6 Oct 2018

Chinese investors offer to build Auckland road

9:51 am on 6 October 2018

Chinese investors are offering to pay for, and build, a major Auckland road.

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Photo: 123rf.com

Auckland's Chamber of Commerce said the joint venture with a local construction company would provide the majority of the $400million funding needed for the Penlink Toll Road Project.

The road would link the Whangaparoa Peninsula, north of Auckland, with State Highway One.

Its chief executive, Michael Barnett, said the seven km road had been talked about for two decades, had consent, but had never been funded.

"The Minister has queued this project out some 10 years, we asked if we were able to identify independent funding would he be interested in bringing it forward? He said he'd be interested in hearing from us.

Mr Barnett said after going to the international market the Chamber of Commerce found a "major roading and rail construction company" from China who were interested.

"I think the reality is for Auckland is that we're in catch up, there's a queue of projects that should done but we're not doing them because we don't have the funding or the priority is not there for them."

The agreement being pitched is know as a BOOT, or Build, Own, Operate, Transfer, and has been lodged with the NZTA as an unsolicited bid.

"I think the Government will probably have some difficulty, I don't mind accepting that, but we need to look at this at say if we're going to do some sort of catch up with these major projects in New Zealand and we don't have the funding here then we need to think differently. Thinking differently means using external money and perhaps having private sector drive the project instead of Government."

The agreement would see the Chinese company own the road and take revenue from a toll before transferring ownership to the Government.

"We already know what the market would find acceptable and that would be around $2.50 per trip and time saved would relate to that. Irrespective of what happens the Government can still regulate, the Government can control, and the Government will demand some element of transparency on whatever happens and those will be to the standard of building and apply to the tolling."

The approach would be something the Government would have to think about and act on if it wanted to meet the needs of Auckland and other parts of the country, he said.

"I think there would be huge interest in some of the rail projects both here in Auckland and up north if the Government was prepared to look at a similar construct as a way of getting these things accelerated."

While he couldn't give any details he said he'd expect the ownership arrangement would last longer than the usual 25 to 30 years of BOOT agreements overseas.

In a statement the NZTA confirmed it had received a letter from a "consortium" proposing to deliver the project.

"This, like any unsolicited bid, would be treated according to the Government guidelines for such bids as set out in Ministry of Business, Innovation and Employment policy."

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