Odds Change For CBD Link


Even the most optimistic betting person would have to admit the odds have worsened for Auckland getting the CBD rail link when it was expected.

The government seems to be scrambling wildly to find money to pay for Christchurch and because the quake’s effect on Christchurch business will also dent an already fragile economy.

Where do you start? @@ThomasMeadia

Finance Minister Bill English seems to be eyeing up any piggy bank he can plunder - saying yesterday he is not ruling out anything including cuts to Working for Families payments and interest free student loans.

English had already warned pre-quake that this year’s budget would be extremely tight.

He was never a fan of Auckland’s rail projects and is now warning Auckland’s infrastructure projects could get pushed back. Let’s hope that includes the Puhoi highway, not just rail. But  there is also talk of the Waterview tunne’s rushed timetable getting delayed

Yesterday, Auckland’s Mayor gave a speech in Christchurch saying Auckland would do anything to help.

That opens up the path for the Government to say, thanks for the offer, we’ll take it up and delay the rail projects a bit longer.

The important thing at this stage is for the Government to signal it accepts the need for a CBD link - one object of which is to revitalise Auckland’s CBD.And it locks in a timeframe.

If the project is delayed, that is highly unfortunate but one that is hard to argue.

But it needs to not then get relegated to sit on a shelf until there is a better time some way in the future.

The quake must be a genuine excuse, not a convenient out for a government which is not a big fan of Len’s rail projects.




  1. Patrick R says:

    It will be used as an excuse to push the government’s existing agenda across the board, SOE sales included.

    However there should be changes to their infrastructure programme, and not just because of the quake, and they should be based on real economics. The low BCR Puford road, amoung others, should be ditched. But not the CBDRL which, we know, is vital for improving AK’s economic performance and contribution to the country’s economy.

  2. Cam says:

    Personally i don’t mind the idea of an additional levy to help CHCH. I’m happy to pay an extra $10 or so a week for a couple of years to contribute to the rebuild. More than happy to do that. Although i think this government would find this idea unpalatable.

    Seems a better solution than a slash and burn excercise that will put everything back by years.

    Interesting they have targeted ideological bugbears like WFF and interest free student loans as the primary sources. Personally I don’t think the government was ever going to commit to the CBD rail loop, English and Joyce had made that pretty clear.

  3. Matt L says:

    Have have been looking for any way possible to avoid funding it and will definitely take this opportunity it just depends on what else they cut. In a funny way this was the most positive English has been about the CBD tunnel as previously he has ignored it completely so him saying it will be delayed means he was actually starting to understand that it is needed.

    I think they will delay it just enough that it becomes a funding issue in about 6 -10 years time when they aren’t in the government as it means they don’t have to deal with it and is something they can then attack a future government on.

    WFF and interest free student loans should be cut/adjusted anyway so at least now there will be an easy path for it.

  4. Matt says:

    It’s this kind of attitude that shows how completely useless the current lot are as economic managers. Auckland’s going to be the core of any taxation-like funding to rebuild Christchurch, so it’s in the best interests of Christchurch to ensure any key infrastructure for Auckland is constructed as quickly as possible to allow the economy to perform as best possible.
    Instead we’re being given the signal that Auckland will have to sprawl, with the associated loss of economic efficiency, because we’re under the thumb of some shortsighted hicks who cannot see the bigger picture.

  5. Patrick R says:

    Matt I’m beginning to think they’re going to play a little smarter than that, Key’s polling will be showing that AK wants this and he loves being loved… I’m expecting a subtler thing than out and out refusal, more cunning; more delay than rejection…. Which should give the AK council the space to get on and protect the route and plan and watch the price of oil go up and up….

  6. Matt says:

    Patrick, this one’s being driven by Bill, not by John, and Bill’s attitude towards Auckland is absolutely that of a Mainland farmer - bloody JAFAs are a drain on the country. He’ll cancel anything that’s not a road, and delay many things that are. It’s telling that the suggestion in today’s Herald is that the only project that’s unlikely to get delayed is Waterview, despite its costs heading toward the $2b mark, because it’s “vital” to improving Auckland’s economic performance. Or some such nonsense.

  7. urban local says:

    Funny that Bill lives in Wellington (not Dipton) and is not a farmer anymore. But maybe it is a case that you can take Bill out of Dipton but …

  8. signalhead says:

    Mainland? Is that meant to mean South Island?

  9. Jon Reeves says:

    Saw this coming. I look forward to the bulk of the Waikato Expressway being held up - another RONs with very poor BCR’s.

  10. damian says:

    While I have mixed views about the CBD rail link, delaying this project for a few years is the right thing to do.

    Long term will still need to press on with it, but for now the money should be spent elsewhere.

    So I am in favour of the rail link being delayed.

  11. Matt L says:

    The thing is it doesn’t have to be delayed at all, the business case suggested that from now till 2014/5 be spent getting the NOR and designation done which in the grand scheme of things won’t cost that much, it is something the council can do without government funding.

    Page 111 suggests that the first serious costs would come in 2014 and 2015 when property purchases would need to start and would be about $230m over two years. Large construction costs wouldn’t start in till 2015 at about $150m and would peak in 2017 at just over $500m. By that time Christchurch would be rebuilt so the money diverted from current plans could go to the tunnel. Hopefully by then the government will be more receptive to rail, especially if we endure a few years of expensive petrol.

  12. Brent C says:

    All this money saving we need to do should be an excuse to have these additional options such as Waikato Trains, Pukerua Bay Bypass and Warkworth Bypass. They will be much cheaper and provide just as much benefits.

    I cannot see how delaying the vision of a City will have any benefit. We still need Auckland to lead from the front and keep the country economy moving ahead. Its the pointless money wasting project we need to remove.

  13. Jon Reeves says:

    Damian - good to know you argee with delaying the CBD rail connector.

    Can you do us a favour and tell us why specifically?

  14. damian says:

    The rail link will provide a long term benefit in years to come. However delaying the project a year or two will not have a significant impact on this benefit.

    I would rather spend what money we do have on the CHCH rebuild rather than borrowing it or selling assets to fund both.

  15. Jeremy says:

    I think the rebuild of ChCh is affordable, with the tax take above forecast this year and with the total cost of $20b being 7% of GDP with the Govt contribution of around $5b of that over 5 years. So with the CBDRT being longterm project interms of planning and construction and with the growing population in Auckland I think Aucklanders need see some value for money in their tax dollars.

  16. damian says:

    Most people don’t see value for money in rail though. They should but they dont

  17. Patrick R says:

    Jeremy that 20billion is mostly already covered by ECQ, offshore re-insurance, LAPP and other sources, it doesn’t not have to come form the gov’s operating account.

    The quake is a stalking horse for agendas already on the gov’s programme.

    And Damian it seems you’re rolling over a bit easily on this issue. This forum is a place to argue for what you believe in not to list what you fear you may have to surrender; ‘most people’ can be addressed and persuaded.

  18. Patrick R says:

    sorry about the dyslexia above ‘form’ should be ‘from’

  19. Matt says:

    Patrick, there’s going to be billions of dollars in government infrastructure that’s not insured, though. State highways, hospitals, police and fire stations… The Crown doesn’t take out insurance on infrastructure, as a general rule, it just self-insures, and that cost is borne by taxpayers when the chickens come home to roost.

  20. Eric says:

    Matt and Brent, please say you did not mean what I think you meant in that we should invest in Auckland to help Christchurch. Now you say that Jafas aren’t a drain on this country then say as a Jafa yourself that we should still fund expensive infrastructure projects in Auckland instead of putting that money into rebuilding Christchurch’s. Aucklands doing fine as it is for the time being and simply building it up economically simply so we can tax it more will take much longer and cost more then simply investing the original money straight into Christchurch. The fact is that this is going to cost this country billions and the government is going to be looking for all sorts of places for money and I don’t think roads are out of the firing line either (or at least I hope they’re not).

  21. Matt says:

    Eric, we absolutely meant it. If English and Key want to keep on calling Auckland an “anchor” and a “handbrake” on the national economy, the best way to pay for Christchurch’s recovery is to get Auckland working properly so there’s more tax revenue available.

    Plus, we only want them to fund the tunnel, which won’t require serious money for several years in any case. To say it’s too expensive because we have to pay for Christchurch is just using the quake as a convenient excuse to justify something they’ve always wanted to do.
    They’re welcome to take funding away from all their precious roading projects (please, oh please, kill Puford dead!).

    That you call us Jafas betrays your prejudices.

  22. Matt L says:

    Eric - Yes investing in Auckland is actually a good way to help pay for Christchurch, that doesn’t mean we don’t put money in there but that also invest it in the area that has the greatest economic growth potential which is Auckland. A 1% increase in economic growth in Auckland will have a much larger effect on the overall economy than a 1% increase anywhere else.

    Also in business there are generally two ways you increase profits, one is you cut spending and the other is you sell more stuff. The first might get more money quicker in the short term but long term it can actually have an adverse effect. I would rather we did the latter by investing smarter i.e. why do we need a $2b road from Puhoi to Wellsford when we can get 90% of the benefits for about $300m

  23. Eric says:

    But by the time we start seeing any benefits from the loop it will be ten-years down the road and it will be even longer before we get a return from the loop itself. So by the time we get increased tax revenue which will supposedly go to CHCH, it will already be mostly, if not fully rebuilt.

  24. Matt says:

    Eric, indeed. However, saying there’s no money for Auckland’s tunnel is saying “It’s OK for Auckland to remain an economic under-performer” (which it’s not, but I like using the allegations to bash a crappy government full of economic mental-deficients) because we don’t care about how all this expensive work is paid for.

  25. richard says:

    Matt I don’t think the Government self insures its assets, they are uninsured.

    There is a subtle difference, if you self insure then every year you invest a sum similar to a premium to cover losses. If you are uninsured you put no sum aside and you have no insurance or savings to cover losses.

  26. Matt L says:

    Eric - Much of the funding for various things around the country, infrastructure or not is coming by way of loans. The money to rebuild CHCH is no different and those loans will need a long term funding stream.

  27. Jon C says:

    3News’ Duncan Garner claimed today the Government never wanted the CBD link so this out suits them fine.

  28. Matt says:

    Richard, yes, that’s true. Good point. I’ve only ever seen the term “self-insurance” used to describe the government’s decisions, or “opt out”.
    It’s quite rude, actually, that they put a Fire Service Levy on insurance to fund the Fire Service, and then not only do they not contribute to it themselves they take some of the FSL for the Consolidated Fund!


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