October 16, 2017 2:00pm by David Farrar

The $10 billion promise

When New Zealand’s new government is formed – most likely some time in the next two weeks – regardless of political stripe, there will be one big ticket project on the agenda: “moving” the 77 hectare Port of Auckland two hours up the road to Northland.

If it goes ahead, this project will create the biggest city centre development project in New Zealand for decades. The new port will require up to $10 billion in government cash just to get off the ground.

Now imagine the opportunity cost of that $10 billion. Think what else you could do with that.

Given the politically sensitive nature of the coalition negotiations, very few key players will go on the record about the project. But what has emerged is a picture of arguably the biggest non-earthquake-related infrastructure project since former prime minister Sir Robert Muldoon’s famed the “Think Big” energy projects of the late 1970s and 1980s that just about bankrupted New Zealand.

It’s Think Bigger!

To give context, $10 billion is half the size of the New Zealand government’s contribution to the Christchurch post-earthquake rebuild, and more than 12 per cent of the annual NZ budget revenue.

But may be the price of power.

Peters wants to move car imports to Northport by 2019 and the containerisation by 2027. Industry insiders dismiss both of these proposals, on that time frame, as pie in the sky.

There is a busy log port at Northport and a small container terminal. But there is only about 500 metres of berth space compared with Auckland’s more than 4 kilometres. So a massive port will have to be built, reclaiming, on a rough calculation by one source, 120 hectares of land.

That is a huge reclamation.

There is only one rickety train line, already in need of upgrade, that goes to Whangarei, the closest centre to Northport. In order to deal with the increased freight requirements, it will effectively require new twin tracks, travelling at least 150 kilometres. Best estimates told to the Financial Review are that the cost of that alone will be at least $NZ2.5 billion.

150 kms of twin track!