The recent National Land Transport Plan includes a $2 billion loan that is a last-minute attempt by the Minister of Transport to balance the books, says National’s Transport spokesperson David Bennett.
“An Official Information Act request shows Cabinet considered the loan on August 20, only weeks before Waka Kotahi had to sign off on the plan, and the Minister released the NLTP.
“It’s proof the Minister had no idea of the cost pressure on Waka Kotahi. It was only at the last minute that he was forced to take action in order to release the NLTP.
“There is a general reluctance among officials to undertake such borrowing as it undermines the prioritisation process of getting value for money, encourages pricing at less efficient levels, and impacts on the ability of future NLTPs.
“The $2 billion in funding is required to meet an investment gap in areas like public transport infrastructure, walking and cycling, and the Road to Zero programme. Together, these politically motivated increases in spending represent nearly half of the total borrowing.
“The loan is forecast to be repaid in 10 years. Even with that low government financing rate, this equates to at least $200 million per year taken off the NLTP over the period of the loan.
“The Minister had to prepare a letter of comfort to enable the Waka Kotahi board to sign off on the NLTP. This Government also committed to review mechanisms to increase the NLTF revenues.
“The Minister agreed to report back to Cabinet on transport revenue tools within the next 12 months. These revenue options include: increases in FED and RUC from 2024; congestion charging; value capture; local share, farebox, tolling, and more enforcement of RUC non-compliance.
“This shows the Minister will be actively reviewing increasing costs on transport users over the next year.
“The Minister’s preoccupation with political projects has led to a deficit that was met at the last moment with a patched-together loan without details on repayment or interest rates.
“In the end, the Minister will then put these costs onto transport users through an increase in NLTF revenue streams.”
Do you like this page?