NZ government cancels Auckland Light Rail bidding process

Opposition from within the governing coalition has led to the project being placed on the backburner until after the general election in September.

The New Zealand government has ended its process to select a delivery partner for the Auckland Light Rail project without naming a preferred bidder, ending for now NZ Super Fund and Caisse de dépôt et placement du Québec’s hopes of developing the scheme.

Government parties were unable to reach an agreement on a preferred proposal and the project will now be referred to the Department of Transport for further work, transport minister Phil Twyford said in a statement.

The project’s future will be decided following the general election scheduled for September this year.

Plans to develop light rail were part of an agreement between the Labor Party and the Green Party, but not part of the agreement between Labor and New Zealand First. Labor and NZ First govern together in coalition, with support from the Green Party in Parliament.

New Zealand media reports suggested that NZ First remained opposed to the Auckland light rail project and wanted to allow the electorate to have its say again on the scheme later this year.

The government shortlisted two bidders for the project in August 2019: NZ Infra, a joint venture between the NZ Super Fund and CDPQ Infra, a wholly-owned subsidiary of Canadian pension CDPQ; and the NZ Transport Agency, a Crown entity that administers the country’s state highway network and provides other input into transportation systems.

The bid process was launched after the NZ Infra JV submitted an unsolicited bid to develop the scheme in May 2018. If successful, it would have been a first for New Zealand, with the consortium co-designing the asset with the government and its partners while taking on most of the financing burden and risk.

The project in its current form would have consisted of two lines, one linking the city centre to Auckland Airport and the other linking the city centre to Waimauku to the north-west.

NZ Infra said it had received news of the decision to end the bid process with “significant disappointment”.

Matt Whineray, chief executive of the NZ Super Fund, said it had entered into the process knowing the outcome was not certain and that it valued the engagement it had had with the Ministry of Transport and other stakeholders over the project.

“We remain committed to seeking opportunities for the NZ Super Fund to invest in New Zealand, including in large-scale infrastructure, and look forward to utilising the knowledge and expertise we have developed on other projects,” he said.

CDPQ Infra managing director Jean-Marc Arbaud said in a statement: “We gathered the best international light rail experts to put forward an integrated, inclusive and sustainable project that had the potential to spearhead the transformation of Auckland. Our proposal was fully funded, deliverable and offered clear value for taxpayers.

“We diligently followed every step of the rules and process designed by the Ministry of Transport. It is disappointing that the process has been cancelled but we respect the decision of the New Zealand government.”

Transport minister Twyford said that the project remained part of the wider Auckland Transport Alignment Project, a 10-year transport plan for the city that earmarked NZ$1.8 billion ($1.2 billion; €1.0 billion) in seed funding for the light rail scheme.

“Auckland Light Rail will be New Zealand’s most complex infrastructure project in decades and it’s vital we get it right for future generations,” he said.