The two Phils on Auckland Council’s revived infrastructure project

Auckland Mayor Phil Goff and Housing Minister Phil Twyford are upbeat about a revived infrastructure project in Auckland’s northwest, and say that new funding mechanism announcements for large projects are weeks away.

Auckland Council will take on a $340m interest-free loan to support roads and pipes out in the northwest region’s Redhills and Whenuapai.

Universal Homes already has a 41ha master planned development at Redhills, which is being marketed as West Hills.

Concrete was being poured on the first of 94 homes in the stage one, which is mostly two level terrace houses, when the announcement was made on Friday.

Mr Twyford says $340m will be spent on roads and pipes in the area which will support 7000 homes.

Under the previous government the proposal was for a $300m loan to support 10,500 homes.

Mr Goff says since the 2017 announcement more detailed analysis has been carried out, and there has been an increase in construction costs. He says the loan will speed up the development by about seven years.

“The figures aren’t as high as we originally anticipated but we think the average figure that the minister has used will enable the construction of 7000 houses and that’s a huge step forward,” Mr Goff says.

More debt for council

The debt will be taken on by the council, without a special purpose vehicle, which had been anticipated by some.  

‘’You can’t get much cheaper than zero interest rate for the first the first 10 years but it still appears on our debt to revenue ratio.’’

However, the two Phils hinted at announcements for new infrastructure funding mechanisms.

“Auckland Council needs mates, and the loans the central government is giving to councils for enabling projects helps that,” Mr Twyford says.

“That’s not the full story and our government is working hard on new approaches to funding infrastructure so that all out towns and cities can grow. We will have to say more about that in the coming weeks.’’

Mr Twyford added that the coalition was looking at how to use long-term debt finance instead of adding to a council’s balance sheet.

Consenting issues

Questioned whether the council could even keep up with resource consenting to keep up with Auckland’s housing boom, Mr Goff jokingly blamed Universal Homes chief executive Graham Street, who attended the announcement. 

The mayor says in the boom the private sector has managed to take on experienced consenting professionals, making it difficult for the council to staff itself.

He says the council will shortly start a recruitment drive in Canada, which has similar building laws, to replenish its workforce.