The Government's infrastructure priorities now need to be reviewed in light of the cost of Christchurch's devastating earthquakes. However, the cost-benefit appraisals of major transport schemes that are likely to form part of the reprioritisation tend to understate the benefits. Thus there is a risk the wrong projects get weeded out or delayed when it would be better to look elsewhere to find the money needed to support Christchurch. We describe the reasons why, and provide some considerations that will help reduce this risk. In the long term we would argue for improvements to methodologies.
The cost of Christchurch’s devastating earthquakes means that the Government’s prior promises to undertake specific infrastructure projects now have to be reviewed. As the Finance Minister1 signalled, funding Christchurch’s recovery will prompt ‘a fairly hard look at our capital investment priorities to see whether they can be shuffled around’.
The challenge is to make the right tradeoffs about whether to abandon or delay a given infrastructure project and redirect those funds to Christchurch’s redevelopment or to continue as originally planned.