Don Brash who, as former Governor of the Reserve Bank, knows what he’s talking about when it comes to making an economic analysis of the future cost to Auckland ratepayers of subsidising the CRL, has this to say. It doesn’t make pretty reading.
The news in today’s Herald (1 December) that the extra revenue from the additional passengers to be expected following the completion of the City Rail Link, at $21 million per annum, will not even cover the operating costs of the Link (projected to be $30 million), let alone the $75 million of interest on the debt and the $21 million depreciation charge, just shows what an utterly crazy scheme the City Rail Link is.
In other words, the CRL needs an annual subsidy of $105 million – or five times the expected extra revenue arising from the Link – even on the optimistic assumption that all the projections turn out to be correct.
And as Bryan Leyland points out in his letter to the Herald (also today), a study of 44 urban rail projects over recent years shows an average cost overrun of 45%, and passenger growth of just half that projected. Can anybody seriously claim that the CRL will be any better, moving through some of the most difficult rock structures ever attempted?
If this project goes ahead, Aucklanders will live to bitterly regret it. Even assuming the situation is no worse than now projected, a subsidy of $105 million annually, spread across, say, 2 million Aucklanders, amounts to an annual subsidy of over $50 for every man, woman and child in Auckland. And all for the benefit of the small proportion of Aucklanders who come into the CBD every day.
If costs escalate as they have done on virtually every other urban rail project in the world, and Auckland’s population grows to only, say, 1.8 million, it is not hard to see a family of four paying $300 a year in subsidy just so that Len Brown doesn’t have to admit that his dream is in reality a nightmare for Aucklanders.
Yes, I know that it is assumed that "government" (that is, other taxpayers) will pick up a small part of the necessary subsidy, but let's face it: much of the subsidy paid by "government" will also come out of the pocket of Aucklanders. And it is not at all clear why other New Zealanders should subsidise urban transport in central Auckland in any event.
Secondly there is the consequence for transport of money being sucked out of maintenance and renewal budgets to be gobbled by the voracious CRL monster. Auckland Transport (AT) has calculated that over the life of the Long Term Plan there will be more than a billion dollars of deferred maintenance. This means a dramatic increase in roads in a poor or very poor condition. Hence the ‘shortfall’ in funding that our NightMayor Brown needs from tolling to try and plug that particular gaping hole.
The other lost opportunity, and the cost associated with it, is the loss of NZTA transport subsidies. AT ekes out its budget by undertaking roading projects that attract an NZTA subsidy of 50%. In this way the nation pays its fair share of the cost of the economic benefits of Auckland to the national economy. No road improvements, no subsidy, more for the hard-pressed ratepayer to find as the Mayor goes it alone.
Already the CRL has brought nearly all other transport projects to a virtual standstill. This includes deferral of the bus network plan that could have created a public transport network that really worked for all Aucklanders at a fraction of the cost of the CRL. I emphasise all because the CRL is for the benefit solely of a few Westies who want to get into the city centre a bit quicker. Cowgirl Hulse is very much Brown ‘lite’.
No matter what happens from here on Brown has bankrupted the city. Contracts are being let, properties purchased and debt increased to such an extent that any new mayor can only inherit a poisoned chalice. It will need a financial wizard to get us out of the mess created by this philandering, profligate, idiot of a NightMayor and his cowgirl sidekick.