Transmission Gully PPP an expensive burden for taxpayers
21 November 2012
Transmission Gully PPP another expensive burden for taxpayers
A Public-Private Partnership for Transmission Gully is an expensive form of borrowing for an uneconomic highway, Green Party transport spokesperson Julie Anne Genter said today.
The National Government today announced its decision to have a private consortium build the Transmission Gully project, which the New Zealand Transport Agency’s own estimates show will produce just 60 cents of benefit for every dollar spent on it. The Government will then repay to the consortium the cost of the project plus interest and profits over 25 years.
“Public-Private Partnerships are just an expensive form of borrowing, and borrowing to build an uneconomic highway is an irresponsible use of taxpayer money,” said Ms Genter.
“How much will this billion dollar project cost by the time the private consortium’s profits and interests costs are added to the bill?
“Leaked NZTA documents show that the National Government’s extravagant and uneconomic highway projects have created a huge hole in the transport budget. The documents warned that the only way to fill the hole was delay the projects, increase petrol tax, or borrow.
“National has chosen to borrow. Public-Private Partnerships are a cover for governments to borrow from the private sector at high effective interest rates while keeping the debt off their books.
“A wealth of experience from Australia shows that Public-Private Partnerships are used to disguise the cost of uneconomic projects.
“Time and again, costs blow out, traffic forecasts are not met, private consortia collapse, and it is the taxpayer who is left footing the bill.
“Just this month, the private company operating the Brisconnections highway called in insolvency analysts and its shares were placed in a trading halt. The Cross City Tunnel in Sydney and the Lane Cover Tunnel in Brisbane have lost billions.
“Why would we copy in New Zealand what has already failed in Australia?
“Rather than waste billions on an uneconomic highway and burden taxpayers with 25 years of debt repayments, the National Government needs to take a smart, green approach to transport spending.
“We have an opportunity right now to invest in better buses and trains, and safer walking and cycling – this frees up the roads for those who are driving and gives Kiwis more options to avoid rising fuel prices.
“The best option is to defer indefinitely Transmission Gully and the other low value highway projects and, instead, direct the transport budget to passenger transport, walking, and cycling.
“This would reduce our $8 billion a year bill for imported oil, lower our greenhouse gas emissions, and create more jobs,” said Ms Genter.