DRAFT Peer review of Auckland Harbour Bridge WC crossing benefits v.3.pdf

Peer review: economic benefits of a
cross harbour walking and cycling link
(including wider economic benefits –
WEBs)
New Zealand Transport Agency (NZTA)
FINAL DRAFT – CONFIDENTIAL
Reliance Restricted
6 June 2019 | Version 1.0 (Draft)

06 June 2019 | Version 1.0 (Draft)
Reliance Restricted
Robert Strong
Principal
NZTA
Level 11, HSBC House, 1 Queen St, Auckland
Ernst & Young
2 Takutai Square,
Britomart, Auckland 1010,
Economic benefits of a cross harbour walking and cycling link (including wider economic benefits –
New Zealand
WEBs) – Peer Review Report
ey.com
06 June 2019
Dear Robert,
In accordance with the IPA Contract, dated 28 February 2019 (“Contract”), EY has been engaged to undertake a peer review
of work by Flow and MRCagney to estimate the economic benefits of a cross harbour walking and cycling link (including wider
economic benefits – WEBs). This engagement provides NZTA with a final draft report (the “Report) with our views and
Chris Money
recommendations to enhance the content provided.
Partner
Purpose of the Report and restrictions on its use
Transaction Advisory Services
The Report may only be relied upon by the NZTA pursuant to the terms referred to in the Contract. Any commercial decisions
T +64 4 817 0546
taken by NZTA are not within the scope of our duty of care and in making such decisions you should take into account the
M +64 275921364
limitations of the scope of our work and other factors, commercial and otherwise, which you should be aware of from sources
E [email address]
other than our work. For further details, please refer to the assumptions and limitations outlined in this report.
EY disclaims all liability to any party other than the NZTA for all costs, loss, damage and liability that the third party may suffer
or incur arising from or relating to or in any way connected with the provision of the deliverables to the third party without our
prior written consent.
If others choose to rely in any way on the Report, they do so entirely at their own risk. If the NZTA wishes to provide a third
party with copies of the Report, then our prior written consent must be obtained.
If you would like to clarify any aspect of the report or discuss other related matters then please do not hesitate to contact me.
Yours faithfully
Chris Money
Partner
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Dashboard
1 Introduction
2 Summary of our peer review
Table of contents
3 Peer review of ‘Wider  ...
4 Peer review of ‘Cross  ...
1
Introduction
Page 4
2
Summary of our peer review
Page 6
3
Peer review of ‘Wider economic benefits of a new walking and cycling link across the Waitemat a Harbour’
Page 8
4
Peer review of ‘Cross Harbour Walking and Cycling Conne ction - Draft Transport Modelling an d Economic
Page 10
benefit evaluation
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Introduction
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1 Introduction
1 Introduction
2 Summary of our peer review
3 Peer review of ‘Wider  ...
4 Peer review of ‘Cross  ...
Outline of this report
Our report has been organised as follows:
► Section 1 (this section) provides an overview of the engagement, our scope of work and its assumptions and limitations
► Section 2 provides a summary of our peer review.
► Sections 3 and 4 contain our full set of comments, including a “traffic light” assessment related to the potential materiality that addressing the commentary may
have on the results presented in the reports subject to peer review.
Overview of the project
► The proposed project involves a 1.3 km shared use, walking and cycling facility on the Auckland Harbour Bridge that will connect Northcote Point on the North
Shore to Westhaven in Central Auckland. It is expected to attract utility and recreational cyclists and pedestrians, as well as tourists.
► The New Zealand Transport Agency has tasked Flow Transportation Specialists and MRCagney to conduct analysis of the potential benefits that may arise from
this project.
Scope of work
Our scope of work includes the peer review of the following reports:
1.
“Wider economic benefits of a new walking and cycling link across the Waitemata Harbour” prepared by MRCagney dated 3 April 2019
2.
“Cross harbour walking and cycling connection - Draft Transport modelling and economic benefit evaluation” prepared by Flow Transportation Specialists dated 15
April 2019.
EY’s role is strictly limited to a methodological peer review of the contents presented in these reports and does not include a review of any modelling conducted to
support their preparation. Our work is bounded by the assumptions and limitations outlined below
Assumptions and limitations
► The scope of EY’s peer review has been limited to the documents listed above. Appendix A referenced in the report titled “Cross harbour walking and cycling
connection - Draft Transport modelling and economic benefit evaluation”  was not provided to us and therefore has not been peer reviewed.
► This report does not include a peer review of other documents used as a reference.
► EY has not peer reviewed any of the models mentioned in these documents nor has EY conducted an audit of any modelling/forecasting process and/or its specific
inputs or outputs.
► EY’s views are limited to the approach presented in the mentioned documents. Whenever possible we have aimed to express views on specific methodological
components such as formulas and parameters applied to calculate results, if available.
► We reserve the right to amend/update our comments with respect to the reviewed documents based on the availability of new information.
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Summary of our peer review
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2 Summary of our peer review
1 Introduction
2 Summary of our peer  ...
3 Peer review of ‘Wider  ...
4 Peer review of ‘Cross  ...
Summary of our approach
Our peer review has been conducted through a four step process:
1.
Initial document review: EY reviewed the reports listed on pg. 5 and provided initial commentary regarding the methodological approach undertaken.
2.
Discussions with authors: EY held meetings with authors to ask for/ provide clarifications based on the comments raised in the initial document review.
3.
Additional documentation review: EY was provided with additional documentation containing updates to the authors methodological approach based on
discussions as per Step 2. EY reviewed the proposed changes and held meetings with the authors to ask for additional clarifications and provided advice to
strengthen their evidence base, as appropriate.
4.
Peer review reporting: The process outlined above was summarised in this report which contains EY’s overall assessment of the authors work as well as
detailed commentary on specific elements of their methodological approach.
General commentary for “Wider economic benefits of a new walking and
General commentary for “Cross harbour walking and cycling
cycling link across the Waitemata Harbour”
connection - Draft Transport modelling and economic benefit
evaluation”
EY’s general views on this report are:
EY’s general views on this report are:
► The methodological approach undertaken by MR Cagney reflects a
► The methodological approach undertaken by Flow, reflects a reasonable
reasonable application of standard methodologies and practices. Overall,
application of standard methodologies and practices in most instances.
conservative assumptions have been applied in the absence of specific
The authors have applied formulae and parameters as per contained in
information.
the Economic Evaluation Manual (EEM) guidance, when applicable.
► The authors have disclosed areas where uncertainties are present and
► While some parameters may carry some level of uncertainty (for example,
further work may be needed to refine estimates.
there is little evidence available on the effect of e-scooters over cycling
demand given that this mode is fairly new), the authors have conducted
► The authors may wish to consider some restructuring in terms of how the
sensitivity assessments to provide confidence that the overall results are
information is presented, in order to make it easier for the reader to
not likely to change significantly given changes in these parameters.
understand key calculations that are specifically related to the project.
► The authors may wish to consider updating these parameters once more
evidence becomes available to refine the assessment.
.
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Peer review of ‘Wider economic
benefits of a new walking and
cycling link across the Waitemata
Harbour’
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3 Peer review of Wider economic benefits of a new walking and cycling link
1 Introduction
2 Summary of our peer review
across the Waitemata Harbour
3 Peer review of ‘Wider  ...
4 Peer review of ‘Cross  ...
Section
Reference
Methodological approach
EY commentary
Materiality
5. Evaluating the
General
This section is based on Flow’s Transportation estimates of the number of tourists

tourism related
comments
going through the facility. Given these estimates have been conducted based on very
benefits
high level assumptions, we suggest including an explanation to that effect in the report
to ensure consistency with Flow’s work.
MRC response:
We propose to incorporate any amendments (or sensitivity tests) ultimately made by
Flow.
EY response:
EY is comfortable with this approach.
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Materiality:    Addressed / Incorporate information in the report             Potentially small impact to the results
 Potentially material impact to the results

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Peer review of ‘Cross Harbour
Walking and Cycling Connection -
Draft Transport Modelling and
Economic benefit evaluation’
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4 Peer review of ‘Cross Harbour Walking and Cycling Connection - Draft
1 Introduction
Transport Modelling and Economic benefit evaluation’
2 Summary of our peer review
3 Peer review of ‘Wider  ...
4 Peer review of ‘Cross  ...
Section
Reference
Methodological
EY commentary
Materiality
approach
3. Demand
Pg. 5
“The same ‘existing’
Please specify the relevant differences in catchment that have been considered. Do these only refer to future land use (as per Table

Section 3.1
pedestrian demands have
3) or are there any other factors being considered?
been assumed to apply to
a walking and cycling
Flow’s response:
facility across the
This statement in the reporting is unclear, and will be corrected. The 1,190 existing pedestrians on Tamaki Drive has been assumed
Auckland Harbour Bridge,
to apply equally to the cross-harbour facility (if built today), as their respective population catchments within a 2km radii are relatively
if it were available today,
equal.
factored by relevant
differences in catchment”
EY’s response:
EY is comfortable with the approach undertaken and acknowledges that reporting will be corrected as per above.
Pg. 5
“A 20% increase has been  Assuming the word above is referring to the 1190 daily pedestrian trips estimated for Tamaki Drive a 20% increase results in 1428

Section 3.1
estimated to apply to the
trips per day not 1400. Please clarify if this is just for rounding purposes.
2018 pedestrian demands
above, to give estimated
Flow’s response:
2026 demands of 1,400
Correct – this is just rounding. 1,428 pedestrians implies far greater accuracy than the estimate has.
pedestrian trips per day”
EY’s response:
EY is comfortable with this explanation, however suggests using 1,428 if possible.
Pg. 5
“Future growth beyond
Please provide explanation for this assumption. It is not clear in section 3.2. why the same growth rate has been set for cyclists and

Section 3.1
2026 has been set at 2.2%  pedestrians beyond 2026.
per annum (linear
increase), based on the
Flow’s response:
forecast growth in cycle
The assumption is that there are multiple drivers behind the expected growth in pedestrian trips across the harbour, including the
trips on the facility (refer
future cost of travel by other modes. These are reasonably expected to grow at a higher rate than the 0% to 2% annual land use
Section 3.2).”
growth forecast north/south of the bridge.
EY’s response:
Please provide clarification on why specifically 2.2% growth has been set.
Flow’s response:
As discussed, we’ve simply pegged this growth to the forecast cycle trip growth predicted by the cycle model, as this 2.2% is slightly
higher than the forecast land use growth (and I would expect pedestrian numbers to grow a little faster than land use). Sensitivity
testing this assumption:
• 0% pedestrian growth beyond 2026: -$3.3 million in discounted benefits
• 1% pedestrian growth beyond 2026: -$1.9 million
• 2.2% pedestrian growth beyond 2026: default assessment
•3% pedestrian growth beyond 2026: +$0.9 million
So this has a very small impact on the overall $259 million in discounted benefits.
EY’s response:
EY acknowledges that the sensitivity assessment provides indication of small impact on the overall result due to changes on the
pedestrian growth rate. We suggest including this assessment in the report to provide additional confidence around these estimates.
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Materiality:    Addressed / Incorporate information in the report           Potentially small impact to the results
 Potentially material impact to the results

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4 Peer review of ‘Cross Harbour Walking and Cycling Connection – ‘Draft
1 Introduction
Transport Modelling and Economic benefit evaluation’
2 Summary of our peer review
3 Peer review of ‘Wider  ...
4 Peer review of ‘Cross  ...
Section
Reference
Methodological approach
EY commentary
Materiality
3. Demand
Pg. 12 Section
“Understandably the forecast
Can we provide any details on the Upper Harbour Bridge cycling connection (e.g. current/future capacity) that can

3.2.6.
for the cross harbour
help understand the high forecasts for the Cross Harbour (i.e. is the argument based on the Upper Harbour Bridge
connection is higher than the
being at full capacity in the near future?)
forecasts for Tamaki Drive and
the Northwestern Cycleway, as
Flow’s response:
the proposed facility will be the
Capacity is not a constraint within the ACM, and the Upper Harbour Bridge in any case is very unlikely to reach
only cycling connection to the
capacity, being a very long way around the harbour. The future demands on the cross harbour facility are higher
North Shore other than the
than those for Tamaki Dr or the Northwestern, because it would be the only link connecting the significant North
Upper Harbour Bridge.”
Shore catchment. As an aside, we understand that Quay Street and the Northwestern cycleway have seen
significant growth in 2018. Table 5 probably warrants updating to reflect 2018 data.
EY’s response:
EY is comfortable with the methodology undertaken and suggests including this explanation in the report.
Pg 12 Section
“the proposed facility will provide  Should this analysis only look at population North and East of the CBD?
3.2.6
access to approximately double

the residential catchment within a  Flow’s response:
5km radius”
This simple analysis is provided as a high level sensibility check. Clearly there are other factors that affect cycle
demand beyond residential populations. But the comparison has been made to provide some comfort in the scale of
the forecasts.
EY’s response:
EY is comfortable with the explanation provided, we suggest including a footnote to this effect.
Pg. 16 Section
“San Francisco has a more
Is there any details on the urban cycleways program (i.e. when will it be completed, what is the proposed

3.3
developed cycle network and
infrastructure involve?, etc.)
bicycle culture than Auckland
generally, but Auckland will
Flow’s response:
have a comparable network
Refer https://www.nzta.govt.nz/walking-cycling-and-public-transport/cycling/investing-in-cycling/urban-cycleways-
within the city centre on
programme/auckland-urban-cycleways-programme/
completion of the Urban
The UCP was funded in 2014, for a four-year investment programme (2014-2018). The programme is partially
Cycleways Programme”
complete, and has been extended to allow for a 2020 completion date.
EY’s response:
EY is comfortable with the information provided and suggests adding a footnote with the above information.
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Materiality:    Addressed / Incorporate information in the report      Potentially small impact to the results
 Potentially material impact to the results

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4 Peer review of ‘Cross Harbour Walking and Cycling Connection - Draft
1 Introduction
Transport Modelling and Economic benefit evaluation’
2 Summary of our peer review
3 Peer review of ‘Wider  ...
4 Peer review of ‘Cross  ...
Section
Reference
Methodological approach
EY commentary
Materiality
[…]It is not practicable to
3. Demand
Given the high level assumptions used to estimate the number of tourists going though the proposed facility it may be useful to include
develop estimates of daily
a sensitivity around this particular demand group. Suggest using evidence on share of tourist trips on existing routes instead.
tourist users on the proposed
cross-harbour walking and
Flow response:
cycling facility based on the
Agree that the high level estimates of tourist numbers warrant sensitivity testing, and this has been done in Section 6.12 of the report.
530 average daily tourist
We’re unaware of any suitable local routes that would provide useful comparisons for tourist trips; happy to discuss options however.
users of the Queenstown
Pg. 18 Section Trail, given the differences
On April 4 2019, Flow issued a technical note including estimation of tourist demand numbers using Queenstown as a benchmark to

3.2.2
between these two facilities
provide a comparison with previous estimates.
and their context. However,
the latter provides some
EY response:
confidence that the separately While estimates are based on high level assumptions, EY acknowledges that sensitivity testing has been conducted (-50% tourist
estimated 550 daily tourist
demand)  and that the impact on the results is relatively small to the overall benefits. Queenstown estimates provide additional
users of the proposed cross-
confidence to the results regarding tourist demand are in the order of 550. We suggest refining estimates when more information
harbour walking and cycling
regarding similar local routes becomes available.
facility is sensible…
Pg. 20
Table 9
Is it possible to provide breakdown for new and existing users?

Section 3.5
Flow’s response:
We don’t have separate breakdowns of new and existing users by type. However, it is reasonable to assume that:
- 100% of tourists are new users
- 85% new and 15% existing users, for utility and recreational cyclists; from the ACM
- 50% new and 50% existing pedestrians; estimated as per Section 6.4
EY’s response:
Please provide clarification regarding the split between new and existing pedestrians.
Flow’s response:
Again as discussed, ostensibly every pedestrian trip across the bridge will be a new trip, as you can’t currently walk across the bridge.
The 50% reduction is a conservative attempt to recognise that some recreational pedestrian trips across the bridge will replace existing
recreational trips elsewhere. Of course there’s no data to give us a more accurate estimate. Again sensitivity testing this:
•100% of pedestrian trips are new: +$14.9 million in discounted benefits
•50% of pedestrian trips are new: default assessment
•0% of pedestrian trips are new: -$14.9 million in discounted benefits
These sensitivity tests are really quite extreme: it’s very unlikely that none of the pedestrian trips across the bridge will replace an
existing trip. Any commute pedestrian trip will generate health benefits, as the current alternative is car/bus/ferry. And clearly some –
possibly most – of the recreational trips will also be new.
EY’s response:
EY acknowledges that the sensitivity assessment provides indication of small impact on the overall result due to changes on the
proportion of new pedestrians. We suggest including this assessment in the report to provide additional confidence around these
estimates.
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Materiality:    Addressed / Incorporate information in the report      Potentially small impact to the results
 Potentially material impact to the results

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4 Peer review of ‘Cross Harbour Walking and Cycling Connection - Draft
1 Introduction
Transport Modelling and Economic benefit evaluation’
2 Summary of our peer review
3 Peer review of ‘Wider  ...
4 Peer review of ‘Cross  ...
Section
Reference
Methodological approach
EY commentary
Materiality
6. Economic
"It is noted that car mode share may not directly
Car mode share is not representative for mode diversion share. Closest substitute is ferry or
Benefit
correspond to car diversion, as public transport
other PT.
Evaluation
users may be more willing to change mode to
cycling than car users.  This would particularly be  Flow’s response:
the case for users who do not have access to a
Agree that we should discuss lower diversion rates. We note however that:
vehicle.
•
The diversion rate applied to the assessment is 36% in 2026 and 32% in 2046 (when
combining mode share, car occupancy and the proportion of utility trips). By comparison, the
The 2013 Census data however indicates that
EEM’s diversion rate for PT is 72.5%
only 5% of households within the Devonport-
•
22% of Auckland Lime scooter trips were reported to replace a car trip in 2018. This
Takapuna and Kaipatiki Local Board areas did not
provides a useful reference diversion rate, particularly given that e-scooters are generally
have access to a car.  Nonetheless, this suggests
used for shorter trips than bicycles and are potentially less likely to replace a car trip.
that an additional factor may be necessary, to
account for this bias.
On April 4 2019, Flow issued a technical note including estimation of lower diversion rates for
the commuter peak period.
Conversely however, we consider that car/public
transport diversion is also corridor specific, and
EY’s response:
will vary depending on the respective levels of
EY acknowledges the clarification and disclosure of uncertainties related to this figure. However,
service offered for each mode.  In the case of the  there is not enough evidence to conclude whether the approach undertaken to estimate car
Auckland Harbour Bridge and its approaches,
diversion rate is methodologically sound. As noted by the author, different drivers for car

existing level of service by car is very poor, with
diversion offset each other to some degree but the extent is unclear. Given that only $0.10 of
Pg. 30. Section 6.7.
significant queues and delays for car users during  the per km cycle externality relates to decongestion (whilst congestion cost per km of car travel
the commuter peak periods.  Levels of service for  is $1.86), car diversion may be less than 10%, which is lower than the proposed rates for the
bus users however are relatively good, with bus or commuter peak (31%). Suggest conducting sensitivity testing to understand the impact .
transit lanes on the key arterial corridors that
supply the Northern Motorway (Onewa Road,
Flow’s response:
Esmonde Road and Akoranga Drive on the North  I attach QTP’s economic evaluation for the Christchurch Major Cycleways programme from
Shore, and Fanshawe Street in the city centre),
2014, which was accepted by the Transport Agency. Refer in particular to paragraphs 5.2.5 to
and bus priority through interchanges.
5.2.7, which document the 0.6-0.65 car diversion rate used in that analysis and accepted by the
Transport Agency.
The two factors above offset each other to some  But sensitivity testing this again:
degree, but it is not possible to quantify to what
•
0.10 car diversion in 2026 and 2046: -$33 million in discounted benefits
extent.  As a result, the car diversion rates applied •
0.31 car diversion in 2026, 0.27 in 2046: default assessment
to the economic evaluation have been developed  •
0.60 car diversion in 2026 and 2046: +$76 million in discounted benefits
based on car mode shares, as documented
below.
EY’s response:
Results appear to be moderately sensitive to changes in car diversion rates. Given that previous
diversion rates approved by NZTA seem to be in the order of the upper range of the sensitivity
test, the default assessment provides a more conservative assumption in the absence of more
corridor specific diversion rates. We suggest including this sensitivity testing in the report to
provide additional confidence in the results.
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Materiality:    Addressed / Incorporate information in the report      Potentially small impact to the results
 Potentially material impact to the results

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