An economic analysis backing the move of the Port of Auckland to Northland has been panned as inadequate, poorly drafted, and full of padding.
Ports of Auckland. Photo: 123RF
The final report of a working party looking into the proposal was delivered to the government last week, giving its backing to a $10 billion move to Whangārei’s Northport, with the economic justification for the move contained in a report by advisory firm EY.
But Auckland’s port company has had the EY report put under the microscope by two economic consultancies – the New Zealand Institute of Economic Research (NZIER) and international firm Castalia.
Both studies said the EY report was short on numbers, made simplistic assumptions, and underestimated the costs of the plan while overestimating the benefits.
“The first and the most obvious point to make is that the report entitled ‘Economic Analysis of Upper North Island Supply Chain’ is nothing of the kind as it provides absolutely no information on how the supposed benefits are estimated,” the Castalia report said.
“The report is poorly drafted and contains almost no supporting evidence.”
Northport in Whangarei. Photo: 123RF
Castalia said the EY study appeared to underestimate the cost of shifting the Port of Auckland to Northland by up to $3bn, while it overstated the benefits to Auckland City from freeing up waterfront land, and seemed to ignore that a shift north would likely see importers and exporters in the region put their business through the Port of Tauranga.
The NZIER analysis said the EY study was full of padding and speculation.
“The report has failed to address the feasibility question with sufficient transparency to provide a credible basis for advice to ministers.”
It also noted that EY had been involved in a 2017 report on the future of the port, which concluded the Firth of Thames or Manukau Harbour were best options for relocation and ranked the Northport option lowly.
Head of the Upper North Island Supply Chain working group, Wayne Brown, said the counter-review by the Ports of Auckland was “rubbish” and about “job preservation”.
The report given to the government relied on much more than the one EY report, with the group consulting 80 organisations, he said.
And he disputed the suggestion that carbon emissions would be greatly increased, saying Northport was closer for ships to get to and would use more rail and less roading than Auckland.
Ports of Auckland management declined to be interviewed but it a statement said the reviews spoke for themselves.
“They [the reviews] show that there are major problems with the EY study and that the idea of moving Auckland’s port to Northland is seriously flawed,” a port spokesman said.
Regional Economic Development Minister Shane Jones marks the announcement of funding for the North Auckland Line
The New Zealand government’s decision to invest $94.8 million to improve the rail line between Swanson and Whangarei in Northland underlines the clear vision it has for rail in New Zealand.
Announcing the funding in September, Regional Economic Development Minister Shane Jones described rail as a crucial part of building a modern transport system, connecting people and regions, efficiently moving freight around the country and helping to take trucks off the roads.
However, he added, rail has been left to languish over the decades, receiving only a fraction of the investment needed to deliver an efficient and reliable network.
The North Auckland Line is a prime example of that. It is worn and prone to flooding, and the infrastructure will fall apart in the near future without proper maintenance. As a result, there are speed restrictions on many parts of the line, so trains have to travel slowly, and freight services are too easily stopped by weather events and derailments.
Tunnel 2, the one closest to Helensville, has already had steel ribs installed to ensure it stays safe in the short term. Without this work the North Auckland Line would have had to be closed within one or two years.
A long history
Rail has a long history in Northland. What became the North Auckland Line was built in sections from the 1870s, with the link between Helensville and Whangarei being built progressively between the 1880s and 1920s. The line north of Kauri (north of Whangarei) to Otiria (near Kawakawa) and the Dargaville branch line are currently mothballed.
The line now running between Swanson and Whangarei is approximately 181 km long and includes 13 tunnels, 88 bridges and 950 culverts. Used predominantly to transport freight, trains have carried logs and woodchips, china clay, dairy products, coal, cement, limestone, fertiliser, livestock, and general freight. Commuter services have never proved sustainable in the long term, and now run only between Auckland and Swanson.
In 2000 almost a million tonnes of freight a year was transported in the region by rail, marking the highest point of its popularity. With the move of Whangarei Port to Marsden Point in 2007, however, this dropped away significantly, and had fallen to 300,000 tonnes by 2008.
Other factors affecting usage include the poor condition of the rail line, resulting in slower trains and delays. Now, only 116,000 tonnes of freight is currently carried on the North Auckland Line a year.
KiwiRail runs one freight service to and from Whangarei each week day, carrying processed dairy products from Fonterra’s Kauri plant to MetroPort and on to Port of Tauranga; a small volume of high-value china clay between Whangarei and Metro- Port; and woodchip from Whangarei to Kawerau.
However, even this reduced tonnage is still equivalent to more than 8000 truck trips avoided each year. This means that if the line closed, Northland would see increased congestion, higher road maintenance costs, and higher transport emissions.
The investment announced by Minister Jones will allow us to offer more reliable and timely freight services and work to grow freight volumes, which will give Northland businesses/exporters more options to move their produce, and help take more trucks off the road.
Planned improvements
While this work is about maintaining what is already there, we are also looking at improvements to the line. Principal among them is lowering the existing tunnels so that hi-cube containers – which are an industry standard for export goods – can be carried on the line.
As part of the strengthening work on the tunnels, KiwiRail will be investigating what would be needed to lower the tunnels (to take hi-cube containers) in preparation for this work to be done later. For most of the tunnels, the works are expected to be relatively straightforward, but lowering Tunnel 2, which has been a problem almost from the day it opened, presents some challenging engineering problems to resolve.
The Ministry of Transport has completed the North Auckland Line Business Case for rail in Northland, and an Upper North Island Supply Chain Strategy study is underway which will focus on the respective roles, opportunities and options for Northport, Ports of Auckland and Port of Tauranga. An improved and extended North Auckland Line and Marsden Spur could play a key role in that, opening the way for freight to flow to and from Northport by rail.
KiwiRail has held a designation for a 20 km Marsden Point rail spur for several years, and we have investigated the design and potential construction methods for the link, as well as costs and timeframes. However, the government is yet to make a decision on a rail line to the port.
The entrance to Tunnel 2, the Makarau tunnel, north of Helensville – the tunnel is one of the longest on the North Auckland Line
Reinforcing ribs inside Tunnel 2 now support the tunnel lining – KiwiRail has nearly completed the work to strengthen Tunnel 2
Detailed works
The work KiwiRail has currently been funded to undertake on the North Auckland Line includes the following.
Track, sleepers and ballast ($40–$50 million)
Works will target improving track resilience and reducing wear on track and rolling stock. Approximately 30% (54 km) of the network will be either upgraded or replaced, particularly worn areas where there are bends, turnouts and steep grades. This equates to around 80 linear kilometres of new rail. Approximately 80,000 sleepers are expected to be replaced and 50,000 cu m of ballast added.
Replacing five of the 88 bridges on the line ($15–$20 million)
These mostly wooden bridges will be replaced with concrete structures due to their deteriorating structural condition.
Repairs to 13 tunnels ($7–$10 million)
KiwiRail has nearly completed the work to strengthen Tunnel 2, north of Helensville, one of the longest on the North Auckland Line. This has included installing steel ribs to support the tunnel lining in an area of deformation. Work will also be done on the other 12 tunnels, including plaster repairs, crack filling and drainage improvements.
As part of the maintenance work on all the tunnels, below-ground conditions will be investigated in preparation for later work to lower the ground level in the tunnels (to fit the larger, modern hi-cube shipping containers).
Clearing drains and culverts ($7–$10 million)
Trackside drains along the 181 km stretch of line will need to be cleared. A quarter (237) of the 950 culverts (drainage pipes) on the line are in poor condition and will be remediated as required. Maintaining the drains and culverts is crucial for ensuring the stability of the rail line and managing flood waters during weather events. Many have not been looked at for decades.
Culvert and drainage work will protect the track condition, reducing clay and mud build-up in the track ballast, which makes the track more susceptible to movement.
Work stabilising the slopes on nine embankments ($3–$5 million)
This work will include drainage improvements and widening the embankments. There will be ongoing monitoring of the embankments to determine if further civil engineering work is required over the longer term.
Vegetation control along the rail line ($1 million)
In recent years, vegetation clearance has been limited to removing fallen trees and branches from the track. A significant amount of vegetation needs to be cleared from the sides of the track, which will protect the track and rolling stock, as well as improving access to worksites.
Review and make improvements to the Whangarei Rail Yard ($2–$3 million)
Changes will be made to improve safety and make freight handling and storage more efficient. For example, disused track that used to go to Whangarei Port could be removed.
A huge project
We are excited by the changes this will bring to our abilities to offer Northland businesses a better deal. We will be able to lift some of the speed restrictions, reducing the rail freight journey time to Auckland by approximately 1.5 hours. And we will be able to make rail services more resilient and reliable, reducing the number of line outages.
Where possible, KiwiRail will be using Northland-based contractors and sourcing materials from Northland. This will see millions of dollars going into Northland’s economy and help boost the region. If KiwiRail takes on any more permanent staff, we will look to Northland first.
This huge project will be structured into a mix of larger and smaller jobs making up the overall programme of works, and we have taken steps to ensure the local industry is aware of the opportunities, not just for large companies, but also for smallerscale contractors. Recently, in Whangarei, we held a briefing for about 40 contractors about future work opportunities. We have ensured that where possible the work is broken into bite-sized pieces suitable for smaller contractors.
We are delighted that the work is already underway, with the majority of it targeted for completion by September 2020. The investment is the first step in setting up the line to deliver for KiwiRail, for the region and for the country.
David Gordon is KiwiRail’s chief operating officer – capital projects and asset development; he oversees KiwiRail’s strategic capital projects and leads KiwiRail’s collaboration with the government, its agencies and local government on transport policy and investment issues
Auckland has placed among the worst cities in the world for public transport and road taxes in a new global rankings index.
The meta-analysis also found the cost of parking in New Zealand’s biggest city is comparable to Los Angeles.
According to a new rankings index, it’s worse than Mongolia and Nigeria’s biggest cities.
A transport expert says there are two key reasons why.
“We need more rapid transit, more busways, more rail lines, more light rail, more of those projects, and cheaper fares in comparison to other options,” said Matt Lowrie from Greater Auckland.
Auckland has the 11th worst public transport, according to the new index, which gave scores based on accessibility, reliability, and affordability.
The best are the ones you’d expect — New York, Singapore, London, and Tokyo.
“You need good public transport so people have more options so people aren’t stuck in a car because every person who’s on a train or bus or ferry is someone who’s not on the road, in your way and causing congestion,” said Lowrie.
Published by an auto retailer, which is part of the French car group that makes Peugeot and Citroen, the research pulled together data from trusted sources like the World Bank, the United Nations, and the OECD.
Auckland Transport says it doesn’t agree with the findings. It pointed to another recent study that ranked Auckland 3rd in the world a measure called urban mobility.
The French rankings found Auckland drivers are out of pocket too – the city ranked as the 8th least affordable in terms of road taxes.
It’s not all bad, though; Aucklanders are apparently comparatively calm drivers – ranked 17th for road rage.
And the air quality was found to be the fourth-best — something that could get even better if more people swap cars for public transport.
The case for moving Auckland’s port business to Northland does not fit the criteria of the working group proposing it, says a new analysis.
A review by Auckland Council said it is not satisfied the move option, recommended by the New Zealand First-driven group, justifies the estimated $10 billion of investment needed.
SUPPLIEDPorts of Auckland continues to invest in its site, with a hydrogen fuel plant and automated straddles
The work by the council, which owns Ports of Auckland and the 77 hectares of waterfront land it operates from, is the most detailed criticism yet of the controversial proposal to wind down the port and transfer its business to Marsden Point, perhaps within a decade.
“The preferred option appears to be an extremely expensive way to relocate jobs to Northland from Auckland,” said the council analysis.
NONEAn aerial view of Ports of Auckland from the east
The council analysis is of the interim report by the Upper North Island Supply Chain Strategy working group, released in October along with an economic analysis from EY, of the future options for the ports at Marsden Point, Auckland and Tauranga.
The group, backed by EY’s findings, recommended re-locating Auckland’s port to Northland, reflecting New Zealand First’s 2017 election policy, before getting agreement from Labour in the coalition agreement to conduct the UNISCS study
The final report has just gone to the Government and will be considered by cabinet in December.
TOM LEE/STUFFNew Zealand First MP Shane Jones is driving the case to relocate Auckland’s port to Northland
Analysis of the interim report by Auckland Council’s chief economist unit and its strategy and research department said the re-location option did not meet the principles which the working group established for itself.
It said instead of “cost efficiency”, costs would rise, “maintaining the level of competition” would not be achieved, and removing a key supply point for Auckland would not “maintain or improve the resilience of the supply chain”.
The review disputed the working group’s conclusion that clearing prime waterfront land would be an economic windfall through higher rates for Auckland Council.
“There is no evidence for this – any new activity on the waterfront will likely displace activity elsewhere in the city,” it said.
The council also said the economic case did not seem to take into account the significant spending before any benefits might flow.
“Investment in Northland required to handle Auckland’s freight volumes would need to be complete and operational before any managed closure (in Auckland).
“This means the net benefit is probably much lower than estimated in the report,” said the council review.
The council said the assessed impacts on employment were inconsistent, suggesting few jobs would be lost in Auckland, but 2000 created in Northland.
“A $10 billion project to relocate 2000 jobs is a very expensive way to relocate jobs (roughly $5 million per job),” said Auckland Council.
It also questioned whether the rail infrastructure that would be needed to run more than 100 freight trains a day through Auckland, as well as the truck traffic generated by a freight hub near Kumeu, had been fully assessed.
Another analysis of the EY economic impact report, seen by Stuff, but with the name of the author not disclosed, believed EY and the group might have over-estimated the net economic benefit of the move by nearly four times.
New Zealand First MP, and Associate Transport Minister Shane Jones who is championing the case to relocate to Northport, said he was aware of the differing views.
“There was always doubt about EY’s work (on the move) – but I just consider that to be part of the consultancy gossip chain,” Jones told Stuff.
The UNISC working party was chaired by Jones’ friend and Northland neighbour, businessman Wayne Brown, who took part in a television interview on TVNZ’s Q&A on Monday night in which several lines said to be from the final report, still unseen by cabinet, were put to him.
Stuff asked Jones whether the interview was appropriate.
“I don’t think it’s disproportionately unorthodox,” said Jones, who had been informed the interview would take place, but said he had not discussed with Brown what should or should not be said.
“Wayne Brown is someone my leader (Winston Peters) and I regard as an incredibly successful businessman, interested in Northland – but he is his own man,” Jones said.
The Government had made no promises on whether the idea proposed by New Zealand First in 2017 will progress.
“We undertook that we would complete the study, and we will,” Prime Minister Jacinda Ardern told Stuff in October.
“I am not going to make commitments beyond receiving the final report because we need to see what evidence has ben compiled, and what the report tells us,” Ardern said.
The conduct of the working group’s study has created tension between it and Auckland Council, with sparring between Brown and Auckland Mayor Phil Goff who favoured the gradual redevelopment of the waterfront, but insisted there would need to be a price negotiated.
Ernst and Young was approached for comment, but declined.
OPINION: So now Winston Peters and his Government want to move the Ports of Auckland to Whangārei.
Such a small little thing to do that will barely cause much disruption at all. Said no-one ever.
Does anyone have any idea how ginormous this pie-in-the-sky promise really is?
Containers being loaded on to rail wagons at Ports of Auckland. Rail freight is a major part of the proposed expansion of Northport, in Whangārei.
Why? When? Where does the cargo go in the meantime? Has it been done before anywhere in a sane Western nation?
I applaud ambition usually, but this Government doesn’t appear to have a master plan at all. It has a series of massive work plans and ideas whose time may never come.
They being an expert panel who probably have no real idea, but call it a panel and it gets serious. Seriously, with Shane Jones’s wacko performance to farmers and now this out-there port wind-up, no wonder business is rightly nervous.
This port idea is shamelessly the work of Jones and Peters. It’s not just economic nationalism but is regional parochialism at its best – or worst, depending on how the future pans out.
NORTHPORTNZ First wants to move Auckland port operations to Northport, in Whangārei.
So will the roads be upgraded north of Auckland, and what trains are needed, and how can it be done when we can’t get a passenger rail system to Auckland Airport?
Peters has spoken publicly about the port report like it’s a done deal, and the money will come shortly. But how can this happen so easily if the same Government couldn’t build a few houses for the middle class? Taking the build out of KiwiBuild since election night 2017.
Also no gain like a capital gain, as in the tax that sunk confidence but never went anywhere. And while we are at it, so much for ETS for farmers, because Labour suddenly froze.
LAWRENCE SMITH/STUFFThe Whangārei port move is “shamelessly” the work of NZ First deputy Winston Peters and his colleague Shane Jones, writes Duncan Garner.
Anyway, the prime minister would hardly say boo about sinking the ports of Auckland into northern waters for fear of saying the wrong thing.
She hadn’t seen the report, but an hour later Winston was word for word all about it. So why was he all over it and the country’s most high-profile Auckland MP, who happens to be the PM, didn’t know anything. Is it deliberate and, if so, let’s drag her deep and demand answers.
It’s not a Government scared of trying anything and everything. Something has to work soon, if not in education, then health. If those then fail, maybe it’s in tax reform, but we know that answer, so maybe it’s on climate reform. Oh yes, the Zero Carbon Bill. That’ll do it.
SUPPLIEDDuncan Garner: “I applaud ambition usually, but this Government doesn’t appear to have a master plan at all. It has a series of massive work plans and ideas whose time may never come.”
I think this Government is dreaming, even on some of the small stuff. Standards and credibility matter, and they need to get busy, but they need to be believable.
Their eyes are bigger than their stomachs, and I wonder how much voters can digest if it’s a repeat next year.
Advocates claim the light rail project could be replaced with a 6km heavy rail line to Puhinui to join up with the existing lines into the city centre.
Calls for Minister Twyford to resign over the inept handling of this project.
The Government could save $2.5 billion if it’s willing to ditch its Auckland CBD to airport light rail plan in favour of the most logical and fastest option – extending existing rail lines, an expert says.
Transport advocates have called the Government’s plans to build a light rail link from Auckland CBD to Auckland Airport “short-sighted” and a “disaster” for the city.
Advocates claim the light rail project could be replaced with a 6km heavy rail line to Puhinui to join up with the existing lines into the city centre – a rethink which could potentially save the Government around $2.5 billion.
“In what’s being planned, it’s kind of like a modern version of a tram service, especially when it runs alongside an existing street. It’s not like a heavy rail network which has its own corridor,” says NZ Transport 2050 chair Paul Miller.
There’s a vast area of unused land that covers 6.5km between the south-western motorway, the main rail line, and the airport, Mr Miller told The AM Show on Wednesday. It’s only a short distance to connect the existing line to the airport, he says.
“We don’t really understand why [the Government isn’t] looking at this. This seems the most obvious thing. We’re investing $3 billion in the central rail loop at the moment that’s going to make heavy rail really useful for Auckland.”
The promise to build light rail from Auckland’s CBD to Auckland Airport within a decade was Jacinda Ardern’s first major policy announcement as Leader of the Opposition last year. The plan was backed by the Greens who want rail to the airport by 2021.
Extending existing rail lines could be completed for just $500 million, says NZ Transport 2050 chair Paul Miller. Photo credit: Newshub
“[The Government] made a big election promise about light rail and how it can solve every problem in the public transport world. But they are ignoring the obvious, and that’s the challenge that we have with them,” Mr Miller says.
The Government plans to build a light rail track running alongside Dominion Rd. But Mr Miller says the proposed light rail track will not be able to cope with the number of passengers, which is expected to double in the next 10 years.
He told The AM Show the only international city to have light rail as their primary airport link is Seattle in Washington. He said, if Seattle had the opportunity to extend their existing rail lines, they would have done so.
But Transport Minister Phil Twyford has said the planned light rail was not about making an express service, but about building a rapid transport network across Auckland City, whereby it could encourage people to not drive.
He brushed off calls to extend the existing line in June, saying “heavy engineering” at the Puhinui end would make the project too expensive.
“This is not primarily about giving tourists an express train to the airport to catch a plane; it’s about connecting the two biggest concentrations – the CBD and airport precinct,” said Mr Twyford.
But Mr Miller says the extending existing rail lines could be completed for just $500 million, in contract to the estimated $3.5 billion cost projected by Mr Twyford for the Dominion Rd light rail to the airport.
“I live off Dominion Rd, and I would love to see light rail on Dominion Rd, but fit for purpose light rail, not something that’s the equivalent of the southern motorway going down it,” he said.
City Rail Link revealed on Wednesday it will hold an open day, giving Aucklanders the opportunity to walk a section of the 3.45 kilometre-long tunnels being built for the project.
Chief executive Dr Sean Sweeney says it’s a rare opportunity to enjoy a “brief snapshot” of New Zealand’s largest-ever infrastructure project.
MERRA committee member Stuart Windross says the railway upgrade is “just the ticket.”
Deputy Prime Minister Winston Peters and Regional Development Minister Shane Jones last week announced a nearly $100 million investment to revive the railway between Auckland and Whangarei, but the response has been mixed.
The planned work will include replacing or upgrading almost a third of the line, maintenance work on 13 tunnels, replacing five aging bridges and improving numerous drains and culverts.
The 181km line runs from Auckland to Helensville, through Kaipara Flats, Wellsford, Topuni, Kaiwaka, Maungaturoto and up to Whangarei.
KiwiRail group chief executive Greg Miller said decades of decline had caused damage that would have closed the rail line for business within a year.
“Currently, 95 per cent of the freight in Northland is moved by road and the improvements to the North Auckland line (NAL) are the foundation for addressing that imbalance.”
Logistics industry magnates Don Braid, of Mainfreight, and former Whangarei Mayor Stan Semenoff, of Semenoff Transport, both came out in support of the upgrade, saying their companies would investigate using rail transport solutions.
But Northland MP Matt King says the announcement shows the government doesn’t have its transport investment priorities straight.
“Rail is not commercially viable, and to throw money at it when 99 per cent of freight movement in the north is by road shows a complete disregard for common sense. Rail cannot compete with trucks, and businesses demonstrate this by voting with their feet,” he says.
“It’s pretty telling that despite much-needed state highway improvements, road is still the first choice for transport in and out of Northland. Unlike the Government, National is prepared to invest in a four-lane highway from Warkworth to Whangarei.”
Rodney Local Board member Colin Smith, whose town of Wellsford sits directly on the line, also says investment in rail is not practical.
Mr Smith points to the fact that cargo transported on trains still has to be loaded and unloaded to be moved by trucks on either end, which is inefficient and not necessarily an improvement on the industry’s carbon footprint.
“If they had any brains they would pull the rail out and turn that corridor into a highway for trucking. It would take all the trucks off the road and, thanks to a flatter incline, could have goods transported to and from Auckland within two hours.
“We are talking about the 21st century, not the 18th century. That rail was put in 100 years ago during the war when we didn’t have decent roads.”
But the rail upgrade has been welcomed by the Mahurangi East Residents and Ratepayers Association (MERRA), which has been lobbying for rail solution for transporting waste to and from Waste Management’s proposed Dome Valley landfill.
MERRA committee member Stuart Windross says the railway upgrade is “just the ticket.”
“Given the upgrade, we expect Kiwirail and Waste Management to work together to help take 451 return trips worth of trucks off the road.”
Stuart says once an application for a resource consent for the landfill has been made, MERRA will advocate for rail in subsequent hearings.
“The fuel burn is 20,000 litres per day for the rubbish trucks on the road. It’s my understanding that rail could reduce that by 65 per cent.”
KiwiRail says it aims to complete the majority of the NAL work within the next year.
Pacifica are proud to announce that our new vessel Moana Chief, sailed into Auckland this week on her delivery voyage to begin a new life dedicated to the NZ coast. We plan to phase her into service this week commencing with voyage 4132 departing Auckland Friday 20 September which will coincide with the departure of Spirit of Canterbury. The Moana Chief brings over 50% greater capacity than SPOC (1700 teu Vs 1100 teu) and will operate on the same fixed day weekly schedule ; rotating Auckland →Lyttleton →Nelson →Tauranga . Pacifica’s introduction of additional capacity is a significant investment and commitment from our parent company Swire , and is a response to the growing demand for reliable access to the “Blue Highway” connecting key North & South Island ports .
As N.Z’s only dedicated weekly coastal carrier Pacifica are uniquely placed to offer a sustainable year-round solution for your wharf/wharf or door/door FCL shipments. We also take this opportunity to pay tribute to the mighty SPOC for years of dependable service ; she never missed a beat during the hundreds of voyages around N.Z and we wish her continued smooth sailings in her next deployment.
