$23m payback clears way for Government rail cash deal

Auckland stands to be repaid up to $23 million for duplicating part of the bottlenecked western railway line - but only to clear the decks for a contentious new Government funding deal.

Although the Auckland Regional Council remains concerned the overall deal will disadvantage it financially, it has offered the Government an olive branch by pledging "every support" to state agency Ontrack in completing the region's rail upgrade project.

That follows a promise by Finance Minister Michael Cullen and Transport Minister Annette King to reimburse the Auckland region for the costs of the first stage of the $200 million rail duplication scheme, which will extend from Newmarket to Swanson from 2009.

The deal commits the Government to the full cost of new rail tracks, signals and platforms, but the region must pay for above-track items such as station buildings and trains. A funding split for rail electrification, which the Government does not see as a priority but which the Auckland Regional Transport Authority says is vital for long-term patronage growth, has not been included in the new regime.

The Government was previously committed to covering 60 per cent of most Auckland railway spending, although the region kicked off the western line with a $23 million grant for the first stage of its duplication, between Mt Eden and Morningside.

Regional chairman Mike Lee wrote to ministers saying his organisation initially supported the new deal on a Government assurance it was "fiscally neutral for the ARC".

But that assurance was given during last year's election campaign, and Mr Lee said it became progressively clearer that the new arrangement was not fiscally neutral.

A council staff report in February warned that the Government's indicated contribution to the region's rail needs over 10 years had declined from $1.5 billion to $780 million, whereas Auckland's expected share remained about $1.1 billion.

The Government has since established a task force of departmental and local officials to identify Auckland's multibillion-dollar land transport funding gap, and to seek agreement on priorities for plugging it.

Mr Lee was in a conciliatory mood at a council transport policy committee meeting last week when he proposed a resolution that the ministers be thanked for agreeing to deal with outstanding issues and that Ontrack be given "every support" for its upgrading task.

Transport authority chief Alan Thompson said work around Henderson Station should be finished in August, in time for the opening in early September of Waitakere City's new $36.5 million civic centre.