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Speaker: Economics of the Waterview Tunnel

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  • Rich of Observationz,

    If the government did the sensible thing and ran a fairly high deficit during a recession (by maintaining public spending, mostly) they would keep unemployment down and wages up, helping most people get through these years.

    That would however, drive up interest rates for the years following the recession, impacting business profits.

    So keeping borrowing down and deliberately shrinking the economy is a political decision to help NACTs constituency at the expense of ordinary people.

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • Sam F,

    Kim: Josh's link to the business case for the connection shows that both connection options to Patiki Road weren't shortlisted - one didn't meet most of the project requirements, and both would have cost about the same as the chosen bored tunnels.

    Auckland • Since Nov 2006 • 1609 posts Report Reply

  • Gareth Ward,

    And where does the funding for the National Land Transport Fund come from?

    Exactly.
    Oh man that's got me mad now - I share Craig's rage at tax/spend/borrow smoke and mirrors. Most especially direct lies like this one.

    Auckland, NZ • Since Mar 2007 • 1727 posts Report Reply

  • Joshua Arbury,

    Very crude map of possible surface option routes:

    http://jarbury.files.wordpress.com/2009/05/waterview-options.jpg

    Auckland • Since May 2009 • 237 posts Report Reply

  • Joshua Arbury,

    Kim, even a surface level Rosebank option was $2.7 billion plus SH16 upgrade plus financing. More expensive than all the Waterview options

    Auckland • Since May 2009 • 237 posts Report Reply

  • Rich Lock,

    I predict high levels of direct action if/when development starts.

    I did wonder about this.

    There are significant costs associated with delays, security and general removal of non-cooperative warm bodies from the paths of bulldozers. I strongly suspect these haven't been taken into account.

    And those are just the forseeable financial costs. The loss of goodwill will be not inconsiderable.

    I am willing to bet that what we (Auckland) will end up getting once all the dust has settled (literally and metaphorically) is the option that no-one wanted built, at the increased cost that no-one wanted to pay.

    I predict headlines over the next few years along the lines of: 'Completion of Waterview connection delayed again. Costs out of control.'

    back in the mother countr… • Since Feb 2007 • 2728 posts Report Reply

  • Sacha,

    Hi Kim - long time, no see.

    To me, that Rosebank route made much more sense in linking the prime industrial area that Auckland City Council are planning to intensify over the next decade or two. Less impact on residential amenity and environment from what I recall, which I think were all factors in its support by ARC as preferred route. Unsure why it was dismissed.

    Ak • Since May 2008 • 19688 posts Report Reply

  • Joshua Arbury,

    And where does the funding for the National Land Transport Fund come from?

    That does come from petrol taxes, road-user charges and vehicle licensing fees. I don't have much problem with those funds being used for it, but that will come at a cost. The government's revised government policy statement on transport outlined that cost: move money away from road maintenance, local roads funding and public transport/cycling/walking funding and into state highways.

    Auckland • Since May 2009 • 237 posts Report Reply

  • Gareth Ward,

    Thanks for the map, the red option goes through the back garden of a friend's (and his young family's) first home bought last year. =|

    Auckland, NZ • Since Mar 2007 • 1727 posts Report Reply

  • Sacha,

    And Josh answers my question. Good on you, and thanks for the map too.

    Ak • Since May 2008 • 19688 posts Report Reply

  • Sam F,

    Can't find the link right now, but Bill Ralston - ever the optimist - has declared that now is a great time for Montaubertistes to get compensation cash and hit the property market. Hoorah!

    Auckland • Since Nov 2006 • 1609 posts Report Reply

  • Gareth Ward,

    Labour running a bad line at the moment - don't make it about Mt Albert and the by-election guys. Making a long-term Auckland-wide issue look like a political grab for a single by-election doesn't play well.

    Auckland, NZ • Since Mar 2007 • 1727 posts Report Reply

  • Sacha,

    Making a long-term Auckland-wide issue look like a political grab for a single by-election doesn't play well

    If you're looking to contrast decisive and inclusive leadership styles, it's a pretty handy issue though.

    Ak • Since May 2008 • 19688 posts Report Reply

  • Sam F,

    Labour running a bad line at the moment - don't make it about Mt Albert and the by-election guys. Making a long-term Auckland-wide issue look like a political grab for a single by-election doesn't play well.

    It's like they saw David Farrar's line about "Labour's pet tunnel" and decided to jump into the trap for shits and giggles.

    Auckland • Since Nov 2006 • 1609 posts Report Reply

  • Sacha,

    Wonder what social impact comes from removing so many parks?

    Ak • Since May 2008 • 19688 posts Report Reply

  • Sam F,

    Wonder what social impact comes from removing so many parks?

    Oakley Creek has been in the news for an appalling crime recently. Not sure that concerting over rogue parks is the answer the area was looking for, though.

    Auckland • Since Nov 2006 • 1609 posts Report Reply

  • Joshua Arbury,

    Wonder what social impact comes from removing so many parks?

    Good question, I'm sure I've heard them valued in the billions....

    Regarding Bill Ralston's assertion, that's all good and well if the motorway runs through your house - demand good money and get out of there. But what if it takes half your backyard and that's all you get compensation for? What if it takes half your kid's school (like we saw in Wymondley) or is now over your back-fence?

    You get shafted and don't get much, if any, compensation. And that doesn't even mention the loss of parkland.

    Auckland • Since May 2009 • 237 posts Report Reply

  • Tom Semmens,

    Politically I can't believe how poor National has been in handling it's Auckland issues. It has managed to turn reasonably widespread support for the concept of a super city into a ticking bomb of oppostion to what is now being perceived as an ACT-driven power grab.

    And I suspect they have also under-estimated how poorly this decision will go down in Auckland.

    Either that or they think their media and poll honeymoon will carry on forever no matter they do, although it would also be nice if Labour had a leadership team which woke up and realised people are looking for a real set of alternatives to the policies of the last quater century.

    Sevilla, Espana • Since Nov 2006 • 2213 posts Report Reply

  • Sacha,

    I'm thinking more all the parkland alongside Hendon Ave, where if memory serves me right there are a lot of low-income families whose children presumably rely on cheap recreational opportunities - like parks.

    Ak • Since May 2008 • 19688 posts Report Reply

  • Sacha,

    Idiot/Savant about the financing smoke and mirrors.

    ...there's only so much money in the NTLF, and its all already committed to other projects. Funding Waterview this way means that some of those other projects will have to be bumped, meaning that either those roads won't be built, or to the extent that they are actually important and necessary, the government will have to borrow to fund them instead.

    Either way, that means more costs, either from increased travel time and inconvenience elsewhere in the country, or from increased finance costs for those projects. But because they're not part of this particular project, the government can ignore them.

    And so it gets to pretend that it has produced a real saving, when all it has done is shuffle the costs around and pushed a bunch "off-balance sheet". Enron tricks again...

    Ak • Since May 2008 • 19688 posts Report Reply

  • Joshua Arbury,

    Yup that's Alan Wood Reserve, I can see it out of my office windw right at the moment. Won't be quite so nice as a 6 lane motorway.

    And yes, there are a lot of Housing New Zealand properties around there. And also around Waterview.... surprise surprise it's the poor who get nailed yet again.

    Auckland • Since May 2009 • 237 posts Report Reply

  • Joshua Arbury,

    Basically the GPS has directed money away from all other transport funds and into state highways, so we can build stupid stuff like the Waterview Connection:

    The revised GPS would increase the level of funding for the New and Improved Infrastructure for State Highways activity class by almost $1 billion over the next three years by: reallocating approximately $420 million over 3 years from non-State highway activity classes freeing up $258 million over 2 years for road–related activity by moving capital investment in Wellington rail infrastructure outside of the National Land Transport Fund providing approximately $660 million over 6 years from Petrol Excise Duty and Road User Charges as an alternative to proceeding with the Regional Fuel Tax Scheme.
    Forecast State highway expenditure is lifted to remain at around 34 percent of total NLTP expenditure.
    Forecast expenditure on local road construction is maintained at the same level as that in the current GPS. Road maintenance expenditure will still increase relative to the 2008/09 level.
    Forecast expenditure on Public Transport Infrastructure differs considerably from the 2008/09 forecast, primarily because other capital commitments for Wellington rail infrastructure funding will be funded outside of the National Land Transport Fund.
    Demand Management and Community Programmes and Walking and Cycling will receive funding allocations near their 2008/09 expenditure levels.
    Changes in forecast expenditure for Rail & Sea Freight and Domestic Sea Freight Development reflect that the Minister wants to focus on other non-monetary interventions that will help increase the market competitiveness of rail and sea freight transport.

    I moaned about this a while back: http://transportblog.co.nz/2009/03/25/government-roading-policy-i-mean-transport-policy/

    Auckland • Since May 2009 • 237 posts Report Reply

  • Kim Sokolich,

    Hi Sacha - I should have guessed it was you from your prolific posts.

    "I predict high levels of direct action if/when development starts."

    "I did wonder about this.

    There are significant costs associated with delays, security and general removal of non-cooperative warm bodies from the paths of bulldozers. I strongly suspect these haven't been taken into account.

    And those are just the forseeable financial costs. The loss of goodwill will be not inconsiderable.

    I am willing to bet that what we (Auckland) will end up getting once all the dust has settled (literally and metaphorically) is the option that no-one wanted built, at the increased cost that no-one wanted to pay.

    I predict headlines over the next few years along the lines of: 'Completion of Waterview connection delayed again. Costs out of control.'"

    I agree wholeheartedly with Rich.

    Having attended a community meeting at Waterview primary I can tell you feelings are running fairly high in the community - and that was with the tunnel option!!!

    Since Oct 2008 • 47 posts Report Reply

  • Joshua Arbury,

    Kim, it has to get a designation first. That's a resource consent process that will definitely not be easy. I reckon the previous government chose the tunnel option because they thought it wouldn't be possible to get consent for a surface option.

    Though National have an easy way around that problem: gut the RMA.

    Auckland • Since May 2009 • 237 posts Report Reply

  • Sofie Bribiesca,

    Lots of state houses and pensioner flats. If they keep saying how great they are at up grading HNZ houses and building shiny new ones, (which they are doing at the moment) people wont care about the load they will bulldoze. Arrogance.

    here and there. • Since Nov 2007 • 6796 posts Report Reply

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