No-one's taking responsibility for a $500 million dollar budget blow out in the Auckland Central Rail Link project

The Minister of Transport Phil Twyford is blaming the former National government for incorrectly estimating the cost of the Auckland Central Rail Link project in the face of a $500 million dollar budget blow out.

“Unfortunately the former National government estimated the cost of the project based on 2014 figures,” Twyford told interest.co.nz. “This means the previous government had not accounted for rising construction costs.”

But when asked to comment further on the growing cost of the project Twyford said he couldn’t elaborate.

“It would be inappropriate for me to comment on the costs of the Central Rail Link (CRL) project while a competitive tendering process is underway.”

The project is being jointly funded by the Government and Auckland Council, and was originally expected to cost $3.4 billion and scheduled for completion in 2024.

But a report in the NZ Herald last week quoted an unnamed senior council officer who said revised estimates for the project had increased by $500 million and that there were now concerns the cost overrun could top $1 billion. Auckland Council has so far refused to confirm or deny the reports.  

A statement from Auckland Council on Monday said:

“Several factors may have a bearing on the final cost of the CRL project, however it would not be appropriate to comment while a competitive tender process for the next stage of the project is still underway and current estimates have yet to be finalised.

“Auckland Council has not yet considered how any extra costs would be funded. An update will be provided when it is appropriate to do so.”

National says Twyford should be held to account

But National Party transport spokesman Paul Goldsmith says Twyford needs to be held to account for the cost blow out.

“After 16 months, the Government needs to take responsibility for its own decision making and poor management of major projects. From what we’ve seen so far, the management of the City Rail Link does not fill us with confidence that the management of the very expensive slow tram to the airport will be any different either.”

In November it was announced that RCR Infrastructure (NZ) had gone into voluntary administration. The company is the New Zealand subsidiary of Australian company RCR Tomlinson which went into liquidation last year.

It was part of the consortium under the Interim Project Alliance Agreement (IPAA) awarded the contract that is currently delivering the designs for the C7 Systems Contract. This includes the rail tracks, signalling, overhead lines, control systems, room fit-out, communications and building works.

RCR Infrastructure (NZ) was in a joint venture with WSP Opus and was still completing the $7.5 million contract to design the railway when it went into voluntary administration. City Rail Link Ltd (CRLL) Chief Executive Sean Sweeney said in a statement late last month that RCR Infrastructure (NZ) would not be contracted for the next stage of the project which could be worth up to $500 million dollars.

This includes building the main stations and tunnels and is due to start mid-way through 2019. The shortlisted tenderers include the Link Joint Venture with Downer, Vinci Grands Projets, Soletanche Bachy, AECOM, Tonkin and Taylor and WSP Opus and a joint venture between CPB Contractors, UGL, Beca, McMillan Jacob and Jacobs.

“The contract is expected to be awarded by the end of April next year and the successful tenderer will now deliver the stations, tunnels and the rail systems for the City Rail Link project,” Sweeney said.

The CRL project is a 3.45 km twin-tunnel underground rail link which will connect the Britomart Transport Centre with new stations at Aotea Square and Karangahape Road. It will make Britomart a through station and will provide quicker travel times for many people and will also allow better access for train users to parts of the city centre with the new stations near mid-town and Karangahape Road.

The CRL project is being jointly funded by the Government and Auckland Council and will allow the rail network to at least double it existing capacity. City Rail Link Limited was formed in 2017.

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29 Comments

He's right, if it hadn't been held up by the car-obsessed dinosaurs of the last National party cabinet, we'd be a good portion of the way there by now.

It's highlighted to me every day how spatially inefficient single occupancy vehicle transport is, as my bus with 60 people drives past tailbacks of cars around 100 metres long, carrying the same number of people but far less efficiently.

Rail will always win in transporting high volumes of people in a small-footprint corridor.

If I got a quote from a builder to build a house in 2014 for 360k, I really wouldn't be surprised at all if it had gone up by $50k or $100k by now. Add 5 zeros and that is what has happened with the CRL. If national are surprised then they have their head in the sand (yet again). Maybe they should have started the project sooner...

They couldn't have started the project sooner, because Auckland Council needed 40 years to decide if they wanted it or not.

you almost got it right, 46 years since robbies rail.

It has taken successive auckland councils 40+ years to convince successive National governments that auckland needs it.

and how many labour governments in between, they was one that had nine years of surplus
sorry but both sides are to blame for the delay in infrastructure spending and short term thinking.
it reminds me of when onehunga motorway was built , I was a youngster at the MOW and asked the engineer why are we not putting in the concrete median barriers while we are building it ( it was a big issue of the day)
and he explained because of cost.
I said but does it not cost more to put in later than now
he said yep 3 times as much
so I say why then
he said because the cost to benefit ratio didn't stack up
first we have to wait for X amount of people to die in head ons then we can go the government of the day and say if we spend this we can save this
and guess what we still operate under that system to this day,
we will not build for the future only the past as per cost benefit ratio UNLESS its a pet policy

The issue with rail like any other public transport solutions in low density country like NZ (even Auckland is very low density compared to almost every other country) is that it has to run almost 24/7. Yet only at few hours a day (peak hours) there are enough people using the trains or buses at serious numbers. The fare from these hours is not nearly enough to cover the running costs of them (let alone paying the infrastructure costs). Hence perpetual subsidising of fares is the only way to go.

The low density destination also means that travelling between two locations by public transport can take between 2-5 times (and at times even more as you have to keep changing buses/trains and go around quite a few KM before you reach your destination) the time it takes with a car.

Auckland is more dense than Melbourne

How is that measured? Where do they put the boundaries for melbourne and auckland when comparing this?

Auckland CBD or inner suburbs don't feel more dense. Outer suburbs though... maybe that's what tips it for Auckland.

I moved from Melbourne to Auckland and common sense says melb is much more dense. As you say, it must be a boundaries quirk or something of the like.

Or the person is talking in the figurative sense - Auckland does appear to be quite dense.

Haha, well that would explain it...

you take the population and divide by the area covered, so it's an average. Auckland CBD is very dense. It's the largest (by population) suburb in NZ by a long way.

Auckland is hemmed in by the ocean, Melbourne has much more land to sprawl over so i would guess you're right that it's the outer areas bringing the average down.

Rail is good at transporting people where rail exists. I guess if those people though the bus was a workable alternative, they'd be on it.

The issue is density, density will drive public transport demand.

frequency, speed and reliability will drive public transport demand.

Far more people will catch a dominion rd bus when the service starts at some ungodly hour and ends after midnight with 5 minute frequences most of the day and less at the peak, than will catch a ferry or the hamilton train that has two sailings a day in each direction.

I think most of voters in NZ blame Peters to let you bunch of incompetents to govern this beautiful country.

^^LOLdgz^^

That is a nasty unwarranted comment. You appear to have forgotten the Dirty Politics National played that resulted in Peter's support three weeks out from the Election dropping from 14% to 7%. Don't whine about him going with Labour - and keep wondering how we ended up with the Greens. National screwed their own nest and lost.

Wrong!! It was originally estimated to cost $2.8 billion!!!
It was and always will be completely and utterly uneconomical.

I know whats going to happen. Goff will attempt to hide the true price of half the cost of the project under "commercial sensitivity". He will also quietly shelve some of the other projects in his 10 yr budget without adjusting down the rates bills or user pay fees at all.

Wait until the Ham to Auckland train starts running on a 5year trial.The losses will be huge,but who cares,us rate payers will soak it up.

Unlike roads, which as we all know cost nothing.

Talking about council costs, they have revealed today that the price of a residential development contribution for a new lot in Devonport has gone up from about $23.7 to $33.3 grand excl GST.
They did not give breakdown by suburb in the recent consultation. Deliberately I think because the average "only" goes up to $25,000.
The politics of envy. (Devonport cross subsidizes Northcote which is miles away).

It is a project designed by AT, implemented by AT, budgeted by AT, overseen by AT and initiated by AT. And AT has taken bribes.

The ensuing costs overruns are therefore the responsibility of, wait for it...

CRLL is a crown entity, listed under Schedule 4A of the Public Finance Act, owned by the Crown and Auckland Council. The company has full governance, operational and financial responsibility for the CRL, with clear delivery targets and performance expectations.

https://www.cityraillink.co.nz/crl-governance/

You are correct AT has taken bribes, but it is worth noting most of the offending was at Rodney Council before amalgamation saw Murray Noone folded into AT. No wonder the roads in Rodney are so dire.

Isn't over half the cost because they decided to future proof the tunnel for longer trains?

Much better and cheaper than shutting the whole thing down for 2 years a few years after opening when the longer trains will be needed.

Longer stations are not "future proofing" it. They sound to me like it would have been absolutely ludicrous to not have made them that long in the first place.If it costs more due to this it will have cost less to have deleted one whole station in the original proposal that Lenny boy chopped from the scheme. So I see any extra prices as due to sheer cost of the whole stupid project. That and that Fletchers pulled out. (Who obviously don't want to sign any more disadvantageous contracts any more).

All project costs are meant to have optimism bias included in them (i.e. we as a society are useless at estimating the real costs & thus you shall be forced to increase the cost estimates). Even then the mandated OB's still seem too low with cost overruns often being significantly larger.

That said there is probably some scope creep in the cost rise as well.

The cost for this was always going to go up.

It'll cost over $4 billion by the end.