Economic impacts - Auckland Strategic Rail Programme

The Auckland strategic rail programme creates a vision for the rail network, its maintenance and resilience, and a strategic programme that will shape rail transport in Auckland over the next 10-30 years. It represents a nationally significant investment to create benefits at national and regional level.

To better understand its impacts across the NZ economy, KiwiRail commissioned a Computable General Equilibrium (CGE) analysis of the economic and emissions impacts of the 30-year strategic rail programme for Auckland (i.e. the recommendations of the Rail PBC 2023). The analysis extends to 2100 (i.e. 50 years beyond completion of the programme).

  • The benefits from the collective rail investment include significant national and regional economic growth and national and international supply chain efficiency and productivity. On programme completion in 2050, national real GDP would grow by $2.2 billion per annum, rising to $6.6 billion to $7.3 billion per annum greater than it would have been by 2100.
  • Emissions efficiency: per unit of economic output emissions will decrease as the programme changes the composition and location of generation. Long-term reductions in the transport, primary and manufacturing sectors can free emissions allowances for more productive uses. The transport emissions saving is 32.3Kt CO2-e by 2100.
  • Employment and sector investment: As well as building and retaining a skilled rail sector workforce, the proposed investment programme provides a sustainable pipeline of work and certainty for firms to invest in rail. It is estimated that the investment programme would create 22,800 to 23,700 additional FTE jobs and increase average real wages.

The higher figures in the ranges shown above occur with earlier construction of the cross-isthmus Avondale-Southdown corridor. By contrast, delaying investment would reduce the scale of benefits from the programme.

National and regional benefits: The investment proposed in Auckland’s rail system is significant and has benefits well beyond just Auckland. All other regions benefit; notably Wellington and the South Island would see real GDP more than $1 billion higher each in 2100 than it would otherwise have been.

This economic assessment and a socio-economic assessment of the value of New Zealand’s existing rail construction industry are available in the following reports and presentations.

Economic contribution of New Zealand’s existing rail construction industry: The investment programme would create around 23,000 additional jobs in the New Zealand economy. This is on top of the industry that already exists and for which future pipeline is important. A socio-economic assessment of the value of this existing industry has also been undertaken.

You can read more about the strategic rail programme here.