ARC worries about train cost proposal

Auckland ratepayers and rail passengers face paying for a share of the region's new electric trains - despite a Government promise last year to foot the $500 million bill.

The Auckland Regional Council is worried about a Cabinet paper which discusses ways of recovering the cost of up to 114 electric railcars, which KiwiRail expects to order next year for delivery in 2013.

Council chairman Mike Lee said yesterday that the prospect outlined in the paper of Aucklanders having to pay some of the interest charges on a Crown loan to KiwiRail was not what Transport Minister Steven Joyce indicated last year when he scuppered plans for a regional fuel tax to buy the trains.

He warned that the new Auckland Transport super agency promoted by Mr Joyce would become "some sort of bailiff or debt collector and the ratepayers will have absolutely no say on how much money it extracts because he has deliberately reduced its public accountability."

Mr Joyce last night denied that, saying the new agency would operate exactly as the regional council and its transport authority subsidiary did now in reaching agreement with the Crown on funding.

He said it was always the Government's intention that Auckland should make some contribution to the new trains, depending on negotiations with KiwiRail, but he believed much of that would be covered by revenue from patronage growth over time.

Although he expected passengers and ratepayers to share any extra costs, including heftier contributions for KiwiRail operations and maintenance, the Government would be sensitive to the need to keep fares affordable so rail commuters did not end up switching to cars and clogging roads.

Mr Lee said he became alarmed after being briefed by staff on the Cabinet paper, which they obtained under the Official Information Act.

That contained advice by Mr Joyce in support of his successful request to the Cabinet in November for a $500 million interim loan to KiwiRail for the trains, while the Government worked out the company's longer term equity structure. Mr Joyce said last night that much as he would like to recover the full amount of the loan plus interest over the expected 35-year life of the new trains, "I don't think anybody's under that illusion".