NZ Super Fund eyes Auckland rail project

AUCKLAND: The New Zealand Superannuation Fund and Canadian fund manager CDPQ Infra have made an unsolicited bid to build and operate two lines in the proposed Auckland light rail, which are already getting $1.8 billion of seed investment.

The governmentowned fund manager and Caisse de depot et placement du Quebec (CDPQ) subsidiary approached the Government with an offer to assess the viability of the rail project for commercial investment and is open to other partners joining a consortium, it said in a statement.

Cabinet has agreed to launch a procurement process exploring possible procurement, financing and project delivery options.

The project attracted $1.8 billion of seed investment in the Government and Auckland Council’s recently announced 10year transport plan for the city, because of the ‘‘potential opportunities for leveraging funding and financing arrangements to progress light rail’’, the report said.

‘‘The Government will not be commenting further on the proposal other than to say that we welcome the strong interest in light rail and acknowledge that any investors will require a reasonable commercial return,’’ Transport Minister Phil Twyford said in a statement.

‘‘The procurement process agreed by Cabinet will review all other proposals in the same way as the Super Fund’s proposal is assessed.’’

The NZ Super Fund has invested about $5 billion of its $38 billion portfolio in New Zealand, and has indirectly invested in publicprivate partnerships in the past via the Morrison & Co managed Public Infrastructure Partners Fund. The Accident Compensation Corp investment vehicle has been more active in the PPP space.

‘‘We consider the Auckland Light Rail network to be an infrastructure project of sufficient scale and significance to be an attractive prospect for investment,’’ NZ Super Fund acting chief executive Matt Whineray said in a separate statement.

‘‘We wish to explore whether a NZ Super Fundled consortium leveraging our international relationships can fund and deliver the project, on a fully commercial basis.’’

CDPQ Infra develops and operates infrastructure projects, and its parent, CDPQ, is one of Canada’s leading institutional fund managers with $US238.2 billion ($NZ342.7 billion) in net assets. CDPQ Infra is responsible for developing, building and operating Montreal’s 67km light rail network.

Finance Minister Grant Robertson said the NZ Transport Agency will run the procurement process, inviting and assessing all potential proposals, before reporting back to him and Twyford.

The Auckland Transport plan puts the light rail project among an $8.4 billion spend over the next decade to develop repaid transport, including busways and rail.

The citytoairport light rail component identified the need for ‘‘a substantial increase in public transport capacity and efficiency’’ to avoid eroding Auckland’s productivity, while the northwest line was seen as more expensive than a busway but ‘‘a longerterm solution to bus congestion in the city centre and is likely to support stronger landuse change’’.

❛ We consider the Auckland Light Rail network to be

an infrastructure project of sufficient scale and significance to be an attractive prospect for investment

NZ Super Fund acting chief executive Matt Whineray