Friday 31 March 2023

Everyone is stupid except me: Auckland harbour crossing edition

The Labour government has put up options for a second Auckland Harbour crossing. All of them look terribly expensive. None of them have any kind of business case, yet. Prior versions of similar options had costs well in excess of benefits.

National's critiques, as observed on Twitter, are that Labour's never been able to build anything so why trust them to build any of these. Of course, if none of them are worth building, then this isn't much of a critique. 

The Greens want any crossing to be climate-friendly, with a focus on mass-transit, and walking/cycling. Whether any of those options make more sense than building none of the options doesn't seem to have been checked. 

All of it is backward.

We don't know whether a second crossing is warranted, let alone how it should be configured. Parliament is incredibly poorly placed for figuring this out. 

There is a much simpler way.

  1. Set congestion charging. If you can end congestion across the crossing at a low price, you don't even need to start thinking about a second crossing. 
  2. Look at the price that clears congestion. It can help inform whether a second crossing could cover its own cost. 
  3. Let NZTA, or a new Auckland Harbour Second Crossing Board, or private investors, build whatever crossing they like if they think they can recoup the cost of the thing from charges on users of that crossing. Return to the kinds of revenue-bond financing that was used to build the first Auckland Harbour Bridge, financed over decades by charges on users of the bridge. 
Governments back white elephant projects with our money.

Investors are more careful about business cases and the likelihood of earning a return. They'll be less likely to be swayed by fashion, ideology, or wishful thinking about what the best mode for any crossing might be. And if they screw up and spend tens of billions on a project that doesn't wind up paying off, they lose their own money. True if it's investors putting in equity and owning the bridge; true if it's bondholders buying the debt that funds the bridge and expecting user fees to finance the payments over time. 


It was two years ago that the last round of cruddy business cases came through. And we're back at it again.

Get this stuff out of Parliament's hands. If a crossing can pay its own way through charges paid by its users over time, it should be built. If it can't, it shouldn't. That's it. 

And if it turns out that multiple projects actually could be viable and that they're mutually exclusive, set a bidding process for the right to build it. The one with the highest expected earnings over time will win, and that's the one that should be built. 

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