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Put the brakes on multi-billion dollar Transmission Gully

21 February 2013

Govt should put the brakes on multi-billion dollar Transmission Gully white elephant

The Government should ditch its Public-Private Partnership (PPP) plans for Transmission Gully following embarrassing testimony today by the head of the New Zealand Transport Agency (NZTA) that revealed a PPP will cost taxpayer three times more than if the motorway was built by the Government itself.

NZTA head Geoff Dangerfield conceded at the Transport and Industrial Relation Select Committee that it would cost the Government $1 billion to build the Transmission Gully motorway, but that service payments under the preferred PPP approach will be triple that over a twenty five year timeframe.

“The Government is locking tax payers into long-term payments for an expensive and unnecessary motorway that will be very profitable for the private consortium building it,” said Green Party transport spokesperson Julie Anne Genter.

"Public-Private Partnerships are just an expensive form of borrowing, and borrowing to build an uneconomic highway is an irresponsible use of taxpayer money.

“The announcement today of a Brisbane motorway PPP going into receivership demonstrates the poor economic returns of building new highways.

“The Government’s proposed PPP model moves all the demand risk to taxpayers. Taxpayers will fund guaranteed payments to a private consortium for decades.

“It is unconscionable that the NZTA has adopted a more expensive funding model. This runs completely counter to normal standards of fiscal decision making expected of Government agencies.

“NZTA is putting the economic interests of the private consortium ahead of the public interest.

"Leaked NZTA documents from last year show that National’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 to delay the projects, increase petrol tax, or borrow.

“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.

"The best option is to upgrade the existing route and invest in other alternatives to take commuter traffic off the road.”


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