6. Hon DARREN HUGHES (Labour) Link to this
to the Minister of Transport
Where did he source the figure of $200 million for finance costs from when discussing the costs of the Waterview project on Tuesday?
Hon STEVEN JOYCE (Minister of Transport) Link to this
I am not sure of the source, but, as I stated earlier this afternoon in the House, I inadvertently used the wrong figure on Tuesday for financing cost during the construction period. The financing cost of completing the Waterview Connection by building the twin two-lane tunnels is projected to be $550 million. The total figure quoted in the business case for the twin two-lane tunnels is $2.77 billion, which is made up of $1.98 billion for construction on State Highway 20, $240 million for additional required work on State Highway 16, and $550 million for financing costs during the construction period. These are real costs, on the basis that the project is to be financed outside of the National Land Transport Fund, which is the basis on which the previous Government was hoping to proceed—hence the business case it ordered.
Hon Darren Hughes Link to this
Does the Minister accept that getting the figures right is very important for New Zealand’s biggest roading project, which is what Waterview is; if so, why does he continue to inflate the cost of the project by including the cost of the State Highway 16 work, when those improvements are needed for the western ring route anyway?
Those figures I just mentioned were the exact figures quoted in the business case. I point out that they were included because those works will be required when the State Highway 20 project is completed. There are also the finance costs; if a project is financed outside of the National Land Transport Fund, there will be a real cost to the Government that impacts in real terms on the Government accounts. It is therefore only reality to include those costs in the business case.
Dr Jackie BlueWhy have the financing costs of the Waterview Connection been included in the estimated cost of the project?
The financing costs were included in the business case released last December because of the unprecedented scale of the project and the then Government’s attempt to find a way of funding the project outside of the National Land Transport Fund. What I have not heard from Labour—which members should remember was planning to reduce the overall capital spend on building State highways, anyway—is an explanation as to how it would have paid for its proposed tunnels. Would it have been done by incurring more Crown debt, tolls, a 35-year property tax, or another regional fuel tax of 20c per litre on top of the 9.5c per litre regional fuel tax that it had already agreed to, and on top of the 4.5c per litre national fuel tax for the next 3 years that it had agreed to, which would have led to petrol prices in Auckland being 34c per litre higher?
Hon Darren Hughes Link to this
Why is he refusing to meet representatives of the local community board to discuss the costs and viability of the Waterview project?
I am not refusing to meet members of the community; I have just said to them that I am happy to meet them once the Government has released its view on whether the project as proposed by the previous Government should proceed.
Hon Darren Hughes Link to this
Does the Minister agree with Labour that the deep twin-lane tunnels for the Waterview project are the best option for the community and represent value for money because they complete the western ring route?
I think the member needs to understand just how much money he is talking about: $2.77 billion for two twin-lane tunnels that would not be expandable to three lanes at any stage in the future. If we actually proceeded with a three-lane tunnel, which is what is likely to be needed in time, the cost would be $3.16 billion. By way of comparison, the cost of running the Counties Manukau District Health Board annually, I understand, is around $1 billion. So the sums of money, I say to Mr Hughes, are huge and they have to be balanced against some form of reality.