Dear KiwiRail,

Please provide the benefit-cost ratio for Project iReX as it was on 1 January 2023 and for every occasion since then when the benefit-cost ratio for the project has been revised.

Please include the following information for each revision of the benefit-cost ratio: the date of the revised ratio, the estimated value of benefits and the estimate value of costs, and the reason for the revision of the figures.

Thanks

Andrew Riddell

Dear Dave Allard,

Thanks for the response.

You mention discussion about the NPV of the project.

This is different to what I requested - I asked about the benefit-cost assessment which is a much broader assessment than a net present value assessment.

Cheers

Andrew Riddell

Dear Dave Allard,

Perhaps I should explain why I made my request.

The 24 February 2023 Ministerial briefing by KiwiRail includes the following discussion on the benefit-cost ratio of Project iReX.

45. The investment provides broader benefits than attaining higher cash flows for the Interislander (through lifting capacity to deliver for a growing Cook Strait market, reducing operating costs while improving operational efficiency, and achieving strong reliability and on-time performance measures). These include broader benefits such as network resilience, emissions reduction, and employment and are measured through the benefit-cost ratio (BCR).
46. Previously, the BCR for Project iReX was 4.4 (i.e., the benefits of the $1.450 billion programme were quantified to represent a benefit of $4.276 billion in economic, emissions, reliability, and resilience benefits). This was a very high BCR. The additional investment would materially reduce the BCR, however it has been recalculated to be 2.1 and represents an economic benefit of $4.014 billion. Note that 2.1 is also a high BCR for a major transport/infrastructure investment.

My question arose because I am aware that the costs of the project had been revised several times since that February briefing. However I could not find further revisions of the benefit-cost ratio in the documents released by Treasury.

Hence the request which covers all internal KiwiRail documentation relating to cost benefit ratio calculations. That would include the calculations behind both the BCRs referred to in paragraph 46, quoted above.

Cheers,

Andrew Riddell