The Third Main Business Case

The proposed third main between Westfield and Wiri – and eventually further north and south – has long been considered one of the most important rail projects in Auckland, if not the country. Being one of the busiest sections of rail for passengers and the busiest section of rail for freight in the country it has long been suspected to deliver huge benefits. Yet bizarrely the project still hasn’t been funded.

We wanted to see how the project stacked up and so Harriet fired off an Official Information Request to Kiwirail to obtain a copy of the business case. Last week things got a little crazy after Winston Peters revealed leaked emails in parliament showing that the Transport Minister’s office was trying to block it being released to her. By the end of the week, Kiwirail had advised that they would release the business case publicly, and that occurred this week. Unfortunately most of the key details in the business case have been redacted but what remains paints a picture of a project long overdue and deserving of funding now. In fact, what is visible suggests this project would have a benefit to cost ratio that would put to shame most of the road projects being built and prioritised by the NZTA.

Here are some of the interesting points to take away from the business case.

First, the document is clearly an NZTA template – while this will be the “misleading template” the ministers office tried to use to block it but I actually think it’s good that the NZTA were involved.

The document describes the issues quite well. It notes that with up to 12 passenger services and two freight services per hour “the current twin track configuration has reached the maximum operational capacity“. It is the busiest single section of freight rail in the country with around 4-5 million tonnes of freight passing over it every year. As of mid-2016 there were also 5 million passenger trips, about 30% of all passenger trips on the network at the time. The report says rail passenger trips are meant double

The lack of capacity is resulting in delays to both passengers and freight. For freight the case notes that Kiwirail are seeing an increasing number of their services arrive at the outskirts of Auckland on time, only to be delayed and end up outside their promise of “delivery within 30 minutes” of schedule. For passenger trains, it notes that to accommodate the freight trains, delays have already been built into the timetables. As of mid-2016, the effect of the delay sees those 5 million passenger trips experience an average delay of 3 minutes each. That’s about 250k hours annually. That 3 minutes time saving is also enough to free up one EMU which can then be used to improve capacity elsewhere.

But it doesn’t stop there. The need to accommodate freight trains It is also the reason why the Southern and Eastern line services can’t run to a consistent 10-minute timetable. This results in passenger service headways varying between 8 and 12 minutes depending on the time of day. The lack of capacity will also prevent us from being able to take advantage of capacity enabled by the City Rail Link.

There are some significant impacts in there. Below is a summary of the outcomes that are said to come from the project

To put a few of those aspects in perspective. A 3-minute time saving for 5 million trips is about 250k hours of time saved annually. My guess, based on a quick look at the NZTAs economic assessment guidelines is that this could be equivalent of over $4 million annually. Each EMU is costs around $10m so saving one would make a nice dent in future costs and of course give is more capacity.

All up there look to be some quite significant benefits that come from the the project and they appear to stack up pretty well to the estimated $50 million cost to implement. Sadly, all the numbers, including the BCR range, have been blacked out. This comment though seems to confirm that they are significant in relation to the costs of the project.

This option is economically efficient, as the forecast benefits significantly exceed the expected costs, with a predicted Benefit to Cost (BCR) ratio in a range between [blank]

It wouldn’t surprise me if this project has a better BCR that almost all roads currently under construction or in planning by the NZTA. Was this the reason the government didn’t want it released. Regardless it once again begs the question of why it hasn’t been funded.

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