Govt considering public-private partnership for new train deal

Steven Joyce

Transport Minister Steven Joyce said today he was looking at whether a public-private partnership (PPP) could be used to pay for new rolling stock needed for the electrification of Auckland's rail network.

Joyce has just returned from Australia and he said PPPs had been used there on a number of occasions to fund passenger rail stock, including an agreement to secure 78 new commuter cars worth A$2 ($2.55) billion for Sydney.

"The use of public-private partnerships can be a sensible way to procure this kind of expensive, long-life asset," he said.

"I have asked Ministry of Transport officials to look into how this might work in the New Zealand context and expect their initial report in a few weeks."

Joyce said that after double tracking, electrification was the important next stage in the development of Auckland's rail network.

He said the Government was committed to electrification and PPPs were one way of providing value for money by reducing the upfront cost to the public purse and shifting "a reasonable element of financial risk" away from the public sector.

The other options were for the Crown to increase investment in KiwiRail so it could buy the trains or for KiwiRail to borrow the money with the Government providing a direct passenger subsidy until patronage increased.

NZPA