Benefits to supply chains are among the factors used to calculate what value the new highways will bring - if they ever get built.
Benefits to supply chains are among the factors used to calculate what value the new highways will bring - if they ever get built.
An infrastructure advocacy group has commissioned research suggesting the flow-on benefits of investing in two new roads could be worth hundreds of millions of dollars to the New Zealand economy.
In a release on Thursday, the Northern Infrastructure Forum presented a report from the NZ Institute of Economic Research (NZIER).
It suggested building the proposed Warkworth to Wellsford Expressway and Cambridge to Piarere roading projects would boost gross domestic product (GDP) by $497.1m and $486.7m respectively.
This was largely due to supply chain efficiency benefits, although NZIER also pointed to resilience and agglomeration benefits.
Auckland Business Chamber chief executive Simon Bridges, who chairs the forum, said the report fully vindicated National’s and Labour’s announced transport plans.
Both parties say they support the Warkworth to Wellsford project, north of Auckland, and the Cambridge to Piarere project in Waikato.
“Over a 20-year period, each project would pump over $6 billion into the economy (in net present value terms), compared to a situation where the investment had never taken place,” Bridges said.
More infrastructure was key to enabling economic growth, he added, and the report should spur decision-makers to invest in and accelerate large-scale infrastructure projects.
“We need to develop a prioritised list of infrastructure projects, and then we need to get on with it,” Bridges said.
“Every year we delay projects like these, we’re leaving up to $500m on the table.”
Different method
Unlike the transport agency, Waka Kotahi, which accounts for direct benefits like travel time savings and safety in its business case process, NZIER said it also captured flow-on impacts from the investments, allowing it to capture broader impacts across industries and regions.
Simon Bridges says each project would pump over $6 billion into the economy. Photo / Andrew Warner
The report described the estimates as conservative because NZIER lacked access to detailed modelling data around travel movements and growth forecasts. It drew on previous business cases for the project and used old costing data from 2020.
Since then, the estimated cost of the Warkworth to Wellsford project has increased from $2.1 billion to $3.5-4b, according to figures released by transport minister David Parker. The Cambridge to Piarere project cost has gone from $631m to $1.5-2b.
Bridges said the assessment model used in the report shouldn’t just be applied to highways.
