Government won't budge on Business Council's demand for roads: Twyford

Transport Minister Phil Twyford says the Business Advisory Council's call to privately fund a dozen on-hold roads is "bad policy". Photo / Mark Mitchell

The Government and the Prime Minister's Business Advisory Council see eye-to-eye on a lot when it comes to fixing the country's infrastructure woes, Transport Minister Phil Twyford says.

They are at an impasse when it comes to roads.

In a damning letter released to The Herald, the council said New Zealand was at an "infrastructure crisis point" and lacked a national master plan to fix the issue.

Chaired by outgoing Air New Zealand chief Christopher Luxon, the group excused the current Government, saying the issue was intergenerational and added there was "no overarching vision or leadership in New Zealand for infrastructure development".

"This means there is no nation-building narrative upon which to build a strategic direction," it said.

It also called for a financing mechanism that would allow for long-term, debt-funded or investable opportunities and said incentives between central and local government are misaligned.

Twyford said there was a lot the administration agreed with.

"The Government shares the view of the Business Advisory Council that it's past time for us to really lift our game in the way we plan and fund and finance infrastructure," he said.

He points to the Infrastructure New Zealand's wish list and says almost every item is already being addressed, through projects such as the planning reform, the establishment of an infrastructure commission, ongoing work on a variety of new financing streams, including infrastructure bonds for urban growth.

But the agreement ends at roading.

The council has called on the Government to proceed with the 12 roading projects presently on hold or under review and to open them to private investment.

"These projects are investment ready, provide the beginnings of a pipeline of investable opportunities and would be an effective use of the roading capability developed in New Zealand over the last 20 years," the letter said.

Twyford said the Government was looking for a more balanced approach to modes of transport.

"It would be really bad policy to do what they're advocating in that particular area," he said

"If we were to do what the Business Advisory Council was saying, it would mean spending a great deal of money, more than $12 billion, on projects that have very low economic value."

Allowing private investment into the roads didn't make sense either, he said.

"Borrowing money is not the problem here. It's never been cheaper to borrow money than at the moment … It's actually having the revenue to be able to service that debt."

That money could only come from the National Land Transport Fund, or tolling, he said.

"None of those roads have enough traffic on them to generate anything like the kind of revenue you would need to pay for them, to service the debt. It's just not realistic."

The June 26 letter, signed by the Business Advisory Council chairman on behalf of the 13-strong council, raised a number of recommendations.

They include the establishing a Ministry of Cities, Urban Development and Population, a Prime Ministerial Taskforce or Commission of Inquiry should be established to undertake a comprehensive review of NZ's planning laws and local government system, including the Resource Management Act, Local Government Act and Land Transport Act.