The Government’s plans for light rail in Auckland are in fresh trouble with Treasury forecasting rising costs and a council source saying it will be “a cold day in hell” before Mayor Wayne Brown agrees to any ratepayer funding.
The council source said the mayor understood the political importance the Government puts on light rail and will not get in the way of planning, but it will be taxpayers, not ratepayers, picking up the estimated $14.6 billion cost.
“It would be a cold day in hell before the mayor agreed for a cent of ratepayers’ funding to go into the project,” the source said.
A mayoral spokesperson said “those are not the words the mayor would use to express Auckland Council’s long-standing position that light rail is a central government project, being driven and funded by central government”.
The spokesperson pointed the Herald to a joint statement last month from Brown and Transport Minister Michael Wood where the pair agreed to set aside their differences to co-operate on a joined-up transport plan for Auckland and says “while the mayor is sceptical about the case for light rail, that is the proper context for it to be discussed”.
The issue of ratepayer funding for light rail follows Treasury’s Half-Year Economic and Fiscal Update last month which said the cost of the mega project from the city to the airport is expected to increase during the detailed design phase currently underway.
This is because last year’s indicative business case did not provide clear estimates of the urban development and enabling infrastructure costs associated with the transport solution, Treasury said.
National’s transport spokesman Simeon Brown said Aucklanders should prepare themselves for another Auckland light rail blowout.
He said the project is already projected to cost up to $29.2b - a reference to an earlier Treasury paper saying the earlier cost estimate of $14.6b was within an accuracy range of minus 50 per cent to plus 100 per cent based on a “very low level of design”.
“National will scrap this expensive and wasteful Labour Party vanity project which has been a gigantic waste of time and money,” Brown said.
Auckland light rail has been plagued with problems since Prime Minister Jacinda Ardern announced in 2017 Labour would build light rail to Mt Roskill within four years and to the airport and West Auckland within a decade.
The city-to-airport project got bogged down when former Transport Minister Phil Twyford brought in a joint venture between the NZ Super fund and a Canadian pension fund, followed by Labour’s coalition partner NZ First scuppering the plan.
In Labour’s second term, Transport Minister Michael Wood has got the project back on track.
Last year, the Government chose the most costly of three options to underground light rail between the city centre and Mt Roskill, then coming to the surface through to Onehunga, Mangere and the airport.
Wood is unfazed by the Treasury forecasts of rising costs, saying the Government and Auckland Light Rail Ltd (ALR), set up to oversee the design and construction of the project, expect costs to reduce as plans for construction become more detailed and clearer, and value engineering and risk mitigation is undertaken.
Evidence from America indicates costs for urban redevelopment and enabling infrastructure around public transport hubs where infrastructure like gas, electricity, water and communications are already in place are lower than those for greenfield development and this is being looked at for the Auckland context, said Wood.
The urban development and enabling infrastructure costs will be the responsibility of other central and local government agencies, the minister said.
Wood said the Government is committed to delivering light rail for Auckland, acknowledging it was a significant investment but an asset that will serve Auckland for generations.
Finance and Infrastructure Minister Grant Robertson has said the Government will pay the “lion’s share’ of the cost of light rail, but was guarded about other funding options, including contributions from Auckland Council.
One funding option is a possible $1000 a year tax on homes within walking distance of stations along the 24km route.
When the Herald sought comment from Wood and Robertson about Brown not agreeing to any ratepayer funding for light rail, a spokesman for Wood said “we have nothing to add to our previous statements”.
Council chief of strategy Megan Tyler said at this stage, the council and Auckland Transport have not committed any funding to light rail, but Government officials have initiated preliminary discussions about possible funding tools, which could include council contributions.
Meanwhile, a spokesman for Wood said there should be greater clarity about a new cost for the $4.4 billion City Rail Link in the next month or so.
A cost blowout has been signalled for some time due to long months of disruption from Covid-19 and a claim from the Link Alliance contractors.
Brown campaigned at last year’s local body elections to open the books on the new cost for the mammoth project, which began construction in 2016 and is not expected to open until 2025.
The CRL is jointly funded by the Government and Auckland Council.