Deputy Prime Minister Winston Peters says he'll be watching out for potential cost blow-outs for Auckland's light rail project, after warnings from a source within the transport industry.
Deputy Prime Minister Winston Peters says he's not seen any official costings for project, but a budget blow-out is something every politician should be trying to avoid. Photo: RNZ /Dom Thomas
And the opposition leader Simon Bridges has lashed out at the New Zealand Superannuation Fund, accusing it of "cynical" conduct by going unsolicited to the government with its alternative proposal.
The promise to build light rail from downtown Auckland to the airport within a decade was made by Jacinda Ardern in her first policy announcement and campaign rally as party leader, ahead of the 2017 general election.
An agreement for "work to begin on light rail from the city to the airport in Auckland" this term was also part of Labour's supply and confidence deal with the Greens.
The Transport Ministry is now considering two proposals - one from the New Zealand Transport Agency (NZTA), and the other from NZ Infra - a joint venture by the Super Fund and the Canada Infrastructure Bank.
The New Zealand First leader told reporters today he hasn't had any official advice about the risk of a cost blow-out, but has been alerted to the possibility.
High in his mind were also cost blow-outs on other projects such as on the Brynderwyn, and Puhoi to Wellford, he said.
"Now when you see cost blow out, or like the CRL [City Rail Link] in Auckland it's high time we say 'well what is the cost here?' - and that's all I'm saying."
He had not seen any official costings, but a budget blow-out was something "every politician should be looking to avoid", Mr Peters said.
When asked if his party would block the project if the costings came back too high, he said that was an invitation to "depart from the modus operandi of a good coalition partner", which was to consult with partners first.
But he said a warning had been sounded - "Have I had cause to prick up my ears and try and listen and find out? Yes, I have been told ... to be on the alert for costs".
That did not come from ministerial colleagues, Mr Peters said, but from a "credible" industry source.
Transport Minister Phil Twyford said the original cost estimate from the preliminary work done was about $4 billion for the city centre to Māngere light rail line, work was still being done on that and he had "received no advice on cost blow-outs or anything".
There was "nothing to suggest that any kind of delay is linked to a cost increase", he said
But National's leader Simon Bridges, also a former transport minister, described the project as a "slow moving economic train wreck for New Zealanders".
National Party leader Simon Bridges. Photo: RNZ / Dom Thomas
When the prime minister first talked about a "tram to Mt Roskill" the price tag was about $1 billion, he said.
"Now the talk is, and Shane Jones, Associate Minister of Transport, Infrastructure Minister talking about $6 to $8 billion."
Those estimates were understandable, Mr Bridges said, "because what you will have here is both in terms of the capital expenditure, hoovering up the transport budget for the next decade or so, and then actually beyond that - massive transport subsidies to get punters onto that tram".
The process had been "appalling", he said, as there should have first been a business case, then a competitive tender then finally the contract awarded.
And he was highly critical of NZ Super Fund's actions, saying it had "very cynically tried to short circuit that process".
"And unfortunately, it seems like there are people stupid enough within the Beehive and the Ministry of Transport and NZTA to entertain that with the so-called six-page Powerpoint, before we even have a business case to see whether it stacks up."
NZ Superannuation Fund said it was not a position to comment on criticisms from the National Party leader about how its handled its joint venture proposal for light rail in Auckland.
A spokesperson said it was in a competitive process and so could not make any comment.
The spokesperson said the Fund was focused on putting forward a quality proposal that met the government's objectives for delivering rapid transport in Auckland.
The project was still at the business case stage, Mr Twyford said, as Cabinet mandated a "detailed investigation" of the proposal from Super Fund and its Canadian partner, which is currently building the Montreal light rail system.
Transport Minister Phil Twyford. Photo: RNZ / Richard Tindiller
"And Cabinet decided that it was sufficiently promising and unique; Treasury and MOT [Ministry of Transport] did extensive due diligence including sending officials to look at the work they're doing there".
The proposed public/public partnership by NZ Infra was like nothing done in New Zealand, he said.
"It would mean that every time we took a ride on the train you're contributing to paying for your retirement, it's a really interesting option."
The government owed it to taxpayers and Aucklanders to explore the most "innovative and clever ways" to deliver this project, he said.
"It's utter nonsense to suggest that (a) the proposal doesn't stack up, or that there hasn't been a detailed process".
There would not be "shovels in the ground before the election", acknowledged Mr Twyford, but Cabinet would make a decision in April about whether NZTA, or NZ Infra would be given the nod.