China eyes investment in rail loop

Mayor Len Brown. Photo / APN

A state-owned Chinese bank is eyeing Auckland's $2.4 billion inner-city rail loop and second harbour crossing as it seeks to invest in New Zealand.

Yesterday, the Chinese Development Bank signed a memorandum of understanding in Wellington with the local arm of the accounting firm PricewaterhouseCoopers to invest in Christchurch reconstruction projects.

But PwC chief executive Bruce Hassall told the Herald that the bank was also interested in investing in a broad spectrum of infrastructure projects and property including roads, bridges and buildings.

"They were in Auckland earlier in the week and we gave them a briefing on a number of the large infrastructure projects that have been talked about around rail and the second harbour crossing."

PwC gave the bank "an overview of the broader transport opportunities" including the inner-city rail loop "and they're open, they're here to listen and learn".

"One of the unique things about CDB is they have the ability to invest in very large infrastructure projects. Also they have a very long-term focus."

Last week, Prime Minister John Key poured cold water on Auckland Mayor Len Brown's plans for the rail loop, saying it was not going to happen anytime soon and that he was not convinced of the project's merits.

Yesterday's agreement will allow co-operation with the bank on big development projects in Canterbury, as well as in agriculture, infrastructure, natural resources and finance. The deal was witnessed by Chinese Deputy Premier Hui Liangyu and Finance Minister Bill English.

Mr English said he didn't expect the bank to play a big role in the reconstruction of Christchurch but suggested hotels and other tourism infrastructure were likely investments.

"The most significant overseas assets damaged by the earthquakes were actually the hotels and we've got growing tourism with Asian countries and so it's logical that Asian investors who currently do own the hotels would be looking at whether they're going to invest to replace them."

A spokesman for Mayor Brown said a number of foreign investors had shown interest in Auckland's infrastructure projects and some had met the council.

"Auckland Council and Auckland Transport are currently assessing the best options for both the construction and the financing for these transportation projects," the spokesman said.

In November, Mr Brown will travel to China and will be looking at some of the more advanced tunnelling technologies the country uses.

"We really want to get on with this project," the spokesman said, "and we're at the stage now where we're considering what the best options are."