Auditor General finds fault with the government’s handling of Auckland’s light rail

The way the Government has acquired light rail in Auckland has left a sour note for the Auditor General.

Put bluntly, Auditor General John Ryan is not impressed with the decision to have a runoff between two bidders in response to concerns that the government was not following its own rules.

Today, Ryan sent a 10-page letter to the Executive Director of the Ministry of Transport, Peter Mersi, about the light rail from the Auckland CBD to the airport, costing between $ 6 billion and $ 15 billion.

“Concerns were raised with our office about the decision to run a ‘parallel process’ to select a delivery partner for the project. In particular, the concerns raised were whether the process was compliant with government procurement rules,” Ryan said.

Auckland’s light rail was a flagship policy for Jacinda Ardern in the 2017 elections when she promised to complete the first section from the CBD to Mt Roskill in four years and reach the airport in 10 years.

In 2018, the Government directed the New Zealand Transport Agency to lead the development of light rail from Auckland’s financial district to the airport.

Shortly thereafter, in April 2018, the Government received an unsolicited offer from NZ Infra, a joint venture between the NZ Super Fund and CDPQ Infra, a Canadian pension fund, to build the scheme as a public-private partnership.

In 2019, Cabinet agreed to support then-Transportation Minister Phil Twyford’s approach for the Transportation Ministry to evaluate rival bids and recommend the best proposal to Cabinet.

The ministry recommended the Super Fund plan in 2020, but it was blocked by NZ First, whose leader Winston Peter said it would cost between $ 10 billion and $ 15 billion and a “decade of chaos.”

Given the scale and importance of light rail to Auckland and the country, Ryan tried to get to the bottom of the concerns raised in his office.

He found general agreement that the parallel process involving NZTA and NZ Infra was “unusual” and found conflicting messages between various government departments about the procurement process.

Ryan said the NZTA and the Ministry of Transportation came to differing views on whether the NZ Infra proposal met the criteria of the government’s procurement rules.

“At one point we were told that it was open to the government or the cabinet to choose not to follow the rules in certain circumstances,” Ryan said.

While the rules do not have the force of law, Ryan said, they are mandatory for many public organizations.

“The rules are designed to guide public agencies to procure responsibly and achieve public value, and to maintain the integrity of public procurement and New Zealand’s reputation as a ‘rule-compliant’ country.

“Any deviation from the rules, and the reasons for it, must be explained clearly and transparently to the market and the public so that bidders can have confidence in the public procurement processes.

“Failure to do so puts New Zealand’s reputation at risk, nationally and internationally,” Ryan said.

Transport Minister Michael Wood said he respected the Auditor General’s findings and the role he plays as an independent official in Parliament.

“As the new Transport Minister, my expectation is that we will follow standard procurement processes in the future.

“Ultimately, the Cabinet decided to end the above process and I am focused on getting the project up and running,” Wood said.

After three years of slow progress by the government, Auckland residents have little idea of ​​what is planned for light rail in the city.