The Government must decide whether to accept a NZ Super Fund offer to build, fund and own Auckland’s light rail project

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The NZ Transport Agency’s (NZTA) business case for the Auckland’s light rail project has been delayed by the Government reviewing an offer from the NZ Super Fund to fund, design, build and operate it.

The NZTA’s final business case for the Auckland light rail project was supposed to be delivered at the end of last year, but it’s still a work in progress.

The report is expected to set out how the procurement process will be handled, whether the development is affordable and a management plan to ensure the project is a success. It would also need to include an analyses of opportunities for more cost effective solutions and set out how the various implementation risks would be managed.

The NZ Super Fund approached the Government in May last year with an offer to design, build and operate Auckland’s light rail network with Canada’s CDPQ Infra, which is currently developing and building the Montreal light rail network. CDPQ was established in 1965 and manages US$238 billion in funds from a number of Canadian based pension and insurance schemes.

In October NZ Super Fund CEO Matt Whineray told www.interest.co.nz that the NZTA was deciding on what type of procurement model it wanted to use. He said the NZ Super Fund had proposed what it called a public-public investment (PPI) model, as opposed to a public-private partnership (PPP).

“That’s where we would partner with whichever the government body is, it could be NZTA, it could be another ministry, and really develop the project.”

NZ Super Fund, along with CDPQ Infra, would provide capital to fund the rail development and then retain long-term ownership over the light rail network.

But according to the NZ Transport Agency’s (NZTA) head of light rail Carl Devlin, it can’t finalise its business case for the project until Transport Minister Phil Twyford and co. finish their deliberations.

He says an early draft business case from the NZTA for the CBD to Mangere light rail line has already been forwarded to the Ministry of Transport (MOT) for review. But Devlin says further work, including more detailed costings will need to be carried out before the business case is finalised.

Devlin says the MOT and Treasury have completed their reviews of the NZ Super Fund (NZSF) and CDPQ Infra proposal and they have now been forwarded to the ministers involved. But now it’s a waiting game.

Under the project proposal first outlined by Twyford in 2017 two light rail lines would be established in Auckland. One leading from downtown Auckland out to the airport at Mangere, while a second line would run from the central city along State Highway 16 to Kumeu/Huapai.

Twyford has estimated that the Auckland that project would cost about $6 billion, making it the biggest transport project in New Zealand history.

The NZTA is leading the development of the Auckland light rail programme with the support of partners, Auckland Council, Auckland Transport (AT) and HLC, a wholly owned development subsidiary of Housing NZ.

A spokesperson for Twyford says an investigation into the feasibility of a northwest line is still in its early stages, but the Government remains committed to the idea.

However, according to NZTA other short term interim options such as a bus way are being considered as “further work needs to be undertaken to develop a business case” for the northwest light rail line.

NZTA spokesman Darryl Walker says he can’t confirm or deny whether the Government or the agency have received any other offers to build and/or operate the light rail project.

But he says standard procedure with such public projects is the business case would be completed and signed off by the board before going to the minister for approval. A competitive tendering process would then take place to decide who would build the project.  

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