Deal will give city extra electric trains

Photo / Steven McNicholl

Auckland looks set to gain more electric trains than initially expected, under a deal to be signed today.

A memorandum of understanding to be signed by Transport Minister Steven Joyce and Auckland Mayor Len Brown at the Henderson railway station this afternoon is expected to establish financing arrangements for the supply and maintenance of 57 three-car trains.

That compares with 39 originally envisaged by the Government under a $500 million funding plan, and will include a 12-year maintenance commitment by the preferred of two short-listed suppliers.

A realisation that the earlier number would have been inadequate to serve more than two of Auckland's three main railway lines sparked intensive negotiations between the region and the Government, which has culminated in an agreed cost-sharing arrangement.

It is understood the Transport Agency will repay about half of a $500 million loan the Government gave KiwiRail to negotiate a supply and maintenance contract, leaving Auckland ratepayers to foot the rest of the bill over an unknown number of years.

Repayments of principal and interest are expected to cost ratepayers about $17 million a year, on top of new rail access charges to be paid to KiwiRail, although it is understood the Auckland Council has already budgeted for those amounts in its 10-year funding plan.

The Herald understands that any cost overruns are to be met by Auckland, although the Government is also believed to be prepared to give a separate $90 million grant to cover previous rail investments. Details of this were not known last night.

No officials were prepared to talk on the record yesterday about the arrangements, although one council source said: "This has got a great deal for Auckland written all over it."

Another called it "a very forward-focused deal, which will be of benefit to all rail commuters in Auckland".

That was a clear indication it will cover all five of Auckland's lines, including the recently resurrected Onehunga branch, and a connection due to open early next year to central Manukau.

The source also noted electric trains would be essential for pressing ahead with the $2.4 billion central Auckland rail tunnel proposal.

Council chairman Mike Lee, who has previously indicated dissatisfaction with Aucklanders having to pay for the trains after the Government scotched a regional fuel tax funding proposal, said he had no comment on the new deal.

The council-controlled Auckland Transport's board is meanwhile understood to have deferred until late this month a recommendation on a preferred train supplier, from a shortlist of two.

These are consortiums led by CAF of Spain and South Korea's Hyundai Rotem Corporation, which is in the midst of supplying Wellington's third generation of electric trains.

KiwiRail hopes to sign a contract by the end of the month for the supply of the first train by September 2013, to be put into service by the end of that year.

The other 56 trains are to be supplied by the end of 2014.

Ticket to ride

* The deal - supply of 57 three-car electric train sets and 12 years of maintenance.

* The cost - $500 million to be shared equally by the Government through Transport Agency subsidies and Auckland ratepayers, who will contribute about $17 million a year in loan repayments.