Wheeling and dealing: the rail track saga

In the second of a three-part series on getting Aucklanders to work more easily, transport reporter SCOTT MACLEOD takes a long look down the tracks.

Twist your head to the left while sitting in this simple little room and you can see part of Auckland's biggest dilemma. Look ahead and you will see a possible solution.

It is a damp Monday morning, November 6, and reporters looking out the Auckland Regional Council briefing-room window can see Spaghetti Junction alongside.

Two hours earlier, the junction was clogged for 30 minutes in one of the worst traffic jams for weeks. Traffic jams are the reason for this meeting - and the reason two of the four reporters are late.

On the wall is a whiteboard on which someone has squiggled a mess of lines and arrows for an earlier meeting. The lines explain a complex deal that will affect every Aucklander for 70 years. The deal being negotiated between Auckland councils and Tranz Rail will cost huge sums, but it will help free the motorways and get Auckland moving again.

The lines are confusing. The previous week, the regional council copped flak when the cost of the deal seemed to shoot up from $65 million to $112 million.

The two council chaps by the whiteboard, ARC transport director Barry Mein and rail corridor project coordinator Kimball Fink-Jensen, say the Tranz Rail talks have been complex, and some things had to be kept secret. There has been much ill-informed debate. But now, they say, Aucklanders need to know what is going on.

The deal goes back to 1995, when Auckland mayors decided light passenger trains could help beat the city's transport woes. The idea was to let a contractor come in and run rail services - just as Stagecoach is paid a subsidy to run the buses.

But there was one big problem. The Government owns the land under the rail tracks - and had agreed to lease it exclusively to Tranz Rail for a further 70-odd years.

Mr Fink-Jensen says that made things awkward because if Auckland wanted to tender out rail services, Tranz Rail would have to be a party. Also, the city would have had little say over things like track maintenance and where stations should be built.

Any train company that failed to perform could have blamed dodgy tracks or poorly sited stations that were not its affair. The city would end up spending megabucks on infrastructure that would benefit only Tranz Rail in the long run and allow it to charge even more for access to lines.

The solution was for the city to gain some sort of control of the rail routes, but Tranz Rail wanted to keep its lease, and said it would negotiate directly with any firms wanting to run passenger services. That was a bad situation for the city - especially since one of the five firms keen to run the services was Tranz Rail.

"Effectively, if you're stuck with a monopoly, then you're always in trouble," said Mr Mein.

So ARC negotiators acting for the Auckland region sat down and talked to Tranz Rail - for three years.

A couple of important things happened in that time. In 1998, Infrastructure Auckland was born, giving a potential pool of money for city spending. In 1999, regional planners finished a big study of how transport must evolve in Auckland.

The results were the Regional Land Transport Strategy and the Passenger Transport Action Plan. They found that the best way to build a rapid transport system was to use the existing rail corridors.

ip0THE FIRST DEAL

ip1Talks were sluggish until June this year, when Tranz Rail agreed in principle to let the city lease the western routes from the Government. These included the North Auckland, Newmarket and Onehunga lines and the proposed Queen St and Avondale/Southdown routes.

However, not included was the North Island main trunk line, which comes straight up from the south into central Auckland. Tranz Rail said it would let the city use some time slots on the main trunk for passenger services.

In return for all this, the city would pay Tranz Rail $65 million up front and $2.25 million each year for 70 years.

This would let the city run 80 daily passenger journeys on the main trunk. The annual bill would go up to $3.25 million a year for 81 to 100 trains and $4.25 million for 101 to 126. That deal, which is still on the table, meant the city could call the shots on the western lines when it came to building stations, going electric and other capital works. But Tranz Rail would have most of the control over the main trunk. It also meant the city would own most of the tracks and buildings in the western routes.

The ARC negotiators say they were pretty happy with that deal.

ip0THE NEW DEAL

ip1However, things changed suddenly in early August.

The ARC says Tranz Rail came back with a new proposal to give up the lease to all the Auckland region rail lines - including the main trunk. The city would pay $112 million up front - $47 million more than the first deal.

But there were two benefits. First, the city would mostly control the main trunk. Second, it would not have to pay Tranz Rail $2.25 million to $4.25 million each year. The situation would be reversed: Tranz Rail would pay the city $2 million a year to run its freight trains on the tracks.

The ARC men say the cost of the two deals is about the same in the long run, but the second is better because the city controls more routes.

So why did Tranz Rail reverse its original stance and agree to give up control? Its new managing director, Michael Beard, says the company needs to get rid of some of its huge money-sucking asset base.

"Unproductive assets will be released," he told shareholders on Friday.

Now the ARC is trying to talk Auckland councillors into seeing the merits of the new deal. Councillors from all over the region were briefed at Eden Park on Monday. No motions were passed, but the Auckland City Council will decide on Thursday next week whether to forge ahead.

Transport and roading committee chairwoman Catherine Harland said yesterday: "This price is by no means set in concrete, but before we ask Tranz Rail to sharpen its pencil we need to know if there is general support among the councils."

The ARC will have to move fast to convince them, because there is a December deadline for the first deal to be settled.

The biggest problem is who will pay. Infrastructure Auckland has agreed to give $30 million, but the ARC is having difficulty getting a further $35 million out of national transport funding body Transfund. That means the councils must find up to $82 million if they go with the new deal.

Remarkably, it is by no means certain that light passenger trains will be used on the Tranz Rail corridors if the deal goes ahead. The councils are yet to decide whether to use heavy trains like the present ones, light trains that can also run in city streets or install bus lanes beside the railway lines. Light trains are by far the favourite option.

The ARC men paint a rosy picture of what could happen once a deal is struck. A foreign train company will move in, such as the French Transdev or German Siemens. Both have already shown interest.

Trains that now arrive every 15 or 30 minutes during peak times will instead turn up every three to five minutes. Shops will flourish near the stations.

Decisions on such things as who pays for trains, stations and maintenance will be sorted out during talks between Auckland and the rail operator.

But for now there is the December deadline to think of.

Further on, another one looms. Tranz Rail's contract to run passenger trains in Auckland expires in 2002, when its ageing carriages will start falling to bits.

* Tomorrow: What is happening to our rail system?

Herald Online feature: Getting Auckland moving

Herald Online traffic reports