The cost of Auckland’s City Rail Link - New Zealand’s largest ever transport project - has blown out by over $1b more due to Covid-19 lockdowns and other revised costs.
The project’s cost is now estimated to be $5.493b - a $1.074b increase on the previous estimate of $4.419b.
The $4.4b estimated cost was itself a $1b cost increase approved in 2019 above the original $3.4b estimated cost for the project.
City Rail Link Ltd (CRL Ltd) today confirmed it has submitted a formal funding request to its sponsors – the Crown and Auckland Council - with Mayor Wayne Brown saying the budget “blowout” is unsurprising.
This reflected revised costs and time required to complete the project as a result of the Covid-19 pandemic, lockdowns and associated impacts, CRL said.
CRL also provided the Crown and Auckland Council with a revised completion date for the project’s stations and supporting rail infrastructure of November 2025.
Following the end of the construction programme, CRL Ltd will hand over the completed infrastructure to KiwiRail and Auckland Transport, which will then carry out the additional work required to open the CRL to its first passengers.
CRL chief executive Dr Sean Sweeney said the extra funding and additional completion time is primarily due to Covid impacts – time lost on-site and the knock-on effect on the supply chain, resourcing, materials, and labour costs.
“People need to remember that in Auckland we endured two level four lockdowns, a further 280 days of restricted working conditions [Covid traffic light system] and we lost 3.2 million hours through illness among staff, with 800-plus workers infected.
“The request for extra funding has not and will not delay continuing work on the project, which is progressing well.
“Together with our contractors Link Alliance, we have got through Covid and surmounted its impacts and are now well advanced in our work to build New Zealand’s first underground metro rail network.”
However, Auckland Mayor Wayne Brown said the blowout is unsurprising.
“The costs associated with the devastation of the 27 January floods and cyclone Gabrielle come as no surprise.
“Neither does the blowout of the City Rail Link budget, which I predicted more than six months ago.
“This is another example of government significantly underestimating the cost of these big projects.
“It just illustrates why I am proposing to cut excess spending and get our debt under control. Only then will we have the financial ability to fix the city’s infrastructure and make Auckland a resilient and prosperous city.”
Brown said the decision is going to Cabinet soon and so he will be making no further comments.
The funding request will now be considered through established governance processes and CRL Ltd will be informed of the outcome in due course.
The City Rail Link project aims to double the capacity of trains in Auckland’s inner city by building 3.4km of underground railway along with some new stations.
The project is being funded in a 50/50 split between Auckland Council and central government.
When Auckland councillors voted in May 2019 for the council to pay its $500m share of the last $1b cost increase, then-Mayor Phil Goff said without the CRL, Auckland would hit gridlock and the city grind to a halt.
“Without additional funding, the CRL would not have been fit for purpose,” Goff said at the time.
“We would have had another Harbour Bridge on our hands which was built at half of the size it needed to be and had to have major additions made to it within eight years.”
“We’ve got one shot at getting the CRL right.”