Simon Collins is the Herald’s social issues reporter.

Private money may fund light rail, say mayoral candidates

Phil Goff leads the latest poll for the Auckland mayoralty. Photo / Nick Reed
Phil Goff leads the latest poll for the Auckland mayoralty. Photo / Nick Reed

Mayoral contenders Phil Goff and Vic Crone both say they will tap private investors to pay for an Auckland light rail system if central government fails to fund it.

The candidates faced off at a Grey Power meeting in Mt Roskill today, just after a Horizon Research poll found Goff still way out in front in the mayoral race, with 38 per cent support to Crone's 11 per cent and 6 per cent for third-placed John Palino. A quarter (27 per cent) were undecided or wouldn't disclose their votes.

Despite being an MP for the Labour Party which has traditionally been wary of private funding, Goff said he would be open to a public-private partnership (PPP) to fund a light rail system, which he has said should start with a line to Mt Roskill costing $1 billion to $1.3 billion.

"For light rail, if I can't get money out of central government, do I have to look at something like a PPP?" he asked the meeting.

"If that meant we could bring it forward, I certainly wouldn't rule it out."

He said his first preference was to for central government to borrow money through infrastructure bonds to fund light rail and other projects, using the Government's ability to borrow at low interest rates. But if the Government refused, he would consider PPPs.

"The downside of PPPs is that they do end up costing you more in the long term," he said. "The upside is that you get your capital quickly."

He said private partners would potentially build a light rail line or other infrastructure, own and operate it for perhaps 30 years, and then transfer it to Auckland Council.

Passengers and ratepayers would pay for it over those 30 years through fares and public transport subsidies.

Goff said the final report of the Auckland Transport Alignment Project, due to be released tomorrow, was expected to disclose a gap between planned infrastructure and available funding of $4 billion over the next decade, or $400 million a year.

Auckland Mayoral candidate Vic Crone during her campaign launch held at Unitec. 31 August 2016 New Zealand Herald Photograph by Dean Purcell
Auckland Mayoral candidate Vic Crone during her campaign launch held at Unitec. 31 August 2016 New Zealand Herald Photograph by Dean Purcell

He said a regional petrol tax of 10c a litre could yield $150 million, or three-quarters of the council's share of the gap if costs were split equally with central government.

"I think the Government wants to go down the congestion tax route, but that takes time to implement, and also you can't make it so expensive unless you have an alternative option that is readily available to use," he said. "The alternative option is rail, light rail, busways and cycleways."

Crone said she favoured PPP funding of major projects in preference to central government funding.

"When Phil says he's going to get the Government to pay, you are the Government," she told Grey Power members.

"It still comes out of your pocket, whether it comes out of your left pocket or your right pocket.

"So for me it's around how do you actually not just rely on you to deliver the money that we need. That is where PPPs play a big role. Sydney and Melbourne are delivering their equivalents of the City Rail Link through PPPs. The Government is contributing about 15 per cent, but a big chunk of it is coming through private capital."

- NZ Herald

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