Crown-owned company to fund projects
The Government is putting $600 million into a new company to invest in infrastructure for housing developments.
Its first job will be two Auckland projects intended to support 23,300 new homes in the north and south of the city.
The body, called Crown Infrastructure Partners, is being formed by re-purposing and renaming Crown Fibre Holdings - the company set up to implement the Ultra-Fast Broadband (UFB) initiative.
The move comes weeks after the Government announced the recipients of the $1 billion Housing Infrastructure Fund, and indicated more infrastructure spending was in the pipeline.
Several councils were keen to get more of the funding but could not put another loan on their books without hurting their credit rating. Crown Infrastructure Partners will avoid this pitfall by building and owning the infrastructure itself.
‘‘Councils will have the option of buying back the infrastructure at some point in the future, but won’t have to commit to doing so,’’ Local Government Minister Anne Tolley said.
‘‘This is all about introducing outside capital to build this infrastructure, so current ratepayers don’t get burdened with all the costs of growth.’’
The Government will invest an initial $600m and will look to get further capital from councils and private investors.
The first two projects on the agenda will be the Auckland North and Auckland South, two proposals that Auckland council submitted for the initial Housing Infrastructure Fund.
‘‘These two large projects can provide an additional 5500 homes in Wainui to the north of Auckland, and 17,800 homes across Pukekohe, Paerata and Drury to the south of the city,’’ Tolley said.
The investment in the south of the city would include a $172m package of new water infrastruc- ture, rail stations at Paerata and Drury West, and $97m of new roads.
North Auckland would see a Wainui Arterial road costing around $60m, a $89m Curley Avenue bridge, and $52m in water infrastructure.
‘‘The handbrake has been a lack of infrastructure such as roading, water and sewerage that supports development. Building cities costs a lot of money and infrastructure is a large proportion of that cost.’’
‘‘Councils will have the option of buying back the infrastructure’’
Prime Minister Bill English has pledged a $600 million housing injection.