Citi wins government advice role for kiwi toll roads

Citi’s mandate will involve exploring toll road concessions on future projects. Picture: Getty Images

Investment bank Citi has won the contest to advise the New Zealand government on options for future toll road and transport development sales that could help pay for billions of dollars worth of infrastructure, including a second Auckland harbour crossing.

Also pitching for the role were understood to be Goldman Sachs and the Royal Bank of Canada, say sources.

Citi’s mandate will involve exploring toll road concessions on future projects, adding to the three existing toll roads in the North Island.

This includes The Roads of National Significance funded by the government aimed at enhancing the country’s infrastructure and boosting economic growth.

The government aims to start work on the list of 17 proposed roading projects for the program over the next three years, with a 10-year construction pipeline being established.

The Wall Street bank will conduct market soundings to determine whether foreign capital can and would be attracted to fund such projects.

Australian listed toll road operator Transurban has publicly flagged an interest in the opportunities, but pension funds from Canada and Australia would be logical investors.

On the agenda could also be a plan for a second Auckland harbour crossing that has been mooted but would need the ­National Party elected for a second term.

It comes after the Chris Luxon-led government held the New Zealand Infrastructure Investment Summit this year to showcase the country’s infrastructure pipeline.

The event attracted Australian superannuation funds and institutional investors, as well as banks and global funds.

It was held as part of efforts to attract more foreign capital into the country for investment in major infrastructure projects amid an economic downturn.

Other assets tipped to be up for discussion surrounding selldowns by the government include its 51 per cent stake in Air New Zealand and electricity ­retailers.

The leader of the far-right Act Party, David Seymour, is understood to be in favour of reducing the government’s interest in Air New Zealand to 25 per cent.

However, some market experts believe the sale of the ­carrier or electricity retailers would be unlikely because the returns received would not make such a move financially worthwhile.