Matthew Hooton
Minister seems illequipped to launch $20 billion project
The Machiavellian theory is that the Government set up the process to drive a final nail into the light-rail coffin.
If the definition of madness is doing the same thing over and over again and expecting a different result, then Transport Minister Michael Wood’s announcement of an Establishment Unit for light rail makes him certifiable.
The same officials, from the same agencies, will do the same analysis, based on the same basic facts and assumptions, that they’ve been doing for a decade. Despite their best efforts — and those of the investment bankers and project managers at the Super Fund and CDPQ Infra — no one has been able to make the engineering, economics, environmental impact, politics and construction plan add up.
Wood’s Establishment Unit will be governed by a board consisting of the chief executives of the Ministry of Transport, Waka Kotahi (previously the NZ Transport Agency), Auckland Council and Auckland Transport.
This is the same lot that has delivered both the shambles in Auckland’s transport network generally and the fiasco over light rail specifically.
They will be joined by elected members of Auckland Council’s local boards, iwi and other Treaty partners, and officials from Ka¯inga Ora (previously Housing New Zealand). Officials from Treasury and the Infrastructure Commission will observe.
Wood says the Establishment Unit will operate out of Waka Kotahi’s offices with staff drawn from the agencies mentioned above. They will be supported by what Wood says will be “international experts and organisations with experience of developing complex projects of this nature”. It is not clear if these foreign consultants will be allowed into New Zealand or just interact with the Establishment Unit via Zoom.
Despite its staff coming from competing global consultancies and rival Wellington bureaucracies, Wood says the Establishment Unit will have “a one-team culture, focused on ensuring that the project achieves the best outcomes for Auckland and New Zealand”.
They will be busy. Wood has given the Establishment Unit just six months to complete its work and wants its final report before Christmas.
In that time, he wants the Establishment Unit to partner with Ma¯ori, engage with stakeholders and communities, choose a mode and route, develop a business case, provide cost estimates and funding options including taxing landowners for an assumed increase in the value of their properties along the route, and determine the best form of delivery entity.
The delivery entity may be either City Rail Link Ltd, responsible for that disruptive, over-budget and behindschedule project, or a new joint venture with Auckland Council.
Wood requires the Establishment Unit to show its recommendations and business case are politically popular — what he calls “social licence” — and how they will “contribute to Auckland’s urban fabric over the next 50 to 100 years”.
This includes showing how the project will improve Aucklanders’ access to housing, work, leisure, educational and other opportunities, optimise environmental quality, embed sustainable practices, create “quality integrated urban communities”, provide a high-quality and attractive service, achieve high levels of usage, and be value for money.
In doing all this, Wood insists that the Establishment Unit must be “open and transparent”. There is talk of public meetings and places where the public can see the latest ideas and plans and study the economic analysis.
When the Establishment Unit’s project director is appointed, Wood says, “I want them to find the best engagement person in New Zealand and set them to work”.
Of course, before this can happen, the Establishment Unit needs itself to be established. Wood says a Mobilisation Team is already working to set it up, with a Mobilisation Director about to be appointed.
When the Establishment Unit is up and running, its board will be led by an independent chair, who Wood hopes to appoint “within a matter of weeks”. Given the potentially reputation-ruining nature of this role, Wood may struggle to find someone suitable.
The pool may also be limited by the Establishment Unit being forbidden from recommending modes other than light rail, or routes other than from the central city to the airport, via Mt Roskill, nehunga and Ma¯ngere. That “strategic decision” has already been made by the Government, says Wood, suggesting his “social licence” concept is more about persuasion than listening.
That constraint also means Wood may have to compromise on the “independent” bit when appointing his chairperson. He is not ruling out former Auckland Transport chairman Lester Levy or former Auckland Transport chief executive David Warburton, both early advocates for light rail down Dominion Rd.
The problem is, if such advocates have already failed to make a plausible case for the project over the past decade, why expect them to succeed over the next six months?
In reality, no one expects they will. Treasury, Infrastructure Commission and Auckland Council all advised Wood his process will not succeed.
The Machiavellian theory is that the Government set up the process precisely to drive a final nail into the light-rail coffin.
With costs speculated to be anything between $6 billion and $20b, that may be why Finance Minister Grant Robertson has allowed the Establishment Unit to go ahead.
Such guile and reputational risktaking seems unlikely by Wood personally. His whole life has been about carefully climbing Labour’s greasy pole, for reasons ultimately known only unto him. His political patron is Phil Goff.
Like his mentor, Wood has never been known to hold strong opinions on anything, except for those authorised by party HQ. His defenders call him “stolid”. His critics prefer “hollow”. The most tragic scenario is that someone has convinced him, against all evidence and for their own political ends, that his Establishment Unit has some chance of success.
Wood was born in 1980 and had a strictly middle-class upbringing in Pakuranga, with neither luxury nor struggle. He joined the Princes St branch of the Labour Party in 1998, when he started at the University of Auckland, where he completed a BA in politics and history. He did a lengthy political apprenticeship, standing for Parliament in safe National seats in 2002, 2005, 2008, 2011 and 2014.
More successfully, he was elected to Auckland Council’s Puketa¯papa Local Board in 2010 and as chairman of Goff’s Mt Roskill Labour Party. There was never any doubt he would be anointed to succeed Goff as local MP in the 2016 byelection, aged 36.
While climbing the pole, Wood spent most of his 20s as a union organiser, most of his 30s as the primary caregiver for his three sons, and did a brief time as a health and safety project manager for Habitat for Humanity.
It is a background that is no worse than the vast majority of today’s MPs, across the parties. But it does not necessarily equip him to realistically assess the likelihood of his process successfully launching a $20b project.