Auckland's top transport politician, Mike Lee, is upset at officials for "overstating" the cost of the inner-city rail loop at $2.86 billion when he says the true cost is less than $2 billion.

Mr Lee has sent a stern note to Auckland Transport chief executive David Warburton expressing disappointment at the $2.86 billion figure being locked in the media and the public mind.

"There is only one party - and one party alone - to blame for this bizarre overstatement of price, and that is Auckland Transport," said Mr Lee, who is on the board of Auckland Transport and chairs the council's transport committee.

In the note, Mr Lee said it was no secret that the rail loop was opposed by the National Government and political conservatives in Auckland, adding that the "astonishing" price would be the main area of criticism at next year's local body elections.


Mr Lee, a longstanding champion of rail, said the true cost of building the rail loop was less than $2 billion and he believed the price could be brought to about $1.5 billion through a competitive, international tendering process.

He has particularly challenged the need to include $336 million for additional trains and land purchases for the 3.5km route from Britomart to join the western rail line at Mt Eden "which apparently will be bought dear and sold cheap".

An Auckland Transport spokesman defended the figures. "If Auckland Transport is to blame for anything it is for presenting the total cost of the project, broken into its various parts, in a number of public arenas," the spokesman said.

The figures have been presented in two forms - 2012 dollar figures and inflated figures at the end of the council's 10-year budget when the rail loop is expected to be completed. Mayor Len Brown said the cost depended on "how you cut the cake".

"The cost of building the tunnel in today's dollars is $2 billion. Taking account of inflation at the end of the project, and if you include the benefit of increasing the number and frequency of trains across the network, the cost is $2.8 billion."

He said the rail loop had to be costed prudently and that was why the $2.86 billion figure was included in his first 10-year budget.

Last week, the Auditor-General cautioned Aucklanders about the rail loop, saying it would need to be reviewed if it did not receive Government backing.

Mr Brown's 10-year budget has assumed the Government will fund half the $2.86 billion cost and approve the introduction of tolls to help pay the council's share.


The Government has been extremely sceptical about the project and has offered no funding - although it has agreed to the council protecting the route. The council has budgeted $112 million in the 2012-13 financial year for route protection and land costs.