The government isn’t mucking around when it comes to light rail in Auckland. Less than two weeks after confirming it as a priority in the Auckland Transport Alignment Project (ATAP), yesterday they announced they’re launching the procurement process and that they’ve already received an unsolicited proposal for it.
A modern, rapid transit light rail network to transform Auckland is a step closer with Cabinet agreeing to launch a procurement process, Transport Minister Phil Twyford and Finance Minister Grant Robertson announced today.
“The Government is committed to progressing light rail to transform Auckland. It will be a magnet for private investment in urban renewal and will be able to carry 11,000 commuters per hour – the equivalent of four lanes of motorway,” Phil Twyford says.
“We are investigating innovative solutions to tackle congestion and build a vibrant and modern city.”
“The New Zealand Transport Agency will now set up a robust process to explore a range of possible procurement, financing and project delivery options. This process will invite and assess all potential proposals and report back to the Ministers of Finance and Transport. The Transport Agency will work with the Treasury and the Ministry of Transport in this process,” Grant Robertson says.
The procurement process covers both the city to Mangere and the city to North West lines. The recently announced 10-year transport plan for Auckland earmarked $1.8 billion in seed funding with the option of securing private investment in the network.
This is a really positive step forward. There’s always a risk when projects get announced that they can drag on for years before seeing any action. AMETI is a prime example of this. What’s more, the government appear to be looking at procuring both of the lines at the same time.
In New Zealand we’ve typically cut large projects up into smaller segments to suit how we finance projects and to play to the scale of our construction industry, sometimes so everyone gets a piece of the action. The Western Ring Route and City Rail Link are examples of this. But that can also miss opportunities for more efficient delivery and timing. Using the City Rail Link as an example, the main works contract (C3), the tendering of which has been having problems, will build the stations and bored tunnels from Albert St to Mt Eden. A separate contract (C7) is being let to install the rail related systems (tracks, signalling, traction etc). Because they’re separate, it’s possible those working on that C7 contract will have to wait until C3 is fully completed and signed off before they can start their work. If however it was all part of one contract, the contractor may choose to install the tracks as they go, while they’ve got their equipment in the tunnels, thereby allowing the job to be finished quicker and cheaper.
By including both lines in the procurement process, it may reveal options and opportunities that might not be feasible otherwise. Furthermore, because of the combined size of the projects, it’s already attracted interest.
“Last month, the Government received an unsolicited proposal from the New Zealand Superannuation Fund, which proposed they would form an international consortium to design, build and operate Auckland’s light rail network,” Phil Twyford says.
“The Government will not be commenting further on the proposal other than to say that we welcome the strong interest in light rail and acknowledge that any investors will require a reasonable commercial return. The procurement process agreed by Cabinet will review all other proposals in the same way as the Super Fund’s proposal is assessed.
“It’s good to see that investors recognise this project will be a game-changer for Auckland commuters and the first step in tackling Auckland’s ever-increasing congestion,” Phil Twyford says.
Unsolicited proposals are rare in New Zealand so the fact the government have already had one for light rail shows how much interest there is in it. Also, while they may be the first in the door, I’m aware of at least two other groups that have been working on their own proposals, and their may be others too. For their part, I think the Super Fund made these comments yesterday:
Acting Chief Executive Matt Whineray said: “The Government has signalled its intention to accelerate core infrastructure investment in a number of areas. We consider the Auckland Light Rail network to be an infrastructure project of sufficient scale and significance to be an attractive prospect for investment. We wish to explore whether a NZ Super Fund-led consortium leveraging our international relationships can fund and deliver the project, on a fully commercial basis.”
The NZ Super Fund has identified as its potential partner CDPQ Infra, a wholly owned subsidiary of Caisse de dépôt et placement du Québec (CDPQ) responsible for developing and operating infrastructure projects. CDPQ is one of Canada’s leading institutional fund managers with USD238.2 billion in net assets, and has extensive experience in infrastructure development and investment globally. CDPQ Infra is responsible for developing, building and operating Montreal’s 67-km light rail network. Other members could potentially be added to the consortium.
It appears the Super Fund want to build and own the network in perpetuity. That’s obviously one option but there are others too.
When the officials and politicians sit down to assess the proposals that come in, one thing I hope they do is ensure that any light rail network is integrated into HOP and Auckland Transport’s fare structure. What we don’t want is the light rail system having a separate fare and/or having surcharges for use, such as the Sydney Airport train stations.
Let’s hope they can get the procurement sorted soon so we can start building the thing.