Cost of advice on rail spirals higher

By BERNARD ORSMAN

Lawyers and consultants are set to pocket $4.2 million in fees whether or not Auckland gets a dream public transport system.

The budget for legal fees and technical advice on the deal to pay Tranz Rail $65 million for access to train corridors has rocketed from $1.4 million last month to a projected $4.2 million by December.

The law firms of Bell Gully and Simpson Grierson, engineering consultants URS (formerly Woodward-Clyde) and advisers Macquarie are the main companies benefiting from negotiations between the Auckland region and Tranz Rail.

Their fees are virtually guaranteed, even though the deal to open Auckland rail corridors for a rapid transit scheme, as agreed in a heads of agreement between the region and Tranz Rail, is looking shaky.

The Prime Minister's senior policy adviser, Heather Simpson, and senior transport officials told Auckland local body chiefs on Friday that the deal did not make sense.

The Ministry of Transport is understood to prefer an incremental improvement in passenger transport services and Transfund, the roading and public transport funding agency, has problems with paying for the deal.

One of the Auckland participants said concerns had been raised about the Tranz Rail deal, "which from our perspective [meant] they didn't really understand it."

Further talks are scheduled this week between Wellington and Auckland officials to try to reach an understanding on the issue.

The Auckland region is seeking $35 million from the Government towards the deal through Transfund.

Another question hanging over the deal is Tranz Rail's announcement today on the future of its passenger transport business. Passenger lines could be sold or contracted out.

An Auckland Regional councillor and opponent of the Tranz Rail deal, Mike Lee, said the only people benefiting were law firms and consultants. "The only train I can see here is the old local government special, the gravy train."

Transfund is expected to pay a quarter of the $4.2 million cost in legal and technical advice. The ARC will pay half of the balance, about $1.59 million, with the Auckland ($1 million), Manukau ($329,000) and Waitakere ($182,000) cities and Papakura ($24,730) and Franklin ($10,304) district councils making up the rest pro-rata.

The chief executive of the Auckland Regional Council, Jo Brosnahan, said the $4.2 million budget was not just about buying a lease, but about getting the best advice to lay the groundwork for a $1 billion public transport project once the lease was secured.

"This is the biggest single project that the Auckland region has ever been involved with."

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