National is locking future taxpayers into paying $125 million a year for Transmission Gully for a quarter of a century even though the traffic volumes don’t justify building it
The National Government’s choice of an ‘availability model’ for the Transmission Gully Public-Private Partnership means that taxpayers foot the bill for this $3 billion duplicate motorway whether traffic volumes are as high as forecast or not, Green Party transport spokesperson Julie Anne Genter said today.
It has been reported today that the Transmission Gully Public-Private Partnership (PPP) may not be tolled and that the private consortium will be paid the same amount by the Government regardless of traffic volumes under what is known as the ‘availability model’. New Zealand Contractors Federation chief executive Jeremy Sole has said that tolling couldn’t fund Transmission Gully because “the patronage isn’t there”. The Government’s forecasts assume traffic volume growth on Transmission Gully, even though traffic volumes on the existing route have actually been falling for the past five years.
“National is locking future taxpayers into paying $125 million a year for Transmission Gully for a quarter of a century even though the traffic volumes don’t justify building it,” said Ms Genter.
“Jeremy Sole is right when he says ‘the patronage isn’t there’ for Transmission Gully to pay for itself as a toll road. The costs are so high and the traffic volumes so low that toll would have to be $15 each way to cover its cost – far higher than road users would pay. That just highlights what an uneconomic project this is. It makes no sense to force the taxpayer to shoulder this $3 billion burden instead.
“The justification for PPPs is supposedly that they shift demand risk from taxpayers to the private sector but National has decided that the private consortium running Transmission Gully will be paid by the taxpayer whether traffic volumes are as high as forecast or not.
“That means the PPP is really just a very high-interest loan that the public will be paying back to the tune of $125 million a year for 25 years.
“National’s plan is to build a 27 kilometre duplicate motorway at a cost of $3 billion, or $100,000 a metre, to service just 10,000 commuters and the taxpayer will be forced pick up the tab. Taxpayers deserve better value for their money. We have the opportunity to be building a smarter, more cost-efficient transport system that will be better for all travellers, whether they drive, take public transport, walk, or cycle,” said Ms Genter.