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The government’s main transportation agency, Waka Kotahi-NZTA, received interest-free long-term loans for some of its trucking projects and other projects from another government-owned entity.
The idea was rejected by the Treasury, which found “multiple major problems” with the proposal.
Crown Infrastructure Partners or CIP approached former Transportation Minister Phil Twyford in December 2019 offering “long-term interest-free loans … to enable investment in road and transportation infrastructure tied to CIP’s own infrastructure projects,” according to a Treasury document issued to Stuff under the Official Information Law.
CIP is currently involved in a variety of infrastructure projects including connectivity and housing.
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The approach appears to have taken ministers by surprise, the Treasury document noted that the CIP did not speak to Treasury officials before reaching out and that the Ministry of Transportation, the Ministry of Housing and Urban Development (MHUD) and Waka Kotahi had to do it. accept proposals in the weeks after meeting with Twyford.
In the end, the Treasury, the Ministry of Transport and Waka Kotahi decided that the Government should pass the offer, while MHUD did not reach a concrete conclusion.
Waka Kotahi is allowed to borrow relatively small amounts of money, but does not use any large-scale loans to finance infrastructure. The issue turned political in the elections with National proposing that the agency should be able to borrow up to $ 10 billion over the next decade.
Labor, however, are lukewarm on the idea. While the party is in favor of allowing more loans, it is concerned that Waka Kotahi may not have the income to maintain that level of debt.
Ross Giblin / Stuff
Finance Minister Grant Robertson turned down an offer to provide interest-free loans to the NZTA.
The CIP was created by the former National Government to manage ultra-fast broadband deployments. Later called Crown Fiber Holdings, it was renamed CIP and aimed at expanding its ultra-fast broadband competition to seek other commercial ways to finance government infrastructure.
The Treasury provided a rather scathing assessment of the CIP proposal.
“CIP is not in the best position to design and administer a series of loans to the NZTA,” the newspaper said, noting that the Treasury itself tended to handle the loans.
“The Capital Markets directorate within the Treasury centrally manages large-scale loans for the Crown, and loans from other Crown entities are generally not recommended,” the Treasury said.
The Treasury also warned that the way the plan was financed would mean the government would have to allocate money during the budget process anyway. This would mean that at least part of the loans would appear on the government’s books.
“The funds received by NZTA would be spent on local road and transportation infrastructure projects that are recognized as operating expenses. Since the fiscal implications would be the result of a policy choice, the ministers would have to consider how to handle these impacts under the Fiscal Management Approach (eg, charge against budget allocations), ”said the Treasury.
However, the Treasury considered allowing Waka Kotahi other ways to find extra money.
“The NZTA is open to discussing ways to secure additional funding from the Crown to deliver highway and transportation infrastructure projects, but notes that the proposal may not be the optimal mechanism for the Crown to provide those funds. The NZTA has a Master Facility with the Treasury Capital Markets Directorate, which simplifies the process by which the Crown can make loans directly to the NZTA, ”the newspaper said.
It is not known how much CIP offered to lend. CIP did not respond to requests for comment, and Finance Minister Grant Robertson’s office declined to comment.
