Airport MAXX: Pushing the Envelope
Owen McShane is right to financially scrutinise the Campaign for Better Transport's "Airport Maxx" rail link proposal to Britomart - as all transport projects should be. However he misses a few important points and a number of broader economic factors need to be considered than just the cost of capital.
Transport investment choices need to be considered in more depth than a check of the numbers on the back of an envelope in order to produce a resultthat is socially, environmentally and economically sustainable in the long term.
Implicit in Mr McShane's analysis is that Airport Maxx should not go ahead, as there is sufficient capacity in the existing roading system to meet demand. To anyone that has attempted to cross the existing Manukau Bridge and associated motorway network at peak time, this is not an acceptable assumption.
Which is why Transit, the Government funded highway planning agency, has announced its intention to build a duplicate Manukau Harbour bridge at a cost of around $100m, including a new junction at Onehunga. Additional expense will be incurred in widening the motorway to the airport by a lane each way. If the budget blows out for this roading project by 81% as it did for the Albany - Puhoi motorway extension, then the conservative estimate of $460m for the Airport Maxx proposal, including electrification, stations and 17 high speed trains, could well be exceeded.
A rail link cannot be considered by Transit. In fact there is no Government agency responsible for the planning of any other transport infrastructure apart from roading, and this won't change under the new Land Transport Management Bill either.
Turning to the broader economic factors, Aucklanders spend over $100m a month importing cars, parts and accessories, and a similar amount on petroleum imports, largely to facilitate transport to and from work and education. For our economy to be successful, we need to earn more foreign currency than we consume. But since most of this $2.4bn annual transport expenditure ends up overseas, we are behind in the race for foreign currency before we even start. Any transport project that can reduce this hemorrhaging of money overseas must be advantageous to the economy. Theoperational expenditure required for Airport Maxx has the potential to remain almost entirely in New Zealand.
Environmentally, since 1990 the transport sector has been responsible for a 59% increase in CO2 emissions. As a signatory to the Kyoto Protocol, the Government must somehow endeavour to get greenhouse emissions to 5% below 1990 levels by 2012. It won't achieve this by allowing the number of cars to double every 20 years as happens currently. The Government will need to invest in projects that have the potential to reduce the number of cars per family in Auckland. Airport Maxx will fulfil this objective as it serves the commuting public along the corridor as well as airport users.
Airport Maxx also has another significant infrastructure spinoff. The principal driver behind the mooted commercialisation of Whenuapai Airport is that travel from the North Shore and Waitakere to Auckland Airport is both unpredictable and expensive. With an extension of the rail network betweenOnehunga and Avondale, both of these areas of Auckland would be well served by Airport Maxx, negating the need for the duplication of expensive airport facilities.
As a first step, right now the ARC is investigating at a high level the issues around the reopening of the Penrose - Onehunga branch line. The ARC is being responsible in doing this. It is ridiculous that such a potentially high capacity transport corridor can remain completely unused, especially as it forms part of the Auckland rail network that the Government paid $81m for over a year ago now.
By now it should now be apparent that there are a number of important factors that are overlooked in a rudimentary cost of capital analysis. Perhaps it is time we pushed the envelope, rather than doodled within its constraints.