Artist impression of light rail at street level. Photo / Supplied
Artist impression of light rail at street level. Photo / Supplied
The Government's $14.6 billion price tag for light rail in Auckland is a rough estimate with ministers keeping a higher figure under wraps.
One scenario could see the price balloon to $24b.
Last Friday, Finance Minister Grant Robertson and Transport Minister Michael Wood unveiled the Government's preferred option for lightrail running in tunnels from Wynyard Quarter to Mt Roskill and then proceeding at street level to the airport.
They said the new line would be designed, consented and built by the early 2030s at a cost of $14.6b.
What they didn't say is the cost is a P50 figure, which means there is a 50 per cent chance the cost will end up higher.
The planned route for light rail from Wynyard Quarter to Auckland Airport. Photo / Supplied
In the just released Indicative Business Case for light rail, prepared by the independent Light Rail Establishment Unit last year, is a higher P95 cost figure, which has a 5 per cent chance the cost will end up higher.
"The Base Estimate figures are likely to increase during the design development, these are contained within the current P50 estimate, with the out turn cost (final completion cost), likely to be contained within the P95," said the business case.
The P95 figure has been redacted from the business case.
But buried in the 185-page business case is a line that says the P50 figure could end up being 60 per cent higher, taking the cost to $24b, or $1b per km to build light rail by 2033.
In a statement, Wood did not deny the P95 cost could be as high as $24b, saying the base cost of the project is $10.4b with inflation and the possibility of increased design and construction costs is built into the $14.6 figure.
"The next stage of the project, the Detailed Business Case, already underway, will offer more accurate estimation of costs," he said.
Transport Minister Michael Wood. Photo / Alex Burton
Wood said P50 has been used as the central cost estimate for the indicative business case as the best indicator of the project costs at this stage of development. This is in line with standard NZ Transport Agency practice, he said.
"Releasing the P95 cost at this stage of the project would also prejudice the project's commercial position as it enters into the procurement phase of the project," Wood said, saying the establishment unit does not yet have a detailed design and all the costs are subject to large contingencies.
"When the detailed design is completed, the range of costs will have reduced considerably from where it is today, based on an increased level of design information, estimating accuracy, escalation accuracy and value engineering," the minister said.
National's transport spokesman Simeon Brown said Wood is dreaming to think he can deliver light rail within the $14.6b announced last week.
Artist impression of light rail running in a tunnel. Photo / Supplied
"This project will undoubtedly blow out with the project likely to cost much more than the $8000 per household nationwide that the Government is already committing to the project," he said, saying Auckland's number one transport project is a second harbour crossing.
Global supply chain constraints, high inflation, access to skilled workers and products like steel rising about 50 per cent in the past year are contributing to a sharp rise in construction costs.
The light rail option chosen by the Government from three options will have about 18 stations, with trains running every five minutes.
It will be capable of carrying 12,000 people per hour, which the Government says is four times more passengers than can be carried on a dedicated busway or "trackless trams".
The ministers said the "hybrid" system had been chosen over two other options - light rail at street level costing $9b and light metro above or below ground costing $16.3b. This is because it had greater carrying capacity, was less disruptive and better aligned to a linked-up rapid transit transport network, they said.
Robertson, who has the job of rustling up $15b or more for the project, said it would be easy to go with the cheaper option, but he had become convinced the preferred option from the establishment group better met the needs for an integrated rapid transit plan.
Finance Minister Grant Robertson. Photo / Mark Mitchell
He said the Government will fund the "lion's share" of the $15b project and look at other options, including "value uplift" - a charge on businesses and developments that benefit from the project - and some kind of targeted rate.
The ministers also announced they are bringing forward planning for a second Waitematā Harbour crossing with public consultation on options starting this year, with a preferred option selected in 2023.
This will include choosing a route, deciding on tunnels or another bridge, and confirming what transport modes will be able to use the crossing.
