$5b question

Labour unclear on tram costs

Labour is unclear how it will fund a $5 billion plan for modern trams in Auckland, but says the Auckland Council will shoulder a “significant” share of the cost.

Labour’s Auckland issues spokesman, Phil Twyford, yesterday said he did not know how the costs would be shared between the Government and the council, except to say the council would not pay the majority.

Twyford also did not know whether modern trams, also known as light rail, would sit on the Government or the council’s balance sheet.

In her first public appearance as Labour leader, Jacinda Ardern promised fast, modern trams along two routes from the CBD to the airport and West Auckland within 10 years at a cost of up to $5b. This would be followed by trams to the North Shore.

Labour has promised to fund its Auckland transport package by a combination of increased expenditure, cancelling or scaling back existing transport projects such as the $1.8b east-west road through the city’s industrial belt and giving the Auckland Council the ability to set a regional petrol tax.

Twyford said Labour would change the mix and priorities of projects in the city’s 10-year transport plan and spend an extra $2.1b. The overall plan would cost $15b, including the light rail projects to the airport

Auckland Council is going to end up contributing a significant amount . . . but probably the smaller amount, not the majority. Phil Twyford, Labour

and West Auckland, and had a $6b funding gap, he said.

Twyford said Labour was committed to funding the full $15b plan, but could not say how much the council would pay towards trams.

“Auckland Council is going to end up contributing a significant amount of that, but probably the smaller amount, not the majority,” he said.

The Government and the Auckland Council are sharing the cost of the $3.4b City Rail Link.

Asked whose balance sheet the trams would sit on, Twyford said: “We haven’t worked that out yet. That is something we will work out when we sit down with Auckland Transport to renegotiate ATAP [the joint Government-council transport plan].”

With the Auckland Council starting work on a new 10-year budget, Twyford said Labour could have a positive impact on the coun- cil’s ambitions for public transport.

“We are going to front up with some serious resources to fund it and make it happen,” said Twyford, adding the New Zealand Transport Agency would fund rail projects if a Labour Government were voted in.

It is unclear how the council, which carries the $3.4b City Rail Link on its balance sheet, could absorb a further $5b for trams when the council is right up against its debt ceiling — which, if breached, could lead to a credit rating downgrade and drive up borrowing costs.

Labour has said a regional fuel tax of 10c a litre would raise $160 million a year for the Auckland Council.

The Herald estimates a 10c-a-litre tax would raise $100m a year.