Steven Joyce responded to my article in the Sunday Star Times last week, as well as Rod Oram’s:
Rod Oram’s second opinion piece on Auckland transport issues contains a further significant factual error, which results in him again overstating his case.
It is simply incorrect to say that the proposed CBD rail loop and the Puhoi to Wellsford Road of National Significance have different benefit cost ratios (BCRs). If you use the same calculation – that is the standard transport BC including wider economic benefits – then the BCR for both projects as the same 1.1.
The associated opinion piece by Cameron Pitches also contains factual errors. It is incorrect to say that the government has not committed any new money to rail capital projects in Auckland. In fact, we have provided $581 million in new funding and loans to support Auckland metro rail, as well as reinvesting $50m to complete Project Dart and a new $500m appropriation for the Auckland Electrification Project.
The previous government planned to fund these projects through an additional 9.5 cent regional fuel tax.
Of course, Minister Joyce is making a few factual errors of his own here.
Starting with the regional fuel tax, this was never going to be 9.5c per litre. The ARC press release here summarised how the fuel tax was to be applied:
As a result of consultation, it is proposed that the fuel tax commences on 1 July 2009, and is phased in over three years at 1 cent per litre on petrol and diesel from 1 July 2009, rising to 3 cents per litre on 1 July 2010, and 5 cents per litre from 1 July 2011.
So initially the tax was going to be 1 cent per litre, rising to 3 and then 5c. The additional 4.5c was to be at central Government’s discretion.
In the end, government repealed the regional fuel tax and replaced it with a nationwide increase in excise tax last October of 3c per litre.
As to the Minister’s contention that the BCRs are equal for the Holiday Highway and the CBD rail taunnel, Josh Arbury has an in-depth analysis here, which concludes:
In short, while the CBD tunnel is definitely the more expensive project, its benefits – no matter which way you measure them, are enormously greater than the benefits of the Puhoi-Wellsford road. Under none of the scenarios for including wider economic benefits does the holiday highway make economic sense, just as under all the scenarios we see the CBD Rail Tunnel making economic sense.
There are other matters that make me think Puhoi-Wellsford’s cost benefit ratio is enormously inflated (like the unrealistic time savings and the fact that the effects of tolling haven’t been considered), but even with the most generous interpretation of that project’s economic benefits, it simply can’t compare to the CBD Rail Tunnel on all measures.