QTS-095 · Indicative business case · 2024
Queenstown Public Transport Business Case
Part of: Rapid transit evidence →
Business case commissioned by Otago Regional Council (ORC) and delivered under the Way to Go partnership with NZTA (Waka Kotahi) and QLDC, setting a 30-year plan for public transport in the Whakatipu Basin, including fleet decarbonisation. It finds the current bus network (about 260 passengers per hour on SH6A) cannot carry the public transport volumes needed to keep the network functioning (1,466 people per AM peak hour on SH6A by 2053). The preferred option is an enhanced 'Bus Max' (Composite) network of high-frequency routes using battery electric articulated and standard buses and ferries, supported by hub changes at Stanley Street and Frankton, a new electric bus depot, an SH6 northbound bus lane and local stop and intersection changes. The BCR is 2.3 and the largest capital item is a $59.5m depot (including land) led by ORC. The business case states that the objective to maintain a functional network cannot be fully achieved by public transport alone: predicted AM peak PT share on SH6A rises from 14% to 34% by 2053 against a 47% objective, and travel demand management is recommended. Off-line public transport was out of scope, but the document recommends that an offline solution such as mass rapid transit be investigated in the 2024-27 period, while stating the articulated-bus network has sufficient capacity until 2053. Park and ride is not part of the preferred option.
What the document says
Context and purpose: ORC commissioned the Queenstown Public Transport Business Case (QPTBC) to follow the 2020 Queenstown Business Case (QBC), which was endorsed on the basis that separate TDM and public transport business cases would be developed (p10-11). Delivered under the Way to Go partnership with NZTA (Waka Kotahi) and QLDC, it sets out a 30-year public transport investment plan for the Whakatipu Basin, including decarbonisation, and was prepared to NZTA Better Business Cases guidance (p10). Pricing mechanisms and TDM implementation, off-line public transport options (other than recommending when one should be investigated), a new strategic model and detailed stop planning were out of scope (p11, p39). The uncertainty log also treats bus lanes, road widening and an off-line system as beyond scope (p31). Detail sits in nine advisory papers (p34-35; the text says eight papers but lists nine).
Problem: Two problem statements were agreed at an October 2022 ILM workshop (p18). Current bus capacity on SH6A is estimated at 260 passengers per hour, against 2021 peak loads of 199 (AM) and 174 (PM) (p18). To keep the network functioning, AM peak PT volumes on SH6A must reach 592 people per hour by 2027, 1,082 by 2039 and 1,466 by 2053 (27%, 40% and 47% mode share) (p19). SH6A's practical capacity was exceeded on 140 days in 2019 (p19). Investment objectives cover mode share (2053 targets of 50% southern, 35% eastern and 48% western corridors), a 100% cut in PT CO2 by 2035, a 20% VKT reduction by 2035 and improved access to jobs and destinations (p29-30).
Options: Service patterns and decarbonisation technologies were assessed in parallel through MCA with partner decision conferencing (p39). An 11-option long list of service patterns (Bus Max variants, spine options, a one-seat-ride network and three ferry options) was assessed; spine, one-seat and ferry options other than the Jack's Point spine were rejected as failing the capacity critical success factor (p42, p49). The short list centred on Bus Max versus a Jack's Point Spine, with bridge, Malaghans Road and ferry variants (p50). The Composite option scored highest in every MCA sensitivity test (p63) and had the highest BCR (2.4) and incremental BCR (7.9) (p64). Battery electric technology was preferred; hydrogen was treated as fatally flawed for the first 15 years (p65-66). Articulated buses (about 110 passengers) were chosen because standard buses cannot meet SH6A demand even at 30 buses per hour (p42).
Preferred option: an enhanced Bus Max (Composite) network with battery electric buses and ferries, staged to a walk-up (15-minute or better) network by 2035 (p79-82). It comprises eight core interventions: service and fleet improvements, Stanley Street and Frankton hub changes, an electric bus depot, an SH6 bus lane (Kawarau Falls Bridge to William Rees Cottage), local intersection changes, and bus stop changes on local roads and state highways (p81). A Secondary Option delays the depot to 2035, with work starting by 2031 (p82, p97). On-demand service is suggested for Queenstown Hill and Goldfield Heights (about $750,000 a year) (p69, p108). Park and ride was agreed not to be part of the preferred option and not value for money (p77). The recommended ownership model is public (ORC) ownership of the depot, with operators keeping the fleet (p94).
Economics and finance: monetised benefits are dominated by network productivity ($1,019m), plus safety ($53m), air quality ($30m) and greenhouse gas ($7m) (p84). The BCR is 2.3 (38-year evaluation, 4% discount rate), with sensitivity tests of 1.6 to 2.5 (p84-86). P50 capital costs total about $68.2m, including the depot at $59.5m (including land), the SH6 bus lane at $3.6m and the Frankton hub at $1.6m (p108). Preferred-option operating costs are $25m a year against $6.7m now (p108; Table 10-3 on p85 instead gives $11m for the Do Minimum in 2039). The funding forecast for the next NLTP period is $9.5m, $36.0m and $24.9m for FY24/25 to FY26/27 (p112). Capital estimates carry a 70% contingency for P95 (p107). Congestion charging and developer contributions are seen as the most promising alternative funding sources (p113).
Performance: predicted AM peak PT mode share on SH6A rises from 14% to 34% in 2053, short of the 47% objective, and the objective to maintain a functional network 'cannot be fully achieved by the public transport services alone' (p81, p86-87). Travel demand measures are recommended (p81).
Management: Table 12-3 assigns lead organisations (ORC, NZTA, QLDC) and NLTP periods (p110-111). ORC is the procuring organisation and will appoint a Project Sponsor/Director, QLDC and NZTA act as road controlling authorities, and the Way to Go partnership is to be reconfirmed and reframed (p116). Next steps are partner endorsement, NLTP funding applications and review of the business case at least once per NLTP period (p121).
Mass rapid transit: Off-line options are out of scope 'other than to recommend when an off-line service should be investigated' (p39). The document states that 'the next logical infrastructure would be an off-line public transport system, which should be in place before a bus-based system reaches capacity', which is 'being considered as a separate study' with NZTA seeking feasibility funding in the 2024-27 NLTP (p40). It recommends that 'an offline solution such as a gondola' be investigated in the 2024-27 period, starting with more detailed town centre modelling, and says articulated buses have sufficient capacity until 2053 (p82). Investigating an off-line route is listed in the next-phase scope (p121). No lead organisation, cost or NLTP period is given for this in Table 12-3.
Key figures
- Current bus capacity on SH6A about 260 passengers/hour; 2021 peak loads 199 (AM) and 174 (PM) (p18)
- AM peak PT volumes needed on SH6A: 592 (2027), 1,082 (2039), 1,466 (2053) people/hour, i.e. 27%/40%/47% mode share (p19)
- SH6A practical capacity exceeded on 140 days in 2019 (p19)
- Preferred option BCR 2.3; sensitivity range 1.6–2.5 (p85-86); short-list Composite BCR 2.4, incremental BCR 7.9 (p64)
- Monetised benefits: network productivity $1,019m; deaths and serious injuries $53m; air emissions $30m; GHG $7m (p84)
- P50 capital costs (Table 12-1): depot incl. land $59.53m; SH6 northbound bus lane $3.62m; Frankton hub $1.57m; Five Mile and Remarkables interchanges $1.21m; bus stops $1.19m; Stanley Street hub $0.56m; four intersections $0.54m; total about $68.2m (computed) (p108)
- Depot $45.5m (P50, excluding land) plus about $14m land for a ~10,000 m2 site; $17m of depot cost is charging and power connection (p96, p101)
- Operating cost $25m/yr preferred vs $6.7m current (Table 12-2, p108); Table 10-3 gives Do Minimum $11m in 2039 (p85)
- Predicted AM peak PT mode share on SH6A 14% to 34% by 2053, against 47% objective (p86)
- Funding forecast next NLTP: $9.5m (FY24/25), $36.0m (FY25/26), $24.9m (FY26/27) (p112)
- Capital contingency: 40% plus 30% for P95, i.e. 70% on delivery-phase CAPEX (p107)
- On-demand service Queenstown Hill/Goldfield Heights about $750,000/yr (p108)
- Current ORC PT funding mix: 31% rates, 41% fuel excise duty, 28% fares (p112)
Rapid transit
Mass rapid transit means light rail, gondola/cable car, bus rapid transit and similar dedicated rapid-transit technologies. It does not include ordinary bus services or ferries.
Substantive. Discusses, assesses, recommends or programmes mass rapid transit.
Off-line public transport is outside the business case scope; recommends mass rapid transit be investigated in 2024-27, while stating articulated buses suffice until 2053. Articulated buses are not mass rapid transit.
The business case excludes 'Off-line options for public transport, other than to recommend when an off-line service should be investigated' (p39), and its uncertainty log lists 'an off-line public transport system' with bus lanes and road widening as beyond scope (p31). It notes that because the network is constrained, 'the next logical infrastructure would be an off-line public transport system, which should be in place before a bus-based system reaches capacity', and that this is 'being considered as a separate study, with feasibility study funding being sought by NZTA for the 2024-27 National Land Transport Programme' (p40). In describing the preferred option it states that 'an offline solution such as a gondola is suggested to be further investigated in the 2024-27 period' to allow lead time for investigation, consultation, land acquisition, design, procurement and construction. The first stage would be more detailed town centre modelling under scenarios (project timing, town centre parking, bus signal priority), to test whether buses could circulate in all foreseeable scenarios and 'the degree to which an offline route would support further public transport mode shift'. It adds that the articulated-bus network 'has sufficient capacity to accommodate the desired mode shift and population growth until 2053' (p82). The next-phase scope includes 'Investigation of off-line public transport route to supplement the bus and ferry based public transport network' (p121). The recommendation is not costed or assigned to a lead organisation in the interventions table (p110-111), and no mass rapid transit option was assessed in the long or short lists (p42, p49-50).
"Off-line options for public transport, other than to recommend when an off-line service should be investigated" (p.39) | "Given the constrained network, the next logical infrastructure would be an off-line public transport system, which should be in place before a bus-based system reaches capacity. This is being considered as a separate study, with feasibility study funding being sought by NZTA for the 2024-27 National Land Transport Programme (NLTP)." (p.40) | "In addition, given the rapid growth occurring in Queenstown, an offline solution such as a gondola is suggested to be further investigated in the 2024-27 period. This will allow a lead time for investigation, consultation, land acquisition, design, procurement, and construction." (p.82) | "The proposed public transport network using articulated buses has sufficient capacity to accommodate the desired mode shift and population growth until 2053." (p.82) | "Investigation of off-line public transport route to supplement the bus and ferry based public transport network" (p.121)
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Actions recorded
Implement public transport service improvements (frequency, span, routes), increasing to about $25.0m a year by 2035; funding approval required.
Not assessed · ORC · 2024-27+ / Ongoing
Public Transport Services Improvements | ORC
Make interim changes to the Stanley Street bus hub to accommodate articulated buses ahead of town centre upgrades ($0.6m).
Not assessed · NZTA · 2024-27 (needed before 2028)
Stanley Street hub interim changes | NZTA
Modify the NZUP Frankton hub design to accommodate articulated buses ($1.6m incremental).
Not assessed · NZTA · 2024-27 (needed before 2028)
Frankton hub changes | NZTA / QLDC / ORC
Develop a Remarkables Park hub (Hawthorne Drive near Tex Smith Lane) ($0.8m).
Not assessed · ORC · 2027-2030
Remarkables Park hub | ORC
Develop a Five Mile hub on SH6 near Grant Road, tied to signalisation of Grant Road under NZUP ($0.4m).
Not assessed · ORC · 2027-2030
Five Miles hub | ORC
Establish an electric bus depot (or two depots) ($45.5m plus $14m land or lease); preferred staging 2024-27, secondary staging 2030-33.
Not assessed · ORC · 2024-27 (preferred) / 2030-33 (secondary)
Electric bus depot(s) Preferred option staging | ORC
Deliver SH6 bus lane from Kawarau Falls Bridge to William Rees Cottage ($3.6m), triggered by southern corridor growth; NZTA to develop a business case.
Not assessed · NZTA · TBC – 2027-30
SH6 bus lane – Kawarau Falls Bridge to William Rees Cottage | NZTA
Modify four local road intersections (Sylvan/Howards, Sylvan/Hope, Rere/Acheron, Jack's Point/Maori Jack) for articulated buses ($0.5m).
Not assessed · QLDC · 2024-27
Local road intersection improvements | QLDC
Show all 31 actions
Make bus stop changes and related infrastructure on local roads ($0.6m), as part of QLDC low-cost low-risk programme.
Not assessed · QLDC · 2024-27
Bus stop changes and related infrastructure on local roads | QLDC
Make bus stop changes and related infrastructure on state highways ($0.6m).
Not assessed · NZTA · 2024-27
Bus stop changes and related infrastructure on state highway | NZTA
Investigate an offline solution such as mass rapid transit, starting with detailed town centre modelling under several scenarios; no lead organisation named (p40 notes NZTA seeking feasibility funding).
Not assessed · 2024-27 period · Relevant to rapid transit
an offline solution such as a gondola is suggested to be further investigated in the 2024-27 period
Investigate an off-line public transport route to supplement the bus and ferry network as part of the next phase.
Not assessed · Next phase · Relevant to rapid transit
Investigation of off-line public transport route to supplement the bus and ferry based public transport network
Investigate travel demand measures (promotion, pricing incl. parking/congestion charges, first and last mile, limiting private vehicle access) to support the business case.
Not assessed
It is recommended that Travel Demand Measures are investigated
Way to Go partnership to direct partners to develop TDM implementation plans that support the business case.
Not assessed · Way to Go
Recommend W2G partnership directs partners to develop TDM implementation plans
Retest the Queenstown Business Case with the new service patterns and Spatial Plan to determine additional demand management measures; consider further bus priority (e.g. at signals).
Not assessed
Retesting of the Queenstown Business Case with the new service patterns and Spatial Plan
Endorse the business case by Way to Go partners; then ORC Councillors to approve it and confirm the ownership model.
Not assessed · Way to Go · Next step
Final versions sent to Way to Go Board for endorsement
Reconfirm and reframe the Way to Go partnership to define responsibilities, including an MoU or similar for this project.
Not assessed · Way to Go · Next step
Reconfirmation and reframing of Way to Go partnership
Appoint a Project Sponsor/Project Director to oversee the programme, subject to W2G board approval.
Not assessed · ORC
ORC will appoint a Project Sponsor/ Project Director
Commit all partners to prioritising public transport in traffic signal operation and enforcing bus lanes.
Not assessed · Way to Go
commitment to prioritise public transport in the operation of traffic signals and the enforcement of bus lanes
Make NLTP funding applications and forward-work planning; NZTA to include items in PT activity classes and QLDC to include local items in its LTP.
Not assessed · Way to Go · Next step
Necessary funding applications from NLTP and forward-work planning
Review the business case at least once per NLTP period to adjust service levels for growth, development and policy change.
Not assessed · Each NLTP period
review the business case at least once per NLTP period
Extend the Unit 7 bus contract to 19 November 2028 so all Queenstown services can be tendered as one combined unit to 2035.
Not assessed · ORC · To 19 November 2028
contract for Unit 7 be extended to match the completion date of Unit 6
Issue advance notice, RFI and RFP to the market for zero emission articulated and standard bus services, weighting driver recruitment and retention.
Not assessed · ORC · Before new contracts
ORC completes an advance notice to potential suppliers
Review school bus services in the Whakatipu Basin before letting the new combined bus contract.
Not assessed · ORC · Before new combined contract
review of school bus services within the Whakatipu Basin is completed by ORC
Create a new contracted unit for the Frankton Arm ferry, with hourly then half-hourly frequency from 2027, and revisit ferry fares.
Not assessed · ORC · Hourly initially; half-hourly from 2027
ORC creates a new unit and contracts out this service to a ferry operator
Investigate an on-demand service for Queenstown Hill and Goldfield Heights, tendered as a separate unit at the same time as the bus unit.
Not assessed · ORC · With bus contract tender
on-demand services... separate unit from the bus services but is tendered at the same time
Identify a depot site: engage Aurora on grid capacity, Frankton and Coneburn landowners, bus operators and Queenstown Airport (long-term lease), and carry out due diligence.
Not assessed · ORC · After endorsement and ownership decision
next steps to identify a preferred location(s) would be: Engage with Aurora
Consider short-term land purchase for the bus depot if a suitable opportunity arises.
Not assessed · Short term
consideration is given to land purchase in the short-term
Carry out detailed timetabling of new services and develop specifications for the new bus and ferry fleet, including luggage and ski space.
Not assessed · ORC · Next phase
Detailed timetabling of new services; Developing specifications for the new bus and ferry fleet
Provide wharf and jetty assets to support ferry services.
Not assessed · QLDC
Provision of wharf and jetty assets to support ferry services
Be responsible for benefits realisation and monitor KPIs; partnership to adjust the programme if benefits are off track.
Not assessed · Way to Go · Ongoing
ORC will be responsible for benefits realisation
Study cost
A study cost has been requested under the Official Information Act or LGOIMA. No figure has been received.
Citation
ORC. Queenstown Public Transport Business Case (2024).