Auckland Transport is spending close to a quarter of a million dollars ($240,875) on a reworked business case for the Penlink project.
In a report to Auckland Council’s Finance Committee meeting on November 14, Auckland Transport (AT) said that a contract has been awarded “to update the [Penlink] business case, which will explore the financial and commercial cases for bringing the project forward to next year without impacting Auckland Council’s balance sheet.”
The contract for the work has gone to Pricewaterhouse Coopers (PwC).
AT spokesperson Mark Hannan says that the 2013 business case was for a four-lane road and this new report will provide updated costs and funding criteria for a two-lane road.
He says PwC is also investigating how the funding gap can be bridged. It had been assumed that the gap between the project cost and the allocated funding would be bridged by tolling, but it appears other options are being considered, although Mr Hannan says it’s premature to discuss these.
“A total of $200m is allocated to Penlink in the Regional Land Transport Plan, and the current cost estimate for Penlink is around $300m,” Mr Hannan says. “They are testing the assumption that tolling is a viable option.”
Currently the $200m (which comes from a combination of the regional fuel tax, NZ Transport Agency and AT) is allocated for the 2025-28 period, and Mr Hannan says PwC will also determine whether the project can be brought forward from that timing.
“The next step in the process will depend on whether the business case identifies a viable funding/financial mechanism to bring the project forward,” he says.
Cr John Watson says Auckland Council is keen to bring the project start date forward but is constrained by its debt to revenue ratio which means it is very restricted by what it can borrow over the next three years.
“The current work is investigating how the start date could be brought forward significantly,” Cr Watson says. “There are alternative mechanisms such as through the Crown Infrastructure Partner structure, which is being used in other infrastructure provision – this, and other options, will be examined.”
Mr Hannan says that AT wants the PwC report to go before its board next February.