Dialogue: Region made a good deal acquiring local rail lines

By PHILIP WARREN*

It was unfortunate that the Auckland region's rail assets were sold into private hands, but we cannot turn back the clock.

In the early 1990s, the Crown-owned rail corridors were leased to Tranz Rail at a peppercorn rental for 80 years. Since that time, the region's local authorities have been trying to negotiate an agreement with Tranz Rail that would allow improvements in passenger transport services to be implemented.

The announcement that a commercial agreement in principle had been achieved is, indeed, a breakthrough.

At last we have a real opportunity to deliver the type of public transport system the people of the Auckland region deserve. This is vital for realising the region's transport and growth objectives. In addition to securing access opportunities for improved services, the deal with Tranz Rail gives us three important advantages over today's arrangements.

First, we are free as a region to determine what sort of system we want to develop. On the western and central isthmus corridors, the deal will allow us to choose the most cost-effective solution, be it light rail, conventional rail or busway.

On the main trunk line, from central Auckland to the southern boundary of the region, we can vastly increase the level of service and are free to introduce modern rolling stock - electrified if we see fit.

Secondly, we are not tied to buying services from one monopoly operator. There are ample examples, in New Zealand and elsewhere, of the benefits that competition can bring to both the cost and attractiveness of transport and other utility services.

One has only to cast one's mind back to the days before the arrival of Ansett New Zealand or Clear Communications to know what I mean.

During the most recent negotiation process, Tranz Rail did provide a proposal to operate improved services, but it was concluded through detailed analysis that these services would be an expensive option for the region, especially in the longer term. Without any competitive tension, the ability for a single operator to ramp up its prices will always be there.

Already, the region has received a number of expressions of interest from internationally respected public transport operators. We can now consider these.

Inevitably, however, any improvements to passenger transport services will require a significant investment of public funds.

For that reason, it is essential that this region gets the best value from this investment, both now and into the future.

The third big advantage is the potential it releases for development around the rail stations. At present, station land is tied up under Tranz Rail's lease with the Railways Corporation, and there are limited incentives for development that integrate well with the surrounding community.

The opportunity for the region to take control of these assets presents huge opportunities to increase the attractiveness of stations.

The Avondale-Southdown option is a further example. This land, which is tied up under a designation, has the longer-term potential to be used as a transport corridor and the remaining land developed or sold for development.

Of course, the question whether all this is worth the $65 million price tag needs to be addressed. Earlier this year, Tranz Rail's initial value attached to just the access to the central isthmus and western corridors was reported as about $300 million.

The region's initial valuation of just the central isthmus and western corridors was between $21 million and $33 million. In addition, it was recognised that we would always need to pay a premium to an unwilling seller.

What this agreement in principle proposes is that the region gains, for $65 million, access to not only these corridors but also the option on the Avondale-Southdown land and control of the stations on the North Island main truck line from the city to the region's southern boundary.

There are a number of conditions - including funding, engineering reports, safety and maintenance responsibilities - that need to be satisfied before any deal can be settled. For this reason, the agreement that the region will sign up to on June 30 is only conditional.

The Auckland Regional Council, its local authority partners and funding agencies, will then address these issues over the coming months.

Some may hanker for a return to the days of a Government-run railway, but that particular horse has bolted and the gate is firmly shut.

The agreement with Tranz Rail is a positive way forward that enables us to make real and cost-effective progress towards significantly improving our public transport system.

Let's get on with it.

* Philip Warren is chairman of the Auckland Regional Council.