The Government official in charge of the Auckland light rail project at the New Zealand Transport Agency has been questioning the whole concept.
Carl Devlin was headhunted from top transport roles in the UK last February to head the project and has led major infrastructure projects in the United Kingdom, including a more than £5 billion sub-surface railway upgrade for Transport for London.
Multiple sources have told POLITIK that three months ago, Devlin met with the Auckland Business Forum for a private meeting.
The Forum comprises a range of Auckland business groups involved with transport including the Employers’ and Manufacturers’ Association, the Chamber of Commerce, the AA and others.
Devlin told the group he wanted to conduct a review of the project “from first principles”.
In effect, he was saying the whole project needed to go back to the beginning.
He said that review would question the route including whether it should go down Dominion Road.
And he went further; he wanted to include heavy rail in his study and look at whether light rail was an answer anyway.
He also wanted to consider the project within the context of the overall traffic network in Auckland and congestion.
He said he came to the study with an open mind.
A central issue is the route of the light rail proposal — down Dominion Road and then on through Onehunga to Mangere and the airport.
There are problems with this.
Deputy Prime Minister Winston Peters, who is also the Minister in Charge of KiwiRail, told “Q+A” on Monday night that he was concerned with the join-up (of the heavy rail line) from the Far North to Hamilton.
Peters was presumably talking about KiwiRail’s long-standing proposal to build a line from Avondale to Southdown which would mean freight trains would not have to run on the inner city passenger network.
That connection, between the Waikato and the North, is critical to any development of Whangarei as a port to replace Auckland.
NZ First are committed to that.
Instead, Peters told “Q+A” the connection to the airport should be heavy rail.
“Obviously, the connection to the airport would be heavy rail, because all the utilities are there waiting for that to happen,” said.
Q+A: “So you don’t support the light rail plan down Dominion Road?”
Peters: “I gave you my answer.”
But it would be surprising if NZ First did not have other objections, particularly if the scheme if it went ahead, were to be foreign-owned.
Both Opposition Leader, Simon Bridges, and Transport spokesperson, Chris Bishop, questioned the Prime Minister and Transport Minister Phil Twyford in Parliament yesterday on the light rail proposal.
The Prime Minister said Cabinet would make a decision on February next year whether to accept the proposal from the Canadian company, CDPQ Infra and the NZ Super Fund or the alternative proposal being developed by New Zealand Transport Authority.
The proposals are currently being evaluated by Treasury and the Ministry of Transport.
The Canadian company is actually the Caisse de Depôt et Placement du Québec, an institutional investor that manages Quebec’s pension plans and insurance programs.
It is currently involved in a $7 billion project to build a light rail system in Montreal.
The Greater Auckland blog writer, Matt Lowrie has done an analysis of that project and how a similar financing deal might apply in Auckland.
His conclusion:
- A significant upfront government contribution will be required, likely around half the cost of the project.
- Ongoing payments of perhaps around 90 cents for every kilometre travelled by every passenger on the train for the next 100 years – committing multiple generations to significant ongoing costs. The exact figure will need to be enough to provide them with an annual 8-9% return on their investment, and much of that will be to fund pensions in Canada.
- Auckland Transport will still to have to pay to run the trains on this new network.
- If it all fails, they can sell and walk away.
However, the Canadian proposal does seem to have impressed the Prime Minister.
She told Parliament yesterday that the proposal the Superannuation Fund was putting before the Government was “a public-public partnership, unlike anything that we’ve seen before, in partnership with operators with good experience in Montreal and a design that was substantively different than what the New Zealand Transport Agency had proposed.”
There is another unknown about the project.
In a Cabinet paper from earlier this year, Urban Development Minister, Phil Twyford said growth enabled through his urban Growth Agenda would likely take a phased and sequenced approach targeting growth within existing urban centres before greenfield development.
“For example, in Auckland, we will firstly emphasise urban intensification and regeneration projects in existing areas, particularly along transport corridors and urban centres,” the paper said.
“Development opportunities will be identified collaboratively with local government and other stakeholders.”
The full suite of legislation to enable this is to happen is yet to be passed `by Parliament.
What is clear is that the project is significantly delayed but what may be more important is what Devlin’s first-principles study reveals.
What will the Government do if it proposes something very different to light rail down Dominion Road?
