The New Zealand government has launched a procurement process for the financing and delivery of two new light rail lines in Auckland after receiving an unsolicited bid from New Zealand’s sovereign wealth fund to develop the scheme.
“The New Zealand Transport Agency will now set up a robust process to explore a range of possible procurement, financing and project delivery options,” finance minister Grant Robertson said. “This process will invite and assess all potential proposals and report back to the minsters of finance and transport,” he added.
NZ Super Fund confirmed that it had made the offer and revealed it has lined up CDPQ Infra, a wholly owned subsidiary of Canadian pension Caisse de dépôt et placement du Québec (CDPQ), as a consortium partner. CDPQ is currently overseeing the development and construction of a new 67-kilometre light rail network in Montréal, Canada, which it will then operate.
NZ Super Fund said other members could be added to the consortium in future.
“We wish to explore whether a NZ Super Fund-led consortium leveraging our international relationships can fund and deliver the project, on a fully commercial basis” NZ Super’s acting chief executive Matt Whineray said in a statement, noting that the light rail project is of “sufficient scale and significance to be an attractive prospect for investment”.
The project is estimated to cost NZ$1.2 billion ($831.7 million; €700.7 million), according to the Australian & New Zealand Infrastructure Pipeline, a joint initiative between the two countries’ governments and Infrastructure Partnerships Australia.
“The government will not be commenting further on the proposal other than to say that we welcome the strong interest in light rail and acknowledge that any investors will require a reasonable commercial return,” transport minister Phil Twyford said in a statement. “The procurement process agreed by Cabinet will review all other proposals in the same way as the Super Fund’s proposal is assessed.”
The Auckland Light Rail project will consist of two lines from the city to Mangere and from the city to North West lines. The New Zealand government recently announced a 10-year transport plan for Auckland that earmarked NZ$1.8 billion in seed funding for the scheme, with the option of securing further private investment in the network.
NZ Super Fund, which currently invests around 2 percent of its NZ$38 billion portfolio in infrastructure, did not respond to requests for further comment.