In his guest post yesterday Minister of Transport Michael Wood highlighted that light rail was a priority for him and that he expects to make an announcement on the next steps for the project next year.
There are going to be a lot of decisions to make to get us from where things are to having spades in the ground and one of the key ones is how the project moves forward and will be delivered. Following the end of the bizarre process that pitted off Waka Kotahi and the Super Fund plus their Canadian partners, the government announced it would come up with a public sector delivery model. It appears there will be even more scrutiny on that process following a review of the procurement process to date by the Auditor General that was released last week. Stuff reports:
Auditor-General John Ryan has delivered a searing rebuke to the Government over its handling of the Auckland light rail project, noting that it’s not clear if procurement rules were followed and suggesting that this could damage New Zealand’s international reputation.
He said he’ll be keeping a watchful eye on the project going forward.
Ryan criticised the “unusual” process the Government ran to decide between the two organisations who would eventually build and run the project: the Government’s own transport agency, Waka Kotahi NZTA and another group, NZ Infra, a joint venture between the Super Fund and CDPQ Infra, a Canadian pension fund.
His key concern was that there were “mixed messages” around the sort of process the government was running to pick between the two bidders – it was part policy development process designed to come up with the best sort of light rail scheme for Auckland, but it was also part procurement process, designed to pick who would build and run the light rail network.
This confusion meant that it wasn’t clear if rules around procurement – designed to ensure a fair and transparent bidding for big government contracts – were followed.
While much of the debate, including on here, has been about the merits of light rail and light metro, at a higher level part of the concern was about the mixing of planning/design and procurement. Put another way, we should be deciding what to build first, such as the mode and the route, and only once that’s agreed then procuring it, not tying the two processes together. It seems the Auditor General agreed and the full letter is both fascinating and concerning as it delves deeper into this, noting:
The Ministry has publicly described the end point of the parallel process as being to select a delivery partner for light rail, but maintains that it was not engaged in a procurement process of the sort contemplated by the Rules or to which the Rules could be applied “given the core policy choices that were ultimately to be made by Cabinet”. The Ministry described the work as a policy process (which was required to understand the interaction between policy concessions and commercial and financial terms, and comparing these to what the Crown could achieve itself), in which the Government was deciding which option (an NZTA-led model or the NZ Infra proposal) was the preferred model for light rail. The Ministry has also told us it was not appropriate to consider the NZ Infra proposal solely through the lens of the Rules or the guidelines.
It is difficult to reconcile the Ministry’s view with a process that intended to ultimately result in the selection of a party to deliver services for which they will receive significant public money. Here, the intended outcome was to select a preferred delivery model and delivery partner to commission and deliver light rail and to commit to pay public money to deliver this outcome, using a particular funding model. In addition, we saw advice from officials to Ministers that referred to the principles of procurement and the need to adopt a competitive process for selecting a provider, and about possible market reaction to the parallel process.
It seems unusual to us for such a fundamental reconsideration of project scope/parameters to occur alongside the selection of a party to deliver light rail, or at the same time as exclusive negotiations with a delivery partner might occur (once one was selected). In our view, where something occurs that causes the overall project parameters and the procurement approach to be reconsidered, or for the key policy settings to be revisited, the more appropriate step would be to terminate any existing process in an open and transparent way and revisit the policy and planning for the project.
This is pretty damning of the Ministry and I question if they should be involved at all going forward.
And what happens going forward is really the big question. One thing that was clear from the light rail document dump in September was that not only were Auckland Council and Auckland Transport shut out of the process, they were treated with contempt. It even appeared the Ministry were prepared to undermine the existing PT system if it meant they got what they perceived as a better deal from their bidders. We believe that Auckland needs to be deeply involved in the decision making, something that appears may be happening.
That was then, this is now. City-centre to Mangere/airport light-rail has come out of the shadows with new Transport Minister @michaelwoodnz recognising it as a city-shaper, requiring @AklCouncil & @AklTransport on the frontline of decision-making. Reset. https://t.co/yZLWwSNQiH
— Chris DARBY (@DarbyatCouncil) November 29, 2020
As for the process itself, my understanding is that the ministry have come up with a series of decisions and/or tradeoffs that need to be made. While we don’t know what those are, it is likely on things like the level of grade separation the route has, the route it takes, how much priority is given to speed vs coverage (stop spacing), and the extent of integration with Kāinga Ora housing developments.
I also think one of the things the government (and council) need to do is to think about the wider context of the decision and how to tell the story of rapid transit in Auckland. One of the pressures for building bigger expensive projects like light metro seems to be a view from some that we have to build the biggest possible thing upfront so we don’t have to do anything else for the next century. When viewed in isolation it’s sometimes easy to justify spending a bit more, or likely a lot more in the case of light metro, but this is just one of many routes that we need. As I suggested in this post, light rail could be just stage 1 of a wider plan that could eventually involve both light rail and light metro.