Auckland's light rail project now has an indicative business case, but still no start date

Could Auckland's already slow burning light rail project be delayed further by the 2021 Asia-Pacific Economic Cooperation (APEC) meetings in the City of Sails?

9th Jul 19, 2:36pm by Stephen Forbes

Is the 2021 APEC Summit going to throw a spanner in the works for the Auckland light rail project?

Sources interest.co.nz has spoken to suggest work on the project could now be delayed until 2022 due to the Asia-Pacific Economic Cooperation (APEC) events, through which a year of New Zealand hosting culminates in Auckland in November 2021 with Leaders' Week.

The Ministry of Foreign Affairs and Trade (MFAT) has raised questions about the light rail project and when work on it will start because of the summit, which is being touted as the largest event ever hosted by the New Zealand Government. According to the MFAT website 10,000 people will visit the city during the Leaders' Week from November 8-14, including ministers, world and business leaders and a large media contingent.

“APEC is a large event which poses many logistical challenges,” APEC New Zealand deputy secretary Andrea Smith says. “As part of this planning for APEC 2021 events in Auckland, APEC New Zealand has to be aware of all factors that may impact on hosting arrangements. For this reason, MFAT has been seeking to understand what construction projects are planned, or will be underway, in 2021. APEC New Zealand’s approach is to take account of, and work around, any existing infrastructure projects in Auckland.

“In this context, MFAT has also asked about the schedule of projects. It would be misconstrued to say the APEC team has voiced concerns about any of the existing or planned infrastructure projects, such as the light rail project. It’s more a case of exploring project schedules and their impacts, so we can plan around these.”

But the fact the event is likely to be held in the central city means MFAT’s ability to work around it could be limited. This means a start in 2022 might now be more likely. Other events in Auckland scheduled for 2021 include the 36th America's Cup, which will be held in March, and 2021 Women's Rugby World Cup which will run from July 28 to August 14.

Indicative business case

In other developments the New Zealand Transport Agency (NZTA) says it has produced an indicative business case for the first stage of the Auckland light rail project, but it still can’t move onto the next stage until Transport Minister Phil Twyford accepts or rejects an offer from the New Zealand Superannuation Fund.

The agency says the report is for the city centre to airport line only. And while it doesn’t answer the all-important questions of exactly how it’s going to be funded and how much it’s going to cost - it is a sign of progress.

According to the NZTA Head of Light Rail Carl Devlin, the indicative business case has been shared with officials from the Ministry of Transport and Treasury for review and feedback.

“Further work is required to progress the indicative business case to the next stage, including the outcome of the Ministry of Transport/Treasury review, policy advice to the Minister and key decisions from the NZ Transport Agency’s Board,” Devlin says. “These outcomes will guide our next steps and provide more clarity on the project. During the next phase of work, there will be more clarity around construction start times and staging.

“The Agency will continue working with its project partners, including Auckland Council, Auckland Transport, the Ministry of Transport, Treasury and other government departments to coordinate our work and develop the optimal design.”

According to the NZTA, an indicative business case sets out the pros and cons of a project proposal and whether it is affordable and feasible to construct and operate it. The next stage would be a detailed business case which will spell out the costs and funding options in more detail.

Goff wants start 'as soon as practically possible'

But any news is good news for Auckland Mayor Phil Goff. He says despite the fact it’s out of his hands he wants to see some progress made on the project.

“Decisions being made on light rail are being taken by central government, but I’ve indicated to central government that with the growing population and increasing traffic and bus congestion on the roads, I want to see this project started as soon as practically possible.”

Under the project proposal first outlined by Twyford in 2017 two light rail lines would be established in Auckland. One leading from downtown Auckland out to the airport at Mangere, while a second line would run from the central city along State Highway 16 to Kumeu/Huapai.

Twyford has estimated the project would cost about $6 billion, making it the biggest transport project in New Zealand history.

NZ Super Fund CEO Matt Whineray told www.interest.co.nz last year that it had put a proposal to the government to fund, design, build and operate the light rail network in partnership with Canada’s Caisse de depot et placement du Quebec. Whineray called it a public-public investment (PPI) model, as opposed to a public-private partnership (PPP).

Twyford’s office was contacted for this story, but our questions were referred to the NZTA to answer as the project’s lead agency. A spokesperson for the minister said there was currently no start date for the light rail project.

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28 Comments

by Due Diligence | 9th Jul 19, 3:00pm 1562641215

Government excelling at "delivery" once again. Airport to city line is basically at a standstill and I bet they'll quietly replace plans for a light rail out west with bus rapid transit.

by GV 27 | 9th Jul 19, 4:37pm 1562647052

So if I have read this correctly; there has been absolutely no work done on the business case for Light Rail to West Auckland? Absolutely nothing? As in, we are still no closer to rapid transit in the NW than we were under National?

Oh dear.

by Due Diligence | 9th Jul 19, 5:26pm 1562649997

Neither this govt nor the last one has delivered light rail. Labour’s most significant transportation deliverable to date has been the cancellation of various road projects.

by GV 27 | 10th Jul 19, 7:20am 1562700047

Now now, National told us it would be viable in 30 years. They also pushed back against any form of rapid transit in the North West. And then stuck SHAs there.

The message is clear for the good people of West Auckland: Shut up, don't ask questions, pay your fuel tax and don't expect anything in return. Oh, and bear the majority of the housing burden because Grey Lynners and Ponsonb'iites don't want to intensify and lose their 'special character'. Too bad they have all the transport connections huh!"

by Due Diligence | 10th Jul 19, 8:45am 1562705145

Can we agree that both governments have actually delivered the same amount of light rail - zero? And didn’t the National govt fund something like half the CRL? I’m no fan of the National govt’s transport policy, but they were in the middle of delivering a massive road building programme. As for the good people of West Auckland, they’ll soon discover that government talk is cheap.

by GV 27 | 10th Jul 19, 8:51am 1562705474

Eventually funded the CRL, after senselessly delaying it; and they were rightly roasted for it. The people of West Auckland, however, are collateral damage. The silence from any other media outlet is deafening, probably as a result of it affecting almost no journalistic types.

by Due Diligence | 10th Jul 19, 9:45am 1562708704

Let’s keep our fingers crossed for the Westies, they deserve some trams!

by SamL | 10th Jul 19, 2:11pm 1562724711

NZTA is working on the business case for the NW Line - but it is nowhere near as advanced as the CC2M Line (primarily because Auckland Transport's work was quite well advanced on the Airport line before it was passed over to NZTA to deliver). It is an absolute outrage that Steven Joyce etc did not proceed with the NW Busway when the motorway was being widened as a result of the Waterview Tunnel - now we are facing further delays and the motorway having to be dug up again to build rapid transit along that route. West Auckland deserves rapid transit and while the RFT did provide some seed funding for light rail, it would be great if more bus lanes could be built in the meantime - that alone would make a world of difference.

by GV 27 | 10th Jul 19, 4:08pm 1562731700

Hi SamL - NZTA responded to an FYI request in April from someone asking about details the proposed route and stations on the basis that such work did not exist at that point in time. If they have made progress since, then that's fantastic. However the response made it very much clear that there was yet to an actual business case process for the NW line underway, and all the focus thusfar had been on the CC2M line.

by SamL | 10th Jul 19, 7:09pm 1562742557

I think that’s very much the case. Reading the response from NZTA in relation to that request indicates the routes and stations won’t be available until the business case is further developed and that as the business case develops, more details about the route and stations will be made available. Hopefully they have made more progress and they definitely have dedicated people working on it. While it’s incredibly frustrating about how slow it’s being progressed, on the plus side it seems to be going through a fairly robust assessment, which makes for a pleasing change from the decision to proceed with some RONS.

by SamL | 10th Jul 19, 7:17pm 1562743053

I’m not sure that’s entirely correct - they didn’t proceed with National’s election promises, but there hasn’t been a wholesale cancellation of roading projects and the NLTF is still primarily focused on roading projects. The Auckland Regional Fuel tax has meant a $7bn funding gap will be met, including the construction of the Eastern Busway and significant number of local road improvements.

by waymad | 9th Jul 19, 3:00pm 1562641221

Further work is required to progress the indicative business case to the next stage, including the outcome of the Ministry of Transport/Treasury review, policy advice to the Minister and key decisions from the NZ Transport Agency’s Board.....These outcomes will guide our next steps and provide more clarity on the project. During the next phase of work, there will be more clarity around construction start times and staging.

Translated:

"We have run the numbers and they are simply dreadful. We are currently casting about for a suitable cloak to throw over this hot mess, for a competent PR write-up to spruik it to the ~~suckers~~ investors we hope to interest, and are keeping our CV's well up to date because no-one here is gonna survive this fustercluck once the inevitable happens and the Paying Public get wind of it all".

by GV 27 | 9th Jul 19, 4:51pm 1562647861

Counterpoint: There's no real alternative planned for the West, people are spending hours a day stuck in traffic and there's a shedload of new housing going in there. The numbers stacking up to give a commercial operator a set return from an unsolicited approach simply shouldn't matter at this point. There should at the very least be a business case study prepared.

Instead we have half a case study, and a whole part of the district missing out on a vitally needed rapid transit corridor - something that I suspect would not have happened if it were the North Shore of Auckland, or a well-heeled suburb of Wellington.

by JimboJones | 9th Jul 19, 7:08pm 1562656101

You may be right. But as GV has said there comes a point where business cases are not that useful. A point where you have a real problem that needs to be fixed but no solution that has a decent business case because all solutions are stupidly expensive.

by paashaas | 9th Jul 19, 8:06pm 1562659617

Nonsense. If you cannot make a coherent business case for it you should not spend money on it.

by GV 27 | 10th Jul 19, 7:18am 1562699921

That's the problem though - we've seen a business case process essentially modified in the face of an unsolicited tender. As a result, only half of the project even has a business case at all. That's simply not acceptable for what is an essential piece of infrastructure.

Give us the business case of the proposed spec first, and then let us decide whether it stacks up. Then if someone wants to put in a tender, let them. Modifying the initial business case to give a commercial return to an unsolicited bidder's spec is just Red Flags 101 if you actually want a proper case study done.

by RickStrauss | 10th Jul 19, 8:58am 1562705917

That's what people said about the East-West Link but many still got hot and bothered when it was cancelled for that reason.

by SamL | 10th Jul 19, 2:17pm 1562725050

The mysterious business case of the East West Link which according to Simon Bridges, remained the same even though the cost tripled. It went from $600m to nearly $2b yet somehow was still worth building - despite never having an updated business case to justify its construction.

by SamL | 10th Jul 19, 2:19pm 1562725140

"No coherent business case" sums up the previous Government's RONS programme. They wanted to spend billions of dollars on building more roads that would have returned less than 50 cents in the dollar.

by mlpc | 9th Jul 19, 3:24pm 1562642686

How can they talk about a start date when they don't know yet what the costs will be, and whether the numbers stack up?

by sharetrader | 9th Jul 19, 3:34pm 1562643279

simple it wont stack up,
up dominion road to the city sure you can make that work,
but the loooong way to the airport just does not make any sense, financial or logical
you already have rail run to onehunga, there are already piles in the manukau for the rail bridge,
you also have the option of running light rail or heavy rail down puhinui road from the puhinui rail station (which is due to be upgraded) both make a lot more sense than this idea

by GV 27 | 9th Jul 19, 4:36pm 1562646973

....but doesn't do anything to increase connectivity in Mangere or in the South West, which is what the SH20B proposal does. The real costs to compare is the marginal cost of the line from the end of Mt Roskill to the airport, vs the vastly different and higher requirements for a heavy rail line that will deliver vastly fewer connections for locals and businesses.

by positivelywallstreet | 9th Jul 19, 5:46pm 1562651164

Exactly, there are hotels and hostels along the light rail path , heavy rail only connects to the CBD.
Ok, there will be a loop, like Sydney, but it is slow and can be quicker to get off and walk.
We ride the airport bus and it is a good way to get weary travellers to their accomodation.

by SamL | 10th Jul 19, 2:15pm 1562724928

Running rail from Puhinui makes almost no sense from either a logistical or financial perspective. The cost of building a heavy rail line from Puhinui would be extremely costly (estimated at $2b) and would interrupt the frequency of trains on the Southern & Eastern lines - all for 4% of travelers estimated to use it. It would also fail to deliver transport choices for the tens of thousands of people who work in the Airport vicinity or along the route back towards Onehunga. Running light rail from the city to the Airport is a seamless journey and would be estimated to take 42 minutes - which is about the same length of time heavy rail would take (and at considerably more benefit given it also deals with bus congestion issues in the CBD).

by Yvil | 9th Jul 19, 6:04pm 1562652248

The city of snails

by ptamanz | 9th Jul 19, 10:08pm 1562666935

The city of fails.

by Pragmatist | 9th Jul 19, 11:20pm 1562671228

"According to the NZTA Head of Light Rail Carl Devlin"

Head of what? Twyfords wet dreams?

by Foyle | 10th Jul 19, 12:01pm 1562716915

Trains wont ever solve the problem. low population density, and far too many people who are commuting suburb to suburb rather than suburb to CBD. Focus has to be on providing more roads - and tunnelling appears to provide a cheap ($10million per km) Nimby-proof option for doing so. With computer controlled EV's of right now (Tesla) a single Ø5m tunnel with 2 lanes can have same throughput as an 8 lane motorway! 1-200km of tunnels costing ~$2 billion could fix all of Auckland's traffic issues forever for less money and sooner than trying to do any train project. Buy some tunnelling machines and start digging now!!