LGWM’s MRT Option Costs look very suspect

  • LGWM was made to release their Mass Rapid Transit Option Capital Cost Breakdown
  • This reveals some very questionable cost estimates in these options
  • Of special concern is the apparent cost inflation of the Bus Rapid Transit Option

Banner showing part of the LGWM MRT Options Capital Costs document

Very quietly, Let’s Get Wellington Moving releases the MRT Option Capital Costs

[UPDATE: The LGWM programme was shut down at the end of March 2024 by the incoming government.  As the LGWM web site has been closed down, links will shortly be updated to link to the Internet Archive]

On the 6th of June 2022, Lets Get Wellington Moving (LGWM) released the high level Capital Cost breakdown for the four options in its Mass Rapid Transit (MRT) Project. Now don’t bother looking in the obvious places such as the LGWM News page, this information release wasn’t announced because LGWM doesn’t want anyone to see it.  Here’s how you find this new document:

  1. Go to the LGWM All Projects Page
  2. Then go to the “Hello to mass transit” Project
  3. Then go down to the very end and click on the Related Documents page
  4. and finally, go right to the end of the page, you will find a new document called “Indicative Business Case cost estimate sheets Nov 2021

Now don’t be fooled by the date “26-Nov-21” in the document which you might think this document has been here the whole time.  This is a lie and easily proved because the Wayback Machine shows this document was not there in December 2021 or even 7 March, 2022 when it last took a snapshot copy of this LGWM web page. No, LGWM quietly added this document on the 6th June 2022 with the date saying it was released in November 2021.

The explanation on why LGWM released is document now is at the end of the article.

The structure of the MRT Capital Costs

Before we commence the analysis of this newly released information, a short explanation is required about the structure of the document released by LGWM.

The “Indicative-Business-Case-cost-estimate-sheets-Nov-2021.pdf” (MRT Capital Costs document) is quite short but somewhat confusing.  Essentially, it consists of two parts:

The first page shows which combination of four “costs modules” makes up each option
The other pages are the cost breakdown for each “cost module”

Each MRT Option is costed as a combination of the four Capital Costs of:

  • MRT to the South
  • MRT to the East
  • the Mount Victoria tunnel(s)
  • The Arras Tunnel/ Basin Reserve

So, for example, Option 2 Bus Rapid Transit is the combined cost of the costs modules:

  • MRT to the South = LGWM – MRT – opt ii – BRT – S (Page 6)
  • MRT to the East = LGWM – MRT – opt ii – BRT – E (Page 7)
  • the Mount Victoria tunnel(s) = LGWM – SHI- opt i,ii Tunnel – diagonal (Page 3)
  • The Arras Tunnel/ Basin Reserve = LGWM – SHI – opt i,ii,iii – basin GS (Page 4)

What do the MRT Option Capital Costs show?

Note that this analysis will focus on LGWM Options 1 (LRT) and 2 (BRT) which are the options most likely to be recommended.

The 2013 Public Transport Spine Study

Before we get into the LGWM MRT Costs, it is important to note LGWM is the second recent transport study to look at MRT Options to Wellington South and East. In 2013, the Public Transport Spine Study (PTSS) considered three MRT options from the Railway Station to Island bay and Wellington Airport:

  • Light Rail
  • Bus Rapid Transit
  • Bus Priority (equivalent to Enhanced Bus)

After nearly two years, the PTSS recommended the implementation of Bus Rapid Transit (BRT). [And if our political leaders followed through on this recommendation Bus Rapid Transit would have been implemented by now].

Unlike LGWM, the PTSS was very open with their cost estimates providing a detailed cost breakdown in its document “Appendix E – Option Cost Methodology”. Below is the summary of the PTSS LRT and BRT costs:

Summary Costs from 2013 PTSS: Light Rail (excluding LRT Tunnel) = $558 Million; Bus Rapid Transit = $207 Million

This study has been used as a baseline against which the LGWM MRT Options have been considered.

Summary of LGWM MRT Option Costs vs PTSS MRT Option Costs

The equivalent summary from the LGWM Options Capital Cost document is:

LGWM Options Capital Cost Summary (excl contingency): Light Rail = $1,964 Million; Bus Rapid Transit = $1,762 Million

It first must be noted that LGWM Option Costs are much higher than PTSS costs.  More importantly for this analysis, the LGWM BRT Option is nearly as costly as the light rail Option

The PTSS focussed on assessing whether Light Rail Transit (LRT), Bus Rapid transit (BRT) or Bus Priority (BP) would be the best MRT solution to Wellington South and East. Because the PTSS separated its option costs for MRT to Wellington south from Wellington East, we can replicate the LGWM Options 1 LRT and Option 2 BRT.  To do this, we need to make two changes:

  • Remove the cost of the LRT Tunnel for LRT to Wellington East (-$316.3M)
  • Replace the LRT to Wellington East costs ($37.7M) with “Priority Bus” costs to Wellington East ($14.1M)

Comparing the adjusted PTSS LRT & BRT Options with the LGWM LRT & BRT Options:

  • LRT Option: PTSS = $530.1M ; LGWM = $2,845.2M.  5 times more costly
  • BRT Option: PTSS = $207.1M ; LGWM = $2,558.7M.  12 times more costly!

We can also compare several elements of the LGWM Options Capital Costs:

  • LRT CBD – Wellington South*: PTSS = $257.5M ; LGWM = $568.1M.  Twice as costly
  • BRT CBD – Wellington South*: PTSS = $109.2M ; LGWM = $387.3M.  3 times more costly
  • Advanced Bus to Wellington East*: PTSS = $14.0M ; LGWM = $151.2M 10 times more costly
  • BRT to Wellington East*: PTSS = PTSS = $25.6M ; LGWM = $268.5M 11 times more costly!

*Excludes vehicles, design and contingency

There seems to be a consistent pattern that bus based option costs under LGWM have risen much more than light rail costs which is puzzling.  Some of this can be explained (see below) but, because LGWM refuse to provide any other detailed information on either option, the full reasoning can only be guessed. But the more than ten-fold increase in bus related capital costs in just 9 years is very suspect and deserves an explanation.

Option Contingency Costs don’t make sense

Being a PDF document, how the Option Capital Costs were calculated is still not known.  But by just observing the totals we can see how logical and consistent the LGWM MRT Option costs really are.

Below is an example of one of the Cost Modules in the LGWM MRT Options Capital Cost document.  You will note that each item usually has three elements: Base Estimate (BE), Contingency and Funding Risk Contingency (FRC).

LGWM MRT Option Cost document example page

The first issue is the estimates for some of the Contingency costs seem very inconsistent:

LGWM MRT Options Capital Costs: example of inconsistent Contingency amounts for LRT ($66.5M w $17.5M contingency) vs BRT ($56.9M w $26.2M contingency)

Normally contingency costs would be a similar % for each item. The strange thing with LGWM’s costing is that, while the light rail option Base Costs for landscaping and for Traffic Management are both higher than the BRT Option, the BRT Option has Contingency Costs for these items that are both $10M higher than light rail.  This higher Contingency Cost results in the Total BRT Option Capital Cost for landscaping and for Traffic Management is higher than for light rail!  This would be understandable if the risk for delivering these items would be very different for light rail and BRT but it is difficult to see that landscaping and traffic management for implement BRT would be much higher than for light rail.

So why are these Contingency costs so much higher for BRT?

LGWM BRT Costs have increased much more than LRT Costs

We can also review LGWM Option Capital Costs by comparing them with the equivalent 2013 PTSS Capital Costs estimated about eight years ago.

PTSS and LGWM Vehicle Costs

The vehicle costs for LRT that means light rail vehicles and for BRT that means articulated buses and probably then same for “Enhanced Bus”.

The PTSS the vehicle costs compared to LGWM vehicle costs are as follows:

  • LRT vehicles: PTSS = 22 x $4.0M = $88M ; LGWM = $108.8M.  1.2 times more expensive
  • BRT vehicles: PTSS = 40 x $0.7M = $28M ; LGWM = $123.7M.  4 times more expensive!

Again we see this pattern with LGWM having increased bus vehicle costs much much more than the light rail vehicle cost increase.  In fact this is the first study I have ever seen where the BRT Option vehicle costs are greater than the light rail option vehicle costs.  This surely cannot be correct.

PTSS and LGWM Pavement and Service Relocation Costs

Both the PTSS and LGWM recognise that implementing light rail requires relocation of underground services and repaving the streets to support the tracks and much heavier LRT vehicles. The pavement and service relocation costs are as follows:

  • LRT Service Relocation South: PTSS = $47.0M; LGWM = $93.6M.  Twice as expensive.
  • BRT Service Relocation South: PTSS = $7.0M; LGWM = $48.9M.  7 times more expensive.
  • LRT Pavement South: PTSS = $10.8M ; LGWM = $123.7M.  12 times more expensive!
  • BRT Pavement South: PTSS = $0 ; LGWM = 36.0M (PTSS BRT did not have repaving)

The LGWM light rail Option Pavement and Service Relocations Costs to Wellington South are about 4 times greater than the PTSS but the equivalent BRT Option Pavement and Service Relocations Costs are 12 times greater!

It should also be noted that LGWM applies the same high costs for Bus Rapid Transit and Enhanced Bus to Wellington East, $46.6M when the PTSS costed just $3.8M for the same route.

PTSS Appendix E provides an explanation of its underground cost estimations:

LRT has included scope for:
   * Concrete slab beneath all tracks, this requiring the movement of existing services outside this concrete corridor

BRT has included scope for:
Assumed as not requiring a concrete slab on the bus route, this therefore does not require the alterations of existing services from these routes unless for specific road alterations …

In contrast to the PTSS, LGWM hides that its BRT Option Capital Cost is much greater because includes tens of millions in new pavement and service relocation costs that the 2013 PTSS said was not required for running BRT buses on roads.

More suspect costs in the LGWM BRT Option

There are other LGWM Capital Costs that are also difficult to explain.  For example, there is the building costs for implementing MRT to Wellington East:

  • LGWM LRT (Enhanced Bus) Building Costs = $7M ; BRT Building Costs = $61.3M

What buildings are needed to support BRT to Wellington East that are not needed for Enhanced Bus?

Another example is the LGWM Tunnel and Rail Infrastructure Costs for LRT and BRT to the South.  Light rail to the South doesn’t have tunnelling but does have rail infrastructure costs:

LGWM MRT Options Capital Costs: Extract showing Tunnelling ($0) and Rail Infrastructure ($24.5M) costs for light rail

The strange thing is the Bus Rapid Transit to Wellington South costs has tunnelling costs and also has rail infrastructure costs:

LGWM MRT Options Capital Costs: Extract showing Tunnelling ($6.6M) and Rail Infrastructure ($4.1M) costs for Bus Rapid Transit

What tunnelling is required for BRT that is not required for LRT and why does BRT have $4M in rail infrastructure costs?

Why have two long tunnels when one short one will do?

The Mt Victoria Tunnel Duplication Project was run by NZTA in parallel to the PTSS. This proposed a second wider tunnel parallel to the current Mt Victoria tunnel. This tunnel would have two road lanes and a separated corridor for active mode travel enabling the current tunnel to be widened.

LGWM are instead proposing two new tunnels that run diagonally and so are much longer. Until now, the actual cost of these tunnels has been a secret but the MRT Option Capital Cost document reveals these tunnels will cost $1,030M … three times the cost of the Mt Victoria Tunnel Duplication Project. LGWM documentation claims they are also considering the parallel tunnel but, without providing the costs or benefits of either option, it is impossible for the public to understand which is best.

It is now clear that, whatever the benefits, the two diagonal Mt Victoria tunnels proposed by LGWM are much more expensive than the one parallel tunnel proposed in 2013.

Why have BRT to the East?

Perhaps the biggest indication of bias against BRT is LGWMs decision to implement Enhanced Bus to Wellington East for the light rail options but Bus Rapid Transit to Wellington East for the BRT Option adding $150M.

The greater cost of the BRT Option would be understandable is it also provided a significantly better service to Wellington East. But LGWM’s own information shows both options deliver exactly the same performance:

LGWM commuter travel time from Wellington East to Railways Station using Option 1 Enhanced Bus: from Miramar shops = 14 minutes sooner; from Airport = 8 minutes soonerLGWM commuter travel time from Wellington East to Railways Station using Option 2 Bus Rapid Transit: from Miramar shops = 14 minutes sooner; from Airport = 8 minutes sooner

What benefit does spending another $150M in implementing BRT to Wellington East if it is no faster than Enhanced Bus? LGWM does not say.

Cr Kirk-Burnnand has suggested a second BRT option combination. Even using LGWMs own costs, he showed it is possible to logically put together a BRT Option that has much better ratepayer value  and should be just as effective as the BRT produced by LGWM.  Let’s just make three changes:

  • Instead of two diagonal Mt Victoria tunnels ($1,000M), only build one new Mt Vic tunnel parallel to the current tunnel (with a section for active mode travel) as proposed in 2013 which would be 1/3rd the cost at $333M
  • Instead of implementing BRT to Wellington East ($390.8M), only implement Enhanced Bus to Wellington East which would cost only $245.5M
  • Instead of including pavement and service relocation costs in the BRT Option to the South ($77.2M) which are not required for the BRT Option, use the PTSS allocation which would costs to about $11.1M

These three changes alone would reduce the base BRT Option Capital Cost (excluding design and vehicles) from $2.4B to $1.5B.


This analysis has highlighted the most significant issues with the LGWM MRT Option Capital Cost information.  It shows, based on the information now released, that LGWM has some explaining to do with their cost estimates for the four recommended MRT options.  Are these really the best, most cost effective options for Wellington? It seems that the PTSS and the Mt Victoria Tunnel Duplication Project together provided the same MRT benefits without the massive costs claimed by LGWM.

Even more important, is the apparent consistent cost inflation for the Bus Rapid Transit Option.  The 2013 Public Transport Spine Study estimated the light rail option would cost more than twice the Bus Rapid Transit option.  LGWM estimated the light rail option and the Bus Rapid Transit Option cost about the same.  But looking into their cost estimates, one can see consistent cost inflation in the BRT Option … even the buses cost more than light rail vehicles according the LGWM!

But most importantly, this analysis shows that that LGWM have NOT been open about the costs of these four MRT options.  Now the next level of costs has been revealed, we can see there are more questions about the impartiality and bias in their MRT analysis. And if they have biased these costs, what other information have they hidden from the public about these options?

We will shortly be asked to approve literally billions of tax and ratepayer dollars on the most significant investment in Wellington City transport for more than two decades and we are about to hear which MRT option is preferred yet LGWM refuses to tell us even basic stuff like:

  • How many vehicles does each option have and why do they cost so much?
  • What is the number of people LGWM expects will be taking MRT from Wellington South and how many will bus from Wellington East?
  • Will the buses from Wellington South and East go direct to the CBD or will bus riders have to interchange at a light rail stop?
  • Why are two new longer road tunnels being proposed when a single shorter Mt Vic tunnel could do the same job?
  • What is the annual extra cost to tax and ratepayers of each MRT option?

LGWM have spent many millions to produce all this information but they refuse to release it to the public. LGWM and its partners in government are railroading Wellington towards options that favour light rail Option 1  without any good evidence that this is the best option or even that it will deliver the improved transport promised by Lets Get Wellington.

Finally, if you want to do something about it then join us in demanding LGWM answer these questions before we’re asked to sign-up to one of these multi-billion dollar options.

Why LGWM Released the MRT Option Capital Costs Now

From the start, many people have been asking LGWM for more details on their MRT Option Costs, including me. I was refused all cost, benefit and patronage information with LGWM claiming these parts of the MRT Option analysis “are the intellectual property of the respective contractors who completed this work” and to release them “would disclose a trade secret”!

I have had a complaint with the Ombudsman but after more than 6 months the Ombudsman’s office STILL haven’t assigned an investigator.

LGWM have a very good reason for hiding this information because, as outlined above, releasing detailed figures only raises questions about their claim these are the best four MRT options that are very hard to explain away.

So why, after all this time, did LGWM released their MRT Option Capital Cost summary now?  Well, one key person who has continued to ask for more information is Regional Councillor Kirk-Burnnand.  He tells me he has not been happy with sitting through 60 page PowerPoint presentations on LGWM that actually contain very little information.  Like me, he wanted to know the key information about these very expensive options such as:

  • What is the cost of the twin diagonal road tunnels? (Cr Kirk-Burnnand has publicly noted that, based upon evidence from an engineer, the proposed tunnel costs might be understated by $1.4 Billion!)
  • What is the estimated cost of building a single parallel Mt Victoria road tunnel that was recommended by the 2013 Spine Study and is the alternative tunnel option still being considered by LGWM?
  • For the LRT Options, how many light rail vehicles are there and how much will they cost?
  • For the BRT Option, how many buses are there and how much will they cost?

In his efforts to find the answer to these and other questions, he discovered that LGWM had released the MRT Options Capital Costs to another member of the public in December 2021.  [This was a fortnight after LGWM refused to release this same information to myself and others!!]

Having been caught, LGWM promised to release this information and they have now done so. But it seems they cannot help but do this in a way that both buries this information and hides they never wanted it to be released.

LGWM have still not released a lot of other requested information. The only two paths to really understanding what they are proposing:

  • wait for the Ombudsman investigation to start or
  • to publicly demand some answers from our political leaders.

As there’s an election coming up they might listen for once.

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