The Government said yesterday it would repurpose its ultra-fast broadband company to co-invest up to $600 million alongside local councils & private investors in network infrastructure for big new housing developments.
Finance Minister Steven Joyce & Local Government Minister Anne Tolley said yesterday: “Crown Fibre Holdings Ltd will be renamed Crown Infrastructure Partners Ltd [though that name has been reserved for a new entity], and bring the investment skills & experience gained through the Government’s world-leading ultra-fast broadband rollout to the job of attracting private investment in roading & water infrastructure that open up big new tracts of land for more housing development.”
Crown Infrastructure Partners will set up special purpose companies to build & own new trunk infrastructure for housing developments in return for dedicated long-term revenue streams from councils through targeted rates & volumetric charging for use of the infrastructure by new residents.
Mrs Tolley said: “This innovative new funding method will be made available to cash-strapped councils who are struggling to fund new long-term infrastructure from their own balance sheets.
“Councils will have the option of buying back the infrastructure at some point in the future, but won’t have to commit to doing so. This is all about introducing outside capital to build this infrastructure, so current ratepayers don’t get burdened with all the costs of growth.”
2 of the earliest projects to be assessed by Crown Infrastructure Partners for investment will be projects in the north & south of the Auckland region previously which Auckland Council said would require investment outside the council’s own balance sheet.
“These 2 large projects can provide an additional 5500 homes in Wainui to the north of Auckland, and 17,800 homes across Pukekohe, Paerata & Drury to the south of the city.”
Mr Joyce said the Government was prepared to be an investor alongside the private sector and take up some of the early uptake risk: “We learnt from the ultra-fast broadband programme that if we derisk some of the early stages of the investment, we can bring in private sector investors to take on much of the heavy lifting as the investments mature. We would expect the Crown’s investment in each project to be matched with at least one-to-one with private sector investment over time.
“This new model is another way in which we are helping councils in our fastest growing cities to open up more land supply so more Kiwis can achieve the goal of home ownership.
“Crown Infrastructure Partners is the logical next step in infrastructure funding following the Government’s Housing Infrastructure Fund, which will deliver 60,000 houses across our fastest growing population centres over the next 10 years.”
Attribution: Ministerial release.