes from within that pool.
This means that the Government Policy Statement needs to be altered, so that funding for rail infrastructure is able to come from the NLTF. It seems self-evident that road-users would benefit from investment in rail infrastructure such as the CBD Rail Tunnel – so the “principle of hypothecation” would still be adhered to. And quite simply, if we do not make this change, the CBD Rail Tunnel will never be built.
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I was thinking about the a few weeks ago and I really think we need to start looking outside the box to fund projects like this, I have had a couple of thoughts:
1. I would probably be happy to invest some money into the project if there were some long term returns available and I would do so even if the return wasn’t as high as other possible investments as I think this would be good for Auckland.
2. We could do something similar to what Ruapehu Alpine Lifts do when they want to build infrastructure and need money for it, they offer life passes. In this case you would get a ticket entitling you to free PT for life if you invest X amount of dollars.
3. Perhaps the government could offer some tax incentives for investing money in the project, that could get some of the big businesses and business men to put money in.
4. When building the underground stations they should be linked in to malls and existing buildings etc. This would be similar to Sydney where there is a massive underground mall next to the one of the train stations i.e. for the Midtown station we could also build a direct link into Sky City as long as they invest a certain amount of money into the project. If the link was lined with retail shops on either side the rent collected could help pay off a loan to build the tunnel or pay private investors etc.
5. As we will need to destroy a number of buildings around some of the stations and the tunnel portals we should sell the land no longer used off again which along with some changes to the zoning of the area and the fact a station is nearby should have nicely increase property values. We could possibly do this before construction starts for the cash flow.
Yes some “outside the square” funding might well be necessary for this project. In terms of acquired properties, I wouldn’t sell them off – but rather redevelop them and then sell the final product.
That policy statement is ridiculous, surely the person who wrote it knew how idiotic it was and felt quite dirty afterwards…
The first paragraph is from the forward, which was (apparently) written by Joyce himself.
The first paragraph is fine its the second one that causes issues. If it was written by Joyce then perhaps things aren’t as bad as we thought. Just need to focus the BCR for the tunnel on how many cars it will remove from the road and how many it will prevent from being needed etc.
Of course Joyce was the one who made the decision to take rail infrastructure funding out of th GPS. So while he didn’t personally write the other paragraph, he might as well have. I find the contradiction that it’s OK to fund rail operating costs from the NLTF but not rail capital costs quite bizarre.
Capturing the increase in increase in property values, known as betterment would be a great way to help fund the project. However the money gained from this will come over a period of 10 years or so after the construction, so money from this could be used to pay off a loan that Transport Auckland could use to pay for some aspect of the project, perhaps the stations could be funded by TA this way. I would still hope than the NLTF is able to pay for a substantial part of the project, maybe the tunneling itself, with the tracks costs coming from a crown grant.
I think you’re right there Luke. A “betterment” tax should help pay for the stations, which I expect Auckland Transport to originally fund (most probably by way of a loan).
I hope that SOMEBODY is thinking about this at the moment. A project is really just a dream until money is found to build it.
Funding should be for a definite plan – I can’t see any set plan in place. Aren’t we placing the cart before the horse here?
If it’s a 20 year plan, then account should be made for things like proportionately higher fuel prices, a plan to have city growth down a CBD corridor etc, etc.
There’s plenty of pressure on Joyce & Co over the CBD tunnel – let’s maintain that pressure, we need the government to commit now!
@Rationale the point is that it’s not a 20 year plan, we should be starting on this in the next decade, Britomart will be at capacity in less than 5 years and waiting another 20 years to build it means ever other rail plan will be postponed perhaps another 40 years.
I honestly can’t see the CBD tunnel or any other rail infrastructure being funded for the duration of National’s term, be it 3, 6 or even worse another 2 terms. I’m sure we’ll be back in the good old 90’s that I remember so well consisting of disintegrating bus shelters, ancients stinking yellow buses and a train system that well best left unsaid.
@rtc – sorry, the number “20” year plan was intended as an example, who knows how long the CBD tunnel will take? I would think a very minimum of 10 years.
I believe that “work” is already underway, with a team working on the CBD route designation now and another or perhaps the same team on the rail aspect of the 2nd harbour crossing
The thing is that Auckland City Council did a quite detailed study into this tunnel not so long ago. Yet after that study nothing really happenend until a few months ago, when we ended up with…. yes, another study.
Hopefully all these studies are adding value and bringing us closer to building this project. I also hope there are some serious discussions about funding it. I find it hard to believe that another harbour crossing is a higher priority than this project, yet we hear Joyce saying that’s the next ‘biggie’ after the Western Ring Route is complete.
I mean that they’re supposed to be working on a formal designation as opposed to a study. Sorry I can’t recall the details but I’ve heard that some of the work for the CBD Loop route designation has been completed already. I understand KiwiRail has no choice but to participate, It’s got to be very similar if not the same process as the recent Marsden Point Branch designation. Once the route has been designated it should be protected.
You might have an interesting point with Joyce. The cynic in me suggests that Joyce wants to get a 2nd crossing built before the CBD Loop, this is so the 2nd crossing won’t have to include rail. It’s our job to make sure that this doesn’t occur.
I’m sure Joyce has started to feel the pressure, we should just keep it up. If we keep talking about how it’s a big constraint on the system, and any additions could affect 10min frequencys and capacity of the whole rail network, Joyce will be forced into thinking about it. He has already being forced to do a investigation.
There will be no way he will get away with doing another crossing with-out rail, I can tell you ill be out there protesting if it were tru, and i’d expect many would.
I think there could be an issue in that we have all been saying that Britomart needs to be turned through station. Joyce could authorize a new harbour crossing with rail component and turning Britomart into a through station. He could then say as it’s a through station we won’t need the CBD tunnel. It makes it more important to get the CBD tunnel done first
The big problem with Joyce is, if the roads are full it means we need more capacity, if the railways are full it means the rail system isn’t working…
That’s why we will have to be careful. If the main argument for a CBD Tunnel is just to make it a through station so trains aren’t reversing out he could solve this with the harbour crossing and it would almost single headedly destroy the BCR for the tunnel. At the moment Auckland probably needs both which will cost a fortune.
I’m with Jarbury on the fact that the clip ons can probably be replaced one each over two summers, meaning we only need a rail tunnel across the harbour and only when the busway is full to capacity…
I can think of at least 5 transport projects I’d put above a 2nd Harbour Crossing after the WRR:
1). Penlink
2). CBD Tunnel
3). Howick Line
4). Upgrade of SE Highway to Motorway interchanging with SH1 and SH20
5). Airport rail/SAL
In no particular order…
Interesting comments – however to extend Britomart to Northshore a small part of the CBD Loop would need to be built anyway. Building the line to the Northshore I don’t think would give equal traffic flows required. There would be empty trains coming back from the shore even in morning peak hour perhaps?
I think it far more likely that Joyce will be doing his best to avoid BOTH the CBD Loop AND the rail component of the 2nd harbour crossing. (To be fair he has acknowledged the need for the CBD Loop – which is why it’s important to keep the pressure full on)