The clown show over Labour’s promised light-rail plan continues, with a three-way split developing amongst the governing parties.
The Government is splitting three ways on plans for Auckland light rail as the saga heads to its endgame phase.
Labour Ministers are erring towards signing New Zealand up to a long and expensive public-private partnership (PPP), while the Greens are understood to favour something more modest. NZ First wants something more modest still, publicly suggesting that its caucus is likely to axe any proposal put to it.
The Beehive has gone into lockdown, with Labour Ministers allegedly not sharing full and timely briefings with their Government colleagues, Stuff understands. None of the governing parties would comment on the record for this story.
Yet the dispute has already spilled out into the open. Associate Transport Minister Shane Jones told an infrastructure conference on Friday that the issue “has not been to the NZ First caucus and it will need to before we have a position as a party.”
Phil Twyford couldn’t organise a root in a brothel. NZ First is also yanking hard on the emergency brake.
Jones also noted that there was no concrete commitment to building Auckland light rail in NZ First’s coalition agreement with Labour. He also said the party were “doubting Thomases” when it came to the “light rail kaupapa”.
Jones made the remarks despite other Government Ministers putting him “under strict instruction not to talk about light rail”, he said.
Labour campaigned hard on building the first section of its light rail scheme from Britomart to Mt Roskill by 2021. It was their second most promoted policy after the embarrassing Kiwibuild policy fail. The light-rail policy has delivered even less than Kiwibuild which has been acknowledged as an unmitigated disaster for Labour. The costs are now spiralling out of control and not even a single millimetre of track is yet laid.
Some in the Government have been spooked by spiralling cost estimates and the amount of money likely to be sent sent offshore. Cost estimates shared with Stuff by sources familiar with the matter are now as high as $20 billion.
It would mean New Zealanders could pay hundreds of millions — potentially close to a billion dollars — to the Canadian fund each year, likely through taxes and tickets sale over the life of the joint venture. This has raised eyebrows at a time when interest rates for government borrowing are at near record lows.
For example, assuming a return on capital of 7 per cent — a global standard for PPPs — on a $20 billion project fully financed by NZ Infra, the consortium could enjoy returns of $1.4 billion every year for as long as the PPP lasted.
Under that scenario, if those returns were split 70-30, just under $1 billion of that income would be heading to Canada, with the rest staying with the Super Fund.
But wait, Twyford, glib as ever, reckons this is a good deal.
Twyford has previously called the bid a “public-public partnership”, and said the scheme’s profits would support the kiwi retirees through returns for the Super Fund
“This would mean that every time you ride a train to work, you’re effectively paying for your retirement,” he said.
But on those numbers it appears that Canadian retirees will be the ones who benefit most substantively from Aucklanders’ light rail trips.
Stuff
This is the same Phil Twyford who said Kiwibuild would build 10,000 houses per annum for ten years.
Phil Twyford seems to be untouchable even though it is abundantly clear to everyone but the Prime Minister that he has tits for hands. He hasn’t delivered on two major policy areas now. How many chances does he have left?
Perhaps he could be made Minister for Clowns.
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