Frustrating news emerged yesterday on the light-rail project, with Transport Minister Phil Twyford confirming a rather weird next step for the project. The government are pitting the NZTA and the NZ Super Fund (with their Canadian partners) against each other, with both ‘bidding’ for the rights to progress the project. More importantly, and disappointingly, it means that there will be no visible signs of progress before the next election.
The two preferred delivery partners for Auckland light rail have been chosen and a final decision on who will build this transformational infrastructure will be made early next year, Minister of Transport Phil Twyford announced.
NZ Infra, a joint venture between the New Zealand Super Fund and Canada’s CDPQ Infra group, and the NZ Transport Agency, will further develop their proposals for Government to consider early next year.
Phil Twyford said light rail will be a game-changer for 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.
“We have to make sure that it will be fit for purpose for generations to come, that’s why we’re taking the time to examine the different proposals in detail and get it right.
“What NZ Infra is proposing has never been considered before in New Zealand, based on a public-public investment model. This includes co-designing the asset with the Government and its partners, with the majority of financing and risk transferred to NZ Infra.
“There are significant differences in how the two options would be financed and delivered. The NZTA is exploring a range of procurement, financing and delivery models, including alliances and public-private partnerships, and will continue to develop these.
“Both of these options for delivering light rail are credible, but neither are fully developed, and we need to understand the long-term implications. That step is critical for the Government if we are to make the right decision on how best to deliver light rail for Auckland.
“This process will take up to six months and will mean we won’t have spades in the ground in 2020. But it will provide us with the certainty we need to progress a multi-billion dollar project which will transform Auckland.
“I have asked the Ministry of Transport to manage this process, and to ensure that our Auckland Transport Alignment Project partners including Auckland Council and Auckland Transport, are closely involved in this work over the coming months,” Phil Twyford said.
Back in May last year when it was revealed the NZ Super Fund had submitted an unsolicited proposal to build the project I was pretty excited by the idea, especially as it provided an opportunity to really get on with quickly delivering the project rather than having it get stuck in limbo forever like has happened to other projects like AMETI.
However since then everything we’ve heard about the proposal has had us more and more worried and indicated the Super Fund proposal would be a poor outcome for Auckland and for New Zealand. That the government have let it continue is now a major concern.
By February this year alarm bells were beginning to go off when it emerged that the Super Fund were looking at quite a different design, something that seems to be confirmed by the the comment that the NZTA and Super Fund will each be developing different proposals. The February information suggested the Super Fund proposal included tunnelling under Queen Street. As I said at the time, you wouldn’t go and build another CRL to then run light rail on the street outside the city so the plan would likely have also involved even more tunnelling or building an elevated line the entire length of Dominion Rd to SH20. This would be incredibly expensive, likely adding billions to the cost, especially for a tunnel. The alternative of an elevated structure would be horrifically ugly and likely be a consenting nightmare. As I discussed last week, these options wouldn’t address the issues of too many buses in the city centre and wouldn’t even save that much time.
On top of the added cost, the Super Fund have made it clear they’re looking for investments with good, long-term returns. Like with other PPPs, this would be achieved by charging the government a commercial interest rate. Given the obvious problems with a radically different design, combined with very low interest rates at the moment, government 10-year bonds hovering around 1% right now, it’s hard to see why the government has pursued this approach. It seems the government has decided to give the Super Fund very a privileged role.
It is also not clear that the Ministry of Transport have the expertise to properly assess this process and appears to be a significant step outside of their usual role.
But the main thing that’s frustrating about all of this is that it’s just adding lengthy delays to ever seeing this project actually happen. Since NZTA took the project over from Auckland Transport progress has been painfully slow and public communications have varied between terrible and non-existent. For example there hasn’t even been any public engagement on route options. By way of comparison, City Rail Link route options were worked through in 2009 before a decision was made in 2010 – nearly a decade ago and major construction on the bulk of CRL is only now finally commencing. Delays on the City Centre to Mangere light-rail project also seems to mean that any work on the desperately needed Northwest Rapid Transit corridor has also stalled.
Given light-rail was the Labour Party’s flagship transport announcement ahead of the last election and became the centrepiece of ATAP, I definitely expected better progress than what has played out over the last 18 months.