By Russell Jones*
Auckland is currently investing heavily in public transport infrastructure, much of which is to transport people to and from their offices, tertiary institutions and other organisations in or near the CBD.
The COVID-19 epidemic has led to many of these people working at home and communicating with their colleagues and customers by teleconferencing.
If a significant proportion of these people continue working remotely, at least part of the time after the epidemic is over, it will affect demand for public transport and hence the viability of these projects.
The economic case for these projects is affected by any reduction in people working in the areas served in two ways. The first and direct way is the reduction in conventional transport benefits (traffic decongestion, savings in existing public transport users travel times, etc.) due to lower patronage. The second way is through a potential reduction in wider economic benefits.
These projects are inherently risky as a very large lump of capital has to be committed at the start to build them with the payoff coming over many years. Calculating the payoff requires many assumptions about the future, many of which are now likely to be incorrect.
Problems also occur where politicians commit to a project before they have been properly evaluated and costed. The City Rail Link is an example of this; Len Brown (the former mayor of Auckland) pushed for this project before it had been properly costed, with the result that the cost has escalated significantly since he proposed it. It now remains to be seen whether patronage has also been over-estimated.
There are also potential problems with the City Centre to Mangere Light Rail project, about which little has been heard in public recently. It appears officials are working on several proposals for the project, one of which has the added complexity of the Government being both a purchaser and an investor through the NZ Superannuation Fund.
Russell Jones is a reader.
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