AWHC - What Should it Cost

This will be the first in a series of posts related to the Additional Waitemata Harbour Crossiing (AWHC), a new crossing of the main harbour in Auckland New Zealand linking the Northshore with the rest of Auckland.

In this post I am going to look into the cost of the project and compare it to recent projects built here in Auckland.

To set the ground work, based on the latest data the estimated cost of the project is $4.85 Billion. As seen here. We also have a rail tunnel only version estimated at $1.5 Billion.

When it comes to New Zealand and transport projects $4.85 Billion is a very large sum of money, to date the largest single transport project to go into construction has been the SH20 Waterview Connection valued at $1.4 Billion.

The AWHC comprises of the following aspects:

• two 3km long 3-lane tunnels (6km total)
• 2.8km of existing motorway upgrades and widening.

For details you can view some of the option drawings here

Now it just so happens that right here in Auckland we have been doing exactly this sort of work as part of the Western Ring Route (WRR) and so have some perfect price examples.

For the Waterview Connection, valued at $1.4 Billion, they are building:

• two 2.4km long 3-lane tunnels (4.8km total)
• 1.6km of 4-lane surface motorway
• 1 full systems interchange

For the SH16 Causeway Upgrade, valued at $220 million, they are widening and lifting the existing causeway over a 4km length, this would be largely similar to the sort of works required on the Northshore side of the AWHC where the existing motorway would need to be rearranged and widened.

Using the above rates, we get the following rough order costs:

• 3-lane tunnel = $580 million/km
• motorway widening and upgrading = $55 million/km

Based on those numbers if we were to go and build the AWHC today we would expect to cost in the range of $1.9 Billion.

So what is the reason for the rather large difference, well it all comes down to cost certainty. The AWHC estimate is a feasibility estimate that was done in 2010 and based on comparatively limited information with the intention of putting a value into the long term funding plan. The Waterview Connection was priced in 2011 and is now under construction based on very detailed information.

In a way it's very similar to getting a builder to price a house, if you give them very little information about where the house is, what size it is and what it is made of you will get a rather high price. However if you give the builder detailed plans and the schedule of quantities you will get a price much closer to what the actual cost will be.

Naturally my estimate is not 100% accurate either, but it is more an indication that the $4.85 Billion estimate is rather conservative. In reality we are more likely to see the actual cost be somewhere between the two and so I would say $3 Billion is more of a realistic value at this stage.

I hope you have enjoyed my first post putting some logic behind the cost of the AWHC.

For the next post, I'll look at just what we can get out of it.