Source: New Zealand Infrastructure Commission
A new report by the New Zealand Infrastructure Commission, Te Waihanga, highlights the opportunities that Auckland’s population density offers for reducing infrastructure costs for New Zealand.
“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,” says Te Waihanga Chief Executive Geoff Cooper.
“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,” Cooper says.
“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,” Cooper says.
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,” Cooper says.
“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.”
Background information
- Outside of looking at the cost of Auckland’s network infrastructure compared to the rest of New Zealand, the report also looks at what Auckland households spend on infrastructure and Aucklanders’ perceptions on options to pay for infrastructure services, such as water, roads and electricity.
- In 2023, the Auckland region had a population of 1.66 million people, or 33% of New Zealand’s total population. However, the Auckland region only occupies 1.8% of the country’s total land area.
- Auckland’s population isn’t evenly distributed within its region, with 92% of Aucklanders living in only 14% of the region’s area.
- Auckland is less densely populated than large European cities, but it is comparable to similarly sized Australian and Canadian cities.
- In 2023, Auckland contributed 38% of the country’s total economic output (GDP, or gross domestic product).
- The median motorway expansion project in Auckland cost around $13.2 million per lane-kilometre (in 2021 New Zealand dollars), which is equal to over $50 million per kilometre for a four-lane road. This is 62% higher than the median cost of around $8.2 million per lane-kilometre in the rest of New Zealand.
