NZ Super Fund submits light rail proposal to Coalition

NZ Super Fund acting chief executive Matt Whineray says the fund considers the Auckland Light Rail network to be an attractive prospect for investment.

The NZ Super Fund has submitted a proposal to the government offering to assess the viability of the Auckland Light Rail Project for commercial investment.

Total project costs have not been determined but the entire Auckland rapid transit network (busway, rail and light rail) is expected to cost $8.4 billion over the next 10 years.

NZ Super Fund acting chief executive Matt Whineray says the $38b fund considers the light rail network to be an "attractive prospect."

“The government has signalled its intention to accelerate core infrastructure investment in a number of areas.

“We wish to explore whether a NZ Super Fund-led consortium leveraging our international relationships can fund and deliver the project on a fully commercial basis.”

Transport Minister Phil Twyford confirmed the government had received an unsolicited proposal from the Superannuation Fund, which says it could form an international consortium to design, build and operate the network. He says the cabinet has agreed to start a procurement process with the New Zealand Transport Agency (NZTA) to explore a range of possible procurement, financing and project delivery options.

The procurement process covers both the city to Mangere route and the city to northwest route.

The recently announced 10-year transport plan for Auckland earmarked $1.8 billion in seed funding with the option of securing private investment in the network.

Mr Twyford says light rail will be a “magnet for private investment” and will be able to carry 11,000 commuters per hour – the equivalent of four lanes of motorway.

“We welcome the strong interest in light rail and acknowledge that any investors will require a reasonable commercial return.”

Joint venture
The NZ Super Fund has identified CDPQ Infra as a potential partner on the project, and other parties could potentially be added.

CDPQ is a wholly owned subsidiary of Caisse de dépôt et placement du Québec (CDPQ) responsible for developing and operating infrastructure projects.

It is one of Canada’s leading institutional fund managers, with $US238.2b in net assets and has “extensive experience” in infrastructure development and investment globally, Mr Whineray says.

CDPQ Infra is responsible for developing, building and operating Montreal’s 67km light rail network.

About 2% of the Super Fund is invested in infrastructure globally. It has $5b invested in New Zealand.


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44 Comments & Questions

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Ask any business (still trading) that's affected by the George St Sydney light rail extension, how it is affecting trade, how long it's taking, and how much it's costing, but hold the phone back from your ear!

We need heavy rail for people and freight, from Onehunga and Puhinui.

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The Gold Coast lite rail project is a huge success

Well done Matt Whineray. NZ Super should have been lead managing infrastructure projects for years. Obviously Mr Orr preferred investing overseas and those regular trips

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Adrian Orr was focused on making money for the NZ Super Fund rather than "fashionable" investing. I would put my faith in Adrian's judgement rather than The Scribe's any day. I would also bet The Scribe (and Phil Twyford, Phil Gooff etc.) any money they like the airport lite rail project will be a "bummer" financially and as a means of reducing traffic congestion in Auckland.

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'Fashionable investing''?

Most other countries have been fashionable investing for decades - to ensure they have good infrastructure.

Ofcourse your model is government not investing and having surpluses but crap infrastrcuture and our super fund investing in other countries including their infrstructure

Maybe your strategy is unfashionable and unsustainable

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The difference is that you are socialist, and I am not.

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Correct me if I'm wrong. Mr Orr was the CEO, not an investment manager. But I must say he did exhibit the behaviour of a canny investor when he exited the Super Fund CEO role at the top.

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Orr wanted long term investments whose profits didn't rely on ratepayers spending hundreds of millions subsidising it to ensure the costs were covered.

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What was the cost of the Gold Coast project? They have plenty of space to put one in there without crowding out road traffic but it's still tarted up 19th century technology!

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Sydney dropped an earlier, just as expensive clanger with the monorail. Even the poli who did that one for an ego project admitted it was a huge mistake in later years. A much cheaper bus lane with electric buses that could carry at least twice the capacity and another small upgrade of existing rail lines would achieve everything this folly will (attempt to) and more, except for one small detail - politicians egos. JA hang your head in shame.

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Why not look at something more practical and cheaper like SkyWay
http://www.skywayaustralia.com.au/#intro

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The blind leading the blind

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NZ Super Fund involvement in local infrastructure development is a positive, and i'm glad they've got the confidence to get stuck in.

The good thing is that they appear to have done this off their own bat, rather than via government pressure. As long as this state of affairs continues, i would remain in favour.

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Monorail! Monorail! (With thanks to Matt Groening)

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When Quax suggests a monorail or Hooton suggests Auckland needs full underground rail. Just eject the disrupters and clowns Quax and Hooton from the meeting and anyone else who suggests Monorail which are fairground toys or underground rail systems which are totally unusuitable for a medium city like Auckland spread over the area of a mega city like LA. The point of trams on Dominion road is its a sad shabby street of fundamentalist and social credit type enterprises, sad bars and eateries a to paraphase Winston rather more politely an excess of Asian type low rent food joints. Anything would be better in terms of retail on that street. Its true the street is already heavy trafficed and even five years like epsom road, south of Epsom Girls grammar you can only cross the road on the zebra or lights - jay walking is dangerous and south of Green cnr, inthe recent past only possible because the traffic was blocked and stopped by congestion, most of the time 5/6 hrs a day. But the whole point of trams I always thought is they block the roads and make a more cosmopolitan lifestyle essential.
The real point is it would have been far more economical if the whole Auckland light rail system had been light rail installed in the rail corridors and only using the road in brief sections . The North Auckland railway should been closed in 1999 its a ridiculous round about 5 hour rail trip route to Whangare ( if there was a service ) and should have gone out about the time of the Irish Narrow gauge and its Rio Grande counterpart. . in terms of rail or light rail to the airport the same problem exists its too long , slow and runs thru three different and incompatible demographic zone. The average high class student of gap year student is sure to arrive thru Mangare airport via - the Pacific world, the Asian world and only the last 3-5 miles in the Remmers world. I mean . Heavy rail should have been used only for medium fast rail to Hamilton and Cambridge with stops only every ten miles or so.

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Good idea for NZ Super fund to invest in infrastructure but not a white elephant like light rail down dominion rd to airport.
That is just a joke

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I thought the NZ Super Fund was for building up a retirement fund for New Zealanders. Since when has it been responsible for "infrastructure"?

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I'd vote for a commercial solution led by the NZ Super Fund, way before anything led by the bloated middle managed Auckland Council, [incl self promoting AT and the (orange A=) flag waving Ateed cheerleading squad].

NZ Super ought not let Auckland Airport Limited gouge this transport solution, in whatever form, with a $10 per passenger tax at the airport terminal.

So with this solution, does that mean its curtains for the dangerous Auckland Council Local fuel tax , [which extends the rating power of that bankrupt entity from taxing your house to also taxing your next biggest domestic asset].

If not, its time for Auckland's current and future home and business owners to fight back, and call Mayor Goff to account on his cost savings promises.

Off with 3,000 of their heads.

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Train derails in Britomart. Trains are always breaking down and are very unreliable. Labour will Tax us all until we all live on the dole !

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What's the bet the Super fund gets the Government to guarantee a certain level of income. Which means the taxpayer will take a bath subsidising this most likely huge loss-making venture. I suppose you could look at it as a way of the taxpayer contributing to the Super fund .....

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Not with my money they don’t even look at it.
What happened to the last lot of teams across the country. What does a track bound tram do that a non track bound rubber tyred bus can’t?

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A very good question, I await the answer with interest

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The Super Fund has doubled from $17b to $35b in 8 years without even any contributions. Is it really so lacking in diversity, or in ways to ramp up its risk and reward profile, that it needs to do this? Seems like an unusually high risk switch in core business for a public asset already performing its nuts off.

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Or maybe re-read your first sentence and trust they know how to invest for the long term

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I will hazard a guess and suggest the enthusiastic approach from the decision makers would be curtailed somewhat if it was their own money at risk.

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I would suggest to Princess Jacinaberry her motley crew that they should travel on Dominion Road and see how unnecessary the light rail is.
What is remarkable is how the timeframe to complete the line keeps on dropping. It's like magic.
Can't wait to see what the cost will eventually balloon out to. I'd suggest at least 50% extra.

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And just watch all the passengers getting mowed down by vehicles as they try and get from the kerb to the trams and back again. Have you seen the artists rendition bugger all room and sight lines. D Rd aint nice and wide like the streets of Melbourne.

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In fact, for many years there were caveats on many properties on Dominion Road for planned road widening but the council of the day decided against it - and took off the caveats. And if you took away the car parking, where would people visiting the restaurants from other areas park?

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Any business on Dominion Rd should think about selling. The construction would destroy most of them. Not that the most unbusinesslike Government in NZ,s history will understand or care.

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Most of those businesses rent. Commercial Dominion Road is largely owned by two Rich Listers

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robbing Peter to pay Paul stuff

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So now we have Public-Public partnerships ha, what a joke.

When it all goes to custard those baby boomer Auckland Leftie-Labour-Goff voters will at least be able to ride on the trams for free ... the trams they paid for with their now non-existent pension promises.

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Given that almost all public transport systems around the world run at a loss, and have to be propped up with subsidies from either local, state or government taxes, is this a wise investment for the Super Fund to be pursuing? I would have thought not.

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I wonder what Adrian Orr secretly thinks about this?

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Always amazed me that Aucklanders love to tout their city as "world class", yet are one of, if not the only, primary city of a globalised country with absolutely no subway system.

On top of that, Kiwi's love to complain about the constant, absolute, unrelenting grid-lock in said city, then absolutely deride any sort of solution to it (read: light rail!) as too expensive, antiquated, idiotic etc etc.

I for one would agree that more NZ money needs to stay within NZ and start developing our neglected infrastructure, especially considering the alternatives are yet more taxes on us in the regions who rarely, if ever, visit Auckland, or ACC, who couldn't organise their books in an accounting office, going to Special Purpose Vehicles for funding because their debt load is now worse than Greece's!

The mind boggles sometimes...

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Can you find me one "world class" city that has major arterial highways with just 4 lanes? Didn't think so. Designed "choke-points" no less. Who builds a transport system with designed choke points when the objective is o maximise throughput.

Auckland has been ham-strung by these insanely radical non-development greenie policies for well over 2 decades. Give us at least 2 alternate route 10-lane highways through Auckland then we can discuss how much "public transport" it really needs to achieve "world class" status.

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some people talk some crap.
Just get on with it before we all find walking quicker than any other transport.
What does it matter who funds it so long as it gets done and gets done quick.
Six years is a nonsense.
Get the french or china in here and it will be done within 2 years and be operating.
Don't let the same gany doing the south motorway anywhere near it or we will never get it completed.

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Build double decker roads forget public transport. Too expensive and doesnt go where when the punter wants it to. Trams trains and buses are so 20th century.

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The entire concept of tracked tramways is rapidly becoming out of date and obsolescent. Check out the "trackless trams" being considered for Perth, they can do everything a traditional tram can do but better and at about one quarter of the capital and operating cost. This technology will kill off tracked light rail in the next two or three years, just when we'll be in the middle of building the biggest white elephant in New Zealand's history.

It appears that both our central and local governments are blind to any alternative to light rail, and will plow ahead with this train wreck of a transport system with no consideration for a comprehensive cost-benefit analysis or evaluation of new technologies. I suppose that after six months and two years respectively of doing nothing they must be seen to be doing something no matter what the cost.

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The Super Fund has proven it's skill over the last decade at picking high performing investments. Many commenters are against light rail politically so it seems the only way they can reconcile the cognitive dissonance this creates is to assume the NZ Super Fund has changed it's investment approach, rather than that they see a real commercial opportunity.

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You are forgetting that there has been a change in management at the top at the Super Fund. And it was under previous management that the funds outstanding performance was achieved. What the current crop will achieve is yet to be determined. Investing 101 when analysing the performance of managed funds, previous returns are no guarantee of future performance.

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In a rational world, you identify a problem, investigate it thoroughly, look at the options, consider future trends and choose the best.

Our irrational Government and Council ignore all other options, choose last century’s inflexible and expensive technology (trams) and apply it to the airport and the north-west. Never mind that no-one knows the magnitude of the problem or where people might want to travel to.

The airport is now served by unsubsidised $18 Sky buses at 10 minute intervals alternating between Dominion Road and Mount Eden Road. It would be easy to add more buses and routes. There is also a door to door service by shuttle mini-buses costing less than $25 each for two people. The mini-buses are GPS controlled to optimise the routing. What more do you need?

Who will prefer to cart their luggage on and off a tram then pay more for a taxi to get them from the tram stop to home?

For the north-west, buses and, in the future, driverless minibuses, are the obvious solution.

There is no justification for squandering billions of dollars of our money on trams. A comprehensive investigation is needed.

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I agree but the first thing you need are impartial people to do the investigating.....not those who have been at the forefront of the planning and spending failures that have put us in the situation we are now

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The NZ Government should be floating Auckland Light Rail / Auckland Transport as an investment entity on the NZX so Kiwis can invest in our own country ..... screw bloated funds and their cash grabbing buddies

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The NZ Government should be floating Auckland Light Rail / Auckland Transport as an investment entity on the NZX so Kiwis can invest in our own country ..... screw bloated funds and their cash grabbing buddies

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