Hughes Darren: Questions for Oral Answer — Questions to Ministers 
Hughes Darren: Questions for Oral Answer — Questions to Ministers 
[Volume:669;Page:15832] 
12. 
Hon DARREN HUGHES (Labour) 
 to the  
Minister of Transport 
: Which project has the higher benefit-cost ratio: the Auckland CBD rail loop or the Puhoi to Wellsford road of national significance? 
Hon STEVEN JOYCE (Minister of Transport) 
: 
 Neither. I refer the member to table E-1 on page 6 of the recently released  
Business Case Auckland CBD Rail Link 
 which states that at an 8 percent discount rate and including wider economic benefits the benefit-cost ratio is 1.1. The benefit-cost ratio calculated in exactly the same way for the Puhoi to Wellsford road of national significance is also 1.1 and it can be found on page 8 of the project’s summary I say to the member. 
Hon Darren Hughes 
: If wider economic benefits and the Treasury discount rate are applied to both projects why does he defend the Puhoi to Wellsford road which gets a benefit-cost ratio of 1.1 on that methodology but say he is sceptical about the benefits of the central business district rail loop which would deliver a benefit-cost ratio over three times that of the Puhoi to Wellsford road? 
Hon STEVEN JOYCE 
: Well that is a difficulty as well because the member refers to a very very new innovative way of calculating benefit-cost ratios which Treasury advised me it had never seen before—the proposed “Net Value Added from CBD Increased Productivity”. Treasury say to me that it does not appear to have any theoretical or evidential underpinning whatsoever. 
Hon Darren Hughes 
: Picking up on that point I ask whether when he questioned the inclusion of the transformational benefits of the central business district rail loop he had consulted his colleagues on the value of such a measurement given that as recently as this question time the Minister for Communications and Information Technology was promoting the broadband policy on the basis of its transformational benefits. 
Hon STEVEN JOYCE 
: Undoubtedly the Minister for Communications and Information Technology whom I respect immensely is well aware of the transformational benefits but even he would not be so ambitious and creative as to suggest a benefit-cost ratio of 3.5 on the grounds that the central business district rail case suggests. 
Hon Darren Hughes 
: Is he aware of any other political figure who is less enthusiastic about Auckland’s central business district rail project than he is; if so who? 
Hon STEVEN JOYCE 
: Possibly the Minister of Finance—and I think he is identifying himself. I say for the member’s benefit that it is quite possible and I am more than willing to accept that the central business district rail project could be a good project for Auckland. But a number of questions need to be answered. For example the business case appears to assume a level of existing infrastructure that does not exist it appears to underestimate the additional infrastructure that is required it does not say how many extra people would use the project compared with the number who would use the electric network without the tunnel it does not tell us how many cars it would take off the road and whether it would reduce congestion and it does not tell us when the Britomart Transport Centre will run out of capacity without it. All those questions are appropriate to be answered before the member starts getting out the Government’s cheque book and waving it around.