Scramble to fix Route K debt

A meeting is to be set up with Tauranga's MPs after city councillors expressed deep frustration at being unable to get the $61 million Route K debt off its books.

The council yesterday agreed to continue discussions for the New Zealand Transport Agency to take over Route K as a state highway, even though it meant the debt would continue to be held by the council.

A sense of helplessness prevailed among many councillors at yesterday's meeting because the agency was unable to buy Route K off the council.

The council agreed to secure the best deal it could in the circumstances while continuing to try to reach a political solution in which it was hoped the money could be found from a different Government pot.

The compromise would see the agency declare Route K a state highway and take over maintenance costs. It also meant the agency would meet the cost of installing an electronic tolling system, but the first priority for tolls would be to continue to repay the debt which was going up by $200,000 a month.

Councillors heard Route K would not turn the funding corner until about 2021-22 when usage of the road was predicted to reach the point where revenue began repaying all the loan costs. In the meantime the interest on the loan would continue to be rolled into the capital.

Councillor Bill Faulkner called for a meeting to be set up with the city's MPs as quickly as possible. "We need to keep up the political conversation."

Cr Faulkner said the economic downturn and the Christchurch earthquake meant the country was in a different space to when the council began the debate about the agency taking over the debt.

He said the council needed to salvage the best deal it could in the meantime because the agency was constrained by both the law and the amount of money it had to spend.

Councillor Murray Guy opposed the basis of a settlement with the agency, saying he was totally opposed to tolling.

He complained they would be giving the agency a fit-for-purpose road for a state highway while the agency was wanting to hand back to the council the 15th Ave-Turret Rd corridor which needed to be widened to four lanes. He had little confidence a political solution would be found.

Councillor Bill Grainger said the council had to be more forceful in its discussions with the city's MPs.

Councillor Rick Curach feared the council would lose its bargaining power and leverage by agreeing to allow Route K to become a state highway.

The proposed deal with the agency was passed 6-4.