Transport Minister Phil Twyford has announced that Cabinet has agreed to end the twin track Auckland light rail project for now as Government parties "were unable to reach agreement".
Twyford said the decision has been made "despite extensive cross-party consultation", and the future of the project - estimated to cost upwards of $6 billion - will now be decided by the Government following September's general election.
"The Ministry of Transport and the Treasury will report back after the general election on the best option for this project to be delivered by the public sector," Twyford said in a statement on Wednesday.
He said light rail remains a project in the Auckland Transport Alignment Project (ATAP), which represents Auckland Council and the Government's agreement to spend around $28 billion over the 2018-2028 period.
"The Government remains committed to fixing congestion in Auckland and boosting jobs through building infrastructure."
Auckland Mayor Phil Goff said Aucklanders will be disappointed that the future of light rail will not be decided until after September's general election.
"I am disappointed with that outcome, as I am sure many Aucklanders are too. It is frustrating that after three years, disagreement within the coalition has held this process up," he said.
"It's now less than 90 days until the general election and we expect the incoming Government to act quickly and decisively to outline its proposal to get light rail built.
"Tāmaki Makaurau needs a decision on light rail to meet growth on the Auckland isthmus, support intensification of housing, and head off bus congestion due to occur within three to four years - light rail needs to be in place before then."
Greens welcome decision
Green MP and Associate Transport Minister Julie Anne Genter welcomed the decision to deliver light rail through the public service instead, after the Government sought external proposals.
"With the twin track process over, detailed planning work on light rail can continue and key design and financing decisions can be taken quickly after the election," she said.
"This decision means Aucklanders will have a greater say in what the project ultimately looks like. It's really important that those living there contribute to the final design - and now they will have that chance."
She said Auckland Transport and the Auckland Council need to be at the table to contribute to final decisions about alignment, stations and how the Mangere line will integrate with the rest of Auckland's future rapid transit network.
Labour's big promise
The Auckland light rail project has looked to be dead in the water for some time now, after Labour's coalition partner New Zealand First refused to sign it off before the election.
Labour's promise to build light rail from downtown Auckland to the airport within a decade was made by leader Jacinda Ardern in her first policy announcement and campaign rally ahead of the 2017 election.
The proposal to build light rail from Auckland CBD to the airport is set out in the confidence and supply agreement between Labour and the Greens.
But the project faced criticism from the outset.
A transport advocate described the plan as "short-sighted" in 2018, claiming the Government could save billions of dollars by creating a 6km heavy rail line to Puhinui to join up with the existing lines into the city centre.
There were further signs in 2019 that the multibillion-dollar project was facing setbacks, as the Government still had not decided who the contractor for light rail would be.
There was a proposal from the New Zealand Transport Agency (NZTA) and a joint venture between the New Zealand Super Fund and Canada's CDPQ Infra group that was estimated to cost $10 billion or more.
Prime Minister Jacinda Ardern got involved when it was revealed the NZTA had failed to properly assess the Super Fund proposal.
Ardern said in October it had been "widely acknowledged now, they didn't properly assess the second proposal" and that the Government "owe it to taxpayers to have done that job properly".
Twyford in January said the Government had been "running a process over the last few months looking at the proposal that the New Zealand Super Fund with their Canadian partners have put forward".
Light rail promised 'soon'
In late May, Twyford told reporters a proposal for light rail would go before ministers "soon" following what he described as "extensive and ongoing conversations" with New Zealand First.
But that same day, New Zealand First leader Winston Peters told reporters light rail was "not an issue" and that it was "not going to happen in the immediate term".
"Costs have blown out massively. We've always been for heavy rail around this country - and light rail has been suspended... I've made my views very clear, a long way back."
National's transport spokesperson Chris Bishop has been scathing about the project.
"Light rail was doomed from the start thanks to the Government which never made up its mind on what the project was for, never clarified its objectives and has gone against advice every step of the way," he said earlier this month.
"Light rail has become the new KiwiBuild - both flagship policies, both utter failures."