What’s In CBD Link Business Case


The CBD rail loop is the secret to “unlock Auckland’s strategic growth potential in many ways.”

That’s the strong message in the much-anticipated CBD rail loop business case.

It argues there’s a strong prima facie case for the link to be constructed and operational by mid- 2021 as a viable and effective transport project with substantial benefits for Auckland and will help our competitiveness as a nation.

It’s essential to support the ongoing development of the CBD as New Zealand’s most productive business area.

The Auckland CBD has the highest value-added per employee of any area in New Zealand, which implies that opening up the already congested transport links into the city will help New Zealand’s external competitiveness.

“Just as importantly, transport links are identified as opening internal opportunities up for a wider range of people across social and cultural classes by improving access to key economic areas.

“Therefore, delivering the CBD Rail Link early (by 2021) creates a range of opportunities both for improving Auckland’s external competitiveness and for improving access to internal markets to a wider range of the region‟s population.”

The report points out that the World Economic Forum established the correlation between infrastructure and competitiveness, citing extensive and efficient infrastructure as one of its twelve pillars of competitiveness.

“Countries with well developed infrastructure score more highly on competitiveness and therefore are more attractive to physical, financial and human capital. Because of the distance of New Zealand from its major trading partners and markets, transport within the country needs to be as internally efficient as possible to help counteract the issues associated with distance.”

“The massive opportunity that exists for Auckland is to unlock the existing capacity within the rail network to meet a significant proportion of the CBDs current and future transport needs.

“The rail network provides complementary capacity to support the road network and recent investments there, helping to improve journey times and reliability – therefore helping to optimise the regions transport network.

“There is also the opportunity to capitalise on infrastructure investment as a catalyst for growth in both economic competitiveness and productivity – the World Economic Forums Global Competitiveness Report shows a positive correlation between well developed infrastructure and international competitiveness.

The report says it’s the secret to unlocking Auckland’s strategic growth potential in many ways:
  • Support agglomeration in the CBD areas;
  • Stimulate additional employment growth in the CBD where higher productivity (both in levels and growth potential) is already being achieved compared to elsewhere in New Zealand;
  • Provide a catalyst for land use intensification and regeneration of CBD areas, thus inducing capital investment in development of the city;
  • Support higher density development at suburban stations, which provides the region with environmental and land use benefits.

Bringing the project forward so that it is built by 2021 would enable Auckland to capitalise on the advantages that the project brings which is lists as being to:

  • Provide alternative complementary infrastructure to roads, thus broadening the region’s transport infrastructure base. The support provided by the CBD Rail Link to relief of pressure on the road network which indicates that 51% of the benefits from the CBD Rail Link are decongestion benefits that flow to road users.
  • Make the best use of existing infrastructure by not only opening up capacity that exists in the rail network, but also by providing for ongoing development of the bus network
  • Support the delivery of the region’s land use strategies for densification and urbanisation around key centres. Bringing the rail link forward helps to cement the objectives for land use and supports the ongoing development of the CBD as New Zealand’s most productive business area.

Auckland's potential can be unlocked with the CBD loop


The report says that, considering the multi-layered benefits that will be generated by the Rail Link Project, the availability of existing funding vehicles, and the risk/reward of instituting a new robust funding vehicle that aligns well with the geographically targeted benefits generated, the following cost sharing approach and funding strategy is recommended:

  • New Auckland Super City share of 40%, with this share divided approximately equally between future general rates revenue and either a targeted rate increase within the CBD plus Newton or tax increment revenue generated by the CBD plus the Newton Station Area. From preliminary calculations, the new Auckland Super City share will require a 1% allocation of its general rates revenue plus a 10% to 15% targeted rates revenue increase for the CBD and Newton Station Area or a 20% to 30% share of the future tax increment revenue collected from the Auckland CBD plus the Newton Station Area. The tax increment approach requires no tax increase, and that is its primary political advantage.
  • Central Government share of 60%
  • The size of the project may warrant consideration of private sector involvement in some role, whether through a private financing initiative or via a full public private partnership. The scope exists to involve the private sector for discrete parts of the project, for example, around the development of the stations and surrounding properties. This could also be done on a franchise arrangement where a development consortium buys in to gain access to a station portal in order to take advantage of the property development opportunities with new stations. The value of this approach can be seen through this project’s work on Transit Oriented Development and CBD regeneration, where the literature from the US suggests there is significant potential value locked up in property development around stations.

The proposed next steps for the CBD Rail Link Project are stated as:

  • Proceed with lodgement of the Notice of Requirement documentation, once it has been completed at the end of 2010, in order to protect the route and station locations;
  • Provide information for discussions between different levels of government in respect of funding arrangements for the project;
  • Begin preparation of a detailed Implementation Plan for the project in accordance with the Treasury Business Case Guidelines.

These activities need to be undertaken in parallel, in order that completion of the CBD Rail Link Project can be achieved by 2021.

Transport argument

  • The road network congestion in the AM peak, as measured by delay in minutes per kilometre, has increased from 0.59 minutes per kilometre in 2002 to 0.88 minutes per kilometre by 2009. This is indicative of the road network being over capacity at key points around state highway junctions and local road intersections at critical times.
  • On the rail network, the Britomart terminus is the most serious constraint, limiting the number of train paths into and out of the CBD. ARTAs post DART and electrification peak period electric train timetable consists of 20 trains per hour (tph) in and out of Britomart during Peak periods, comprised of 6 tph on each of the Southern, Western and Eastern routes, together with 2 tph from Onehunga. Thus by 2013, almost all of the useable train paths into and out of Britomart will be in use, providing virtually no room to add additional services in future.
  • The fortunes of the bus network are largely tied to the ongoing traffic conditions of the road network and the constraints imposed by the narrow streets with the CBD. Using a maximum desired lane capacity of 100 buses per hour for CBD streets, then the majority of key inner city routes reach capacity between now (2010) and 2020. This is based upon Option C PTIS routing and single lanes operating across most of the CBD. Without the CBD Rail Link, the CBD would require twin or triple bus lanes on both sides of the road on most corridors.
  • Therefore, the current transport links into the CBD act like a funnel, getting progressively narrower as they approach the CBD, making the CBD the most congested area in Auckland. Current systems are either already at capacity (road), or will be at capacity within the next 10 years – less than 5 years for the rail network and up to 10 years on one or two inner city bus routes (with the other bus routes at capacity before then). To reap the full economic benefits of the projected population and employment growth, the transport network requires significant investment and management.

Auckland is estimated to account for around 36% of New Zealand’s GDP and 32% of employment, with Auckland having a productivity premium over the rest of the country, and the Auckland CBD more so. Motu (2008) research compared the differences in value-added per worker across Auckland with the rest of New Zealand. The Auckland region has a 25% productivity premium over the rest of New Zealand, but the CBD value added per worker is 63% higher than the rest of the region, implying that the value added per worker in the CBD is more than double the New Zealand average.

There is lack of available space to provide for road network expansion.

Cost benefit:

The project is comfortably over a BCR of 1. Lower discount rates are modelled as the NZTA presently models its roads of national significance.

At 8% discount rate 3/5, 6% 4.7 and 4% 6.6.

The cost estimate ranges from $1.99bn to $2.38bn. This includes property costs of about $230m.

Britimart capacity

Maximum Capacity for EMUs provided by Post Electrification Signalling System Line Section Trains Per Hour (in each direction)

Papakura- Westfield 15

Manukau City- Wiri 15*

Westfield- Newmarket 20

Onehunga- Penrose (single track) 15 *

Swanson- Morningside 15

Morningside- Newmarket 20

Westfield- Britomart 20

Newmarket- Britomart 22

*Equivalent to 4 minute headways for following trains on single line

Post electrification, passenger services will be operated largely by electric multiple unit (EMU) trains (6 cars long on all routes except for 3 cars on the Onehunga line), with a planned seated plus standing capacity of 385 for a 3 car EMU and 770 for a 6 car.

Therefore ARTA’s proposed 20 tph service would provide an hourly carrying capacity of around 16,100- 16,200 passengers into Britomart, although the actual number of CBD passengers able to be transported by rail will in practice be determined by the number of passengers travelling to intermediate destinations such as Newmarket.

The current configuration of Britomart appears to provide adequate capacity into the CBD for rail passengers in the future; however, Britomart’s position on the northern periphery of the CBD effectively limits the catchment for CBD rail journeys to those passengers travelling to destinations within 400-500m distance of Britomart. The rail development plan provides for the current upgrading and capacity improvements to the existing Auckland rail network (these are in progress), enabling the delivery of more passengers. The addition of the CBD Rail Link would offer better exploitation of these improvements through penetration of the central and southern parts of the CBD, extending the service that can be provided for rail passengers. Through-routing at Britomart not only would allow for capacity utilisation, but also would afford better network optimisation from flexibility in services patterns and scheduling.


Cost and what’s involved

Watch Len Brown’s news conference

Len Brown -I want it in 7 years
Chinese interest in CBD loop

Loop funding row

Read the full case




  1. joust says:

    Lets build it

  2. rtc says:

    Puford scores 0.4, the rail link scores 6.6, both cost around 2.2. billion, and nevertheless Joyce funds the former…..

  3. Matt L says:

    With a BCR that good the government is not going to be happy, it is far better than a few of the RONS like P2W.

    We need to build it and get started on it tomorrow.

  4. joust says:

    the BCR is amazing. no-brainer really.

    the whole thing sounds amazing - certainly not the Auckland we’re used to. the CBD will be transformed.

  5. Andrew Stevenson says:

    Forgive my ignorance (and perhaps lack of reading ability in the mid-afternoon) but the higher the BCR the more benefits would be expected?

    The news agencies covering the story haven’t been clear on this.

  6. Jon R says:

    With a BCR like this it is obvious Steven Joyce and all the Govt get in behind and support an immediate start on the rail link tunnel.

  7. joust says:

    BCR means for every dollar spent on the projects capital costs, the city/economy/country can expect X dollars of benefit having built it. So 6.6 is a pretty healthy return.

  8. Andrew Stevenson says:

    Joust: Thank you. That’s what I assumed from the context but I appreciate the clarification.

    If I was National I would get in behind it now to help “win Auckland” and then after the election drag their feet and then claim it’s too costly. Plus they may help affect a change of mayor and council who would likely cease progress on it.

  9. Nick R says:

    In a nutshell a cost-benefit ratio of 3.5 means that if it costs $2 billion to build, there will be benefits equivalent to $7 billion over the evaluation timeframe (normally 20 years if I remember correctly).

    Do bear in mind that these benefits are moneterised, while it does includie direct financial benefits such as increased ticket sales, most are calculated by placing a dollar figure on non-financial benefits such as travel time savings etc.

  10. [...] scroll forward to late last week when the business case for the Auckland CBD rail link was launched. Commissioned by KiwiRail and ARTA, it was supplied by APB&B. Who? Oh APB&B, they’re [...]

  11. [...] In the case of Auckland, it could be argued that spending on the RWC has already crowded out the funds available for such things as the CBD rail loop – which, arguably, can mount a far stronger case for its lasting social and economic benefits. [...]


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