NZ Super Fund submits light rail proposal to Coalition

NZ Super Fund wants to fund and operate Auckland light rail.

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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