Auckland: The windfall

By John Roughan

As Auckland merges to create a supercity, the Herald looks back at how Auckland has changed over the years. Click here to view the full series.

Britomart Transport Centre in the old Chief Post Office
building. Photo /  Supplied
Britomart Transport Centre in the old Chief Post Office building. Photo / Supplied

In the last decade of the 20th century, when Auckland's motorways had reached peak-time capacity and congestion was a daily experience, an unexpected windfall revived its transport planners' dream.

The billion-dollar windfall came from an unlikely combination of hard-headed public finance reform and a voters' revolt against asset sales.

It all started in 1992. Legislation enacted that year reduced the mighty Auckland Regional Authority to a regional council with restricted
roles and gave its buses and other charging services to a newly created body that was instructed to make them pay.

Crucially, the assets passed to the new Auckland Regional Services Trust included Ports of Auckland Ltd, a company formed to run the port when harbour boards were abolished four years earlier

The trust's assigned task was to clear a regional debt attributed in large part to the ARA's grand new headquarters in Pitt St. To that end
the legislation enabled it to sell assets such as the port, a prospect hotly opposed by a small political party that was polling strongly in that recessionary year.

At the October election the Alliance Party put up a full slate of candidates for the trust and campaigned to "save the port".

It won four of the six seats.

Over the next three years the trust, under chairman Bruce Jesson, allowed no assets to be sold and its chief executives, Mark Ford and then Christopher Russell, set about clearing the debt by other means.

They restructured the finances of the Pitt St building and squeezed the assets for a return comparable with capital invested in the private sector.

The Alliance was voted off the trust at the next election in 1995 but by then it was evident the debt would be cleared within a year or two and its legislation would require the trust to be wound up.

But it was also evident that with the assets still intact, the trust would leave a healthy accumulating fund. What should be done with it?

The trust, under new chairman Craig Little, was in no hurry to wind up. It found a popular first investment, contributing $38 million to the reconstruction of the Viaduct Basin for the defence of the newly-won America's Cup.

But the fund was going to be much bigger than the Cup and almost all Auckland politicians, including some in the National Government, wanted it preserved for much bigger projects.

The cabinet, though, was sticking to its original intention: the trust should sell the assets, distribute its funds to Auckland ratepayers and wind up.

In September 1997 its local government minister, Christine Fletcher, suddenly resigned, returning to the back benches to fight as Epsom MP for the retention of the fund.

That was the beginning of a year of public disagreement within National ranks between finance minister Bill Birch and local government minister Maurice Williamson on one side, Fletcher and police minister John Banks
on the other.

No such division was evident in Auckland's local politics. Little's
trust campaigned for its survival as an "infrastructure bank", Regional
Council chairman Phil Warren wanted the assets returned to the rump of the ARA. But they wanted the funds for the same purpose.

The mayors of the four big metropolitan councils, who included North Shore's former National minister George Gair, also lobbied the Government in unison for the fund to be kept intact.

New Prime Minister Jenny Shipley proposed a referendum to give Aucklanders a choice of retaining the fund or cashing in.

Opponents, including Auckland's mayors and regional chairs, labelled the share give-away a bribe.

In April 1998, the referendum legislation was put to a vote in Parliament and Fletcher and Banks crossed the floor to defeat
it.

Wearily, Shipley's cabinet agreed in June to replace the trust with an investment agency called Infrastructure Auckland with assets of $900 million ($650 million being port company shares) and $140 million cash.

In August the Yellow Bus Company was sold to Stagecoach Holdings of Scotland, adding $111 million to the fund.

The agency's legislation directed it to invest in public transport and stormwater disposal but with its board chosen only indirectly by Auckland councils it would have a great deal of autonomy to assess
applications for funds.

It proved to have too much autonomy for the liking of councils that knew exactly what they wanted: an integrated public transport network of electrified rail lines fed by local bus services. The North Shore, lacking train lines, would have an exclusive busway.

Meanwhile the Auckland City Council had been pressing ahead with its own plan to bring the central railway station back to Queen St by redeveloping the dilapidated Britomart block it had inherited from the Harbour Board.

The original station had been there until 1907 when the Government
pushed it eastward to make way for a new Central Post Office.

Then in 1927, for reasons that eluded all subsequent generations, a grand new station was built even further east on land reclaimed from Mechanics Bay.

By 1992 the railways were under pressure to get rid of grossly underused assets such as the Auckland railway station and the marshalling yards that extended almost to Britomart Place.

But Maori were given first claim on the rail assets and Ngati Whatua in Auckland did not want trains running across their newly acquired city-edge estate. To bring the line to the now disused CPO the council would have to go underground.

In 1995 Mayor Les Mills announced a $300 million multi-level underground transport terminal for buses as well as trains and possibly, in time, light rail trams. It had car parking floors as well and Mills insisted the whole project would not cost ratepayers a cent.

The cost was to be fully recovered from office blocks to be built on top. The Historic Places Trust put paid to that plan, defending the early 20th century buildings that would have to go.

By 1997 the scheme was being criticised as too big, too costly and of dubious value. It looked more like a property development than a practical transport terminal. Who would catch buses underground?

Among its opponents was Christine Fletcher who campaigned for mayor against it in 1998 and won. Two years later the council produced a scaled-down scheme which she championed.

The underground levels would be for trains alone. The carparks had gone, the buses would use Queen Elizabeth Square. One day, light rail trams might run from ground level portals in or beside the retained Post Office frontage.

By that time the Government had changed, Infrastructure Auckland was out of favour and in 2004 its assets and cash were put in a holding company under the wing of the Regional Council.

The wheel had turned full circle - but the busway and Britomart were built. The rail plan remained dependent on decisions in Wellington but slowly it was making progress.

- NZ Herald

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