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Infrastructure Auckland Says Yes To Rail Purchase

October 17, 2000

INFRASTRUCTURE AUCKLAND SAYS "YES" TO TRANSPORT CORRIDORS ACQUISITION

Statement made by John Robertson, Chairman, Infrastructure Auckland

Infrastructure Auckland has agreed to make a grant of $30 million towards the cost of gaining control of the region's rail corridors.

The decision, made at today's meeting of the Infrastructure Auckland board, is a major step forward in the development of a world-class integrated passenger transport system by the region's local councils.

The money will be granted to a LATE owned by five of the region's local authorities.* In turn, the LATE will put the money towards purchasing from Tranz Rail

* Ownership of all the railway stations within the region. This will enable the stations to be developed into safe, friendly and attractive terminals where passenger services interconnect.

* Assignment of the remaining 70-year leases Tranz Rail has to the North Auckland, Newmarket and Onehunga branch lines.

* The right to develop a transport corridor along the route designated for the Avondale to Southdown rail link.

* Access to the main trunk rail route for passenger transport, and

* Rights of access in relation to the planned Queen Street underground rail station.

The decision by Infrastructure Auckland is only one of many yet to be made by a number of organisations before an integrated passenger transport system becomes a reality.

However, it is an important early step as it secures nearly half of the $65 million in funding the region is seeking to obtain control of the rail corridors. Gaining control of the corridors is the overriding priority.

* Auckland City, Manukau City, Waitakere City, Papakura District Council and Franklin District Council

The region's local authorities sought a grant from Infrastructure Auckland of $40 million to go towards the deal it has negotiated with Tranz Rail.

After analysing the application under our Multi Criteria Evaluation process, which looks at the project across the dimensions of economic benefit, environmental considerations and social benefits, the Board has decided to contribute $30 million towards the project.

The project stood up strongly in the evaluation process when we compared regional ownership against Tranz Rail ownership.

On "overall outcome," regional ownership benefits were more than double those from Tranz Rail ownership. The "economic benefits" were four times greater, the "social outcomes" were more than double while "environmental outcomes" were some 70% greater.

In all, it was a compelling case for bringing the rail corridors back under public control.

It must be remembered that we were only evaluating the rail corridors coming under public control, not the benefits of developing passenger transport corridors.

Securing public control of the rail corridors is only the first step towards establishing a world class passenger transport system, but it is fundamental as to whether the project can proceed. It secures the strategic assets that are vital to the system being developed.

Through control of the corridors all the other elements needed for an integrated, rapid transit system can be made to work.

The alternative, of building new corridors, would be far more costly and disruptive to the community.

In making the grant, key conditions we have imposed are

* any surplus made by the LATE from controlling the rail corridors must be used to fund future passenger transport infrastructure in the region and * sufficient funds are made available from Transfund to complete the purchase.

While the arrangement as negotiated by the region does carry with it economic risk, it is limited and would occur only if the region, having acquired the corridors, did not develop them. This is highly unlikely. It also assumes that the region would be unable to realise any value from property rights the region acquires, which independent valuation has place at $117 million.

The region still requires a further $35 million to conclude the arrangement negotiated with Tranz Rail. The State funding agency, Transfund New Zealand, meets on Thursday to consider an application from the region's local authorities to bridge this gap.

We support the view of the region's councils that Government should pay towards the costs of returning the rail corridors to public ownership. IA's view is the region's application to Transfund appears to establish benefits to road users and the nation which would justify Transfund contributing the full $35 million requested under its normal procedures. The benefits identified include sections of the Avondale - Southdown transport corridor which could be released for sale by the Government, and which have a market value of up to $25 million.

As the State and Crown will benefit from the transaction, it is reasonable that those benefits be matched with a contribution from the State.

The Regional Land Transport Strategy and Passenger Transport Action Plan, which set out the blueprint for transport developments within the region over the next decade, make it clear that opening up the rail corridors for competing forms of passenger transport is vital if Auckland is to be a region with better flowing transport.

The rail corridors at present are totally under utilised.

With proper management, the corridors can be used to accommodate high density passenger movements without hindering freight traffic.

Developing the rail corridors for passenger transport is not the total answer to the region's transport issues. There must be an integrated system which incorporates completion of the motorway system, better feeder roads through the suburbs and the greater use of ferries.

The decision last week by Tranz Rail to sell its passenger train services does not alter the importance to the region of regaining control of its rail corridors. It is the corridors that must come back under public control. Once under public control decisions as to what runs in the corridors and who runs the services can be made with input from the community.

What the region must ensure is these strategic assets come under public control and that there is open access to them from competing services.

If the region does not take control we are faced with a future passenger transport system no better than the piecemeal one that has served us for the past 20 years.

Other key components of the total integrated passenger transport system, which are not directly associated with rail corridor access, are the North Shore Busways and the Central City Rapid Transit Corridor.

For further information please contact Richard Maher, Chief Executive, Infrastructure Auckland Tel 0-9-379 2540

Issued on behalf of Infrastructure Auckland by Dennis Lynch, Network Communications. Tel 0-9-379 3154.

INFMR053

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