Subscribe to RSSInteresting Approach To Funding New Bridge
Those proposing the so-called Anzac bridge as a solution for Auckland’s present harbour crossing have come up with some interesting options for how to find the $3b funding.
In the end, it’s possible such funding variations will convince the government of which of the two available options to go for - a tunnel as envisaged by the NZTA and supported by local body officials like ARC’s Mike Lee - or another bridge.
A recent gossip column in a business newspaper speculated that the government, especially the transport minister, liked what had been seen of the Anzac proposal because of the cost and the fact it was potentially iconic, being of an unusual design and marking Anzac, which is an event steeped in our history.
Anzac bridge design as it would look at night
The transport minister says building a third harbour crossing will be a key transport priority for the government in the soon-to-be-released 20-year infrastructure plan. With a new bridge possibly needed in 20-30 years, the minister said: “It is my current expectation that construction will largely occur in the second half of the twenty year period.”
Especially if funding options allowed the government not to front up with all the money, the new timetable may be achievable with the Anzac bridge.
As detailed in the Beca engineering report, the present bridge has a reduced shelf life on current heavy vehicle trends.
The Anzac group points out that traditionally, a large infrastructure project of the scale of the proposed new bridge would be funded from the Crown balance sheet via NZTA. Due to the current state of the New Zealand economy and tight domestic capital markets, other funding options should be considered.
They suggest for consideration (in no particular order):
- Electronic tolling: tolling could be used on all vehicles crossing the new bridge, similar to that used on the Alpurt State Highway One project between Orewa and Puhoi. However, given that the ANZAC Centenary Bridge would be a strategic link in the Auckland infrastructure network, and that alternative routes would be limited to road via the Upper Harbour Highway or Waitemata Harbour ferry services, the tolling option may face policy constraints
- Public-private partnership (PPP): The PPP concept has often been touted as an effective risk-sharing strategy between the public and private sector. The key consideration to be addressed would relate to mitigating the specific project risks (e.g. design, construction, time delays, etc) and ensuring that the Crown borrows at a lower cost of capital
- Infrastructure bonds: Funding for the ANZAC Centenary Bridge could be obtained from the creation of an infrastructure bond designed specifically for retail investors. This could be a long-dated bond with an attached coupon. Such a bond would be consistent with the Government’s desire to increase the savings ratio in New Zealand
- • Special purpose legal vehicle (SPV): The ANZAC Centenary Bridge could also be built, owned and operated by an SPV, similar to Transpower’s ownership of the HVDC Cook Strait Link. The SPV could incorporate a mix of shareholders and/or lenders, including the private sector, NZ Superannuation Fund and international investors. This syndicate would seek a return on investment commensurate with risk and would require payment from all bridge users or the Crow
- Regional fuel tax: The new bridge could be funded over a fixed-term period from part or all of a regional fuel tax levied on Auckland motorists. This mechanism may create distortion between private vehicle users and other bridge users (for instance, bus and truck operators, cyclists, pedestrians, etc)
- International involvement: It is envisaged that an international design competition could be held to ensure that an appropriately iconic structure is built. In a similar manner, international expressions of interest could be sought from major infrastructure owners and fund managers. These submissions would canvas a wide range of funding and ownership alternatives which would then be benchmarked against the traditional models for funding infrastructure in New Zealand . A new bridge would lend itself more favourably than a tunnel option to these different funding models. Bridges face lower design/build and geotechnical risks. Consequently, a new bridge would have a lower risk profile, implying a lower cost of capital. Further, bridges face a lower degree of construction risk, which implies an increased certainty of timetables and of fixed pricing for construction.
It will be fascinating to see how this plays out over the next few months, with the government promising some sort of decision soon. The NZTA board and the government have already had a briefing on the Anzac proposal.
7 Comments
I’m loving this talk of a new bridge - fantastic idea. Give us something iconic and functional, with plenty of capacity to grow. And do it now! Why wait? Dismantle the old one and sell the land ASAP!
But whats wrong with the old bridge? Nothing… Is clip on’s which are the problem.
Why remove a perfectly good bridge, just to build a new one?
I’m liking the talk of how we are going to celebrate the ANZAC centennial.
I think we should be suspicious of any idea being promoted by the construction industry to give themselves more work. NZTA already analysed several hundred ideas and the two best were a rail only tunnel or a rail and road tunnel. That’s what’s best and that’s what should be built. Joyce is merely attempting to make out the decision made under the last government was a bad decision, much as he turned the waterview connection into a half above ground route simply to differentiate himself from Labour. The tank farm is also too much of an opportunity to revitalise the CBD for it to be destroyed by a freeway.
Tunnel or nothing..!
That sounds familiar…
And once again I’m coming out on the side of “nothing”.
The busway has plenty of capacity left in it, traffic volumes on the bridge are stable since 2004, peak hour volumes are stable since 1994. The lifespan of the clip-ons is an issue, but surely we can look at other ways of solving that problem than replacing the whole bridge.
If we’re looking at transport projects to build in the 2020s that will cost $4 billion, I’d much rather build a railway line between Glen Innes and Manukau City, via Botany and Flat Bush, than another road tunnel under the Waitemata.
I’m liking the bridge idea more and more. Lengthy road tunnels are full of fumes, and for both road and rail you don’t see anything. A bridge would be much more enjoyable for users and would be a great showcase for rail transport as Aucklanders marvel at the sight of trains going up and over the harbour. It’s a nice design too.
We would have to dismantle the old bridge effectively giving us just one crossing, like we have now. I would have to say tunnel to give us the security of two crossings, and protecting public space etc.
To bad we cant have both