Aucklanders face $90m annual bill for completed rail link

Mayor Len Brown expects future ratepayers to fund operational costs.

Auckland Mayor Len Brown is locking future ratepayers into paying at least $90 million a year for operational costs once trains begin using the City Rail Link some time from 2021.

The $90 million figure is the first sign of how much the most expensive project undertaken by a council in New Zealand will cost Aucklanders.

The 3.5km underground tunnel from Britomart to Mt Eden is budgeted to cost $2.4 billion.

The council's funding package for the rail link has become clear in the past month, although there is still uncertainty about when the Government will come on board with its half share of the building costs.

In a nutshell, Mr Brown has decided the City Rail Link (CRL) is the number one priority for Auckland and put it in the new 10-year budget funded by a mix of debt and development contributions.

He said there will be no impact on rates until it is completed because until then all costs, including interest, will be debt-funded in line with standard commercial practice.

Council figures show the net operating and repayment costs to ratepayers will be $90 million a year if the CRL is opened in 2021, or $112 million a year if it is opened in 2023.

These dates are based on a council assumption of Government contributions from next year, or the Government's "committed" date of 2020 to start contributions.

Council finance officer Matthew Walker said interest costs will tend to decline as debt reduces, but operating costs will continue over the project's estimated lifespan of 70 years.

Councillor Cameron Brewer said the gung-ho approach by Mr Brown of shoving the cost on the public credit card when the Government contribution was still six years away was a high stakes games with considerable risk.

Government transport officials are urging their political masters to support an early start, but new Transport Minister Simon Bridges is sticking to the Government's guns for a 2020 date.

The council is limited in how much funding it can commit to the project before the Government starts contributing.

It has $400 million set aside for the link over the next three years to cover enabling work, but even Mr Brown concedes the project will grind to a halt without Government funding, saying "council will only proceed with the main works of the city rail link once full funding is in place".

Aucklanders will get a steer on the funding package when the Auditor-General, Lyn Provost, signs off the 10-year budget document for public consultation this month. In September, Ms Provost said the financial watchdog would look at the assumptions made, funding sources, and other factors to form a judgment on the budget consultation document.