The NZ Super Fund aligned NZ Infra hits back at critics and says it's on track to deliver its bid for an Auckland light rail network to the Government before Christmas

The NZ Super Fund aligned NZ Infra hits back at critics and says it's on track to deliver its bid for an Auckland light rail network to the Government before Christmas
An artist's impression of Auckland light rail.

NZ Infra claims a proposal for the Auckland light rail that has been reported in the media is out of date and says it plans to present its final bid to the Government before the end of the year.

The company is a joint venture between the NZ Super Fund and Canada’s Caisse de depot et placement du Quebec (CDPQ) and wants to fund, design, build and operate an Auckland light rail network. It approached the Government with an unsolicited proposal for the project in May last year.

“It’s important to note that the information that has been put into the public arena is outdated and that we have substantially progressed our plans since then, with the benefit of further information from the Government and local and international expertise, including from leading engineering firm BECA. We continue to work on our proposal in order to present the Government with the highest quality option possible," a spokesperson for NZ Infra says.

“We have taken into account the sensitivities and constraints in terms of what is realistically achievable along the entire route and are looking at options that will minimise disruption to the greatest extent possible. While final decisions are yet to be made we’re acutely aware that a realistic solution will need to reflect community expectations and imperatives and have the ability to take Aucklanders with it.” 

Twyford in the firing line

In the last week Transport Minister Phil Twyford has been in the firing line over the proposed light rail project. It follows a series of stories on Stuff which have referred to a leaked early proposal from the NZ Super Fund from December last year and a letter from the New Zealand Transport Agency’s then interim board chairman Nick Rogers criticising the fund’s proposal.

But looking at other cities around the world, from Melbourne and the Gold Coast in Australia to Edmonton and Calgary in Canada, light rail is seen as a viable option when attempting to address congestion and calls for better public transport.

NZTA announced last month that it would reallocate $313 million in funding originally earmarked for the Auckland light rail project. It followed ongoing delays with the light rail proposal and an announcement in August by Twyford that none of the construction work would now take place until 2021.

He said he had shortlisted two potential partners for the light rail project, NZ Infra and the NZTA, and he was hoping to make a decision early next year. The NZTA is going to be involved at some level, even if it’s only in a funding capacity, and has already been given the task of coming up with a business case for the project. 

NZ Infra's proposal

Recent news reports on the leaked report from NZ Infra from December last year suggest it wanted fewer stops on the line to Auckland Airport. This would serve the airport's needs with a light rail shuttle service between Mangere and the CBD, but wouldn’t address the overloaded public transport between areas like Mount Roskill, Onehunga and Mangere and the CBD. It would also include an underground station at Queen Street and automated trains.

According to Stuff reports, the NZ Infra proposal would be fully automated with driverless trains or trams and would need to be "grade separated", which means the lines would either have to be below the ground, or above the road on an elevated railway. And NZ Infra will ultimately want to recoup the costs associated with its proposal, while some critics have suggested it could cost more than $10 billion.

NZ Super Fund has previously attempted to paint its project proposal as a public-public partnership (PPP) because CDPQ is a publicly owned superannuation fund in Canada. But it isn’t New Zealand owned and for that reason it's really just another public-private partnership.

PPP dilemma 

And such a model still comes with costs and risks. It’s something Auckland Mayor Phil Goff is more than aware of. In August he told interest.co.nz that Public-Private Partnerships aren’t a silver bullet solution.

“PPPs keep the initial capital costs off the council’s books, or off the central Government’s books. But it’s like hire purchase, you can afford it now but you pay for it for much longer. So it’s not a magic fix.”

He said if the project isn’t funded by the NZTA and the Government it will cost more in the long run.

“The taxpayer, the ratepayer and the commuter will all be contributing to the higher costs that will be involved with a PPP. I’m just stating problems that are inherent with that model," Goff says. “I don’t think it’s a big risk for them unless they get something terribly wrong in the planning, but you know we’ve got mixed feelings about that. We want the NZ Super Fund to do well because that’ll be paying our super for us in years to come, but we don’t want them to put the price up, other than a reasonable level, for the money they invest in delivering this infrastructure.”    

And while the Government and the NZ Super Fund claim they will be funding the light rail project, AT and the city’s commuters could end up paying for it in one way, or another through subsidies or fares.

Goff says under the $28 billion 2018-2028 Auckland Transport Alignment Project the Government agreed to fund the light rail project.

“As the funder, it has primary responsibility for determining which of the two proposals, NZTA and NZ Infra, is the more affordable and feasible,” Goff says. “When it has made that decision, I expect extensive consultation with Council and Aucklanders on how the project will proceed.”

During the 2017 election campaign Twyford said if elected he would deliver light rail from the CBD to West Auckland and to the Auckland International Airport within a decade at a cost of $6 billion, with longer term plans to extend the network to the North Shore.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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Absolute shambles this is even being considered on so many levels.

NZ Super Fund has attempted to paint its project proposal as a public-public partnership (PPP) because CDPQ is a publicly owned superannuation fund in Canada

I don't see many other investors of this calibre lining up to partner on NZ public projects. CDPQ has a fund 8x the size of NZSF and has been in the infrastructure business for 15 years.

I am more concerned about missing out on this chance to get something worthwhile built in Auckland than how the government introduces the partner to the public. It can't be as bad as Nat MPs pushing for more Chinese involvement in our public projects.

Agree on the missed opportunity Advisor.

Not sure if you've read this - https://www.greaterauckland.org.nz/2019/10/10/the-super-fund-light-rail-...

But it sounds every bit as bad as any foreign investment we've had.

Good points to be considered, especially the contract for 99 years and the additional cost for maintenance

Delays and controversy over Aucklands light rail is bad for integrated public transport and housing advocates outside of Auckland too.

One of the big decisions about public transport in NZ which successive central governments from David Lange onwards have avoided is devolution of revenue gathering to regional government so they can fund their own capital projects.

There is an argument that Auckland Transport which did the original evaluation of light rail down Dominion Road should have run the project. People who believe that should have been campaigning that revenue gathering be devolved to Auckland and the other regional government entities. Because whoever funds the capital projects is the decision maker.

One of the arguments used against devolution is that Wellington has the expertise and regional bodies do not. Well NZTA shows they lack the expertise. They clearly do not understand how urban transport systems work. Basically they are only in their comfort zone when building regional state highways. Even worse they have no idea how to evaluate complex financial transport options.

All of this points to an endless argument between Wellington and Auckland that is going nowhere fast. The other urban centers of NZ. Christchurch, Hamilton, Tauranga will as per usual in NZ get ignored and the cluster- f.. that is NZs investment in capital projects will continue.

6 Billion just to build something that may be obsolete within 20 years? Rough calculation you could purchase 500 brand new 6 PAX seater VW electric Microbuses (coming soon). 1000 drivers on 60k per year. Deploy them on route from city to the airport. Replace vehicles every five years. 24/7 free service for riders operated by ride sharing/pool app. Pickup and drop off anywhere along the route on demand.Total cost to run for 50 years about 4 billion. Obvious option to convert to autonomous vehicles within first 20 years cutting the annual running cost by 60 million.

Your proposal doesn't solve the congestion problem and neither does autonomous vehicles. Downtown Auckland streets are getting clogged with too many buses. So adding in many more smaller buses just adds to the problem. The tried and tested solution around the world is to move some of the travelling public onto vehicles that carry more people using less space i.e. mass transit. The exact system and funding model is up for debate but the broad solution is clear.

I'm not finding the streets to be particularly clogged with buses.
Rather, they are clogged with too many cars!!!

I am informed by GA blog that particular Auckland downtown streets are reaching bus carrying capacity. Meaning increasing bus priority services to the CBD is reaching its limits. Is that not the case?

Uh oh...an electric Manila. Jeepneys are the future.

I am concerned about the message that financially the difference between the two schemes is the NZTA scheme will be funded upfront and the Superfund scheme being a PPP will have ongoing payments.
There is actually multiple variables to consider. Like how mass transit works with real estate development, can some of that value be captured, does this land use variable also lead to patronage and fare revenue increasing, is there a way that congestion cost externalities are internalized either through car parking or road pricing. Does investment in mass transit part of a scheme that builds affordable housing? And so on.
The Japanese are brilliant at this.
https://medium.com/land-buildings-identity-and-values/japanese-urbanism-...

It's useful to reference the thread at Greater Auckland on this very topic. It is entitled 'fixing the light rail mess'......
Plus an earlier one which notes that the mess will delay everything by years....
GA's plaintive cry:

...no matter who takes the project forward we will have lost at least two and a half years in terms of delivery timeframes from what would have been possible if NZTA has simply picked up the design that Auckland Transport had been working on since around 2014/15 and taken it forward. As well as the lost time, there’s also the millions of dollars that have already gone into that design that will be lost.

I would take anything written on that website with a big grain of salt.
They are a bunch of well meaning amateurs. The origin of the nonsensical inter-regional rapid rail project that Twyford got all excited about.

The quality is probably as good as other NZ media sites, such as, Newsroom and Interest.co.nz. A lot of it is evidence based but they have their own particular biases/viewpoints. This determines what articles get published and what evidenced is considered. Matt Lowrie in particular has strong views. He and GA are strong on transport but weak on housing and land use issues and not surprisingly he has a Auckland bias. GA are missing more open minded contributors like Peter Nunns and Josh Arbury.

Let me know when NZTA wants to do something meaningful about the congested mess that is SH16. Current MO seems to be pretend it doesn't exist because it's not a problem that effects them as highly-paid Wellingtonian public servants. Until then, I'll take the well-meaning amateurs who don't think it's fair that people should spend hours in congestion each day with no alternatives over the government flunkies who don't seem to give a shit.

I am sure that people and businesses located presently on the proposed route, mainly Dominion Road are happy with all these confusions and delays. They may be wishing that this never takes off.

ABSURD.

NZ taxpayers funded the NZ Superfund.
Now NZ transport users & AUckland ratepayers (who are also taxpayers) will be required to further fund it.

The light rail proposal is a political solution looking for a problem. Based on a social cost benefit analysis of the welfare benefits to NZ it is more than likely there are much better ways of spending $6 bn.

Implementing congestion tolling first would be far more beneficial and better support PT patronage whilst further delaying expensive roading infrastructure.

Even then, if the light rail proceeds no doubt the return the NZ Superfund will want will be substantially higher than the rate the NZ government could borrow at on the international market. Its simply a cross subsidization of the NZ Superfund by NZ transport users who already contribute to it as taxpayers.

Cool. So the congestion tolling: What are you proposing the people who live in North West Auckland do, where there is currently no rapid transit for them to use as an alternative to driving? Unless this is just a tax on people who have to get up and go to work to fund the tax take to begin with? We already pay a congestion tax out here: it's the value of time stuck in congestion. In other places, like the North Shore, they have alternatives to driving. We don't.

Just remember...if this project goes ahead it will NEVER come in on budget. Budgeted figures are just something that is thrown out there by politicians and vested interests. Once the project is in full swing it will be too late to bow out and then the hundreds of millions or quite possibly,billions, in cost overruns will start to be slipped into the budget lines.
Just the way it is.

Having used light rail in European cities I can only say , its great .