BRIEFING
Auckland East-West Motorway Link
Reason for this
To provide you with advice on giving effect to Government priorities for a
briefing
lower cost, better value Auckland East-West Motorway Link.
Action required
Sign the attached letter to the New Zealand Transport Agency Board.
Deadline
Before the scheduled Board meeting on 10 November 2017.
Reason for
In time for the Board’s response to be considered in the development of the
deadline
Government Policy Statement on land transport.
Contact for telephone discussion (if required)
Telephone
First
Name
Position
Direct line
After hours
contact
Helen White
Manager, Investment
Bryn Gandy
Deputy Chief
√
Executive, Strategy and
Investment
MINISTER’S COMMENTS:
Withheld under section 9(2)(a) of the Official Information Act 1982
Date:
1 November 2017
Briefing number:
OC05388
Attention:
Hon Phil Twyford,
Security level:
In-confidence
Minister of Transport
Minister of Transport’s office actions
Noted
Seen
Approved
Needs change
Referred to
Withdrawn
Not seen by Minister
Overtaken by events
Purpose of report
1.
This report provides you with information on how the Auckland East-West Motorway Link
(East-West Link) project may be reviewed. It attaches a letter to the New Zealand Transport
Agency Board (the Board) seeking its views on how it would achieve the Government’s
priorities for a lower cost, better value east-west link in Auckland.
Background
2.
The Government Policy Statement on land transport (GPS) sets out the Government’s
strategic priorities for land transport investment. The Board must ensure the National Land
Transport Programme (the Programme) gives effect to the direction in the GPS. However,
the Land Transport Management Act 2003 (the Act) does not enable you to use the GPS to
direct investment into or away from specific projects. The Board independently makes
decisions to fund specific projects using the National Land Transport Fund (the Fund).
3.
The Board’s statutorily independent functions are found in section 95(2) of the Act. Section
70 of the Act requires that the GPS is not used to direct the Board to approve or decline
funding for a particular activity or combination of activities.
4.
The effect of these two sections of the Act mean that a GPS cannot be constructed in such a
way as to remove the Board’s ability to determine which projects proceed or do not proceed
under the Programme using the Fund. Other instruments (e.g. Letters of Expectations) also
cannot be used to direct the Board in the matters that it is statutorily independent.
5.
It may be helpful to read this East-West Link report alongside our report on achieving your
priorities through the GPS. This separate report explains the GPS mechanism, and the
associated funding regime in more depth.
6.
The East-West Link is a proposed investment in the National Land Transport Programme
2015-2018, with construction proposed to start in 2018.The Government has signalled a
preference for an east-west link in Auckland that would cost less and have a higher benefit
cost ratio than the current East-West Link proposal.
7.
Information on the East-West Link, provided by the New Zealand Transport Agency, is
appended to this briefing.
Giving effect to a more cost effective east-west link in Auckland
8.
You have asked how to achieve the Government’s intentions for the East-West Link. Given
the independent function of the Board, we recommend that you write to the Board inviting it
to identify how it could achieve Government priorities, with a specific focus on cost effective
delivery of the East-West Link.
9.
Attached is a draft letter that invites the Board to provide its views on achieving this.
10.
The letter also invites the Board to identify if amendments are required to the GPS to
implement a response. If the Board identify that the GPS needs to be amended, then,
depending on how quickly this change is required, it may involve amending the current GPS
2015 or including provision in a new GPS 2018.
11.
At a later point during the development of a new GPS, you may choose to confirm the
delivery of Government priorities through the Ministerial expectations in the GPS. In addition,
you may consider using the Letter of Expectations that, by convention, the Minister of
Transport (as responsible Minister) typically sends to the Chair of the Board between
December and February each year.
12.
With any of these actions, it is important to ensure that the Board’s statutorily independent
functions are respected and the GPS is not used to direct the Board to approve or decline
funding for a particular activity or combination of activities.
13.
We have considered other options that could be available to you to give effect to the
Government’s priorities for the East-West Link. For example, we could amend the strategic
direction and associated funding ranges in the GPS, amend legislation to delay and require
restructuring of the East-West Link, or consider further actions under the Crown Entities Act
2004.
14.
These options are not recommended at this stage, as you are able to achieve what you seek
under the existing framework.
Allocation of savings
15.
The Government’s transport initiatives identify that $1.2 bil ion could be made available if a
lower cost East-West Link is progressed.
16.
Any savings to the Fund from implementing lower cost and/or more cost effective land
transport investments become available for other land transport investments and are guided
by the GPS. Decisions on the use of Fund are made by the Board exercising its independent
powers. For example, savings may be used to accelerate existing projects in the Programme
or to bring new projects into the Programme.
17.
You could consider inviting the Board to identify what projects would progress if a
significantly lower cost option for the East-West Link achieved savings for the Programme
that were available for reallocation. The attached letter has been drafted to seek this
feedback from the Board. However, until a new GPS is issued and the Programme for 2018-
2021 is developed, it may be difficult for the Board to undertake this exercise in a meaningful
way. You may also wish to signal your interest in a further report from the Board on how it
has reprioritised projects within the Programme given Government priorities signalled in a
new GPS.
Recommendations
18.
The recommendations are that you:
(a)
invite the New Zealand Transport Agency Board to inform you on how they
Yes/No
could give effect to the Government’s priority for a lower cost, better value
east-west link in Auckland
(b)
sign the attached letter to Chris Moller, Chair of the New Zealand Transport
Yes/No
Agency Board
(c)
copy this briefing to the Associate Minister of Transport (Hon Julie Anne
Genter).
Yes/No
Helen White
Bryn Gandy
Manager, Investment
Deputy Chief Executive Strategy and
Investment
MINISTER’S SIGNATURE:
DATE:
Chris Moller
Chair
New Zealand Transport Agency Board
Private Bag 6995
Wellington 6141
Dear Chris
Government priorities for land transport The Government has identified a number of areas where it is seeking change in the type of
projects and programmes that are given priority for land transport investment. One of the
priorities that the Government has identified is the Auckland East-West Motorway Link where
it is seeking a lower cost, better value option.
I am therefore writing to you to invite the Board to identify how it believes a lower cost, better
value Auckland East-West link could be achieved.
I would welcome the Board identifying how it could make its response, alongside any
comments the Board has on adjustments that might need to be made to the Government
Policy Statement for land transport (GPS) to implement this response.
I am looking to make decisions on the GPS over the next few weeks. I would appreciate your
reply in time for any amendments to the GPS to be considered as part of the GPS
development process.
I would also welcome a report from you, once the National Land Transport Programme 2018-
2021 has been developed, that identifies how the Board has prioritised and reprioritised
projects within the Programme given Government priorities signalled in the new GPS. For my
information, I would appreciate this report giving examples of the key projects affected.
Yours sincerely
Hon Phil Twyford
Minister of Transport
6. The key NZ Transport Agency Board (Board) approvals followed the below timeline. These
decisions resulted in approval of implementation funding for the East West Link totalling $1.65 Bn
(in 2017 dollars inflation adjusted). This is made up of $400m for property and $1.25 Bn for
design and construction project and remains within the $1.25Bn (P5%) to $1.85Bn (P95%) range
forecast in the Detailed Business Case.
The Board of Inquiry are due to advise on the East West Link planning approvals early November
7. The Board of Inquiry established to assess the planning approvals (resource consents and
designation) for the East West Link is due to release their Draft findings to the EPA on 7
November, which are required to be publically released by 14 November. The full timeline is
outlined below:
Property negotiations are well developed
8. Landowner negotiations commenced in October 2016. Currently 38 out of 200 properties have
been secured on a willing buyer/seller basis, the majority along the SH1 corridor.
9. We have in principle agreement for another six properties with Public Works Act agreements yet
to be concluded. These properties total $98m (purchase price - excludes resale recoveries),
detailed in Attachment C.
10. Public Works Act Section 18 (s18) notices of desire for the required residential properties were
served in May 2017 on 22 private owners (and 1 in July) around the Princes Street area. The s18
notices are valid for 12 months. There are currently 11 owners for the Princess St properties for
which the Transport Agency is preparing the Section 23 (compulsory acquisition) paperwork.
11. There are approximately 60 remaining landowners. The Transport Agency has been preparing
the paperwork to serve s18 notices of desire on all remaining landowners. Nine signed s18
notices have been received from LINZ but are currently on hold.
Procurement for the East West Link
12. An existing professional services contract is in place to complete the detailed design and
procurement of the East West Link. The proposed procurement has been broken down into three
contracts as indicated in Attachment D.
13. Contract 1 is proposed as a $50m traditional contract for the Princess Street Interchange area.
Design is in the final stages and is anticipated to be ready to go to market in early 2018.
14. Contract 2 is proposed to be a circa $500m Competitive Alliance contract focused on the
Onehunga interchange and foreshore works. This contract is expected to go to a shortlisting
process just prior to Christmas.
15. Contract 3 is proposed as a second alliance type procurement and includes flyovers and
interchanges from State Highway 1 through to the foreshore. This package could be up to a
$700m Competitive Alliance contract and is programmed for tender mid-2018.
16. A geotechnical investigation package of work has been prepared to inform the procurement
process and is currently on hold.
Attachment A
Key issues (and future freight trends) in the Onehunga Penrose Area
