Auckland's eastern highway will need $250m a year

By BERNARD ORSMAN

The eastern highway project will need a $250 million annual subsidy - but Auckland mayors have been told not to expect any Government favours to fund the $4 billion motorway.

The subsidy figure is revealed in a report by international consultants Deloitte's which shows that tolls would pay only a fraction of the cost of the 27km highway.

This shortfall, the report indicates, would need to be met by an additional annual subsidy of $250 million from the public purse.

"The total Eastern Transport Corridor project," says Deloitte's "is unlikely to be financially feasible as a privately financed toll-funded project."

Transport Minister Pete Hodgson said yesterday that there would be no special Government funding for the project.

He said the Government had pledged an extra $1.6 billion to Auckland transport projects over the next 10 years.

"This does not include funding for the eastern highway, which is not part of Transit's 10-year plans.

"The project is being driven by councils, and if they want it to proceed they will have to bring something more substantial to it than calls for the Government to pay more.

"Legislation allowing for public-private partnerships and tolling is now in place," Mr Hodgson said.

Eastern corridor political steering group chairman Greg McKeown conceded funding was a crucial issue.

"Given the funding pool that is available for transport infrastructure and services in Auckland there aren't enough identifiable funds today to build something on this scale," he said.

Mr Banks, who six weeks ago said the "Government is going to have to pick up some of the costs", yesterday said Auckland would be relying on isthmus-wide tolls to fund completion of the motorway and public transport network, including the eastern corridor.

"The funding we have got for network completion is simply not enough.

"We have gone to the Government urgently putting a case for network tolling across the isthmus."

Mr Banks said the eastern corridor would be scaled back by doing away with buses across Hobson Bay parallel with the existing railway line, saving about $400 million.

This would be part of the recommendations put to Auckland and Manukau councillors and Transit New Zealand for a final route into the city for the highway, by crossing Hobson Bay or going along Shore Rd and under Parnell through a tunnel to Grafton Gully.

Auckland City's transport committee will hear today from three schools and two sports clubs opposed to the Parnell option, as well as John Haigh, QC, the high-profile lawyer taking on Mayor John Banks in an acrimonious battle to save Hobson Bay from the highway.

The Stop the Eastern Motorway lobby group and the Institute of Architects Auckland branch are also going on the offensive by presenting an alternative to the Transit board tomorrow.

Graeme Scott, who chairs the institute's urban issues group, believes the one-size-fits-all proposal for the highway is flawed.

The group favours an alternative new road through the industrial heartland of East Tamaki, completion of State Highway 20 from Manukau to Rosebank Rd, improved rail services and a busway from Manukau to Glen Innes.

Stop the Eastern Motorway executive officer Richard Lewis said the Deloitte report reinforced the lobby group's view that the project was not financially viable.

Mr McKeown said the sharp edge of the decision-making process would start next Wednesday around the form, route and types of transport to use the corridor.

Politicians and Transit also have to decide how to proceed to the next stage of notifying the project, which will make the notifying body liable for property purchases up to $1.2 billion.

Manukau has $120 million set aside for these. Auckland City has nothing put aside.

The Deloitte report

* Tolls over 35 years fall far short of bankrolling the eastern highway.

* A $2.90 toll, or $1 toll to cross Panmure and Pakuranga bridges, pays 45 per cent of the $1.2 billion cost of the toll road component.

* A $5.40 toll "theoretically" supports the $1.2 billion road component but is unlikely to attract private investors.

* The 55 per cent cost of the toll road component, road maintenance costs, land purchases and public transport costs require an annual public subsidy of $250 million.

* The preliminary figures are based on desktop studies and are likely to vary significantly once more detailed work is done.