Auckland Rail “Funding Gap”

There have been a couple of stories this week in the Herald. The first one talks about Transport Minister Steven Joyce claiming there is a “funding gap” for rail operational costs. The second is a response from Auckland Councillor Mike Lee claiming Steven Joyce is trying to stymie Mayor Brown’s vision. It’s all a bit confusing, but fortunately Josh Arbury over at  has got to the nub of the matter in this post here.

It is appropriate that the Auckland region pays a fair value for track access. It has been doing so since 2003, paying an average $5m per annum.

But now Transport Minister Steven Joyce wants to unilaterally increase this fee to $16m annually. Included in this are loan repayments at commercial rates of interest for the purchase of $500m worth of new electric trains for Auckland. The new trains were originally to be funded through a regional fuel tax of 2c per litre until the Government decided against this in March 2009.

Instead now it is obvious that central Government has decided to stick ratepayers with the bill for the new electric trains. It is disingenuous of the Minister not to mention this and to present this as a fait accompli to the new Mayor.

The Minister also needs to explain to Auckland ratepayers why Wellington’s new electric trains are 90% funded from central Government, and what “track access fees” Wellington ratepayers are expected to pay.

UPDATE: A well placed source tells me that in fact Steven Joyce is still considering how Auckland trains should be funded and what the funding split should be between Auckland and central Government.  Funding of trains is not included in the higher track access fee. It makes the decision to increase the track access fee from $5m to $16m even more confusing.  We will have to wait and see.

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