What has happened, is that there has been no business case published to illustrate the value of either of the current options of NZ Infra or the NZTA versions of light rail being considered. Current capital cost estimates from published figures are approx $6 billion and $4 billion respectively.

The process the Government is now proposing has been changed to selecting the nicest funder/proponent to build a line from Auckland CBD to the airport, without any published business case. We have been told the preferred entity will be asked to put together a team, select the transport system, design it and handle all things to the built stage. Note this is now a clear ‘open cheque book’ arrangement. Not a best value decision.

Consider the two options. A nice teachers retirement fund from Canada, joined with the NZ Super Fund, proposes to provide ALL the capital required to build the line. And the NZTA option, which the current Government will have to finance, assisted by the Petrol Tax collected for the Auckland Council. With the seemingly limitless Government borrowing occurring at the moment, guess which option is more likely to be selected as the ‘best’? No money needed! NZ Infra has to be better?

However, the NZ Infra option requires an undertaking guaranteed by the Government to pay 9% interest a year on the capital NZ Infra supplies. The 9% alone will be $540 million per year for the NZ Infra proposal and somewhat lower interest for the NZTA option. Year on year, for the next 50-100years! In addition to this expense there will be the replacement cost over 50 years and the actual operating costs, less the fare take.

The Government may be stalling on making a decision until the new Infrastructure Funding and Financing Bill is passed into legislation, whereby a new levy has to be paid by the property owners or occupiers of properties that receive added value from infrastructure projects. This Bill once passed in Parliament, could enable all the required funds to operate the selected light rail, to be collected from properties along the route. A rough calculation for the NZ Infra option would amount to $16,000 each year from each property within 500m of the approx 25km route. For the NZTA option depending on a lower interest rate, the levy could be around $4000 per property every year, plus repayment of any loan.

Given the current state of the economy, supplying all the capital might ensure the Coalition Government selects the NZ Infra option as the favoured funder, despite the clearly disastrous cost of having to fund its operation to the tune of over $660 million each and every year for the next two generations!

There is a better option, but I need to declare my interest.

I am the CEO for a NZ designed two-directional elevated monobeam transport system. For under $1.2 billion, a SkyCabs monobeam could be built from around the CBD to the Airport. It is estimated it will halve the travel time of the light rail options, use a fare similar to current bus fares, operate with an on-demand service, all without removing any traffic lanes and with little or no operating subsidy.

SkyCabs International Ltd was asked by NZTA to present an Unsolicited Proposal, the same as NZ Infra. But the SkyCabs proposal was dropped before the first official meeting, because ‘it was not considered to be an “open and competitive” bid. Strange that a New Zealand option with a price that is much less than the cost of the other alternatives, is not considered competitive! Since when has ‘competitive’ meant 3-5 times more expensive?

SkyCabs International Ltd would welcome participation in any open and competitive evaluation system.

Now more than ever, NZ should be pursuing the most cost-effective and innovative ways of solving our transport issues.

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