Fitzsimons Jeanette: Rodney District Council (PENLINK Toll Road) Empowering Bill — Second Reading 
Fitzsimons Jeanette: Rodney District Council (PENLINK Toll Road) Empowering Bill — Second Reading 
[Volume:614;Page:10411] 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 This local bill proposed the building of the first public-private partnership road in New Zealand and the first private toll road in New Zealand. It was setting a major precedent and for that reason the Local Government and Environment Committee gave the bill very careful scrutiny when it came before us. The first public-private partnership in New Zealand was proposed to be a partnership between a relatively small local council and a large multinational corporation. As one might expect in that situation when we analysed it it turned out that a rather unequal partnership was being proposed. 
Public-private partnerships do have something to offer in building New Zealand infrastructure but only if the relationship is a fair one where the public interest is preserved and the risks are shared fairly. That was not going to be the case with this bill. The road itself was quite hotly contested locally by those who felt that it undermined the development of the Whangaparaoa area as a self-contained community where people were beginning to develop local jobs for local residents and that it would encourage Whangaparaoa’s future as simply a dormitory for Auckland. So in terms of planning it was a bad move. The road would drive through an ecologically sensitive area towards the Weiti estuary and through a quiet local community that got no benefit from the road and fiercely opposed it. 
Part-way through our consideration of the bill the Government announced a new policy package to overhaul transport legislation generally and provide in a general sense for public-private partnerships and toll roads. The criteria announced in the Government’s statement in February 2002 were simply not met by the provisions of this bill. The committee considered that it was not appropriate to pass one-off legislation for one road that was clearly at variance with Government policy and generic legislation that was about to be produced. So Parliament eventually put this bill on hold until it could be considered alongside the new Land Transport Management Bill and benefit from the policy development work that went into that. 
As the committee went through the bill and took advice from a number of departments it was clear that the bill itself was seriously flawed in favour of the private partner and against the public interest. So the committee recommended that if this bill were going to proceed some major alterations needed to occur. The committee believed that the concession period of 50 years proposed in the bill was far too long. If the road could not pay for itself faster than that then there was not a very good case for building it and it recommended shortening the concession period to 40 years maximum. One might note that the Land Transport Management Act has an even shorter period in it and that was regarded by the private partners interested in building such a road as acceptable. 
Part-way through with the help of the Department of Inland Revenue we discovered that the profitability of this road was based on a tax rort—a form of double-dipping whereby the tax department would end up paying a considerable part of the profits that the private partners in this road were going to get. So on the advice of the Department of Inland Revenue we recommended that that should be fixed and that clause 14(7) should be deleted in order to prevent a depreciation tax issue which was simply not fair play. It remains unknown whether the road would proceed without that clause which was to be a significant contribution to its profitability. 
We also thought it was appropriate to put a limit on the time that tolls could be charged on this road. It was OK to charge tolls until the road had been paid for and a reasonable profit obtained by the private partners but there was nothing in this legislation to prevent those tolls going on ad infinitum raising money for people who had already been well paid for the work they had done. So we recommended that there should be a clause to say that after the capital costs of the road certain preliminary costs and a fair return had been recovered then the road should revert to being a free road. 
There were serious privacy implications in the bill as introduced in terms of the rights it gave private enforcement officers employed by the private partner in the road to collect personal information from road users. We suggested that those provisions should be deleted. In fact the enforcement powers given to the private agents of the private partner were we thought quite inappropriate. The New Zealand police force enforces our traffic laws on public roads. It should also enforce them on private roads and only the bare minimum of enforcement powers in terms of the payment of the toll itself should be handed over to private agents of the private partner. 
With those amendments we reported the bill back and Parliament eventually decided that it was appropriate to put it on hold until it could be considered along with the generic legislation and that is what has happened. However our work was not wasted because those provisions from the careful consideration the select committee gave the bill became the basis for much of the work that went into the Land Transport Management Act which we have just passed. So the question of concession periods the question of the balance of risk between the public and private partner the question of tax and depreciation arrangements the question of protection of privacy and enforcement have all informed the work that has gone into the Land Transport Management Act. 
The Penlink bill is now simply unnecessary. If the Penlink road can meet the criteria of the New Zealand Transport Strategy and the criteria of the Land Transport Management Act then it can proceed under that generic legislation. However if it does not have the support of the communities through which it passes if it does not take adequate steps to minimise the impacts on the environment of building the road if it does not contribute to better integration of transport management and if it does not exhibit the various social and responsibility clauses in the Act then it may struggle under that legislation and that is as it should be. The bill should now be discharged because it is no longer necessary but I think its process through Parliament has been useful in that it has been a kind of a dry run for the larger bill that followed and eventually overtook it.