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BOARD OF INQUIRY

BASIN BRIDGE PROPOSAL

UNDER the Resource Management Act 1991.

IN THE MATTER of a Board of Inquiry appointed under s149J

of the Resource Management Act 1991 to

consider applications for a notice of

requirement and resource consents made by

the New Zealand Transport Agency in

relation to the Basin Bridge.

SUPPLEMENTARY EVIDENCE OF LAWRENCE MURRAY PARKER

ON BEHALF OF SAVE THE BASIN CAMPAIGN INCORPORATED

3 MARCH 2014

Barristers and Solicitors

PO Box 25 433 Featherston Street Wellington Tel: 64-4-4735755

Counsel acting: TH Bennion

Contact: Tom Bennion

DDI: +64 4 473 05755

Email: tom@bennion.co.nz

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Contents 1.0 Introduction .................................................................................................................. 3

2.0 Purpose ........................................................................................................................ 3

Part A: Summary of Statement of Evidence .............................................................................. 3

Part B: Supplementary Evidence ............................................................................................... 6

4.0 Introduction – Supplementary Evidence ........................................................................ 6

5.0 NZTA BCRs: Strategic Fit vs. Economic Efficiency ........................................................... 6

6.0 TR17 BCR (of 1.2): NOT A BCR FOR THE PROJECT ........................................................... 7

7.0 THE BUCKLE STREET THIRD LANE .................................................................................. 7

8.0 PROJECT COST .............................................................................................................. 8

9.0 WIDER STRATEGIC FIT OF THE PROJECT......................................................................... 9

10.0 CAPACITY AVAILABLE IN THE EXISITNG BASIN RESERVE ROUNDABOUT ....................... 12

11.0 NZTA REBUTTAL OF MY STATEMENT OF EVIDENCE ..................................................... 13

APPENDIX A (1): OVERVIEW OF THE BCR METHODOLOGY ...................................................... 14

APPENDIX B: Application Documents BCR (TR 17) Overstated ................................................. 18

APPENDIX C: Revised BCR (2.0) Overstated ............................................................................. 19

APPENDIX D: NZTA Economic Evaluation Manual – Definition of “Do Minimum” .................... 20

APPENDIX E: Email Correspondence - Susan Rawles of NZTA ................................................. 21

APPENDIX F: Response to NZTA Rebuttal Evidence ................................................................. 23

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1.0 Introduction

1.1 My name is Lawrence Murray Parker.

1.2 I have previously provided a Statement of Evidence (economic assessment) and

of Rebuttal Evidence for the Basin Bridge Proposal. My qualifications and

credentials are noted in section 1 of my Statement of Evidence. I attested to

the Code of Conduct requirement in section 2 of that Statement and confirm

that I continue to abide by that requirement. I again confirm that I agree to

comply with the “Expert Witness Code of Conduct”. I also again acknowledge

that I am a member of the organising committee for the Save the Basin

Campaign Incorporated and that in accordance with the Expert Witness Code

of Conduct I am not herein advocating for the Save the Basin Campaign.

1.3 I participated in the expert conferencing (economics) for the Proposal and

signed the Joint Witness Statement from that conference.

2.0 Purpose

2.1 This statement addresses the NZTA economic assessment of the Project, and in

particular the BCR. Part A provides a summary of my earlier Statement of

Evidence (SoE) of 13 December 2013. Part B provides supplementary evidence

based on further findings since that Statement was submitted, including a

response to the Rebuttal Evidence of Mr Copeland and Mr Blackmore, both of

whom appear for the NZTA.

Part A: Summary of Statement of Evidence

3.1 Appendix A provides a framework for considering the various BCRs presented

by NZTA in support of the Project. It is provided in this document because

there seems uncertainty about how to properly consider the BCR. Appendix A

also provides an explanation of the relevance of the 2021 and 2031 transport

models used by NZTA to support their analysis of the Project. This is provided

to explain how the benefits of the Duplicated tunnel projects ripple across the

entire benefits analysis provided by NZTA. It further clarifies that while the

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2031 Models measure benefits inclusive of the Duplicated Tunnel projects,

those projects are actually assumed commissioned in an unspecified time well

before 2031.

3.2 The BCRs provided by NZTA overstate the BCR of the Project itself, and do not

provide a proper assessment of the Economic Efficiency of the Project. The

original BCR presented in application documents (TR 17) was overstated

because it included contingent benefits. Eliminating contingent benefits

reduces the BCR to between 0.2 and 0.3. This is illustrated in Appendix B.

3.3 In EIC, NZTA revised the BCR to 2.2. In rebuttal evidence and as explained in Mr

Dunlop’s Summary of Evidence (section 2), this was reduced to 2.0 following

the correction of errors. I will refer to this lower number even though my SoE

addressed the earlier number of 2.2. The revised BCR was similarly overstated

because it included contingent benefits. It also included a number of other

changes which inflated the BCR. These have since been more fully identified by

Mr Dunlop as being due to the 3rd lane at Buckle St (and associated

improvements to the Taranaki Street intersection) and the various Vivian Street

works1. These should be excluded from the Project BCR (included in the Do

Minimum) because they are either part of the existing baseline (Buckle St) or

fall within an existing designation (Vivian St works). On the basis of available

evidence, the BCR excluding contingent benefits and the Buckle St and Vivian St

works would be well short of parity. These issues with the revised BCR are

illustrated in Appendix C.

3.4 The project cost estimate of $90M has not been updated since it was

completed for the March 2012 SAR2 even though considerable works have

been added since then. These added works include the Northern Gateway

Building, the Building under the Bridge, the Green Screen and the further

1 In his rebuttal evidence (Annexure B table 12), Mr Dunlop identifies these projects as adding $50M of

the total benefits included in the BCR of 2.0. In his Supplementary Information Statement Mr Dunlop estimated a BCR of 1.4 excluding these projects. That BCR will still include the contingent benefits associated with the Bridge part of the Bridge Project. 2 Refer Appendix B of Appendix E, Basin Reserve SAR (March 2012)

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mitigations agreed between NZTA and WCC). The project cost should therefore

have been updated.

3.5 The BCR assessment was based on a comparison of the Project against a “worst

case” scenario. This further inflated the BCR: it assumed a “Do Maximum” (the

Duplicate Tunnels) which created increased traffic demands on the Basin

Reserve zone; at the same time it assumed a “Do Nothing” for the Basin

Reserve itself. Overlaying the Project over this “worst case” Do Minimum

provided “relief” to the artificially stressed environment and delivered an

inflated assessment of benefits.

3.6 Apart from the flawed BCRs, NZTA has provided no other measurement based

evidence in support of the Project. The opinion based evidence that was

provided has not been assessed against the cost of the Project, and is difficult

to weigh against other effects of the project. My view therefore remains that

NZTA has not established proper economic justification for the Project.

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Part B: Supplementary Evidence

4.0 Introduction – Supplementary Evidence

In this Supplementary Evidence, I address:

The NZTA use of “Strategic Fit” rather than “Economic Efficiency” BCRs

in its economic assessment (section 5)

The BCR in TR17 was not a BCR for the Project for which consent is

sought (Section 6)

The Buckle St Third Lane (Section 7)

The Project Cost (Section 8)

The wider Strategic Fit of the Project (Section 9)

The “Do Nothing” assumption for the Basin Reserve (Section 10)

Response to NZTA Rebuttal Evidence (Mr Blackmore and Mr Copeland)

(Section 11)

5.0 NZTA BCRs: Strategic Fit vs. Economic Efficiency

5.1 The BCRs presented in the NZTA Economic Assessment (TR17), EIC and rebuttal

evidence provide an assessment of the Project’s “strategic fit” to the wider

NZTA Northern Corridor RONS strategy. The BCRs are based on benefits that

the Project could deliver if that entire RONS programme is completed

(including current unconsented and unfunded projects). These BCRs have been

calculated to meet the needs of NZTA decision making processes rather than

for the RMA consenting process. They are useful for NZTA (and are useful

background for the BOI) as they show how the Project “fits” with the wider

NZTA strategy. NZTA would also seek to maximise the “strategic fit” BCR when

selecting between alternatives.

5.2 In my opinion however, these BCRs provided by NZTA do not measure the

economic efficiency of a Project for consenting purposes. An “economic

efficiency” BCR should only include the costs and benefits estimated to occur if

the Project itself is approved. Further benefits that might be crystallised from

other future projects would then be counted in the economic efficiency BCR of

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those future projects. This is the same as for any infrastructure (including this

Bridge Project) built into an existing network.

6.0 TR17 BCR (of 1.2): Not a BCR For the Project

6.1 The BCR provided in the Economic Assessment of the Project (TR17) was not in

fact a BCR for the Project described in application documents, but was based

on an earlier version of the Project. It seems to have been prepared for NZTA

internal decision making purposes. Having served that purpose, NZTA decided

it was not necessary to revise that BCR, even though the Project as submitted

for consent was materially different to that earlier version of the Project.

Subsequent BCRs have been more correctly based on the Project as presented

for Consent but remain substantially overstated. NZTA should have provided

proper BCRs for the Board to consider, and could have provided proper BCRs

had they complied with their Economic Evaluation Manual, especially in terms

of setting the Do Minimum.

7.0 The Buckle St Third Lane

7.1 It is acknowledged that whether the Buckle St third lane is part of the Project

or of the Do Minimum remains contentious. In his presentation of evidence at

the Hearing, Mr Blackmore indicated the Buckle St third lane can only safely be

used if approached from the proposed Bridge. Mr Blackmore still then

considers the third lane and associated benefits should rightly be included in

the Project. I am not aware that this safety issue has been raised previously in

evidence. It was not raised in Mr Blackmore’s Opening Statement and appears

to remain undocumented apart from verbal evidence provided by Mr

Blackmore. There seems to be disagreement amongst NZTA experts on this

matter. Furthermore, at the time the Project application was submitted to the

EPA, NZTA held a different view to that now presented by Mr Blackmore. In

June 2013 I requested clarification from NZTA on this issue. In her email of 2

July 2013 (Appendix D) Susan Rawles of NZTA advised me that in the event the

Basin Bridge did not proceed:

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“a decision will need to be made in respect of when the third lane within the

Underpass might be usefully opened and the improvements if any that are

required to other parts of the network as part of the opening of that

additional lane” [highlights not in original].

7.2 At the time this seemed a sensible response. More so now it is clear that the

benefits of relieving the Taranaki St bottleneck are substantial; more

substantial indeed (by a factor of 4) than the time saving now attributed to the

Bridge in the AM peak3. It is not clear why the newly raised safety issue could

not be remediated in the Do Minimum. Unless there is clear evidence to the

contrary, in my opinion the entire Buckle St project is part of the Do Minimum

and the benefits of the third lane should be excluded from the Project BCR.

8.0 Project Cost

8.1 Further to paragraph 3.4 above, there are further differences between the

March 2012 SAR Project Cost estimate and the Project in the consent

application. These include the Vivian Street works, and differences between

Buckle Street works in the SAR and in the final Project.

8.2 Turning again to the Northern Gateway Building, this was initially proposed by

the Basin Reserve Trust. It was considered but rejected in the March 2012 SAR

which concluded “it is not proposed to construct a Grandstand as part of the

Project”. Amongst other things, the SAR cited adverse visual and heritage

effects of the building4.

8.3 As documented in an MOU, and in a subsequent Agreement between NZTA,

Wellington City Council and the Basin Reserve Trust,5 the NZTA subsequently

reversed its position on the Grandstand/Northern Gateway Building. In the

MOU, the parties agreed they would work together to ensure the 65 Metre

option for the Northern Gateway Building (the subject of the Specific

3 Of the total 7.5 minutes time saving for the East/West journey in the AM peak, 80% is attributed to

relieving the Taranaki St bottleneck while just 20% is attributed to the Bridge itself. 4 Refer page 129 Section 8.7 for the March 2012 SAR assessment of the building proposal. Note that at the time, the building was referred to as a “grandstand”. 5 Both the MOU and subsequent Agreement are appended to Mr Blackmore’s rebuttal evidence.

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Agreements in clause 3 of the MOU) can mitigate the adverse effects of the

Bridge “in such a manner as not to prevent the New Zealand Transport Agency

from obtaining consent for the bridge” (clause 2.1.1 of the MOU). In clause 3.6

the parties further agreed to support the 65 metre building [as mitigation]

separately from any expert evidence. This reversal of the NZTA position on the

matter can be considered against the fact that at the time of the March 2012

SAR, the Basin Reserve Trust was identified as the highest source of outturn

cost risk for the project6, and that the Basin Reserve Trust stuck to its original

position regarding its proposal for a “Grandstand”. This suggests that the

decision by NZTA to reverse its previous position and to proceed with the

Northern Gateway Building came at some cost and this could be expected to

be reflected in an updated Project Cost.

8.4 This further evidence adds more weight to my opinion that the Project Cost

should have been reviewed and updated since the March 2012 SAR.

9.0 Wider Strategic Fit of the Project

9.1 While it is important to properly assess the economic efficiency of the Project

itself, an economic assessment should also include an assessment of the

strategic fit of the Project. The proposed Basin Reserve improvements occur at

an important “intersection” of two key strategies: the Northern Corridor RONS

and the Ngauranga to Airport Corridor Plan (including the Public Transport

Spine Study). The Basin Reserve and the route for the Mt Victoria Duplication

project are key routes for both of these strategies – see Figure 1 below.

Figure 1: The Basin Reserve Improvements – an intersection of strategies

6 SAR March 2012, Appendix E page 11, Table 4

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9.2 NZTA expert evidence relies significantly on the Ngauranga to Airport Corridor

Plan (NtoAC) and the outcomes of the Public Transport Spine Study (PTSS).

Much has been said about the Bridge enabling a “step change” for the PTSS

plans. A strategic fit assessment of the Bridge Project to the NtoAC and the

PTSS has however not been carried out. NZTA has instead clearly focussed its

strategic fit assessment on the RONS strategy. This is evidenced by:

Mr Blackmore’s assertion that the only relevant BCR for the Project is

the BCR for the Northern Corridor RONS7

The inclusion of the unconsented RONS projects in the Do Minimum,

while no attempt being made to reflect the PTSS projects

The insignificant Public Transport and Active mode benefits actually

assessed and included in the Project BCR analysis

9.3 In my opinion, an assessment of the strategic fit of the Project to the PTSS is

also required. This cannot be performed properly until the PTSS confirms its

choice of strategies and key design decisions are made. It is acknowledged that

7 Paragraph 7.3 of Mr Blackmore’s rebuttal evidence: “the Transport Agency is advancing the Project as part of the Wellington Northern Corridor RONS programme ... Accordingly the only relevant BCR for the Transport Agency is the [RONS] Programme BCR.

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the NtoAC anticipates separation of vehicle flows at the Basin Reserve and this

is consistent with the Project. However, separation was not an objective of the

NtoAC Plan. It was a means to an end, and a detailed economic assessment of

whether it is the “right” means to that end can best be made only when the

“end” is determined, and at some level of detail.

9.4 A wider “strategic fit” assessment also seems to have been overlooked. This

concerns the interdependencies, and possible tensions and conflict between

the objectives of the RONS and the objectives of the PTSS. For example, the

preferred Bus Rapid Transport option of the PTSS seeks dedicated corridors

(dedicated bus lanes). In the case of the East/West spine this potentially

includes dedicated bus lanes in the duplicated Mt Victoria Tunnels8. This would

require a balancing of vehicle and Public Transport priorities along the

East/West corridor and through the Mt Victoria Tunnels. The outcome of that

balancing of priorities could have a substantial impact for both the assessment

of transport outcomes of the Bridge proposal, as well as the design of the Basin

Reserve and of the Bridge itself (e.g. the off ramp from Patterson to Dufferin St,

which in the Project is designed as one lane). The need to integrate the PTSS

and RONS strategies seems clear. This would ensure that possibly conflicting

priorities are assessed strategically, targets are set, and funds are properly

allocated to meet the confirmed priorities and targets.

9.5 The Urban RONS and the PTSS strategies anticipate very substantial

expenditures. A proper strategic fit assessment would consider the

interdependencies between these strategies and establish overarching

transport priorities and objectives for the affected Central Wellington zones.

Assessment of this wider strategic fit is an important issue that should be

addressed in an economic assessment of the Bridge Project. This cannot be

addressed by considering either the RONS or the PTSS plans in isolation.

8 On page 14 of its report to the Wellington City and Regional Councils, the Public Transport Spine Options Hearing Subcommittee noted “as a first step we agreed that it would be desirable for NZTA to plan for a designation over this corridor to include a provision for dedicated bus lanes”.

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10.0 Capacity Available in the Existing Basin Reserve Roundabout

10.1 NZTA has indicated some urgency is needed to progress with the Project, and

that delays could undermine the timetable for the Mt Victoria Tunnel

Duplication project. This urgency seems to be based on the assumption that

the Basin Reserve is currently operating at capacity and would not be able to

handle the increased demand that might arise from the Duplication project.

The “Do Nothing” assumption for the Basin Reserve that was included in the

Project Do Minimum reflects this same assumption. Mr Dunlop’s rebuttal of

the BRREO9 indirectly confirms the “Do Nothing” assumption is flawed. In

Annexure B of his rebuttal evidence, Mr Dunlop provides an assessment of the

BRREO. He concludes that the BRREO (basically an optimisation of the existing

roundabout) delivers over 60% of the benefits attributed by NZTA to the Bridge

proposal. This is achieved with the relatively minor upgrades anticipated in the

BRREO. This suggests the urgency that NZTA has attributed to the Proposal is

misplaced.

10.2 Including Basin Reserve Optimisation in the Do Minimum would provide

further insight into the “Strategic Fit” of the Project – it helps answer the

question: is the Project necessary? This further “Strategic Fit” BCR is illustrated

in Figure 4 of Appendix C. An assessment of further optimisation for the

current Basin Reserve layout could have more properly shaped an assessment

of the need for the Project, the urgency for the Project, and the benefits

available to the Project. For example, according to Mr Dunlop’s analysis, the

Bridge itself delivers $96M of tangible benefits, of which $39M is available

from optimising the existing Basin Reserve layout. Thus for an incremental cost

of, say $77M ($80M10 less cost of BRREO, say $3M), the Project delivers

benefits of just $58M, or a “strategic Fit” BCR of 0.8. The contingent benefits

associated with the Duplicated Tunnels would need to be deducted from this

9 Dunlop Rebuttal Evidence, Annexure B Tables 12 and 13 10

The NZTA estimated cost of the Project is $90M. For purposes of the BCR, this future expenditure is discounted to $80M in the same way that future Project benefits are discounted.

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BCR to determine an economic efficiency BCR; that could be expected to be

considerably lower than 0.8.

11.0 NZTA Rebuttal of my Statement of Evidence

Mr Copeland and Mr Blackmore provided rebuttal for NZTA for my Statement

of Evidence. I have responded to their rebuttal in Appendix F.

Lawrence M Parker

5 March 2014

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APPENDIX A (1): OVERVIEW OF THE BCR METHODOLOGY

PART 1: Measurement of Benefits: Project vs. Do Minimum

1 NZTA has represented a variety of BCRs in evidence statements. This includes a

BCR for the Northern Corridor RONS, a BCR for the “Tunnel to Tunnel” suite of

projects, and BCRs which are represented as being for the Project itself. The

BCR is a simple discounted cost benefit analysis concept. All BCRs can provide

insight and can be relevant for specific purposes. The important point is to

ensure the BCR being used is “fit for purpose”. A key part of that requires that

only benefits and costs relevant to the purpose are included in the BCR.

2 Figures 1 to 3 below provide a schematic framework for considering the BCR. In

Figure 1 the “Do Minimum” is the transport infrastructure we currently have or

assume to have in the future. The “Project” represents the changes to the

transport infrastructure we are considering. Figure 2 shows that the outcomes

of the Project (inclusive of the Do minimum) are compared to the outcomes of

the Do Minimum infrastructure. The difference between the two (change

(delta) in costs and benefits) determines the BCR for the Project (Figure 3).

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PART 2: Relevance of the 2021 and 2031 Models for the Basin Bridge Project Analysis

Frequent reference is made in NZTA evidence to the 2021 and 2031 transport models.

These have been used to assess the delta of benefits attributed to the Project. It is

important to note that while the 2031 model includes the unconsented RONS projects

(Duplication of the Tunnels, Ruahine St and Wellington Rd works), that is not the same

as assuming those works are completed in 2031. These unconsented projects are

assumed to be commissioned at an undefined earlier date. The benefits attributed to

the Project from the unconsented works in fact ripples through the entire period of

benefits from 2017 to 2053. This is illustrated in Figures 1 to 3 below. Figure 1 shows

the two modelled years. Figure 2 shows that the benefits in the intervening years are

assumed equivalent to a straight line interpolation between the years. Figure 3 shows

that the rate of change in benefits between 2021 and 2031 is assumed to persist

beyond 2031. The same rate of change is inferred into the benefits for 2017 to 2020.

There is no valid basis for either these latter assumptions.

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Figure 1: Benefits modelled in 2021 and 2031 (relative values for illustration only)

Figure 2: Benefits between 2021 and 2031 estimated by “straight line” interpolation (relative values for illustration only)

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031

Basin Bridge Project: Benefits (before discounting)

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Figure 3: Benefits extrapolated forward to 2053 and “backward” 2017 (relative values for illustration only)

The benefits attributed to the Project are the sum of the “bars” shown in Figure 3

(after those values are discounted). The chart demonstrates the relationship between

the 2021 and 2031 model values and the overall 40 year benefits analysis. The benefits

stretching beyond 2031 simply assume the same rate in growth of benefits as

interpolated between 2021 and 2031. This has not been validated. It would be more

appropriate to assume no change in benefits after 2031 (i.e. which would result in a

“flat line” in the Figure 7 chart from 2031). The assumption that the rate of change in

benefits prior to 2021 would be the same as the interpolated rate of change has no

basis.

Benefits are extrapolated forward and backwards by assuming the same rate of change as for the interpolated years 2021 to 2031.

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Basin Bridge Project: Benefits (before discounting)

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APPENDIX B: Application Documents BCR (TR 17) Overstated

Figure 1 : Application | Figure 2 : Remove Unconsented

Documents - BCR = 1.2 | works - BCR = 0.2 to 0.3 (2)

[A "Strategic Fit" BCR] | [An "Economic Efficiency BCR]|

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| (2) L M Parker, Satement of Evidence.

DO MINIMUM

PROJECT

Tunnel

Duplications

ICB 3 lane -

2031

Basin Bridge

3 Lane

Buckle St (1)

(1) At grade; Taranaki St

bottleneck not remediated

DO MINIMUM

PROJECT

Tunnel

Duplications

ICB 3 lane -

2031

Basin Bridge

3 Lane

Buckle St (1)

(1) At grade; Taranaki St

bottleneck not remediated

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APPENDIX C: Revised BCR (2.0) Overstated

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APPENDIX D: NZTA Economic Evaluation Manual – Definition of “Do Minimum”

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APPENDIX E: Email Correspondence - Susan Rawles of NZTA

From: Susan Rawles [mailto:Susan.Rawles@nzta.govt.nz]

Sent: Tuesday, 2 July 2013 12:18 p.m.

To: 'Murray Parker'

Cc: Greg Lee

Subject: RE: Basin Reserve Flyover - Guide to Lodgement Document

Hi Murray,

Technical reports 4 and 5 have different definitions and terms. They are two distinct technical

fields and each report provides their own definitions based on best practice, and for noise

allowing for the relevant New Zealand Standard (NZS 6806).

Page 1 of the Technical Report 5 provides an explanation of the ‘do-nothing’ and ‘do-

minimum’, as follows:

the noise environment that would receive the Project, being the road layout without the Project as it would exist in 2021 operating with 2021 traffic for that road layout, termed the do-nothing receiving situation;

the noise environment with the Project in the road layout as it would exist in 2021 operating with 2021 traffic for that road layout including the Project, termed the do-minimum Project situation.

‘Do nothing’ as a term is not used in transport assessments as it might be taken to imply that

no improvements are undertaken to transport infrastructure/ network. Instead ‘do minimum’

is used which is ‘the minimum investment to maintain the network operation’ and accordingly

it includes planned improvements to the network but excluding the Project. See page 13

section 3.3.4 of Technical Report 4 for detail.

The ‘do minimum’ transport scenario includes two operational lanes of the Buckle street

underpass. The third lane will become operational as part of the Basin Bridge project opening.

If the Basin Bridge Project is not consented or does not proceed then a decision will need to be

made in respect of when the third lane within the Underpass might be usefully opened and

the improvements if any that are required to other parts of the network as part of the opening

of that additional lane.

I trust that the above is helpful and clear. If you want to discuss any aspect of the above then

please do not hesitate to contact me.

Kind regards,

Susan Rawles

From: Murray Parker [mailto:murrayparker@clear.net.nz]

Sent: Sunday, 30 June 2013 2:17 p.m.

To: Susan Rawles

Cc: Greg Lee

Subject: RE: Basin Reserve Flyover - Guide to Lodgement Document

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Thank you Susan

My apologies for not looking more closely at Technical Report 5. I was put off by the reference

of that report to “noise effects” as I was hunting for a definition of “Do-min”. I have now found

a summary of the Do Minimum” in Table 4.1 of Technical Report 4.

It seems that the Do-Minimum definition of the “Noise Effects” report differs from this “Do-

Minimum” definition in Technical Report 4. Also, the Noise Effects report brings in a new

scenario “Do nothing” which is not included in Technical Report 4. Can you please clarify.

Can you also please also specifically confirm if the “Do-Minimum” summary definition noted in

Technical Report 4 includes “Buckle Street Three Laning”. I ask this because elsewhere in the

documents the three laning of Buckle St is described as dependent on the Flyover being built:

“A third lane ...[through the Buckle St underpass] ... will become operational once the bridge is

in place.” This implies that if the Flyover does not proceed, the third lane (which is presumably

being constructed as part of the Buckle St project currently underway) will be redundant if the

Flyover is not built – on the face of it this does not make sense. Can you please clarify this

apparent ambiguity.

Murray Parker

Home: +64 4 972 0565

Mobile: +64 27 633 0565

Email: murrayparker@clear.net.nz

Postal Address: 137 Clyde St, Island Bay, Wellington 6023, New Zealand.

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APPENDIX F: Response to NZTA Rebuttal Evidence

Mr Copeland and Mr Blackmore provided rebuttal evidence to my Statement of

Evidence. I respond to that rebuttal evidence below.

1.0 Mr Copeland’s Rebuttal

1.1 In paragraph 9.4, referring to my assessment of the contingent benefits added

to the BCR from Duplication projects, Mr Copeland suggests they are in fact not

contingent (Mr Copeland refers to the “so called contingent benefits”). It is

difficult to understand Mr Copeland’s position. Benefits that are dependent on

a future decision or event are undoubtedly “contingent” on that decision or

event. Mr Copeland also considers that the contingent benefits remain relevant

to a consideration of the Project. Mr Copeland should have made a clear

distinction between the Strategic Fit assessment of the Project (for which the

contingent benefits can provide a useful context) and the economic efficiency

of the Project (for which the contingent benefits are not relevant since the

Project itself cannot deliver those contingent benefits).

1.2 In paragraph 9.5 Mr Copeland points out the uncertainty associated with road

improvement benefits as a reason for the Transport Agency reducing its

reliance on BCRs. This is in contrast to his rebuttal in paragraph 9.2 where he

defends the lack of quantified measurement in his economic assessment and

places reliance on the fact that he has included BCRs in his evidence (these

being the only measured benefits he includes in his assessment).

1.3 In paragraph 9.6 and 9.7 Mr Copeland defends the “Do Nothing” assumption at

the Basin Reserve on the grounds that no effective improvement options have

been identified. It would seem that Mr Copeland did not read the rebuttal

evidence of Mr Dunlop, which concluded at least in the case of one option for

enhancing the current Basin Reserve layout, benefits of $39M had been

identified.

1.4 In paragraph 9.8 Mr Copeland claims that benefits from the third lane at Buckle

St should be attributed to the Project because the third lane was only included

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in the Buckle St project on the assumption that the Bridge project was going to

proceed. Mr Blackmore uses the same unusual justification in paragraph 7.8 (a)

of his rebuttal evidence. It would seem that neither Mr Copeland nor Mr

Blackmore have considered the concept of sunk costs. The decision to include

the third lane at Buckle St was made some time ago and the costs are now

“sunk”. Any benefits associated with that sunk cost are only relevant to a

future project - in this case the Bridge project – to the extent that the Bridge

Project might be necessary to crystallise benefits from that sunk cost. Neither

raised this point in written evidence or rebuttal although Mr Blackmore now

states the Bridge is in fact necessary to realise the benefits of the third lane.

1.5 In paragraph 9.10 Mr Copeland seems to confirm the cost of the Northern

Gateway Building (NGB) is not fully covered in the Project cost estimate. He

claims however that this will be at least partially offset by (presumably

intangible) benefits from the NGB to users of the Basin Reserve. This is not

consistent with the purpose of mitigation. The cost of mitigation offsets and is

a proxy for the costs of the unmitigated adverse effects of the Project. It would

seem Mr Copeland might be referring to benefits of the NGB in excess of that

needed for mitigation – in other words compensation. However I had

understood that the NGB was proposed for mitigation purposes. The Project

documents do not raise nor provide justification for compensation.

1.6 In paragraph 9.11 Mr Copeland clarifies that NZTA intend to sell or rent the

proposed “Building under the Bridge”, thus justifying its exclusion from the

Project cost. While this commercial proposition for the building is relevant, the

cost of the building still needs to be included in the Project cost and a proper

assessment made of the commercial value of the building. It is not sufficient to

simply say one will offset the other.

2.0 Mr Blackmore’s Rebuttal Evidence

2.1 In paragraph 7.1, Mr Blackmore “assumes” my assessment of the BCR relies on

the evidence of Mr Foster. It would appear Mr Blackmore has not read my

Statement of Evidence. It is clear from my evidence that it is based solely on

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data provided by NZTA. This analysis was completed independent of and

without reference to Mr Foster’s evidence. It is though informative that Mr

Foster and I came to similar conclusions.

2.2 In paragraph 7.2 Mr Blackmore reiterates his view that the BCR has been

developed for a different purpose other than for considering economic

efficiency relevant to the RMA. It is unclear then why NZTA nevertheless

presented those same BCRs in support of the proposal in this RMA consent

hearing. Further, understanding that economic efficiency is “a relevant

consideration under the RMA”, it is unclear why Mr Blackmore did not ensure

that analysis appropriate to the RMA consideration of the proposal was in fact

presented. As I have demonstrated, it is certainly possible to provide that

proper BCR analysis. The result would have been considerably lower than the

BCRs actually put to the Board, which is more reason why correct BCRs should

have been presented in the first place.

2.3 In Paragraph 7.3 Mr Blackmore suggests that I have not understood that “the

only relevant BCR for the Transport Agency is the “Programme BCR” [the

Northern Corridor RONS programme] and not individual “sub-section” BCRs”

[for example, the Bridge BCR]. While the relevance of a BCR to the Transport

Agency might be interesting, this hearing is not made in front of the Transport

Agency. It is held under the RMA in front of a Board of Inquiry. Relevance is

determined by that context, not the context of the NZTA deliberations.

2.4 In paragraph 7.6 and as previously noted in his EIC, Mr Blackmore claims

support for his view that the only relevant BCR for this Inquiry is the BCR for

the entire Northern Corridor RONS. He refers to various comments from

previous reports of Northern Corridor RONS Boards of Inquiry in support of his

view. It is not entirely clear what those previous Boards intended. The

interpretation that Mr Blackmore draws from it however seems unusual. Mr

Blackmore is suggesting the BCR for the actual project in front of a consent

hearing should be put aside in favour of the BCR for a group of Projects which

have been considered through an administrative process (the Transport

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Agency) but which otherwise stand outside the RMA consent hearing

procedures. Further, Mr Blackmore claims support for this view from other

Boards of Inquiry. In my view this is a misinterpretation of what those Boards

intended, and reflects a confusion between an assessment of the “strategic fit”

of the Project with its “economic efficiency”.

2.5 In paragraph 7.8 Mr Blackmore suggests my analysis should be subject to peer

review. Mr Blackmore has not understood that in fact my analysis is a peer

review. I have simply assessed the way that NZTA has made its assessment, and

found that the assessment does not properly measure the economic efficiency

of the Project for which consent is sought. It is perhaps notable that the NZTA

has not challenged the actual analysis which I performed.