No mandate for Central Rail Link spending, says David Thornton

Statement from David Thornton of NoMoreRates.Com
Today’s media story of a ‘leaked report’ on the Central Rail Link is yet another attempt to convince Aucklanders that the Central rail Link is inevitable and vitally necessary.

There is no mandate for the expenditure of more than $3 billion on the proposed Central Rail Link in Auckland over the next seven years.

Despite Mayor Brown’s frequent claims that Auckland supports his Rail Link, and his use of an unscientific ‘phone-in’ survey to back his claims, most ratepayers do not support significant rates increases to pay for this project.

And ratepayers are aware that there will be permanent demands for subsidies to bridge the negative difference between fare revenue and cost per passenger.

While many ratepayers may approve of a Rail Link at some time they will not give full support until they are given the true picture of the impact on rates.

Recent public transport usage statistics do not indicate the level of growth in passenger numbers which would be needed to support a business plan strong enough to attract Government into paying for half the cost.

There has been no convincing evidence so far that forecast passenger growth could be achieved.

Who will these passenger be – shoppers, workers, tourists, – where will they be going to and from?

What will be the fares they will pay? What will be the subsidy required from rates for all of these extra passengers

And even if the Government does eventually contribute to 50% of the cost Auckland Council will still have to borrow at least $1.5 billion to meet its share.

We are all well aware that major projects such as this have a tendency to incur huge cost overruns – and, with the Council already planning to borrow up to, and occasionally beyond, its maximum prudent borrowing limits, the financial viability of the Council would only be saved by increased demands on ratepayers.

Ratepayers are aware of the Kaipara Council nightmare, and the latest credit rating downgrade for Dunedin City Council – there is no reason why Auckland will not suffer a similar downgrade with consequent hikes in interest on borrowing.

A recipe for bankruptcy – but Councils don’t go bankrupt, they use their power to set and collect rates to avoid this.

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  1. B, 23. November 2012, 19:54

    I think David Thornton’s article lacks understanding of the whole issue and seems a bit biased. He hasn’t taken National’s expensive roading projects into account, not only the projects happening in Auckland itself but also Aucklanders are paying for road projects in Wellington.
    The scary thing is that this can be done without Aucklanders having their say and we are left with no choice but to go along with the government’s word.
    As for Transmission Gully, this will eventually fail one day, if growth in Wellington remains modest that is.

  2. Bob Lawton, 5. December 2012, 19:56

    I suspect that David Thornton is voicing the concerns of many and I too am nervous that the rail loop cost will be beyond original estimates. But, let’s assume that the rail loop will last 100 years – we should be able to pay it off in that time with reasonable patronage. Auckland will easily be a population of 5 possibly 10m by 2050 because the hundreds of millions made homeless by sea rise around the world will have to be housed somewhere – many of the them in Godzone. As we have seen from more recent immigrations of asian peoples, they are far more likely to use public transport than Kiwis. Do you know if the current rail loop engineering takes into account a 2m rise in sea level? If we are to spend Millions more on saving our Port (maybe to pay for our rail loop?) to what extent will the rail loop help in the logistics of getting containers to and from the Port to Wiri? And yes, which parts of downtown Auckland would be useable if the sea level rises by 2 meters? Yep, some realistic forward thinking could be really helpful.