New budget for Auckland's City Rail Link to stay secret

Saturday, 27 October 2018

Auckland's City Rail Link could cost a lot more than the original estimate of $3.4 billion.

The rising cost of Auckland's multi-billion dollar City Rail Link project is being kept secret for perhaps another six months, and changes could trigger more spending on Auckland's rail network.

The Government, Auckland Council, and their joint venture City Rail Link Limited have told Stuff that releasing the new estimate could influence tender prices being prepared by two consortia.

The company's chief executive Sean Sweeney said design changes and a 'hot' construction market meant the four-year old estimate of $3.4 billion could be out of date.

Construction work on the City Rail Link in a section known as the Albert St Trench.

'It's a bit like buying a house in Auckland four years ago, it's probably going to cost a bit more now,' he said.

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A further six metres is still to be excavated where twin tunnels will pass under the former Chief Post Office building.

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Work on the Customs/Albert St intersection.

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A big cost factor was the decision announced in July to build bigger underground stations to accommodate nine-carriage trains rather than six.

The council and government agreed to upgrade the downtown rail tunnel project after new patronage forecasts showed the link could hit capacity as early as 2026, just two years after it opened.

A letter from CRL Limited to the Ministry of Transport in March showed that if the link was built as previously designed, it would need to be closed for two years within a decade of opening for the capacity upgrade.

The forecasts for patronage growth triggered by the opening in 2024 of the City Rail Link are dramatic, tipping 20 per cent a year during the first few years.

'That includes a 33 per cent increase on the Western Line in the first year of operation,' CRL Limited said, citing significantly shorter journey times as trains entered the downtown area more directly than at present.

Reports obtained by Stuff under the Official Information Act show that boosting capacity by 50 per cent would also have a knock-on effect beyond the project, which will create a city rail loop by building 3.4km of twin tunnels under the CBD.

'Expanding the scope of the City Rail Link system to accommodate increased patronage demand will require upgrades to the rest of the Auckland rail network – at a future date,' a report to Auckland councillors in July said.

That previously confidential report, released via City Rail Link Limited, showed Auckland Council expected its half-share of the additional costs would temporarily breach its internal target of keeping debt at no more than 265 per cent of council revenue.

'The proposal will not result in the council exceeding its Standard and Poors [credit rating] debt-to-revenue threshhold,' it added.

Based on the council's current debt levels, it can add $182 million of additional debt before hitting its in-house debt-revenue target.

With the council paying a half-share of CRL, that suggests the overall estimate for CRL could have risen by more than $365m.

All of the material obtained by Stuff has dollar figures redacted.

The company also highlighted other upgrades outside of the CRL project that would be needed as rail patronage grows, with longer and more frequent trains.

Those included grade separations, three- or four-tracking of some sections of the network, and power supply upgrades, it wrote in a letter released to Stuff.

The government, council and CRL Limited expected fully costed tenders for the major tunnelling part of the project to be lodged by February.

Sweeney said until then, revised estimates would remain confidential.

'We want our two bidders to focus on their analysis of what the project is going to cost them, and we really don't want to distract them with a separate re-costing exercise going out into the public domain,' he said.

The section of underground line between the Britomart station and Wyndham was well-advanced, with the tunnels on a 450-metre stretch of Albert St 60 per cent finished.

The former Chief Post Office building at Britomart had been successfully lifted by one millimetre to sit on a new sub-structure while twin tunnels were built below it to connect with the existing dead-end platforms.

A system of lasers had measured points around the building every 15 minutes to ensure there'd been no movement.

'It's over 100 years old, a heritage building made of pretty brittle delicate stone and it's stood the journey incredibly well, and that's a credit to the team,' Sweeney said.

The chief executive said he doesn't get 'emotionally involved' in major projects worked on, but that the arrival of tunnel boring machines for the major dig to link with the western line at Mt Eden, will be as close to a 'wow' as he gets.

'I can't help but be impressed by the tunnel boring machines, they are such beasts of nature – I'll be pretty excited to see two of them grinding their way up Albert St.'