Good afternoon Andrew

Thank you for your enquiry.

All the relevant information on Project iReX has been proactively released by Treasury, Ministry of Transport, and KiwiRail.
The information you seek can be found here - https://www.treasury.govt.nz/publication...

The document of 29 Nov 2023, would probably be the most helpful in terms of setting out the timeline, and specifically discussed the NPV for the Project.

Kind regards

Dave

-----Original Message-----
From: Andrew Riddell <[FOI #26766 email]>
Sent: Tuesday, May 14, 2024 7:39 AM
To: KiwiRail <[email address]>
Subject: Official Information request - iRTeX benefit cost ration

CAUTION EXTERNAL EMAIL: Do not click links or open attachments unless you know the content is safe.

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

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Sorry, should have clarified - no Benefit-Costs analysis was completed for iReX as it was considered on commercial terms.
If you look at the May Board deep dive document - it speaks to the wider benefits a bit, but there was no BCR calculated as such.

Hope that helps.

Dave

-----Original Message-----
From: Andrew Riddell <[FOI #26766 email]>
Sent: Thursday, May 16, 2024 6:01 PM
To: Dave Allard <[email address]>
Subject: RE: Official Information request - iRTeX benefit cost ration - response

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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

-----Original Message-----

Good afternoon Andrew

Thank you for your enquiry.

All the relevant information on Project iReX has been proactively released by Treasury, Ministry of Transport, and KiwiRail.
The information you seek can be found here - https://www.treasury.govt.nz/publication...

The document of 29 Nov 2023, would probably be the most helpful in terms of setting out the timeline, and specifically discussed the NPV for the Project.

Kind regards

Dave

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Morning Andrew

 

My recollection is that we moved away from BCR to NPV. If there was a
recalculated BCR, it would be in the documents released under the latest
tranche of documents – that release covers everything up to the decision
to halt to project in December.

 

I know, we responded to a Written Parliamentary Question in Early March
2023 with the below –

 

Did KiwiRail complete a Benefit-Cost ratio for project iRex prior to
finalising a contract for the project?

 

No. KiwiRail is a State-Owned Enterprise and Project iReX is primarily a
commercial investment to maintain and grow Interislander volumes. The
assessment criteria focussed solely on commercial benefits. The NPV is
commercially sensitive, however I expect KiwiRail will confirm this
information after major construction contracts have been entered.

 

I believe the detailed business case may have had a BCR calculated which
is possibly what is being referred to – that can also be found proactively
released here - [1]Official Information Act response: New Interislander
ferries | KiwiRail

 

Cheers

Dave

 

-----Original Message-----
From: Andrew Riddell <[FOI #26766 email]>
Sent: Thursday, May 16, 2024 6:55 PM
To: Dave Allard <[email address]>
Subject: RE: Official Information request - iRTeX benefit cost ration -
response

 

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know the content is safe.

 

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

 

-----Original Message-----

 

Sorry, should have clarified - no Benefit-Costs analysis was completed for
iReX as it was considered on commercial terms.

If you look at the May Board deep dive document - it speaks to the wider
benefits a bit, but there was no BCR calculated as such.

 

Hope that helps.

 

Dave

 

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