Govt Should Back Residents on Rodney Tolls

MEDIA RELEASE
09 May 2007

!! EMBARGOED TILL WEDNESDAY 09 MAY 2007

Government Should Back Residents' Support of Rodney Toll Road

With unprecedented support from locals, consents in place and funding requirements met, the Government should back resident's support for Rodney's long awaited Penlink Toll Road. This is according to NZ Council for Infrastructure Chief Executive Stephen Selwood. "When Cabinet considers the issue prior to budget it should approve funding to allow the project to finally go ahead".

Land Transport New Zealand recently declined to provide funding in support of Rodney's proposed Penlink Toll Road, despite the project ticking all the necessary Land Transport Management Act boxes. Potentially New Zealand's first toll road involving private sector funding, the project has overwhelming community support and once completed would open up vital access and growth opportunities on the Whangaparaoa Peninsula.

Rodney District Council have already committed all they can to the project. In an open letter to the Prime Minister and the Ministers for Transport and Finance, NZCID has made it clear that, "while expected traffic volumes are not initially expected to be enough to fully fund the project from tolls alone, a combination of user tolls and supporting Government finance would be money well spent to make the project viable".

Says Mr Selwood, "in the Auckland region alone we are facing a transport funding deficit of $3.5 billion over the next decade. That's three times the amount that could be expected to be raised by the proposed Regional Fuel Tax. We are clearly not in a position to be shutting the doors to alternative funding possibilities, and certainly not ones supported by 80-90% of local residents, as the proposed Penlink Toll Road is".

Despite the injection of an additional $1.3 billion for roading last year the latest Transit 10 year forecast depicted a significant decline in capital works post 2012. Already there has been the rejection of toll funding of Auckland's Western Ring Route, LTNZ's decision not to provide funding for Penlink and ongoing roading and public transport funding pressures. This raises real concern within the industry about the consistency and reliability of the work stream going forward.

* Diagram - Transit 10 year financial forecast

"It is agreed that we are facing an unprecedented challenge to fill our transport funding gap. In addition to Auckland there are many many projects across the country which could benefit from using private sector funds to free up limited public funds. This would free up limited public funds for areas that would otherwise go unfunded. Public transport and walking and cycle routes for example. Just in the Waikato, Bay of Plenty,Wellington and Canterbury regions there are multiple projects that have spent years waiting on the books.

"To solve this issue going forward we must develop and make use of the full range of funding options, including private sector involvement", he adds. Penlink is potentially a national first involving private sector finance to deliver a project earlier, to transfer risk to the private sector and to provide greater value for money than would otherwise be possible.

If Penlink were to succeed, the project would be instrumental in opening the door for innovative approaches to funding. It would also send an important and necessary positive message for private sector involvement in funding.

Selwood says, "It would be a step backward to thwart this project any longer, as it was it in 2003 when tenders for the project were returned unopended when the Penlink Empowering bill was withdrawn and replaced by the Land Transport Management Act.

"Clearly traditional funding methods alone can not address the deficit we are facing. We must think outside the square and consider this full range of proven funding solutions. For Penlink and other projects like it, continued delay spells increased costs and reduced viability. Undoubtedly it also sends the wrong signals to the market about the Government's commitment to innovative funding solutions for infrastructure projects.

"Right now Penlink has an unprecedented 80 - 90% public support. That level of support can not be undervalued. The project complies with all Land Transport Management Act requirements and is ready to start with all consents in place. It is a prime example of how the Crown can leverage private sector interest in a project to make the public sector dollar go further", says Selwood, "so why are we waiting another minute? Let's just get on with Penlink".

ENDS

NOTES TO EDITORS

Diagram - Transit 10 year financial forecast

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