The Auditor-General says the governance of Auckland's underground rail project is working well but expects costs to blow out significantly.
A report released today warned the biggest challenges to the $4.4 billion dollar City Rail Link project are yet to come.
The Auditor-General's office often identified poor governance as the reason why major projects had problems but said the governance arrangements for the City Rail Link were effective and likely to see it through to completion.
"However, even with effective governance and best efforts of all parties to deliver the project as planned, it is likely that this project will exceed its current budget and take longer than originally planned to be completed," the report states.
"It seems likely that there will be continuing disruptions to supply chains and pressures on the cost of materials. CRL is likely to continue having difficulties getting enough expertise from overseas to support the work. This is because of competition from other infrastructure projects in New Zealand and overseas."
Deputy Auditor-General Greg Schollum said as the country's largest transport infrastructure project, it was already complex before the pandemic began.
"We think it is being well governed and the project is still proceeding notwithstanding the headwinds of Covid."
The CRL is a 3.45km twin-tunnel underground rail link below Auckland city centre that was due to be completed by late 2024 but the pandemic has pushed out the project's timetable and costs.
CRL chief executive Sean Sweeney earlier told RNZ it expected to have more clarity around the timing and cost later this year.
It partly depended on the value of a claim from the tunnel and station builder Link Alliance for additional costs due to Covid-19 restrictions.
"The impact of these matters is currently uncertain. Although the additional project costs cannot be reliably quantified at this point, they could be significant," the report said.
"Settling the claim involves negotiating how increased costs incurred to date will be shared and assessing the impacts of the Covid-19 pandemic on future costs."
The report did not look at the project's cost and whether it was value for money.
The City Rail Link board is accountable for completing the project, while the Government and Auckland Council, which are funding it, have oversight.
The report found there was a lack of clarity around who tracks the project against the planned benefits.
"We observed that there was confusion about which agency is responsible for planning, managing, and reporting progress in achieving the benefits of the City Rail Link project in the context of the wider Auckland transport network," Schollum said.
"This is concerning for a project of this significance, but we understand this work is now under way."
The Auditor-General has made four recommendations that are intended to strengthen the City Rail Link project's leadership at board levels.