Artist impression of light rail on Queen Street in Auckland. Photo / Supplied
Artist impression of light rail on Queen Street in Auckland. Photo / Supplied
The way the Government has gone about procuring light rail in Auckland has left a sour note with the Auditor-General.
Put bluntly, Auditor-General John Ryan is not impressed with a decision to have a run-off between two bidders in response to concerns the Government was not following its own rules.
Today, Ryan issued a 10-page letter to Ministry of Transport chief executive Peter Mersi about light rail from the Auckland CBD to the airport, costed anywhere between $6 billion and $15b.
"Concerns were raised with our office about the decision to run a 'parallel process' to select a delivery partner for the project. In particular, the concerns raised were whether the process complied with the Government procurement rules," Ryan said.
Auckland light rail was a flagship policy by Jacinda Ardern in the 2017 election when she promised to have the first leg from the CBD to Mt Roskill completed within four years and running to the airport within 10 years.
In 2018 the Government directed the NZ Transport Agency to lead the development of light rail from the Auckland CBD to the airport.
Shortly afterwards in April 2018, the Government received an unsolicited bid from NZ Infra, a joint venture between the NZ Super Fund and CDPQ Infra, a Canadian pension fund, to build the scheme as a public-private partnership.
In 2019, the Cabinet agreed to endorse the then Minister of Transport Phil Twyford's approach for the Ministry of Transport to assess the rival bids and recommend the best proposal to Cabinet.
The ministry recommended the Super Fund's plan in 2020, but it was blocked by NZ First, whose leader Winston Peter said it would cost between $10b and $15b and a "decade of chaos".
Artist impression of proposed light rail station for Montreal being built by the Canadian pension fund, which could be replicated in Auckland. Photo / Supplied
Given the scale and significance of light rail to Auckland and the country, Ryan sought to get to the bottom of the concerns raised with his office.
He found general agreement the parallel process involving NZTA and NZ Infra was "unusual" and encountered mixed messages between various Government departments around the procurement process.
Ryan said NZTA and the Ministry of Transport came to different views about whether the NZ Infra proposal met the criteria of the Government's procurement rules.
Artist impression of light rail down Dominion Rd in Auckland. Photo / Supplied
"We were told at one point that it was open to the Government or Cabinet to choose not to follow the rules in certain circumstances," Ryan said.
While the rules did not have the force of law, said Ryan, they are mandatory for many public organisations.
"The rules are designed to guide public agencies to procure responsibly and achieve public value, and maintain the integrity of Government procurement and New Zealand's reputation as a country that 'plays by the rules'.
"Any departure from the rules, and the reasons for it, should be clearly and transparently explained to the market and the public so those tendering can have confidence in Government procurement processes.
"To not do so puts New Zealand's reputation at risk, domestically and internationally," Ryan said.
Transport Minister Michael Wood. Photo / George Novak
Transport Minister Michael Wood said he respected the Auditor General's findings and the role he plays as an independent officer of Parliament.
"As the new Transport Minister, my expectation is we'll follow standard procurement processes going forward.
"Ultimately Cabinet decided to end the previous process and I'm focused on getting the project moving," Wood said.
After three years of slow progress by the Government, Aucklanders have little idea of what is planned for light rail in the city.
