Chinese Interest In CBD Loop


There have already been approaches from Chinese interests about being involved in the CBD rail loop project.

That was revealed today during the Auckland Council’s transport committee’s first ever meeting.

Auckland Transport’s Peter Clark, giving a presentation to members about the business case, made public yesterday, and answering councillors’ questions said:

  • Some sort of Public/Private partnership is one option. There had already been approaches from Chinese interests keen on exploring options and such a relationship may result in a shorter time frame for the project being possible, such as the seven year plan Auckland Mayor Len Brown is keen on achieving. Such a timeframe also depends on the designation of the route and property acquistion process and whether the short of shortcut the Waterview project is taking is chosen.
  • The business case was careful not to get into detail about funding options and that’s a matter for more extensive discussion at a later debate between interested parties and the government.
  • Being a tunnel there should not be a significant effect on properties. The main issue is at Britomart with the tunnel extending under the Westfield Downtown shopping mall and discussions had already begun sometime ago about that. As far as station locations were concerned, Mt Eden would see the bulk of properties affected - not so much around the station but where the tunnel emerged. There would be few in the K Rd area because the station was intended to be around Beresford Square.
  • The business case had been thoroughly peer reviewed with costings reviewed by the same parties that had looked at the SH20 costings and Price Waterhouse had peer reviewed the whole case.
  • Transport minister Steven Joyce reportedly described the inclusion of transformational benefits to calculate a return of $3.50c for each dollar invested as “webs [wider economic benefits] on steroids” and said it was the first time he had seen such an approach in a business case. Mr Clark said the business case had taken the best expertise available internationally and the best advice. This had even included a leading US expert on urban renewal who had advised from San Francisco on the possibilities of urban renewal around areas where new rail stations were created, as planned in the loop alignment.
  • The business case put the project as being comfortably over a BCR of 1.  This was way ahead of two of the roads of national significance - the planend Puhoi road and Wellington’s Transmission Gully. But in terms of the benefits economically for serving the country’s most congested area and one where population was expected to grow substantially, the benefits were better than any in those terms. The ministry of transport and treasury were now working through the case.

The new transport council unanimously endorsed the economic benefits of the report and urged it to now move to the next phases as soon as possible. That phase involves the designation of the route to protect it from any other future development and it is hoped that is completed within weeks.




  1. Matt says:

    If we have to get Chinese money to build infrastructure that’s key to increasing NZ’s economic performance, that will say every last word that needs to be said about National’s real commitment to “catching Australia”.

  2. Matt says:

    And not just Chinese money. Any offshore money. Sure we’ll probably have to borrow it from someone else, even if Joyce opens his wallet wide, but that’s not quite the same thing.

  3. Doloras says:

    This is good news. If the Chinese are interested then John Key will be interested.

  4. Matt says:

    Doloras, Key will only be interested in signing them up for a PPP. So long as the money doesn’t have to come from the taxpayer, he doesn’t give a toss where it actually does come from.

  5. max says:

    Actually, on this one, I am not too worried about a PPP. Sure, if we f*** up the contract structure and the level of financial gain we promise whoever might want to go for a PPP, they may end up owning a valuable piece of infrastructure, or at least “billing rights” for the use of the tunnel. But a (relatively) expensive-to-use tunnel would STILL be better than no tunnel.

  6. Doloras says:

    I’m opposed to PPPs in principle, and I truly doubt that any are feasible at this point in history when ONLY governments can actually get finance capital; but I support any and all means of funding the CBD Link which don’t actually involve asset sales, slavery, etc.

  7. Matt says:

    Max, the history of PPPs is they cost far more, long-term, than doing it on the back of state borrowing. There’s one underway in the UK at present around hospital pharmacies that, over its lifetime, will end up costing the taxpayer about eight times as much as it would’ve if the NHS has been funded to do the work itself - and we’re talking hundreds-of-millions of pounds extra cost. That’s a whole lot of money that has to come from somewhere.

  8. Matt says:

    Doloras, given that the Chinese groups that’re interested will be state-owned, the distinction between state borrowing and constructor borrowing is effectively non-existent.

  9. Patrick Davis says:

    “WEBs on steroids” - Joyce.
    What a 2 faced prat! This is how argues the justification for the Holiday Highway and here he is being blatently hippercritical!

    Just keep in mind the experiences in Australia re PPP’s.

  10. greenwelly says:

    IF they are seriously looking at Chinese backing for the Tunnel, then it is a given the EMU contract will go that way too….

  11. Simon says:

    Greenwelly you beat me to it! This is a “If you give us the EMU contract, we`ll build you are tunnel” operation. Sorry, I am happy to have Japanese, Korean, European and Australian finance and expertise but count me out on the Chinese.

  12. Simon says:

    In addition to my comments above it has to do with wanting a quality EMU after waiting for so long in Auckland. As the TV ad says “Because you deserve it!”

    Also as with the yanks, Anything with the Chinese has big strings attached and probably we`d be giving away more than we`d be getting

  13. max says:

    “Max, the history of PPPs is they cost far more, long-term, than doing it on the back of state borrowing.”

    I know. But look, I literally would be happy for NZ to pay 3 billion for this if that is the only way we can get it. Contrary to Puhoi, it is going to have BENEFITS with pretty essentially no drawbacks beyond the cash paid itself.

    “but count me out on the Chinese”

    A bit arrogant? The Chinese have long since learned to do electronics and heavy machinery well, and building a tunnel is not THAT difficult either. It’s more a matter of making sure no corners are being cut. THAT is very we should be careful, in case this ever ends up a Chinese-company-led effort, not WHETHER they can do it.

  14. Simon says:

    Come on Max we know that of all the EMU tenders the Chinese ones will be the lowest quality. They`ll probably also be the cheapest though which scares me that we`ll get crappy EMUs when we finally get them.

  15. Matt says:

    Max, I will be very, very angry if Joyce ensures that the only way we can get this tunnel is by going the PPP route when he’ll happily throw billions into a project that’s a money sink. National are supposedly the party of business and sound spending policies. Supposedly.

  16. Matt L says:

    A PPP doesn’t have to be bad, in New Lynn this is being used for development around the station with the idea that Infratil will invest and develop the old bus station site along side the new station development. Without that agreement the land could have sat unused for years.

    In the CBD tunnel situation it could be that the Chinese build and develop commercial buildings around the stations, possibily even connected to them at the same time as the tunnel construction and contribute some money towards it. That would help to make the staitons more used and sucessful earlier.

  17. max says:

    “Come on Max we know that of all the EMU tenders the Chinese ones will be the lowest quality.”

    See, that’s exactly the kind of comment that borders on racist. The same thing was said about the Japanese products once. Heck, even forcing manufacturers to put “Made in Germany” on their products was in actual fact an attempt by the UK manufacturers to slander a foreign product that had started to gain market share.

    Just because most Chinese manufacturers specialise in mass-produced consumer goods of short term quality (which the world gobbles up, rather than buying appliances made in Italy or wherever) does not mean the Chinese CAN’T produce good stuff. With something like rolling stock or construction, you are not dealing with a manufacturer who was just started yesterday. You can look at their track record and decide whether they have sufficient skills.

    I am by no means un-worried about our government’s record of skimping and cutting corners on rail. That’s not the same as saying “Don’t buy Chinese”.

  18. Doloras says:

    I endorse the above comment. My original comment was based on the theme that John Key has made a big thing about NZ’s economic links with Asia, encouraging Chinese investment etc., and so this might be a “wedge” to get him to overrule Joycey’s road-mania and give the CBD Link the go-ahead. I would much rather see borrowing funded by a rates levy or fuel tax than a PPP, but I’ll take what I can get so I can be on the first train into K’Road station in less than 10 years.

  19. Jeremy says:

    Agree with you Max, mass consumer products in China can come in different grades.

  20. Nick R says:

    China can produce products ranging from plastic crap bought in bulk by the Warehouse through to HSR trains that do 350km/h… we’re just more used to seeing the plastic crap on our shores.

  21. Matt says:

    Max, it doesn’t just border on racist, it is racist. Very.
    My objection to a possible PPP with Chinese firms is not that they’re Chinese, but that it’s a PPP. I wouldn’t be any happier if it was Australian, American, Brazilian, Ethiopian, or Martian, it would still be a PPP forced upon us because our Minister of Trucks is a poo-poo head and our PM won’t break out the clue-by-four.

  22. anthony says:

    China is the first country in the world to start a proper Maglev system from downtown Shanghai to the Airport. China is also one of the few countries that is tempted to try news things as well wether it works or not. therefore the chinese would have the experience of building, just like the japanese.

  23. Kansas says:

    The Chinese are leading the world in rail, we can learn a lot from them. Give them the job ASAP.

  24. Nick M says:

    “I wouldn’t be any happier if it was Australian, American, Brazilian, Ethiopian, or Martian”

    You never know, those little green men might be so good at tunnel building that a PPP is bearable. Then again, imagine the outcry from people critical of foreign investment when we skip to interplanetary investment…

  25. Elliot7 says:

    To all you knockers of the China rail build quality, please go to Shanghai and use the MAGLEV, use the metro there, and see how fantastic it is! As a frequent visitor to China over the last years, and a frequent user of their rail service, I can only say YES YES YES to the idea that the Chinese get involved here in Auckland.

  26. Kel says:

    I agree with Max too. In fact the Chinese Rail system is really efficient and well organised. We could use a hand from them any time.

  27. Simon says:

    Max it has nothing to do with rascism. I`ve lived in Japan, speak Japanese and also studied and speak some Mandarin. I have friends and colleagues that are Chinese and they have the same respect I give to people of any race. I have no problem on a personal level with Chinese.

    I do have a problem with a Chinese govt and huge SOEs that can put a lot of pressure on smaller govts and authorities (ie Auckland council) and have done so recently (think nobel peace prize pressure on other countrie`s diplomats not to attend the prizegiving) and also are likely to have the upper hand in any agreement. I still wonder what we have actually signed up to on the free trade agreement with China. And no it`s not just China. I have excatly the sameopinion about another country that likes to push it`s weight around, namely America. So I guess that makes me anti-American too (tho I have heaps of friends from there as well!) .Just because someone doesn`t like the state or how it does things doesn`t mean their rascist against the people. LEARN HOW TO MAKE THAT DISTINCTION!

    It is a FACT that the Europeans (ie CAF in the case of our EMU tender), Japanese and Koreans DO have more experience and proven history in building EMUs. Chinese firms are a recent addition to the scene and I would rather go with PROVEN and EXPERIENCED manufacturers from Japan, Australian (Bombadier), Europe (CAF) or Korea. Again nothing rascist about it. When the Chinese have been in the game for a while longer and have the same rep as the others I would have no problems taking their EMUs. Just remember we have waited a VERY LONG TIME to get EMUs in Auckland. We should be getting the best! We shouldn`t be getting a particular EMU for political reasons like a trade off for building the tunnel or because John Key is cosy with the Chinese.

  28. damian says:


    Tend to agree with you, the last thing we need is Chinese controlled projects in this country.

    I have no issue with the technology, but we dont need their money

  29. karl says:

    Damian - we already have overseas-controlled-everything. What’s some Chinese-financed projects more or less? As I said - I’d rather have a CBD tunnel with Chinese financiers having a stake in it, than all 100% homegrown Kiwi tunnel plans which never see the light of day. It may not come to that stark choice, but if it does, I know what I’ll chose.

  30. max says:

    “Just because someone doesn`t like the state or how it does things doesn`t mean their rascist against the people. LEARN HOW TO MAKE THAT DISTINCTION!”

    Knew that would rile you. I sorta searched for a better word than ‘racism’ - maybe I should have used arrogance. Not that you would have been more pleased by that accusation. But for what it’s worth, I retract the ‘borderline racist’ comment.

    And I am not convinced by your rebuttal. You basically say that automatically less experience = worse result. Under that logic, we should all buy our computers from companies which have been around for at least 50 years.

    I say “let’s see what they offer at the tender stage”, instead of talking them down now, as if it was inconceivable that they can offer us something that is both quality and cost-effective.

  31. Simon says:

    Max, if you knew that would rile me why stoop to write it in the first place?! YouRe not convonced with my rebuttal. Well I guess that just means we`ll have to agree to disagree:)

    But aren`t you worried that politics could decide what EMU we take, not which EMU is best for Auckland? Maybe it was mere coincidence the increase in short-listed tenders happened just after Key went to China. maybe it wasn`t. Anyway he`s far too close to the Chinese for my liking. And to make myself clear I`m not saying we shouldn`t trade and have good relations with China but we should be wary about giving away our right to say what we think about their policies and the right to disagree with them on certain areas - just like we do with Japan. Unlike most other countries, China seems to be overly sensitive to the most delicate of criticisms.

    Finally, thank you for retracting the borderline rascist comment.

  32. Simon says:

    BTW max, don`t you think it was kinda unprofessional to announce a short list of four companies/consortiums, only to later increase that to eight? I know if I was one of the originally short-listed companies I`d be a bit pi**ed about that decision!

  33. Matt L says:

    No-one has yet answered my question, what if the Chinese are talking of guaranteeing commercial developments around the stations providing the tunnel gets built. That is still a form of a PPP and one that could be quite successful as it allows the council with some certainty to say “we know that this project will directly lead to X amount of development and jobs from the private sector”

  34. DanC says:

    I’d be interested how many strings it comes with. I would like to be positive but I would be a bit nervous if this relationship went ahead.

  35. damian says:


    Personally I would rather not have it.

  36. max says:

    “Max, if you knew that would rile me why stoop to write it in the first place?! ”

    Because YOUR “It’s Chinese, so their stuff is crap” comment riled ME.

    Just because OUR government has a track record to shaft rail decisions and shift goalposts doesn’t mean Chinese tenderers should be subject to that kind of suspicion just because they are Chinese. Once tenders come in, you are welcome to try and find dirt on the specific tender(rer).

  37. Joshua says:

    Chinese Contractors will have the ability to bid with lower price, purely on experience. They have more expertise in major project like this, however when it comes to building the thing I believe we should look home. When have NZ Contractors such as Fletchers or Fulton’s who are more than capable in delivering such a project, and that is the key reason I don’t support PPP in this situation.

    In saying that, PPP’s are not all that bad either, yes there is history in these projects being over budget and costing twice as much to the taxpayer, however there is also history where the projects have been delivered ahead of schedule and a saving to the taxpayer. Obviously a Competitive Alliance would be the ideal but we do need to fund it somehow.

    But remember, if we are able to keep it in New Zealand, the higher benefits we get from it, as the money building it will also be supporting the National Economy, I’d hate to see the profits go overseas.


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