The council will decide on Thursday if they will go ahead with a funding arrangement for Skypath.
An item (Page 21) at the council’s Finance and Performance Committee gives an update on the project, much of which will be nothing new to those who have been following it. This includes that progress has been made on a number of areas such as that the wind tunnel testing requested by the NZTA found no significant concerns and that progress has been made on connections to Skypath with projects such as Seapath having been consulted on and getting strong public support.
The second item (Page 25) is the key one though and looking to get agreement from the councillors to move forward with the project. It has the following recommendations to councillors.
That the Finance and Performance Committee recommend to the Governing Body that it:
a) agree to proceed with the SkyPath project and that the hybrid Public Private Partnership proposal is the preferred procurement option to deliver SkyPath.
b) authorise the Chief Executive to enter into all necessary agreements in relation to the SkyPath proposal, subject to minimal financial impacts, and to take any other actions in the Chief Executive’s delegation to facilitate the progress of the project.
c) agree to make appropriate provision for the project in the 2017/18 Annual Plan and the 2018/28 Long-term Plan.
The council have been working with the private backers of the project (the PIP Fund) for a few years now to investigate options for financing the project. The preferred approach is for the PIP Fund is to build it as a PPP in which the council underwrites revenues up to a certain level.
The PIP Fund’s PPP proposal is to finance, design, build, maintain and operate SkyPath as a user pays facility for 25 years, after which it “reverts” to Council ownership. In return:
- Council would underwrite actual revenues to a pre-agreed dollar amount in the “base case” (the agreed financial model that sets out the cost envelope), and have a share of upside profits above a specific threshold.
- The PIP Fund’s returns depend on it managing its costs and performance within the parameters of the fixed base case. Any cost overruns are the PIP Fund’s responsibility.
That this private project will likely have a portion of its revenue underwritten by the council has long been one of the key arguments for those opposing it. They claim it will be a failure from not enough people using it – lumping costs on ratepayers while simultaneously claiming it will be so popular the local streets in Northcote will be overrun by people on bikes
Unfortunately the attached reports have blacked out the exact details of costs, revenues, thresholds etc so we can’t see just what those are. But unless something drastic has changed, it is still likely to represent a good deal for Auckland even if the council has to honour the underwriting. The last we saw the project was expected to cost $33 million, a significant sum but since the government came to the cycleway funding party with the Urban Cycleway Fund, there are already projects underway that cost more and are not likely to be used as much. One such example is the Glen Innes to Tamaki Dr shared path. This is not to say the GI to Tamaki Dr project is bad, it’s a great project in its own right but that when it comes to benefits, it simply can’t compete with opening up a walking and cycling connection between the North Shore and the city.
In the past the council have been largely very supportive of the project – or at least supportive of investigating it. Only two councillors have consistently voted against it being George Wood, whose constituents stand to benefit the most from the project, and Sharon Stewart. In addition Cameron Brewer and Dick Quax also voted against providing some extra funding to the investigations. Given his ardent opposition to the project, George is almost certainly going to continue to try and fight the project.
While the council will be making a decision this week on whether to financially support the project, we might be still waiting for some time to the outcome of the Environment Court Appeal. It is currently expected that the hearing for it will happen in October or November. In saying that we learned recently that one of those appealing the project had pulled out citing the costs of fighting the project. I’m guessing they more likely realised that it was a fight they wouldn’t win.
Meanwhile, the Herne Bay Residents Association Incorporated has withdrawn its appeal because it believes the project is not feasible so will not “see the light of day”. Therefore, its efforts were “a waste of time and money”.
The group’s co-chair Christine Cavanagh said as a responsible organisation it did not intend to waste residents’ money on an “unnecessary appeal” that could cost hundreds of thousands of dollars.
The Northcote Residents Association are still fighting though and are appealing to the public for cash to help them do that. As of writing this post they’d raised almost $9,500 but that is a long way from the potential hundreds of thousands their Herne Bay brethren suspect will be needed. They’ve also sent this out in response to Auckland Transport looking at implementing a residents parking scheme which would prevent people from driving to the bridge and then using Skypath, one of the key arguments the residents have used against the project.
FYI, this is the local handout NRA have recently dropped in Northcote Pt. pic.twitter.com/w66NTJyZK9
— Louis Mackenzie Mayo (@LouisMMayo) July 17, 2016