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The Labour-led Government is looking to hefty private-sector funding - possibly meaning road tolls - for a 5km Auckland motorway tunnel unlikely to leave much change from $2 billion.
Confirming the Government's preference for a deep bored tunnel between Mt Roskill and the Northwestern Motorway, via Waterview, Finance Minister Michael Cullen told Auckland business leaders it would "actively investigate" digging it as the country's first public-private partnership for major infrastructure.
"This is a huge project, with a potential cost of $2 billion or so," he said in an address to the Auckland Chamber of Commerce on the state of the economy.
"We believe the private sector has much to gain from Waterview and that the entire community - and the taxpayer - could have much to gain from involving the private sector in its construction."
His comments came as Transport Minister Annette King confirmed plans to appoint a six-member steering group, with three private-sector representatives and former Chief Ombudsman Sir Brian Elworthy as its independent chairman, to investigate the feasibility of such an arrangement.
Transit NZ's board also yesterday followed the political lead in confirming its preference for a deep tunnel ahead of other more disruptive - and not necessarily cheaper - trenching options through the Waterview route.
Although the agency is not disclosing details until today, it is understood a bore tunnel about 35m deep could cost around $1.8 billion, compared with covered-trench options ranging from $1.1 billion to $2.3 billion.
Dr Cullen did not believe bringing the steering group into the project would lose any "significant time" towards meeting a deadline of 2015 for completion, which will be the final link in Auckland's 48km Western Motorway bypass. He believed planning for a deep tunnel - for which Transit's design estimate alone has soared to almost $80 million - would reduce the time spent gaining consents because of its lesser impact on homes and the environment.
A deep tunnel would reduce property purchase costs and run beneath rocks from an ancient lava flow around the sensitive Oakley Creek catchment.
"Because tunnelling technologies have improved very considerably in recent years, it is both less intrusive and possibly a bit cheaper than the cut-and-fill option."
Dr Cullen said that while the steering group determined the feasibility of a public-private partnership, Transit would retain overall accountability for the project.
Asked whether private investment meant the imposition of road tolls, a concept which Transit is understood to be revisiting for the Waterview link despite abandoning an earlier proposal after public opposition, he said: "Obviously if there's a PPP then there's an issue around whether there's tolling as well."
He said it would be "quite difficult" to complete the link as well as other Auckland transport projects by 2015 from fuel taxes alone.
Auckland Chamber of Commerce chief executive Michael Barnett, an appointee to the steering group, said he expected strong interest from the private sector as the Waterview link was expected to siphon 100,000 vehicles a day away from Spaghetti Junction and would return $4.50 in economic benefit from each $1 invested.
But Green MP Keith Locke said the money would be better spent on public transport, including a $1 billion inner-Auckland rail loop through Britomart and trains to the airport.
"It's a pity that a week after the North Shore Busway came on stream, which gets Aucklanders out of their cars, the Government wants to waste $2 billion on a new motorway which will only encourage them to hop back in."
