Key Points:

Uncertainty over new fuel-tax legislation is forcing Auckland Regional Council to prepare for a possible public transport future without electric trains.

Councillors reluctantly approved an annual transport budget yesterday with no allowance for the Auckland Regional Transport Authority to start ordering a fleet of 35 electric trains for $495 million by the end of this year.

Even some proposed service boosts for existing trains, buses and ferries may have to be delayed, despite modest gains on other fronts from an 11 per cent increase in the authority's operating budget, to $222.6 million.

Delayed projects are likely to include a review of West Auckland bus services, to the dismay of council transport chairwoman Christine Rose, who bemoaned the loss of a chance to make savings from efficiency gains.

The authority's operating budget - almost $96 million of which will come from regional ratepayers and $100.7 million from Land Transport New Zealand - is being stretched to meet fuel price rises which are boosting costs as well as increasing Aucklanders' appetite for public transport.

It will also receive $83.5 million from the council for capital investment, as a draw-down from Auckland Regional Holdings funds.

Although the council still hopes the Land Transport Management Bill will be passed in time to allow an early request for bids from international rail suppliers, chief executive Peter Winder said it had to "cut its cloth" against the possibility of not being able to reap revenue through a fuel tax.

That is because the council must confirm its overall annual budget, including an average rates rise of 4.95 per cent, by the end of the month.

The legislation is awaiting its second reading in Parliament, with the Government unwilling to predict its prospects for success.

National Party leader John Key has indicated opposition to a regional fuel tax although his transport spokesman, Maurice Williamson, has promised Auckland's rail network will be electrified somehow.

Regional councillor Joel Cayford at yesterday's meeting said approving a budget without provision for electrification was "pretty frightening".

Although he was well aware of provisions to review the budget when and if the legislation was passed, he said he felt "we had a kind of Mayor Robbie moment" when he and other councillors first saw a staff reference to removing the electrification project.

He was referring to the failure of former Auckland Mayor Sir Dove-Myer Robinson's electrified scheme after National won the 1975 election.

Council chairman Mike Lee said the Government and its political rivals must be told that the people of Auckland expected capital investment in public transport to be something it needed to be "much more involved with in the future".

"No other region in the country can say they contribute $100 million from their own regional resources in terms of capital for what is in essence a national public transport effort for Auckland to be considered the country's world-class city and gateway."

Although the council has backed away from a fuel tax of 5c a litre, in favour of starting at just 1c next winter and 2c in 2010, Mr Lee told the Herald that the transport authority would be in a position to seek expressions of interest from suppliers as soon as enabling legislation was passed.

He warned any politicians inclined to oppose the legislation to be ready to come up with some funding alternative "because there will be an uproar here in Auckland if that's not done".

"The people of Auckland will not tolerate Wellington having a brand new fleet of electric trains paid for about 80 per cent by the government, and Auckland having to make do with do-up diesels."

Transport Minister Annette King was unprepared to offer any comfort, saying that the regional council was "being prudent" against the fact that the legislation had yet to be passed, and quoting a legal precedent against an attempt by the late Sir Robert Muldoon at "second-guessing the will of Parliament".