5 April 2005 Media Statement

Toll motorway policy approved

Cabinet has approved the policy of allowing the Orewa to Puhoi (Alpurt B2) extension of State Highway 1 North of Auckland to proceed as a toll road.

The proposal is for Transit to receive a grant of around $180 million out of the National Land Transport Fund from Land Transport New Zealand; and for a government loan of $159 million to be repaid from toll revenue over a period of up to 35 years. An initial $20 million has already been released by Land Transport New Zealand to Transit for the project.

It is proposed that the government will fund the loan through the issue of Infrastructure Bonds and that the servicing of the bonds would be offset by toll revenue. Such an arrangement will allow Transit access to capital at government rates.

"This is the first toll project to be approved since the Land Transport Management Act was passed," says Transport Minister Pete Hodgson. "The government backed funding package that has been put forward will enable the benefits of completing this project to flow years ahead of when they otherwise might have. This is good news for drivers and the economy."

The road is scheduled to be open during 2009. Work is continuing on the design of the tolling system and tolls are likely to be set at around $1.80 for cars and $3.60 for heavy vehicles in today's money.

"The government is being straight with the public about how it is going about funding further investment in the nation's transport infrastructure. The contrast with National and its use of smoke and mirrors on transport funding could not be greater. Last week Don Brash pledged to take $4 billion out of the Crown Account that is already being used to offset the costs of roading without offering any explanation of how he would cover the black hole in the public purse National's policy would create."

It is anticipated that the Order in Council necessary for the scheme to proceed will be made before the end of the month and that it will be conditional on the design of the tolling system.

ENDS

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