Mayor Could Have Derailed the City Rail Link

Pays to Check before announcing something

 

I believe it was around 12 hours before the cold water got poured onto the Mayor after he announced a $250 million sweetener to kick-start the City Rail Link. While I mentioned in my “$250m for CRL Still Has Hurdles” post the hoops that $250 million CAPEX budget line has to go through – at Council level before it becomes reality, I seemed to have forgotten one other hurdle. Our Central Government (as rather expected though) was that other hurdle to the sweetener.

 

From the NZ Herald

$250m fast-track offer derailed

By Bernard Orsman 5:30 AM Tuesday Feb 11, 2014

Mayor’s proposal to kick-start billion-dollar City Rail Link four years early fails to impress Prime Minister.

Prime Minister John Key has rebuffed a $250 million offer from Auckland Mayor Len Brown to kick-start the $2.86 billion City Rail Link in 2016, saying the project is on track to begin construction in 2020.

The two leaders met in Auckland last week where Mr Key told the mayor the Government was still committed to the rail project, but its preferred timetable was to start in 2020 with a review in 2017 to see if that date could be brought forward.

Mr Brown had written to Mr Key saying his council would pay for an early “works programme” to get the project started at Britomart and under much of Albert St, partly driven by Precinct Properties wanting to start rebuilding the Downtown Shopping Centre next year. The offer included $250 million of the city’s money for work under the Downtown centre and up Albert St and a Government commitment to pay for half of the project from 2020.

Source: http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11199627

 

That was expected from the Prime Minister so no surprises there. The targets of 25% growth in CBD employment and 20 million rail passengers (or 8% growth year on year) for the CRL to be started in 2017 (the date I am forecasting it will start) are still there and still achievable (without sacrificing the rest of Auckland’s economics (I’ll be writing a post on real estate after this)). That said I did pick this also up from the same Herald article:

City falling short of Key’s targets

Auckland is falling short of rail and employment growth targets set by Prime Minister John Key last year to make an early start on the rail link, says the Ministry of Transport.

Mr Key said the Government would consider an early start if city centre employment increased by 25 per cent and rail patronage hit 20 million trips well before 2020.

Yesterday, the ministry published the first six-monthly report of these targets showing employment numbers have risen 2.1 per cent, or 2030 employees.

The report said there were 10.3 million rail trips in the year to the end of last October, compared with 10.2 million trips the previous year.

The thresholds were “very unlikely to be met before 2020”.

Electric trains from this year would boost patronage but it would be about 2024 before it hit 20 million.

 

Employment figures should get a boost in the CBD area as I believe a few large construction projects are coming through the pipeline. What could derail that though is the employment growth moving out to the Metropolitan Centres for whatever reason. I will be watching if that kind of trend (moving away from the CBD and towards the Metropolitan Centres) starts as the Council could get spooked and dump everything back into the CBD at the high detriment of everyone else in Auckland so the CBD figures can get to 25%.

As for patronage that was a 1% increase. WELL SHORT of the 8% required which means per Auckland Transport the growth target for current year is now 15% in order to maintain the 8% per year, year on year to get the CRL brought forward. Very rough math tells me that a 1.545 million increase will be needed this year alone to get things back on track. It can happen especially as the EMU’s come on stream in April but it could be further helped by electrifying Pukekohe as fast as possible and getting the Manukau South Rail Link built by the end of this year. The South Link (allowing 20 minute services (from 6am until 11pm) from Pukekohe/Papakura direct to Manukau with no transfers at Puhinui) I theorise would deliver on average 6,750 passengers a day – seven days a week (as would be strong off-peak demand as well). Yearly (363 days) that could mean an extra 2.45 million rail passenger trips thanks to that link. And to be honest I believe I am being conservative with the theoretical figures too. What would give weight behind the patronage estimate for the South Link is the fact we have MIT and AUT campuses coming on stream with (5,000 and 4,500 students respectively), the development of residential, retail and office complexes in Manukau, the courts, Rainbows End, the mall, and the area acting as an interchange for airport and Botany bus connections.

So 2.45 million extra annual rail trips a year down at the southern end of the network does give a nice boost towards the 20 million trips needed for the City Rail Link.

Workings:

  • 132 passengers per train average on each 20 minute service (this allows for peaks and troughs through out the day and year) that runs from 6am until 11pm seven days a week (EMU holds 375)
  • 397 passengers an hour average
  • 6,750 passengers a day (the South Link would attract strong off peak and weekend demand)
  • 2,450,250 passengers a year (363 days as the network is closed Good Friday and Christmas Day)
  • Remember Manukau gets surges at Christmas, Easter, June-August with our winters and soon in March with the two tertiary campuses are at full strength). The troughs are January-February and November

 

I also see in the main Herald Editorial that the Mayor could have very well shot from the hip with his $250m apparent sweetener.

While the Editorial makes a gaffe about the route (it has been decided and locked in) it has concluded (in a round about way) that the Mayor would have been wise to go through the respective Council Committees and the Governing Body first before making such a presumption on the CAPEX line.

The votes would have been around the 11-10 mark (or even 12-9) by the time the offer got to the Governing Body. But with the vote onside it would have given the Mayor more fire power if the Prime Minister were to again rebuff him on the offer. However, the Mayor did things in reverse and the Prime Minister poured cold water on to the idea some 12 hours later effectively killing it off this side of the elections. There is no point in my eyes now sending the appropriation request for $250m to the Finance and Budget Committees unless Labour come to power or National changes their mind. That said the $250m that went on offer could be spent on the following if the Mayor is so keen to spend it:

  • $118 million on extending the electrification to Pukekohe from Papakura. This includes new stations at Paerata and Drury
  • $4 million on the Manukau Rail South Link
  • Maybe seven more EMU’s
  • Whatever is left over to grade separate as many rail crossings in Auckland as possible

 

My final remarks on all this?

Calling David Cunliffee! If you were serious about Auckland you would at 8:30 tomorrow morning stand outside Britomart and re-announce your City Rail Link policy……..