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Speaker: Economics of the Waterview Tunnel

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  • Joshua Arbury,

    Paul, I'm not a huge expert in Sydney's tunnels. I know that the cross-town tunnels did not nearly attract as many people as originally thought, which led to reduction in the toll.

    Sydney's tunnels definitely weren't cheaper eithe, and surprise surprise the road tunnels haven't hugely improved traffic.

    Auckland • Since May 2009 • 237 posts Report Reply

  • Paul Williams,

    I know that the cross-town tunnels did not nearly attract as many people as originally thought, which led to reduction in the toll.

    Don't want to distract attention from Mt Albert - the cross city tunnel was a PPP development, the Eastern Distributor was public $$. It collapsed for various reason, economic and political. That said, it's still here... just operated by different owners.

    Sydney • Since Nov 2006 • 2273 posts Report Reply

  • George Darroch,

    Sydney's tunnels definitely weren't cheaper either, and surprise surprise the road tunnels haven't hugely improved traffic

    They also have very nasty effects in concentrating pollution, and on those who live near to their exhaust towers. They're carcinogen concentrators.

    WLG • Since Nov 2006 • 2264 posts Report Reply

  • Sacha,

    That most recent Herald story concludes:

    Mr Joyce said using a public/private partnership was not being proposed in this case and increases to transport funding meant it was the most cost effective way of paying for the road.

    In what way can using the existing transport fund be cheaper? Does servicing the interest in the NZTF somehow cost less than general Crown borrowing for the same amount would? Hoping a journalist asks those types of questions or we're in for snowjob.

    Ak • Since May 2008 • 19735 posts Report Reply

  • Joshua Arbury,

    NZTF uses money from petrol taxes, road-user charges and so forth - which means that debt is not incurred. So it is cheaper than borrowing.

    Interesting that everyone's moved away from PPP. I guess they've finally figured out it's a rort.

    Auckland • Since May 2009 • 237 posts Report Reply

  • Sacha,

    I'd like to acknowedge Christopher for being so open with his feelings here. We often don't get to hear the very real emotional impact of taking up community leadership. I doubt Joyce is feeling any kind of concern.

    Ak • Since May 2008 • 19735 posts Report Reply

  • Paul Williams,

    It collapsed for various reason, economic and political. That said, it's still here...

    Just realised how odd the above sentence is... hope it's comprehensible. George, thank for posting the links re polution. Now back to Mt Albert.

    Sydney • Since Nov 2006 • 2273 posts Report Reply

  • Sam F,

    I doubt Joyce is feeling any kind of concern.

    The pic appearing with the Herald story is a window onto his inner torment.

    Auckland • Since Nov 2006 • 1609 posts Report Reply

  • Sacha,

    But Joshua, wasn't that earlier quote from I/S saying that other NZTF projects would need a source of extra funding? I guess they might just can them, but if they don't then you'd either need a government top-up or extra taxes of some sort, surely?

    Ak • Since May 2008 • 19735 posts Report Reply

  • Gareth Ward,

    NZTF uses money from petrol taxes, road-user charges and so forth - which means that debt is not incurr

    But if you want to do the other things currently in the NZTF then you have to borrow for them. Or equally you could stop those things going ahead and redivert the funding to the tunnel option.

    So doing a straight apples-for-apples, the financing cost is accounting quirks only.

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

  • Joshua Arbury,

    I would imagine they'll just can them Sacha. As you say there's only a certain amount of money in the NZTF each year. Joyce has already pushed most of it into state highway funding, even without this extra $1.4 billion to fund.

    I suppose construction might start in 2012-2013 and this one project will eat a huge chunk of the fund for the few years it takes to build it.

    This image linked to below shows the NZTF spending for the next 3 years I think. Imagine trying to skew that even further towards new state highway funding.

    http://www.jarbury.net/GPS-funding2.jpg

    Auckland • Since May 2009 • 237 posts Report Reply

  • Sacha,

    Snap.

    Ak • Since May 2008 • 19735 posts Report Reply

  • dc_red,

    I found this writing from CK Stead, at the time of the Eastern Highway 'debate', remarkably applicable to today's sad turn of events. Worth quoting at length I hope:

    Short of a huge aerial bombardment, a motorway is the most destructive modern weapon against an urban environment, blocking access on either side, dividing communities, destroying housing, waterways, parklands and areas of natural beauty, creating air and (even worse) noise pollution, and in the long term making worse the traffic problem it is supposed to solve.

    This latter point cannot be repeated too often, since our civic leaders seem unable to learn the lessons even of very recent history. I am old enough to remember when Grafton Gully was a piece of charming bushland, with old graves and a stream running down towards the harbour.

    When it was proposed as the route for a motorway, we were assured that only a thin strip would be taken and that, otherwise, its natural beauty would be preserved. It is now a maze of concrete.

    Oil Patch, Alberta • Since Nov 2006 • 706 posts Report Reply

  • Idiot Savant,

    Creek? What economic benefit does that have to anyone?

    Farmers can use it as a cheap sewer?

    Palmerston North • Since Nov 2006 • 1716 posts Report Reply

  • Sacha,

    Factory-owners, too, no doubt. Let's call it job creation.

    Ak • Since May 2008 • 19735 posts Report Reply

  • Sofie Bribiesca,

    I'd like to acknowledge Christopher for being so open with his feelings here. We often don't get to hear the very real emotional impact of taking up community leadership

    With Auckland being quite relevant in Parliament at the moment, it was interesting also to see that the LP have changed their tack slightly when dealing with questions and promotion of themselves rather than complaining about MUF NACT. Goff's reshuffle seems to have a good impact.(on me anyways :)

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

  • George Darroch,

    In case we forget, air pollution from motor vehicles kills over 250 every year in Auckland, and seriously harms the 25% of children with asthma.

    Yeah, I know, we'll all have electric cars in 2030, and the singularity won't be long after that.

    WLG • Since Nov 2006 • 2264 posts Report Reply

  • Idiot Savant,

    I would imagine they'll just can them Sacha.

    Depends - are any of them in National electorates?

    Palmerston North • Since Nov 2006 • 1716 posts Report Reply

  • Sacha,

    Any of them not?

    Ak • Since May 2008 • 19735 posts Report Reply

  • Kumara Republic,

    "Prosser, what about my house?"

    "What do you mean you've never been to Alpha Centauri? For heaven's sake mankind, it's only four light years away you know. I'm sorry, but if you can't be bothered to take an interest in local affairs that's your own lookout. Energize the demolition beams."

    The southernmost capital … • Since Nov 2006 • 5439 posts Report Reply

  • Rich Lock,

    Someone asked an interesting question upthread along the lines of 'who benefits?', or to put it more crudely, 'where's the money?'.

    Now, I'll admit I haven't been through the numbers with a fine tooth comb, but the take home message I get from them is that all the options are, in a cost sense, more or less the same, if all the relevant factors are taken into account, and the same sums are applied to each of the options (to put it in a very rough sense).

    Let's assume that's correct, and that I haven't missed something vital somewhere (I haven't seen anyone seriously challenge the figures on here). Therefore, National must know that they've had to do some extremely creative accounting to make the overground option look like it costs a lot less - I find it very, very hard to believe they wouldn't.

    So why are they doing it? Who benefits? Where's the money?

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

  • Sacha,

    Explanation about cost from Q&A section of Joyce's media release which I don't think any of us have linked to so far:

    How will the construction of the Waterview Connection be funded?

    A lower cost option of between $1 billion and $1.4 billion can be funded through the NLTF. The NZTA Board makes decisions on funding from the NLTF.

    Where is this extra money coming from?

    The revised Government Policy Statement on Land Transport Funding (GPS) commits almost $1 billion in additional investment into the State highway network over the next three years. Over the next 10 years, $10.7 billion will now be invested in the state highway network.

    This additional investment means that a lower cost Waterview option is affordable to be funded through the NLTF.

    How can this option be so much cheaper?

    The main reasons why the alternative options are cheaper are that construction costs for building alternative options will be cheaper than for building twin tunnels and the more affordable options are also within New Zealand’s current expertise and available equipment. Total costs will also be lower as no debt financing will be required.

    Ak • Since May 2008 • 19735 posts Report Reply

  • Sofie Bribiesca,

    (I haven't seen anyone seriously challenge the figures on here)

    Joyce has been called to account for his fudging of the costs in Parliament but that was somewhere in Question time last week I think. There are figures quoted further up thanks to Joshua. I have no answer as to the accurateness of them but seems accepted. Who benefits? Well I suspect Fulton Hogan for a start.Roading projects contractors up against tunnel boring contactors.

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

  • Sacha,

    Sofie, I kind of alluded to that earlier.

    Discussion about Waterview costing on frogblog.

    Ak • Since May 2008 • 19735 posts Report Reply

  • Sofie Bribiesca,

    Yes sorry Sacha. I was just jogging Rich Locks info request he was asking further up. :) My memory, my bad brain. :)

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

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