Fran O'Sullivan on business

Business analysis and comment from Herald columnist Fran O'Sullivan

Fran O'Sullivan: Auckland lobby behind Key's about-turn

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Alignment of central and city leaders on infrastructure projects now needs to happen in Christchurch.

Business groups helped persuade the PM's inner circle that they need to get behind projects like the Waterview link. Photo / APN
Business groups helped persuade the PM's inner circle that they need to get behind projects like the Waterview link. Photo / APN

Prime Minister John Key's decision to suddenly back Auckland on big infrastructure investments wasn't simply designed to steal a march on his Labour opponents in the country's largest voting catchment.

Behind the scenes, leading Auckland-based business lobbies - particularly the Auckland Regional Chamber of Commerce and the NZ Council for Infrastructure Development (NZCID) - had a lot to do with persuading Key's inner circle that they need to get behind game-changing infrastructure developments in New Zealand's economic powerhouse.

The NZCID has held meetings with Finance Minister Bill English (who holds ministerial responsibility for infrastructure) to emphasise the need to get on with projects that will enable and service business growth in the city.

The lobby had good feedback from English who has been emboldened, not simply by the business case for the projects, but also because the fiscal track is turning positive much quicker than the Treasury has forecast.

The windfall gains from Meridian Energy's sale of wind farm assets in Australia - which were unveiled this week - have helped. But that is just one of several factors in play.

The NZCID - led by chief executive Stephen Selwood - has been the leading advocacy group lobbying for investment in roads, public transport, electricity projects, digital infrastructure, social housing and more to close the national infrastructure deficit that National inherited from Labour when it came to power in late 2008.

To be fair to Labour, former Finance Minister Sir Michael Cullen had already begun this process by instituting work on the Waterview project in Auckland, investigating the electrification of Auckland rail, buying back KiwiRail off its Australian owner as well as a range of other projects.

But when National took power it brought forward some projects - particularly the "Roads of National Significance" - to stimulate the economy and keep construction workers employed in the post-global financial crisis environment.

Auckland Mayor Len Brown lifted the tempo when he swept to power in the first elections for the Auckland Super City in 2010 on a platform of introducing three transport projects: the Central Rail Link, another harbour crossing and an Auckland Airport-CBD rail link.

On the Government's metrics these projects did not stack up - at least in the short term.

But the business cases have been reworked by officials from Government, the NZ Transport Agency and Auckland Transport. If growth rates in the Auckland CBD move faster than projected, then the Central Rail Link in particular may be brought forward according to a pledge Key made on Friday.

The Auckland Regional Chamber of Commerce also alerted the Government - particularly John Key - to the growing concerns in the city that decisions that should be made on Auckland's big issues were not happening. Key was urged to show some leadership and take the opportunity to put his Government back in the box seat at a time when it was losing its own positioning in New Zealand's commercial hub.

In April, Chamber of Commerce chief executive Michael Barnett put a case to Key to address four areas: Auckland's long-term housing shortage, where there was an opportunity for the Government-Auckland housing taskforce to set a game-changing housing action programme; funding the completion of the strategic roading network, in particular the AMETI/East-West Link that is so essential to the movement of freight across the city's manufacturing and logistics hubs; giving priority to the Central Rail Link to allow a doubling of train services through Britomart station coupled with improved bus services (Barnett stressed the strong public support for the service and the need to realise the benefits of the Government's investment in rail electrification and loan for new passenger rolling stock); the need for a confirmed agenda to finalise the Auckland Unitary Plan in a way that accelerates the delivery of Auckland's growth plans; and confirmation that the International Convention Centre would be built as soon as possible.

Both the NZCID and the Auckland Chamber have made strong business cases for the completion of these projects and for the Government to pony up with the billions of dollars necessary for it to pay its part - alongside the council - in bankrolling the projects in future years.

It has not been plain sailing.

Sources suggest Cabinet ministers - notably Transport Minister Gerry Brownlee and his predecessor Steven Joyce - were not easily persuaded to move on Brown's big-ticket numbers.

The NZCID reckons the proposed route for the Central Rail Link does not take sufficient account of vital traffic nodes such as the Auckland University precinct or Wynyard Quarter.

Given that the project is not slotted to start for another seven years, there is time to investigate further options on the route.

Barnett has also suggested investigating a fast rail link between Auckland and Hamilton. This would enable Hamilton to become a dormitory city for Auckland where workers could commute to the big city in less than an hour's travelling time either way and live in more affordable housing.

Both ideas are worth pursuing.

What is good from an Auckland perspective is that pragmatism has finally reigned.

Now the same formula needs to be applied in Christchurch so that both the city leaders and central Government are singing from the same hymn sheet.

- NZ Herald

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