Fiona Rotherham at Stuff reports:

Chinese investors have shown encouraging interest towards the Auckland Council’s planned $10.8 billion worth of infrastructure projects and other trade and investment opportunities, Auckland Mayor Len Brown says. …

But the council has also been touting for early stage interest in three of its own major projects: the inner city rail link that central government has rejected funding for; a second harbour crossing; and for the new Innovation precinct in the Wynard Quarter on Auckland’s waterfront. …

China, as our second largest trading partner, was one of the few countries with significant capital to invest offshore and was particularly interested in tourism investment, Brown said.

The first project off the block will be the $2.4b inner city rail loop and Brown favours a PPP (public/private/partnership) deal over borrowing, issuing infrastructure bonds, or raising rates and taxes in order to fund it.

An excellent idea. I look froward to the local Labour MPs supporting an innovative PPP such as this.

Tags: cbd rail loop, China, Len Brown, PPPs

The Herald calls for PPPs to hasten infrastructure projects:

Finance Minister Bill English calls his National Infrastructure Plan an important step towards better infrastructure management. “Even a small improvement in this area could reap gains worth billions – making our infrastructure dollars go further and ensuring a better return for taxpayers,” he says.

The multibillion-dollar sums sprinkled throughout the plan leave no doubt about the size of the commitment. Equally, the OECD’s view that investment in infrastructure, especially transport and communications, boosts long-term economic output more than other kinds of physical investment emphasises this is a road that must be travelled.

The Government, like its predecessor, does not seem sold on fixing this by adopting the bold option of build, own, operate, transfer (Boot) schemes, even though they have been widely used in Australia. The plan is not specific, talking only of PPPs expanding “the scope for innovation in design, construction and management of new assets”.

But it also pays attention to their potential downsides. These include the “reduced flexibility due to the long-term nature of the contract, and the cost that arises from unanticipated contract variations”. The latter can, of course, be mitigated by precise framing, so the private partner is in no doubt about the risk to itself.

Far more emphasis should have been placed on the advantages of PPPs at a time when, despite the squeeze on its finances, the Government is eyeing spending $8 billion to $9.6 billion on designated roads of national significance over the next decade. These pluses include not only the reduced cost to the Crown but the economic value of private investment decisions if they have to carry a fair share of the risk.

Transmission Gully would be a fine candidate for a PPP.

The Dom Post looks at waterfront democracy:

Democracy can be a messy, expensive and lengthy business, as Wellington City Council is finding as it tries to push ahead with its plans for the waterfront. It also provides the best chance of the public ending up with with something it finds acceptable.

Wellington Mayor Kerry Prendergast’s sense of frustration at the appeals against Variation 11 is palpable. In broad terms, Waterfront Watch and the Historic Places Trust believe the variation, which allows buildings under certain heights to go ahead on part of the waterfront without any public consultation, is not stringent enough, and will mean the loss of transparency in the process. Queens Wharf Holdings, on the other hand, believes the proposed restrictions are too stringent. …

Ms Prendergast hopes a solution can be found through mediation. That, based on past experience, is unlikely. The dispute over the proper role for the waterfront has dragged on too long and the positions are too entrenched to hope with any sense of realism for a negotiated settlement. Instead, it seems inevitable that both sides will remain in their trenches, lobbing legal grenades at each other. That is not ideal, but it is the price paid for having a democracy where everyone can have their say and test their case.

It’s ridicolous that after almost two decades we still have no agreed upon plan implemented for the waterfront.

The Press looks at the proposed driving changes:

Despite clear evidence that younger drivers are over-represented in crash statistics, successive governments had for too long placed the controversial issue of the driving age in the too-hard basket.

Finally the present administration has decided to act by accepting the recommendation in the Safer Journeys discussion document to raise the age to 16. And, in another welcome move, the Government has announced that there will be a zero-alcohol limit for drivers under 20. …

And the ODT also looks at the driving changes:

Fifteen is too young to be out and about on the road in cars.

Once, of course, cars in this country were a relatively expensive commodity, owned only after years of hard work and saving.

It might be surmised that a degree of maturity and good sense would have been inculcated in the individual in that time.

There were no cheap Japanese imports, the banks operated under much stricter lending criteria, and there were no such entities as finance companies as might be recognised today; certainly none especially designed to propel young men and women, barely past puberty, into the ownership of fast cars.

Tags: Dom Post, driving age, editorials, infrastructure, NZ Herald, ODT, PPPs, road safety, The Press, Wellington Waterfront

The Dominion Post reports on a speech by Mark Solomon to the Wellington Chamber of Commerce where he signals Iwi wish to be partners for the Crown in Public/Private Partenrships (PPPs) and even possibly minority investors in SOEs.

I was at the breakfast address, and thought it was an excellent speech that had several aspects worth considering. From his speech:

It’s a simple fact, but a vitally important one when thinking about Iwi Maori – WE ARE HERE FOREVER!

We are as much part of the landscape as the mountains and the lakes – our people will always be here, our focus will always be here and our money will remain here.

It seems like an obvious statement, but if you contemplate it for a minute, extrapolate an investment out over generation, after generation, after generation, after generation, after generation… you begin to see the power of the statement and get an insight into the vision of Maori investment.

I had not considered this before, but Solomon is right about the long-term future. Most companies are here for a limited duration and/or get sold, merged etc. Iwi as local investors will be here permanently, and as most of their investment will be in local companies and institutions they will over time be very major economic forces.

According the Te Puni Kokiri – the Ministry of Maori Development – the total commercial assets owned in 2005/2006 by Maori individuals, whanau, hapu and Iwi stood at $16.5billion – a massive increase of $7.5 billion from 2001.

This represented 1.5% of the reported value of the total New Zealand business sector.

And that percentage will grow over time.

The Ngai Tahu Settlement was a platform for the creation of our future, on our own terms.

The quantum we were offered was not fair or just. Treasury acknowledged our land assets alone in 1998 value would have ranged from $12b to $15b.

But, we voted to accept just $170m – cut our losses, move forward and build a future for our people. …

Ngai Tahu Holdings Limited, our commercial entity, is today worth $606m, with equity of $473m and more than 500 employees through our companies.

Growth from $170 millon to $473 million in a decade is a result many would like.

Iwi Maori are diversifying their investments, but for Ngāi Tahu as an intergenerational investor we take a deliberate and conservative approach – for us, like many Iwi, the next wave will be infrastructure.

Iwi investment in infrastructure will be good for Iwi wanting a more conservative investment.

And we have big plans.

We see further public/private/Iwi partnerships.

Perhaps on roads, airports and other strategic infrastructure. It is not impossible to imagine Iwi as cornerstone shareholders in State-Owned Enterprises – making them State-Iwi Owned Enterprises.

While any investment has to stand up on commercial grounds, the political aspect is intriguing, Labour could find it very hard to demonise PPPs and minority investment in SOEs, where the investors are Iwi, not multinational companies.

It just makes sense, if you think about it. Iwi will have the resources, we want our profits to stay in New Zealand – to reinvest for our people, for New Zealand Inc.

We are the perfect partner for Government. And they are well aware of our thoughts on this matter.

This could be a very interesting area to watch.

Tags: Iwi, Maori, Mark Solomon, Ngai Tahu, PPPs

Maurice Williamson on Agenda yesterday confirmed that National would look to speed up construction of new roads with private-public partnerships and tolls.

The party’s transport spokesman, Maurice Williamson, said yesterday that commuters could face bills of up to $50 a week for tolls of $3 to $5 a trip on new motorways or similar “roads of national importance”.

But he believed that most people, if given a choice between tolls or queuing on free roads, would gladly pay.

Also free roads are not free. They are just funded through petrol tax. I think it is vitally important that users of roads pay for them, and tolls are better at doing that, plus will allow for some roads to happen, which would not have happened otherwise.

He believed an obstacle to public acceptance of tolls had been removed by a new law requiring all money raised from fuel taxes to be paid into the national land transport fund.

“I think New Zealanders will now say, ‘Well okay, if it is going to provide a solution to a problem I face and you are not stealing my petrol tax, well then I’ll go for it’.”

Another policy Labour stole from National!

Transport Minister Annette King accused Mr Williamson of not thinking his toll plans through properly.

She said that even if the $365 million Albany-to-Puhoi toll road, to open early next year, had “maximised” use, a $2 toll would still pay only half its cost.

So what? Half is better than none.

But she said the Labour-led Government believed strongly there was a place for PPPs.

But I thought they were evil privatisations in drag?

Mr Williamson listed these possible candidates for tolls:

• Auckland’s next crossing of the Waitemata Harbour (expected to cost at least $4 billion).
• Auckland’s motorway tunnels through Waterview on the western ring route ($1.9 billion).
• A 19km motorway extension to Warkworth or beyond ($1 billion-plus).
• Completion of the Waikato Expressway on State Highway 1 ($1 billion).
• Kopu Bridge, on the way to Coromandel Peninsula ($32 million).

Don’t forget Transmission Gully!

Tags: Annette King, Maurice Williamson, petrol tax, PPPs, roads, toll roads