Tauranga region to benefit from new funding and financing tool
Tauranga will be the first region to use a new Government tool to raise funding for much-needed infrastructure.
A Special Purpose Vehicle (SPV) will be used to raise finance from private markets, which is then repaid via the levy on those who benefit from the infrastructure. The finance raised by the SPV will sit outside of Tauranga City Council’s balance sheet constraints.
The first levy to be applied under the innovative Infrastructure Funding and Financing (IFF) Act, will enable Tauranga City Council to raise approximately $175 million towards the construction costs of thirteen transport projects across the region.
“The Western Bay of Plenty is one of the fastest growing regions in New Zealand with growth projections showing, on average, hundreds of people are moving there each month,” Megan Woods said.
“This high-speed growth is putting pressure on our infrastructure and services. The 13 projects that will be part funded through the new model are focused on finding solutions for the challenges related to housing, transport and urban development.”
The IFF Act offers councils an alternative model to provide infrastructure needed for housing and urban development through a levy. The IFF levy will partly replace a targeted rate Tauranga City Council is charging to fund its Transport System Plan (TSP) projects, increasing balance sheet headroom for the Council.
“Crown Infrastructure Partners, which will wholly own the SPV, has secured debt finance from Westpac and Bank of New Zealand to enable the SPV to contribute approximately $175 million towards the construction costs of the 13 TSP projects,” Grant Robertson said.
“This will be repaid over time by the annual IFF levy which commences in July 2024.
Tauranga City Council Commissioners are delighted that the proposal is proceeding, and Tauranga is the first council to utilise the IFF Act.
Commission Chair Anne Tolley says the Transport System Plan benefits Tauranga City and the wider Western Bay of Plenty in a number of ways, including reducing greenhouse gas emissions through more public transport, cycling and walking options, and better urban development.
“This innovative financing approach means we have more balance sheet headroom available to progress other vital infrastructure and community facility investments and that’s hugely important for a fast-growing city like Tauranga,” Anne Tolley said.
The 13 eligible TSP projects are:
- Hewletts Road sub access area – Transport infrastructure works in the Hewletts Road project area to improve access to the Port of Tauranga and Mount Maunganui.
- Connecting the People Fifteenth Avenue to Welcome Bay – Transport Infrastructure works on the route between City Centre fringe and Fifteenth Avenue, Turret Road and Welcome Bay to improve access to and from Te Papa Peninsula and City Centre.
- Tauriko West enabling works package – Transport infrastructure works to support new urban development and housing in Tauriko West, while also supporting the inter-regional freight movement function of SH29.
- Cameron Road multi-modal upgrade stage 1 – Transport works (including public transport, cycling and walking) on Cameron Road between Harington Street and Tauranga Hospital.
- Cameron Road multi-modal upgrade Stage 2 – Transport infrastructure works (including public transport, cycling and walking) on Cameron Road between 15th Avenue Tauranga Hospital area and through Barkes Corner to integrate with Pyes Pa Road.
- Cameron Road corridor connections – Transport infrastructure works to improve access to Cameron Road to support the use of bus, walking and cycling facilities delivered in the stage 1 and 2 upgrade works.
- Primary cycle route facilities (Accessible Streets Area A) – Improvements to walking, cycling and public transport facilities in Mount Maunganui, Papamoa and the CBD.
- Primary cycle route facilities (Accessible Streets Area B) – Improvements to walking, cycling and public transport facilities in Otumoetai, Bellevue, and Brookfield.
- Tauranga Crossing bus facility improvements – Transport infrastructure, including a public transport hub, to support multi-modal access to and from the Tauriko commercial area in and around Tauranga Crossing.
- City Centre transport hub – Transport infrastructure, including a public transport hub and support for active transport modes, to support multi-modal access to and from the city centre.
- Barkes Corner to Tauranga Crossing multi-modal (local road component) – Transport infrastructure works to improve public transport connections between some local roads and SH36 on the corridor between Cameron Road and the Tauriko commercial centre in and around Tauranga crossing.
- SH2 revocation (Cameron Road to Bethlehem) – Transport infrastructure works to support improvements to local roading networks to integrate with the revocation of the existing SH2.
- Maunganui road future proofing – Infrastructure upgrades to roading, cycling and pedestrian facilities to improve safety and speed management. Enables improved connections and parking amenities to Blake Park & Mt Maunganui College.