Tauranga in line for $230m govt loan

Nick Smith on The Strand Waterfront with Tauranga Mayor Greg Brownless. Photo: Sharnae Hope.

Tauranga is in the running to receive an interest free loan of $230m from central Government, to support the delivery of growth infrastructure.

Today Minister for Building and Construction Hon Dr Nick Smith announced the preliminary results of applications to the Housing Infrastructure Fund at a gathering on Tauranga's waterfront.

The Housing Infrastructure Fund is a contestable $1 billion fund from central Government to assist high growth councils advance infrastructure projects required to increasing housing supply.

In March, Tauranga City Council made an application to the HIF to fund four packages of projects that will allow both city-wide growth and to open new urban growth areas:

  • New Waiari water treatment plant to supply the city ($114.6m)
  • Upgrade of the Te Maunga wastewater treatment plant to increase capacity ($55.9m)
  • Infrastructure for Te Tumu new urban growth area ($39.8m to $59.8m)
  • Infrastructure for Tauriko West new urban growth area ($45.8m)

These projects were all previously planned by Council to accommodate current and projected growth.

Funding through the HIF would allow to deliver these projects sooner than initially planned.

The Government has approved for the first three projects above (Waiari, Te Maunga and Te Tumu) to advance to the second phase of assessment.

This represents a potential $230m worth of funding in the form of a 10 year interest-free loan.

The potential interest savings would take significant pressure off Council's balance sheet, with estimates that at their peak the savings could reach $10m a year.

Mayor Greg Brownless welcomed the announcement from the Minister, calling it great news for Tauranga and an encouraging first step.

'We are under a lot of pressure to deliver housing fast to provide for our growing population, and I am acutely aware of the strain this puts onto our infrastructure, and our finances. But growth is here and needs to be faced.

'Our role as council is to manage this in a way that our city and our residents can enjoy the benefits of our growth – the increased amenity, the vibrancy, good education and career opportunities, fun things to do in town and around. To get there we need to get the fundamentals right – water supply, wastewater treatment, our roads – across the existing city and in our new urban growth areas.

'I am very glad to see, through this announcement, the commitment of the Government to supporting our city. I am a great advocate for partnerships – and I truly believe that central, regional and local governments need to work together to deliver positive outcomes for our cities and for New Zealand. We're on the right path for this. Thanks again to Minister Dr Smith for coming over to make the announcement in person.”

The next step in the HIF application process is for Council to prepare detailed business cases for the three shortlisted projects, for the Government's further review.

Council will assess strategic and financial impact linked to the urban growth projects through the 2018-2028 Long Term Plan process. Planning for the urbanisation of Tauriko West will continue, with the financial implications on infrastructure provision also to be considered through the Long Term Plan.

In the meantime, Council will be negotiating funding agreements with the Government and the NZ Transport Agency, and continuing conversations with the Ministry for Business, Innovation and Enterprise and other growth councils on possible alternative financial and funding structures.

Tauranga MP Simon Bridges and Bay of Plenty MP Todd Muller have welcomed the Government's investment of $230 million for much-need infrastructure projects in the district.

Tauranga has been identified as one of five of New Zealand's fastest growing Councils that will have infrastructure projects funded through interest-free loans from the Government's $1 billion Housing Infrastructure Fund.

Both MPs joined Building and Construction Minister Nick Smith for the announcement in Tauranga today.

Three successful proposals have been approved under the fund for the Tauranga City Council:

- a new water treatment plant

- a capacity upgrade to the current wastewater plant

- and a greenfield development east of Papamoa

'Tauranga is growing at a rapid pace and these developments will open up more land for use, bringing forward the ability to build more homes, much faster,” the MPs say.

'This investment in vital infrastructure future proofs housing growth in Tauranga. It will see 35,000 homes brought forward and built, providing for much of our forecast future housing needs for the next thirty years

'The Te Tumu greenfield development alone will provide more than 7,000 homes and include a connection to State Highway 2.”

The Waiari Water Treatment Plant is a new water supply for Tauranga that will improve water supply and resilience for the wider network while the extension to Te Maunga Wastewater Plant, leverages existing infrastructure to increase wastewater treatment capacity.

'These new and extended water plants will enable both intensification within the built up urban area and greenfield developments such as Te Tumu.

'These are important projects that will support the Council to keep up with the exponential growth we're experiencing in Tauranga.”

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8 comments

A few questions ...

Posted on 11-07-2017 14:13 | By Murray.Guy

Are repayments to begin when money is drawn down off the Crown? When does the 10 years start, from each progress payment and apply to that payment or will all moneys be due 10 years from the first draw down? ALL debt, regardless of source and repayments scheduled is DEBT, regardless of how anyone tries to paint it. Will the staff, Mayor and elected members be able to control the Adams CAG group/Molloy, Baldock/Mason and Clout BIG SPENDERS, rejecting any and all corrupt manipulation that implies 'more borrowing' is immediately freed up to squander on the Adams/CAG Think Big projects? Will the developers try and reduce their DIF contributions? The additional debt will result in an increase in interest costs on any traditional borrowing. Has this been factored in?


Feed us

Posted on 11-07-2017 16:09 | By Chris

Gotta love these election year lolly scrambles.


There's...

Posted on 11-07-2017 17:13 | By penguin

...an election coming folks!


Gee Whiz

Posted on 11-07-2017 17:54 | By astex

All this PLUS a record debt level which is racing towards $1 Billion for 130,000 ish people to repay.


Wondering

Posted on 11-07-2017 19:28 | By Merlin

Wondering as this is a loan to the council to help with infrastructure costs how much affect it will have on rates as the council has I believe has a large debt burden now.


just maybe,

Posted on 12-07-2017 07:49 | By old trucker

bridges could talk to our mayor about taking the toll gate down, and send it to auckland to pay for the new road tunnel and give us a chance to move freely about here, but me tinks I DONT THINK SO TIM,(justa thought) more cars and trucks would use the toll road without this gantry, my bottom 5 cents is not many would use the new tunnel if it was tolled, and that cost millions of $$$$$$,very unfair, BUT NO one LISTENS and dont CARE,Sunlive Thankyou,10-4 out,


Tsunami

Posted on 12-07-2017 14:14 | By Linaire

The Council wants to get everyone ready for a tidal wave or earthquake, but throws all this money at Papamoa/Te Tumu which would be completely underwater when one hits! Totally ridiculous!


in answer Murray....

Posted on 16-07-2017 23:20 | By groutby

...er.....NO. It's election year. lollies are being thrown around as usual, sad thing is, some with get sucked in!


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