Light rail train luckily shunted by lockdown
Phil Twyford’s ghost train has been shunted into a siding where it will be soon forgotten in the post-Covid recession, but a story remains to be told about the mess he has made of this project.
Back in March, just before a virus changed the world, he was due to announce which of two schemes the Ministry of Transport recommended for “light rail” in Auckland. One of them was his initially favoured line to the airport via Dominion Rd, the other a subsequent proposal from the NZ Super Fund in league with a sovereign fund in Quebec.
The public has been told little about the latter scheme but it seems it was not going to be conventional light rail, a glorified tramway running on streets. It was to be a fast train from the airport to the CBD with few stops, running on its own track with new flyovers and tunnels.
It sounded like the mammoth the Quebec fund is already financing in Montreal, described there as “an entirely new mass-transit system that would have the effect of radically altering the city’s urban landscape”.
The institutional investor has been guaranteed an annual 10 per cent return by the federal and provincial governments.
It’s not hard to see the attraction of such an arrangement for our “Cullen fund”, which was starved of government contributions last time National was in power. It’s harder to see any benefit for taxpayers if the investors are facing no risk and governments can raise capital more cheaply.
But Twyford was very keen on it, so keen that when the NZ Transport Agency assessed the proposal in 2018 and decided it did not meet the Government’s stated objectives for light rail, he asked his ministry to review both “bids”. (The Government’s initial scheme had somehow become NZTA’s “bid”.)
The NZ Transport Agency does not bid for projects, it selects bids. It is a quasi-autonomous authority that has operated under several names but always with the same purpose: to keep political fingers out of the cookie jar of revenue raised from road use.
Governments can impose their transport objectives in the form of published policy statements but they are not supposed to decide how and by whom those objectives are met.
Last year, long after NZTA had completed its assessment of the proposal from the Super Fund’s joint venture, entitled NZ Infra, Twyford replaced all remaining members of the NZTA board, some of whom had done extended terms. A little later an internal memorandum written by one of them, interim chairman Nick Rogers, leaked to the press. Rogers accused the Government of encouraging the latecomer to a point that “the market had advised NZTA that the current approach is seriously impacting the integrity of the New Zealand procurement process”.
Twyford and Jacinda Ardern responded by claiming the Transport Agency had “dropped the ball” on light rail. Even their newly appointed chair of the agency, Sir Brian Roche, said it had been given a job to do and hadn’t done it. Rogers’ memorandum explained exactly why the project was delayed and it was not the fault of the Transport Agency.
NZ Infra had filed its proposal in August, 2018. By then the NZTA had begun its market engagement for a project in line with objectives set out in a revised Auckland Transport Alignment Project announced by Twyford and Mayor Phil Goff in April.
Those objectives were not confined to accelerating an Auckland rapid transit development but doing so in a way that would “unlock housing and urban development opportunities”. A fast line to the airport did not offer much of that.
Nor was the joint venture much interested in working with firms that had already responded to NZTA’s market engagement, the memo recorded. NZ Infra “wanted an exclusive arrangement directly with the Government and a 12-month noncompete agreement”. And the Government was receptive. “Rather than aligning themselves with NZTA, the Government and Ministry of Transport have both entertained and actively encouraged NZ Infra to continue down a separate path.”
The Transport Agency had done its assessment of the Canadian proposal, “using an established Treasury process for considering any unsolicited bid”. It failed on a number of counts, including value for money. The agency delivered its decision on November 5, 2018, less than three months after receiving the proposal. The Ministry of Transport’s attempt to reconcile the “bids” or choose between them was expected by the end of 2019, then February, then March . . .
The delay has turned out to be a blessing. Covid-19 has reduced the demand for public transport of all forms as more of us choose to work from home. The attempt to override the statutory agency agency best equipped and responsible for properly evaluating transport projects remains a disgrace.