Te kaupapa Tereina Kōpā ki Tāmaki Auckland Light Rail project

Auckland Light Rail Sponsoring Ministers took a paper through Cabinet to update on progress being made in implementing the governance arragements agreed by Cabinet in December 2021, the work to initiate the next stage of business case assessment, progress in aligning ALR with other investments in Auckland, and other policy and delivery workstreams.

Hon Michael Wood has today announced the appointment of Honourable Dame Fran Wilde as Chair and both Lucy Tukua and Leigh Auton as Members of the Auckland Light Rail (ALR) Board.

In January 2022 Ministers announced Cabinet’s decisions on a preferred way forward for the Auckland Light Rail project. This includes decisions on the Government’s preferred option and the approach to detailed project development, governance and delivery. This is in response to the recommendations that project sponsors received from the Establishment Unit.

Further information, including the Indicative Business Case (IBC), can be found on the Auckland Light Rail website here.(external link)

In March 2021, the Minister announced the next steps for the City Centre to Māngere (CC2M) project. This announcement followed months of collaborative work between the Ministry, the Treasury and other central and local government agencies to inform the Government’s decision.

The Minister announced a temporary Establishment Unit would be formed with a 6-month work programme including:

• progressing a business case to enable decisions to be made on mode and route, and providing cost estimates (which are mode and route dependent) and funding and financing options
• partnering with Māori to identify opportunities
• engaging with stakeholders and communities
• determining the best form for the delivery entity.

The Establishment Unit will be a collaboration between central and local government, drawing on expertise from a range of agencies including Waka Kotahi NZ Transport Agency, Auckland Transport, Auckland Council, the Ministry of Transport, Kāinga Ora and others.

It will be governed by an inclusive governance board, involving an independent chair, key agencies and community and Māori representatives. The Project will be sponsored by the Minister of Transport, Minister of Finance and the Mayor and Deputy Mayor of Auckland.

The Government indicated that it intends to make further decisions at the end of the year on how the project will be taken forward, including the entity that will be responsible for its delivery.

Beehive release: Next steps for Auckland light rail(external link)

In June 2020, Cabinet directed us, together with Treasury, to build on the previous work. With support from ATAP agencies, and the Ministry of Housing and Urban Development, we are developing options for the public service delivery of CC2M that could be presented to the new Government following the 2020 general election.

Auckland Light Rail is likely to be New Zealand’s largest ever infrastructure project. Building the first light rail line in New Zealand involves setting up new systems and regulations, and building local capability to deliver the project. This is a very complex project so it is important that our advice and Treasury’s takes account of these complexities and provides practical ways forward.

Ministers considered advice on the selection of a preferred delivery partner for CC2M and engaged in cross-party discussions.

The COVID-19 pandemic slowed consideration of the cabinet paper as the Government’s full focus was on the health and economic response to the virus. Cross-party consultation eventually took place in late May. Near the end of that process it became clear that Government parties would be unable to make a decision on a preferred delivery partner. Cabinet then decided to end the proposal process and ask for options on a public service delivery approach to be presented to the new Government following the 2020 general election. 

Even though the parallel process ended without a preferred delivery partner being appointed, Government and agencies from central and local government made significant progress over this time and undertook work that is fundamental to achieving the best result for Auckland. This included:

• agreeing and refining the outcomes for Auckland Light Rail that were included in the Response Requirements Document (RRD) — these had been expressed only in broad terms in ATAP
• identifying changes needed to the current legislative and regulatory regime to allow for the delivery and operation of mass rapid transit systems — this work continues
• looking at useful intellectual property in the 2 proposals that could inform the next phase of the project — discussions are underway on which elements could be acquired for this next phase.

Beehive release: Auckland Light Rail process ended(external link)

Waka Kotahi and NZ Infra submitted their proposals to us on 29 November 2019. We coordinated a confidential evaluation process through which both proposals were deemed credible. In February 2020, the Secretary for Transport provided advice to the Minister of Transport on the appointment of the preferred delivery partner.

The evaluation process was based on the criteria in the Response Requirements Document (RRD). It involved more than 100 people from around 15 local and central government agencies, and expert advisory firms. In addition, we investigated the system and public policy considerations to ensure they were all taken into account.

The outcome of this work was reviewed by an overall evaluation team which presented its recommendations to the Secretary for Transport at the end of January 2020.

The Secretary for Transport presented his advice to the Minister of Transport in February, which led into the Cabinet process for selecting a preferred delivery partner for CC2M.

The evaluation process yielded valuable insights into the delivery of light rail — including technical and service delivery aspects, commercial and financial considerations, and system and regulatory issues.

Most of the documents relating to the evaluation process are confidential as they contain commercially sensitive information about the contents of the proposals.

In June 2019, Cabinet directed us to run a parallel process, also known as the twin-track process, with Waka Kotahi and NZ Infra so their options for developing CC2M could be evaluated against a common set of criteria and the Government could choose a preferred delivery partner.

The first step in the parallel process was to develop the Response Requirements Document (RRD). This is a key document as it outlines the information that NZ Infra and Waka Kotahi needed to include in their proposals. It also set out the main outcomes the Government was seeking, and the criteria and weightings we would use in the evaluation. Government, and agencies from central and local government, collaborated to produce the RRD and the outcomes framework.

Waka Kotahi and NZ Infra agreed to respond to the RDD.

Beehive release: Next steps for Auckland Light Rail(external link)

Outcomes framework

The outcomes framework clarifies what the Government expects to achieve from the CC2M project. An important part of the evaluation process was looking for evidence of the extent to which each proposal would achieve these outcomes.

How the process worked

Every aspect of the parallel process was governed by a probity plan and overseen by an independent probity auditor to ensure that both Waka Kotahi and NZ Infra had equal and fair access to information.

Starting in August 2019, the respondents were given 4 months to develop their proposals. They were invited to take part in an interactive engagement process so they could check in with the project team and other experts if they wished to clarify any of the requirements. An advisory group of chief executives assisted the Secretary for Transport and a Ministerial oversight group was established.

Limits were placed on how the respondents could engage with stakeholders while preparing their proposals. This was to ensure that both respondents had equal access to information and to avoid engagement before a preferred delivery partner was selected.

Waka Kotahi was developing a business case for CC2M when in April 2018 NZ Infra, a joint venture between the New Zealand Superannuation Fund and Canadian institutional investors CDPQ Infra, submitted an unsolicited bid to deliver CC2M. This is the point at which we became involved in the project.

Earlier in 2018, Waka Kotahi had begun work on an indicative business case for CC2M and had started to engage with the market.

In April 2018, NZ Infra approached the Government with an unsolicited option for an alternative plan for the delivery and financing of CC2M. Recognising that the approaches of Waka Kotahi and NZ Infra were different, later in 2018, the Minister of Transport sought further advice about the 2 models.

As a result of this advice, in June 2019, Cabinet directed us to run a parallel evaluation process with Waka Kotahi and NZ Infra.