Toll roads in sight with fund change

By VERNON SMALL

The Government has unveiled plans to revamp land transport funding, opening the way for toll roads and private public partnerships (PPPs).

But key support party United Future is frustrated it did not have more say in drafting the plan and is promising changes to make it "less Green".

Transport Minister Paul Swain yesterday told a joint press conference with Green co-leader Jeanette Fitzsimons that PPPs were likely to be tolled. Wholly public projects by local government could also be tolled. But he expected only three or four PPPs would be viable.

There had been no input into the policy from a group of business and industry leaders set up by former TVNZ chairman Dr Ross Armstrong.

Dr Armstrong was forced to resign his state posts after a letter he oversaw offered businesses the chance to influence Government policy and get the inside running on future PPPs.

The new Land Transport Management Bill was hammered out between the Government and the Greens as part of their co-operation agreement. It builds on a deal between the two parties last February which saw an extra $227 million in fuel and road-user charges raised.

But United Future's transport spokesman, Larry Baldock, said yesterday that he was surprised at the Greens' role after United had struck its confidence and supply deal with the Government.

"We had the agreement for this legislation to go forward and then the Greens agreement had transport in it. So it has meant it has been more of a three-way discussion. Two's company, three's a crowd."

He said the bill lacked flexibility in some areas, although overall it was a huge step forward.

The bill is part of a broader strategy which will fashion the Government's transport plans through to 2010.

Ms Fitzsimons and Mr Swain said the new approach marked the biggest change in transport policy for 20 years.

The new objective would be "a safe, sustainable, integrated and responsive" transport system, compared with the present narrower aim of a "safe and efficient roading system".

Under the new approach transport "no longer means just the car and the motorway. Rail, bus, ferry barges, the bike and the footpath gain equal status", Ms Fitzsimons said.

But she said funding for rail should contribute to the development of rail, and not just be a transfer to Tranzrail shareholders. In future, if the Government agreed, a local authority would be able to own and operate infrastructure services, including commuter rail services.

Transfund, and all agencies seeking funding from it, would be required to prepare 10-year financial forecasts. Transit, with the permission of the minister, would be able to borrow to fund projects.

Mr Swain said PPPs would allow projects to start sooner and would spread costs over time.

Ms Fitzsimons said the Greens were opposed to PPPs, but believed they had achieved changes in the law which would safeguard against problems overseas. .

For instance, the public sector would not be liable to compensate any party if traffic numbers were below forecast.

A requirement for public ownership of infrastructure projects would rule out build, own, operate and transfer (boot) deals. But the private sector could be part of "design, build, fund and operate" PPP deals. PPPs and toll roads would need the backing of their communities and would be subject to ministerial approval.

Mr Baldock said the bill prevented councils from underwriting traffic volumes to get projects underway.

Private operators would charge more or be involved in fewer projects if the local authority took no risk, although he could see problems if local governments were given carte blanche.

National's transport spokesman Roger Sowry agreed that the rules around PPPs were too inflexible. He said the bill put too much emphasis on ministerial discretion over commercial viability.

The bill is expected to be passed next year.

TRANSPORT STRATEGY

* Allows Government and councils to build roads in partnership with private companies and toll roads.

* Regional councils to pay for, own and operate public transport infrastructure and services.

* Transfund and Transit given more flexibility to pay for projects other than roads.

Public-private partnerships

* Partnership for 35 years or less.

* Land remains in public ownership.

* Private companies shoulder the risk.

* Ministerial approval and community support required.

* Likely to involve tolls.

Toll roads

* Must be new roads and have an alternative route.

* Tolls can be collected electronically.

* Road-controlling authorities can enforce toll collection.

* Road users and local community must be consulted.

Herald feature: Getting Auckland moving