Prime Minister John Key has today outlined a plan to make an early start on the main works of the $2.5 billion city rail link in 2018.

In a state of the nation speech to the Chamber of Commerce in Auckland, Mr Key said the Government will work with Auckland Council to bring forward a business plan and formalise Government funding from 2020.

"It's become clear that we need to provide certainty for other planned CBD developments affected by the rail link," Mr Key said.

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Mr Key said the council had indicated this would allow construction of the rail link main works to start in 2018 - two years earlier than envisaged.

It would also allow the council to get on with negotiating contracts, give investors certainly for other important projects in the CBD and reduce disruption in the central city.

A number of important and quite complex issues still needed to be worked through with the council, Mr Key said.

"These include how project costs will finally be shared between the Government and the council and how the rail link will be owned and managed.

"Providing these issues are resolved, and I'm confident they can be, we'll aim to finalise the business plan later this year," Mr Key said.

Me Key also announced an east-west connection between Onehunga and Mt Wellington, considered a project of national significance by the Government and costing more than $1 billion, would go through a streamlined consenting process to bring forward construction.

The Government intended it to be funded through the land transport fund so construction could start as early as 2018.

Mr Key said about $4.2 billion would be invested in transport in and around Auckland over the next three years.


Mayor Len Brown welcomed the Government announcement saying it provided certainty over funding for the city rail link.

"To reach our vision of Auckland being the world's most liveable city we need this to happen.

"Aucklanders have been waiting for the CRL for decades and it's been my No 1 priority since my first Auckland Council mayoral campaign," Mr Brown said.

Planning on the rail link started under the former Auckland Regional Council and has been progressed under Mr Brown and the Auckland Council.

The first preliminary works began before Christmas and work on beginning the link from Britomart and up Albert St to Wyndham St is due to begin in May.

Main works on an underground tunnel from the Mt Eden end of the link are planned to start in 2018.

The proposed city rail link entrance on Victoria Street. Photo / Supplied
The proposed city rail link entrance on Victoria Street. Photo / Supplied

Auckland Transport figures show that last year rail patronage increased 22.9 per cent, or 2.9 million trips to 15.4 million.

Labour leader Andrew Little accused the Government of acting too slowly, saying its commitment should have been made five years ago.

"Today's announcement will be a relief for Auckland's frustrated commuters who have endured years of clogged roads while the Government sat back and criticised this vital transport link," he said.

"But it's typical of this Government that they had to be dragged kicking and screaming to get to this point."

He said National's lack of ambition had held back growth and prosperity in Auckland, costing jobs and strangling businesses.

"[Mr Key's] annual State of the Nation speech today featured only a last-minute announcement of something the rest of New Zealand has been calling for for years."


Act Party leader and MP for Epsom David Seymour said the decision to fund the City Rail Link at an earlier date meant the Government would need to invest more in education infrastructure in the city.

"The reality is that we have a train looking for passengers, rather than the other way around. That's why the rail link requires heavy intensification around Mt Eden Station, among others, to be viable.

"The [Auckland] Council has not considered the implications of changing land use on education in the area, where schools are already bursting at the seams. The Mt Eden Station development, for instance, will bring hundreds of new residences into already-full school zones."

Mr Seymour said the Government needed to fund schools in the same way it funded the rail link.

The proposed city rail link Aotea platform. Photo / Supplied
The proposed city rail link Aotea platform. Photo / Supplied

"Epsom Girls Grammar, for instance, requires classrooms to absorb demand. The Auckland Grammar community has just had to fundraise two thirds of the cost of a new classroom block."

Greenpeace executive director Russel Norman said the funding decision proved that public pressure on the Government had worked.


"This is a huge win for people power," he said. "John Key and the National Party have been dead-set against funding a rail link for years, they've made very disparaging comments about it.

"The fact Key has changed his tune now shows he's buckled under the massive pressure applied by the public, transport campaign groups and the Auckland Council."

Dr Norman said the new rail link would help reduce New Zealand's greenhouse gas emissions and its dependency on oil.

Key also stressed the importance of the Trans-Pacific Partnership Agreement in his state of the nation address today.

"It really is unthinkable that any responsible government would now walk away from the TPP," he told more than 450 people at the Chamber of Commerce lunch in Auckland.

"It will be New Zealand's biggest free trade agreement, giving our exporters much better access to more than 800 million customers in 11 countries across Asia and the Pacific," Key said.


"It will eliminate tariffs on 93 per cent of exports to our new FTA partners - the United States, Japan, Canada, Mexico and Peru. Successive New Zealand governments have worked hard to achieve this for 25 years. They knew it would help diversify and grow the economy," Key said.

The Green Party was holding a celebration at its Auckland headquarters following Mr Key's announcement.

The party's office - which will be demolished for the construction of the rail line - has been dressed up as a construction site for the K Rd station.

The Greens' finance spokeswoman Julie Anne Genter said the Prime Minister had backtracked on National's proposed start date of 2020.

Her party had been lobbying for a start to construction for six years, she said, and the only remaining obstacle had been the National Party.

Ms Genter said the new rail line should mark a shift in Auckland's transport system to a more balanced network which included more investment in clean, modern public transport. In particular, she wanted National to begin work on the rapid transit network instead of investing in motorways.


She also said the streamlining of a new $1 billion motorway showed the Government appeared to have forgotten climate change pledges made at historic talks in Paris last month.

The proposed underground plans on the new city rail link

What is the City Rail Link?

A 3.4km rail tunnel up to 42m below ground from Britomart to Mt Eden will have two new stations, Aotea and Karangahape Rd. The link is costed at $2.5 billion and, according to Mayor Len Brown, will have wider economic and environmental benefits beyond the central city. Britomart, which can handle 20 trains an hour will become a through station handling 48 trains an hour.

How will Auckland benefit from the Government coming on board the CRL earlier?

Bringing forward funding from 2020 to 2018 will make financing of the project much easier for council. The council hopes the Government will pay half the $2.5 billion cost, but that remains to be seen. If the Government only pays a half share from 2018, its share will be about $1 billion and the council will pay about $1.5 billion. The completion dates remains at 2023.