Funding crisis hits plan to tackle Auckland's bottlenecks

Fixing the bottleneck between the Auckland Harbour Bridge and city and widening the Newmarket Viaduct face further delays despite the latest petrol tax increase, says the Auckland City Council.

Only two weeks after motorists were hit with the 5.6c-a-litre increase, the national transport funding agency, Land Transport New Zealand, wants to borrow some of the money earmarked for Auckland to bankroll national projects.

The agency has suggested borrowing $80 million of the $176 million in extra tax from the petrol increase in the 2005-2006 year for national projects.

When Prime Minister Helen Clark announced the 5.6c-a-litre tax rise in December 2003 she said: "Auckland, with around one-third of New Zealand's population, will receive 35 per cent of that revenue. The rest will be allocated elsewhere throughout New Zealand on a population basis."

The council's director of strategic development, Grant Taylor, said Land Transport New Zealand's grab was taking $80 million away from Auckland.

"For Auckland this will probably mean the deferment of major new state highway projects and possibly some works that Transit [the national road builder] regarded as committed.

"Obvious exclusions from national funding include Harbour Bridge to city and the Newmarket Viaduct. This is somewhat alarming as these are both high-priority projects for Transit and the region," Mr Taylor said in a report at yesterday's transport committee.

He said the region might have to use its own money to ensure these projects remained a priority. Another project facing delays was double-tracking the western railway line, Mr Taylor said.

Transport committee chairman Richard Simpson was concerned that the funding body would need to consider borrowing regional funds for national projects.

"Land Transport New Zealand's proposal signals an overall funding issue for transport projects in the future. To a large extent this can be attributed to escalations in construction and maintenance costs ... we are concerned that cost increases will mean the level of funding available becomes a problem for the region once again," Mr Simpson said.

A spokesman for Transport Minister Peter Hodgson last night said there was absolutely no doubt that Auckland would receive its share of money from the new petrol tax over the 10 years of the package.

He said the Government was giving an extra $900 million to Auckland from its own coffers to bring the city's total transport package to $1.62 billion.