Low-cost Ways To Grow Auckland’s Infrastructure

Statistics New Zealand’s population projections show that Auckland is expected to grow nearly 30% over the next 25 years, so it’s crucial we figure out ways to reap the benefits of population density when it comes to providing infrastructure services like our water, electricity, hospitals, schools and roads.

The good news is that on many counts, the cost to service infrastructure can be cheaper in Auckland than in other places. For example, the cost to the Crown to roll out the Ultra-Fast Broadband Initiative that occurred between 2009 and 2022 for Auckland households and businesses was around 13% lower than the cost elsewhere in New Zealand ($971 for Auckland compared to $1,110 for the rest of New Zealand).

Retail electricity prices, which reflect the full costs of generating, transmitting, distributing, and retailing electricity, are lower in many parts of Auckland compared to other parts of the country. For example, in Auckland Central retail electricity prices are about 5% lower than the national average. The lower prices appear to be mostly due to lower distribution charges, which makes sense when you consider a kilometre of electricity line in an urban area will serve more customers than a kilometre in a rural area.

In terms of land transport, Auckland’s density reduces the average distance that people need to travel to reach their destination, which is reflected in the fact that Auckland has 79% less local roads per capita and 88% less state highways compared to the rest of New Zealand. Auckland’s density also increases the viability of providing public transport services – Auckland accounts for 55% of New Zealand’s total public transport boardings.

Auckland receives 33% of total National Land Transport Fund (NLTF) spending, which is similar to its share of national population. But it spends this very differently compared to the rest of New Zealand.

Auckland spends less on road maintenance as it has a smaller network to maintain. It spends more on public transport operations and capital investment, reflecting higher levels of public transport provision and use. Auckland also spends more on road improvements due to more complex mitigation requirements in an existing urban environment and higher land acquisition costs.

The challenge then is to manage these costs down through a longer-term approach to infrastructure planning that leverages the benefits of density. For instance, designating or acquiring land for infrastructure in advance to make it cheaper and easier to build the infrastructure when and where we need it. As we gave as an example in our 2023 report ‘Protecting land for infrastructure’, if the land for the North-South Opaheke Arterial had been purchased at the time the cost would have been $78m, but the price could rise by 13 times, to $1.0bn by the time of expected purchase.

Our largest city needs to grow in a way that stacks up financially and shares benefits widely. This means that a critical component of addressing the infrastructure challenge is a deeper understanding of where the lowest-cost places are to grow from an infrastructure perspective. This information might then usefully drive planning processes rather than follow them.

© Scoop Media