Matthew Hooton: How Phil Twyford went off track

Transport Minister Phil Twyford. Photo / File

COMMENT:

Whoever would have thought the investment bankers and foreign exchange dealers at the New Zealand Super Fund would be the ones to raise Auckland's ambitions on public transport?

The process that led to the Fund's proposal to design, build and operate the next stage of a rapid transit system for Auckland demands that Transport Minister Phil Twyford be sacked.

By commission or omission, for nearly two years he has misled the global infrastructure industry, local business and the public over what has been going on with the project. Still, none of that means his successors shouldn't pick up the Fund proposal and run with it.

The Fund's leaked proposal is several generations ahead of the original concept of a tram up Queen St, along Dominion Rd and out to Māngere. It is surely just the first stage of a 21st century rapid transit network including West Auckland and the North Shore, via a harbour tunnel, and fully integrated with the existing 20th century rail system.

When announcing a procurement process for the Dominion Rd tram, Twyford claimed last May that the Fund's proposal was unsolicited by the Government. He said it would be assessed in the same way as all other proposals as part of that process.

In fact, as early as January 2018 — just three months after the Government was sworn in — Twyford and Finance Minister Grant Robertson began a secret dialogue with the Fund on the light rail project.

The initial intermediaries were Auckland Transport (AT) board member Sir Michael Cullen and former NZ Post chief executive Sir Brian Roche.

Twyford's contact with the Fund continued even after the procurement process was announced, including the co-ordination of PR efforts.

Despite renewed denials by the Beehive yesterday, all this has the appearance of the Government soliciting the proposal. Twyford has subsequently appointed Sir Brian chairman of NZTA and yesterday said there is no conflict of interest on the light rail project. The Beehive did not answer questions about whether the Prime Minister knew of Sir Brian's involvement in the Fund proposal before the NZTA appointment.

In any case, Twyford's secret dealings with the Fund make a sham of the procurement process he announced last year. Other major infrastructure companies who wasted time and money preparing to pitch will surely now investigate legal mechanisms to seek redress.

Politically, Twyford's conduct represents a major betrayal of all those who were championing the earlier Dominion Rd tram proposal but were kept in the dark that he was seeking bolder alternatives.

This includes the bloggers at the Greater Auckland website who have passionately promoted the Dominion Rd tram for some years; Auckland Mayor Phil Goff, who promised it during his first mayoral campaign; local Labour MP Michael Wood, who made it a campaign promise in the 2016 Mt Roskill byelection; NZTA's management and recently replaced directors who knew nothing of the Fund proposal until it was announced; Associate Transport Ministers Julie Anne Genter and Shane Jones; and perhaps even the Prime Minister, who promised the Dominion Rd tram as part of her 2017 election campaign and signed up to it in her subsequent confidence and supply agreement with the Greens.

The irony is that had Twyford been open and transparent about actively soliciting better alternatives, he might be hailed as a hero.

Instead, his behaviour was characteristic of the previous Government's dealings with SkyCity over the NZ International Convention Centre, which was heavily criticised by the Auditor-General back in 2013, and Clare Curran's secret interactions with RNZ's head of content, for which she was sacked.

The problem with the original tram proposal was that it had contradictory objectives.

As initially envisaged by its blogger supporters — including Grey Lynn photographer Patrick Reynolds, also recently appointed by Twyford to the NZTA board — it was all about urban design and housing intensification. There would be lots of stops and it would necessarily be fairly slow, given it would share Queen St and Dominion Rd with buses, motorists, cyclists and pedestrians.

The public-transport bloggers were surely also pleased it would displace existing roads, reducing the number of people able to drive into town.

On its own terms, this makes a certain sense. The problems arose when Goff, the Greens and Labour decided the project was better marketed as light rail to the airport — in time for the America's Cup and Apec, no less. For that to be viable, it would need to be much faster, requiring fewer stops and greater separation from other road users.

NZTA could never reconcile these conflicting goals. If the politicians wanted to help locals get around Mt Roskill and into town, then maybe trams were a solution. But if they wanted rail to the airport, NZTA saw the obvious option as extending the Ōnehunga line through Māngere, or a branch line from South Auckland's Puhinui Station, or both.

Even more important, NZTA advised that no tram has the power to go up Upper Queen St, demanding tunnelling under the Karangahape Rd ridge alongside the new tunnel being built for the City Rail Link. That and other engineering challenges meant the $4 billion pricetag promised by the politicians was never realistic, and NZTA never used it.

Politicians continuing to quote $4b were either not reading their briefing papers or were deliberately misleading the public.

Blessed with inside knowledge as early as January 2018 that the Government was not in fact committed to the bloggers' project but wanted more radical alternatives, the Super Fund partnered with Quebec's CDPQ, responsible for the massive new REM system being built in Montreal. Twyford was also kept informed of these talks.

Unlike the original tram proposal, the Fund and CDPQ project would be fully integrated with the existing rail network through the Aotea and Mt Eden stations. It would offer 30-minute trips from the CBD to the airport every four minutes.

A planned station on the line that the Super Fund's partner is building in Montreal. Will the pair get the chance to build something similar for Auckland? Photo / Supplied

It is said to be much quieter than either Auckland's existing trains or the proposed trams, making housing intensification around stations more attractive, higher value and thus more economically sustainable.

KiwiRail has been consulted on the Fund proposal so that — unlike the tram idea — it would not jeopardise the proposed Avondale-Southdown line, necessary to make a new Marsden Point mega-port viable.

While as yet publicly unsaid, the Fund is surely also interested in taking its project from Aotea Station to Kumeu, and also to Wynyard Quarter, under the harbour and to the North Shore. This would give Auckland a proper rapid transit system to rival the likes of Hong Kong or Singapore. The Fund presumably has further aspirations to be involved in Marsden Point.

All this could be done without extra debt going on the Crown balance sheet and risking Robertson's post-election debt limit of 25 per cent of GDP.

Three major questions remain. First, the Fund was meant to fund baby boomers' retirements and healthcare. Is Parliament comfortable for it to evolve into something more like Singapore's Temasek?

Second, if the Fund's rapid-transit idea is so good, why doesn't the Government lift its debt cap and just borrow at 1 per cent to build and own the system itself rather than giving the Fund and CDPQ the 8 per cent return being speculated about?

Third, the Greens and NZ First are deeply uncomfortable with any ongoing operating profits flowing to Canada. Are New Zealanders happy with Canadians having a minority interest in some of their transport infrastructure?

Serious politicians in Labour, National and NZ First really need to reach agreement on these points to make possible the type of radical, long-term projects necessary for Auckland to remain a viable business centre and place to live.

Auckland is doomed if its political leaders from left, right or wherever else think its transport needs next decade can be met with a few road-network improvements and a couple of new trams.

The Auditor-General and other authorities may yet have something to say about Twyford's conduct over the last 18 months. It would be a tragedy if that meant Auckland rejected the Super Fund's idea and defaulted to the city's mediocre existing plans.

- Matthew Hooton is an Auckland based public relations consultant and lobbyist.