Rail Electrification Delayed As PPP Investigated

The Herald reports on the news that the Government is now investigating the possibility of a public private partnership for electric trains.

The electrification of Auckland’s rail network could be delayed further after the Government announced it was investigating a different funding option to buy new trains, warns the head of Auckland Regional Council.

Transport Minister Steven Joyce said yesterday that he was considering using a public private partnership (PPP) model to buy new rolling stock. Mr Joyce has just returned from Australia and he said PPPs had been used there on a number of occasions to fund passenger rail stock, including an agreement to secure 78 new commuter cars worth A$2 billion ($2.55 billion) for Sydney.

ARC chairman Mike Lee said he suspected the announcement was an ominous sign for the rail network before today’s Budget.

“I would say this is a signal … of a lack of electrification funding in the Budget.”

Mr Lee warned that such a plan was discarding an expensive and time-consuming plan which was already under way, and would delay electrification further.

“The international tender process for 140 electric rail cars that [Auckland Regional Transport Authority] launched last December and was due to go into its final stage early in May would in effect be torpedoed.” … more

A PPP would be extremely difficult to get right.  The successful partner would have to figure out how to stable and maintain the rolling stock at Kiwirail depots, or build their own facilities.  I just can’t see this working on a number of levels, cost of capital being expensive for private operators being the main one.

Leave a comment