The splits among the three governing parties over the multibillion-dollar Auckland light rail project are to be expected. More worrying for Jacinda Ardern is the chasm within her own Labour Party.
She will soon be forced to choose between Finance Minister Grant Robertson and Transport Minister Phil Twyford.
Ifthe decision goes against him, Twyford's career will surely have reached the end of the line.
The light rail proposal was a legacy project of former Auckland Transport (AT) boss David Warburton, who stepped down in 2017 after bequeathing the city the transport network it has today.
Inspired by Melbourne and Sydney, light rail was strongly backed by the middle-aged Grey Lynn cool kids, of whom Ardern is the patron saint.
Depending on the audience, it was promoted as a fast and efficient option from the airport to the CBD or as a hop-on, hop-off system for people in Mt Roskill to get to work or gigs in K' Rd.
The two objectives were obviously unreconcilable. Not even a route was agreed.
Undeterred, Opposition leader Ardern declared light rail a "game-changer" and promised the CBD-to-Mt Roskill stretch would be completed by 2021.
That promise has gone the same way as Ardern's promises on KiwiBuild, child poverty, the "nuclear-free moment", "Let's Do This", and the whole "transformational" shtick generally.
As previously revealed in this column, Twyford's hesitancy to press "go" on Ardern's promise followed secret representations within weeks of the Government being sworn in on behalf of the NZ Superannuation Fund by AT director Sir Michael Cullen and City Rail Link (CRL) czar Sir Brian Roche, later appointed by Twyford to chair the NZ Transport Agency (NZTA).
An artist's impression of AT's light rail plan for Auckland. Photo / Supplied
The private dialogue continued through 2018, including the co-ordination of PR efforts between the fund and the Beehive ahead of the fund's "surprise bid" that May with Canada's Caisse de depot et placement du Quebec (CDPQ), now called NZ Infra.
Twyford says there is nothing unusual about this, that the proposal was unsolicited and that any suggestion he has lied about that is defamatory. Roche, Cullen and NZ Infra have publicly backed him up. Cullen says the secret January 2018 meeting was "to ensure that the Government was aware that the Super Fund was interested in putting forward a proposal and that space was made to listen to that proposal".
Twyford says there are no conflicts of interest between Roche's activities for the fund and his new role as chairman of NZTA. This is despite NZTA now competing with NZ Infra for the project. Regarding any possible conflict between Cullen's activities for the fund and his then role as an AT director, Twyford says Cabinet Office advice is that questions should be directed to Auckland Council.
Twyford also struggled to answer parliamentary questions from National's Chris Bishop about how the unsolicited proposal met the Government procurement rules for such bids.
With public transport lobbyists Greater Auckland, Generation Zero and Bike Auckland joining with the Employers and Manufacturers Association, Automobile Association and Heart of the City to protest the Government's lack of transparency, it is increasingly likely that the matter will end up with an Auditor-General's inquiry.
In the meantime, the Ministry of Transport is about to recommend whether NZTA or NZ Infra should be the Government's preferred "delivery partner", but the Cabinet itself will make the final decision. What the "delivery partner" will actually build will be worked out later.
Broadly, NZTA is offering to build and own a light rail system on behalf of the Government, funded through long-term borrowing at around 1 per cent.
This would formally add debt to the Crown balance sheet, which would affect the presentation of the Government's net public debt forecasts into the election campaign.
In contrast, NZ Infra is proposing a public-private partnership (PPP). CDPQ and the fund would finance and own the system with the Government contracted to pay them an annual return of, say, 7 per cent.
Although this would increase the actual cost to taxpayers perhaps seven-fold, it would help the politicians look fiscally responsible in an election year by keeping that liability off the Government's formal balance sheet. What percentage of the annual payments would flow to Canada and how much to the Super Fund is unknown.
That the proposal has got this far speaks to the brilliance of NZ Infra's lobbying effort, carried out by some of Auckland's most deeply connected Labour Party figures who also succeeded in pushing the CRL.
Finance Minister Grant Robertson. Photo / File
Some National MPs back PPPs because it makes them feel all right-wing but proper right-wingers would instead do some basic net present value calculations. The worst part is that almost nobody on the Government or Opposition front benches would even know what that means.
Within the Government, NZ First advocates heavy rail over light rail and is deeply sceptical of the whole project. At the least, it would prefer to see how the CRL improves the existing heavy rail system before investing billions in an alternative. It also worries that a major piece of infrastructure being foreign owned would constrain future decision-making about Auckland's transport mess.
The Greens have similar concerns about foreign control and want to revert to the original plan they and Ardern promised in 2017. Robertson now leans towards the Greens' view, mainly because he and the Treasury understand 7 per cent is more than 1 per cent.
The political problem, though, is that backing the NZTA proposal would raise serious questions about why Twyford was allowed to fluff around for so long despite Ardern's campaign promise that light rail would be operational by next year.
Twyford's ministerial colleagues report he alone remains gung-ho behind the NZ Infra proposal, which the Ministry of Transport is also expected to recommend after its controversial decision-making process.
Ardern rightly sacked Twyford as Housing Minister after his KiwiBuild fiasco. If it turns out he has wasted her entire first term and caused her to break yet another major election promise by mucking about with an alternative light rail proposal for which he cannot gain the confidence of any of his senior Labour colleagues or their NZ First and Green partners, he can surely no longer remain Transport Minister or in any ministerial position at all.
- Matthew Hooton is an Auckland based public relations consultant and lobbyist.
