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Earthworks are expected to start as early as next summer on Auckland's $1 billion-plus rail electrification.

The Government rail agency Ontrack intends starting with big trenches for cables and other underground services, although 40 new electric trains to be bought by the Auckland Regional Transport Authority (Arta) by 2013 will be powered by overhead lines.

"You wouldn't like a job on the railway?" Ontrack spokesman Kevin Ramshaw quipped yesterday, contemplating a feverish few months ahead on planning and design work for the project, given Government approval last week in the Budget.

His comment was a far cry from the lean times of the 1980s when the rail workforce was reduced by mass layoffs and only about a million passenger trips a year were taken on Auckland's suburban network compared with more than five million now - and growing fast.

Ontrack, which is responsible for about half the new project's value as owner of Auckland's rail corridors, intends giving priority to electrifying lines from Britomart to Otahuhu and to Henderson.

It will then extend the project to Papakura, and finally to Swanson on the western line.

Diesel trains will continue to carry passengers to Pukekohe and to Waitakere, which is separated from Swanson by a 450m tunnel deemed too costly to modify for electric lines.

The project is expected to cause severe disruption for public transport users.

Arta chairman Mark Ford said the work would put pressure on transport operators to retain customer loyalty.

"It is going to be no easy communications exercise to keep that loyalty during that period because it is going to be extraordinarily disruptive," he said.

Ontrack chief executive David George said the company intended electrifying the network in stages, concentrating first on routes to the most popular destinations.

"We will work with Arta and rail operators Toll and Veolia to reach an accommodation on service issues," he said.

Next summer's work will start with digging big trenches for underground services.

That will be in tandem with other big rail upgrade projects such as a $120 million track duplication trench through New Lynn and the $70 million redevelopment of the Newmarket station and junction.

Although an electric rail system will be run on an overhead 25- kilovolt supply, new underground signals will have to be laid, in ducts to "immunise" them from electrical interference.

Bridges will have to be raised, or the ground dug out under them, to accommodate overhead wires.

The trains will use the equivalent of a year's growth in Auckland's overall power supply.

Ontrack and Arta, an Auckland Regional Council subsidiary, are expected to share costs about equally - meaning outlays of about $500 million each.

The money will come from a new fuel tax on motorists of up to 10c a litre of petrol or diesel although about one-third of that sum will be spent on other transport projects, including roads.

Arta says motorists will gain about 44c of each $1 of benefits from the project through reduced road congestion, and Auckland Regional Council chairman Mike Lee says he is keen for full cost transparency to assure them of value for their money.

The transport authority said late last year, when it presented a business case to the Government, that the cost of electrifying Auckland's rail network would be no more than about $180 million more than the cost of buying a new fleet of diesel trains.

It said lower capital and maintenance costs for trains would eventually make electric rail cheaper than diesel, as faster running times would help boost patronage from about five million passenger trips a year now to 30 million by 2030.

But Arta is responsible for buying trains and building stations, rather than track development, and its other cost assumptions were made without Ontrack's involvement.

Mr Lee accepted last night that infrastructure costs may be higher than initially estimated, but he hoped for savings on buying trains, especially if Auckland could join an order by the Wellington Greater Regional Council for about 70 new units for little more than $3 million each.

The authority's business case outlined a 25-year rail capital spending programme of $1.452 billion - to which operating costs of $2.146 billion must be added - to achieve a goal of train departures every 10 minutes.

A serious development constraint is the Britomart station in downtown Auckland, which needs to be turned into a through station linked to an underground rail loop through central Auckland if it is not to reach saturation point by 2020.

This will cost another $1 billion