Time to wake up from the multi-billion-dollar fantasy of Auckland's light rail

Friday, 17 February 2023

The City Rail Link will cost $1 billion more than anticipated.

Sam Stubbs is the managing director of Kiwisaver fund Simplicity and a regular commentator on financial and economic issues.

OPINION: Last year I wrote that the proposed $14 billion Auckland Light Rail project was a Harry Potter fantasy.

Why? Because politicians love the allure of trains. Our new Prime Minister has confirmed it, with the light rail link surviving the Government’s policy cull, at least as it was announced earlier this month.

For voters, trains are an easy sell too. They’re the aspirational form of public transport.

And because new rail projects take so long to build, voters get to pretend that someone else will pay for it.

* Auckland's light rail: Under Queen St and over Mt Eden, the Super Fund's tunneling, or flying, tram

* Auckland City Rail Link: More major works announced, minimised disruptions promised

Retiring Phil Goff says it would be a 'tragedy for the city' if a change of government in 2023 scuttled plans for light rail, currently priced at $15 billion.

* Cost of Auckland's City Rail Link could blow out by another $600 million

But let’s look at the numbers, especially in the light of the recent floods and cyclone, which highlight that we are going to face vast bills to fix, never mind future-proof, vital infrastructure across the North Island.

First let’s look at the train line we’re already building, the Central Rail Link (CRL). It’s 3.5 kilometres long, with a current cost estimate of $4.4 billion. That’s $1.25b per kilometre, making it the second most expensive rail line in the world, ever. Only New York has spent more. It’s not a competition anyone wants to win.

But it gets worse. $4.4b is a 2019 estimate, with a clear warning recently that it will rise.

That could mean a final bill of more than $5b, compared to the original 2010 estimate of $2.3b.

For context, the 2010 original estimate for CRL was $2.3b.

Let this be a lesson for us all. The real bill for a single light rail line is likely to be much higher than the $14b “estimate” the politicians currently use to justify the project.

An artist’s impression of Auckland’s proposed light rail link. Politicians love such projects, but Sam Stubbs says the cost is enormous.

Why could they get it wrong a second time?

Once again, let’s look at the maths. The line is estimated at 24km, 12 underground and 12 overground.

So assuming the current cost of the central rail link of $1.25b per km, that’s at least $15b spent on the underground section, before we get to the other 12km overground.

If we repeat the Central Rail Link experience, and double the original estimate, the proposed line could cost over $28 billion.

Non-Aucklanders should be very concerned, because the Light Rail Establishment Unit clearly states “the Crown is expected to fund most of the capital costs of the project”, meaning all taxpayers will pay for most of it.

After speaking with transportation experts, overseas and in New Zealand, it is clear to me that the current light rail proposal has some very basic flaws.

The principal one is that in trying to please everyone, it will disappoint them all. It is simply trying to achieve too much.

For example, it wants to efficiently connect passengers from central Auckland to the airport.

But the proposed 18 stops will make that journey frustratingly slow. Anyone who has taken the Piccadilly line in London (also 18 stops to the airport) knows how that feels.

It’s 18 stops because the line also wants to serve as a local metro, with lots of places for people to get off and on through South Auckland.

But a train line will only serve a part of South Auckland. Everyone else will still need to connect via buses, which will likely remain underfunded for the many years it will take the rail line to be completed.

A third problem, as we are seeing with the Central Rail Link, is that underground tunnels and stations are extremely expensive to build and maintain.

And the fourth problem is that the underground Auckland Central Station (with only four platforms) will be a choke point for three rail lines at rush hour.

As impressive as it looks, the station is just too small. We will have to pay a huge additional price to enlarge it.

Is there a better way?

Yes, and it’s cheaper, faster, easier, and leaves billions for the new infrastructure we will surely need.

When done well, dedicated busways really work. The key infrastructure required – roads – are usually delivered in New Zealand on time and on budget, because we do them often.

Auckland bus drivers are on strike and will not work in early hours of the first shift on Tuesday, Wednesday and Thursday.

A dedicated bus network could be expanded much further, in a much shorter time, and at a much lower cost, than a train based solution.

Modern electric buses are both more pleasant (i.e quiet), and a much better environmental solution. They cost approximately $800,000 each.

So $650m would replace every public bus in Auckland with a new, more pleasant, quieter, electric equivalent.

Auckland Transport trials show that every electric bus saves $10,900 in operational costs and 160 tonnes of carbon dioxide, every year.

Simplicity managing director Sam Stubbs sees a role for Kiwisaver funds like his to disrupt markets and improve competition.

An all-electric bus fleet would prevent 128,000 tonnes of carbon from going into the atmosphere, and save $8.7m in operational costs, every year.

Yet under current planning, we will only get to a zero-emission bus fleet in Auckland by 2040, and will still be buying brand new diesel buses for the next three years.

In 2021 the world had 425,000 electric buses operating. New Zealand had 19. Go figure.

The reason there is so much transport poverty in South Auckland is precisely that buses have not been properly funded. A new rail line is likely to extend this horrible reality for decades.

Sadly, misinformation plagues the current public transport debate in Auckland.

For example, the light rail proposal, as presented by planners and politicians, is justified because “the roads and bus lanes are full” and “buses can’t park or turn around in Central Auckland”.

Anyone driving past Auckland’s northern busway can see it is hugely under-utilised. It’s “full” because we need more car parks at the bus stops to increase capacity. That is an easy and relatively cheap fix.

And if we can park thousands of cars on the Auckland wharves, we can certainly park and turn around dozens of buses on those same wharves.

Spending a small fraction of the $14 billion on expanding Auckland’s cycleways is a better choice too. Electric bikes have transformed this form of transport, yet our cycleways are too few and far between.

We could do all this, and still have plenty of change from $14 billion for more flood protection, or hospitals and schools, across all of New Zealand.

Our politicians do have to choose between trains, drains and automobiles. They can’t fund them all.

This article has been amended to correct the reference to the length of the Central Rail Link. It is 3.45km, not 4km as originally stated. The stated cost-per-km of the line has also been amended accordingly. Article corrected at 4pm on February 20, 2023.