The Government will today officially stump up half the cost of the City Rail Link - but the final cost will not be known until tenders are let for the remaining contracts.

Transport Minister Simon Bridges and Auckland Mayor Len Brown will sign a heads of agreement and hold a press conference outside a giant hole for the project in Victoria St.

A senior source told the Herald the Government has agreed to pay half the cost of the project, including half of the $276.5 million of work between Britomart and Albert St, which began in June.

The council, however, will have to wear interest costs to date on what is believed to be the costliest project in New Zealand's history.


By comparison, the twin-tunnel Waterview motorway connection, due to open early next year, is expected to cost $1.4 billion.

The City Rail Link, a 3.4km tunnel up to 42m below ground from Britomart to Mt Eden with two new stations, Aotea and Karangahape Rd, is expected to more than double the number of trains running through the city and speed up journeys on the rail network.

The rail link has been costed at $2.5b, but has a funding envelope of between $2b and $3b. In June, Prime Minister John Key predicted the rail link will "almost certainly cost more than they thought". The Herald understands a figure of more than $3b has been bandied about.

In January, Key announced a plan to make an early start on main works for the rail link in 2018 with the Government paying half the cost of the $2.5b project. At that stage it was unclear if the Government would pay half of the full cost or half of the cost of the main contract.

Since then, the Government and the council have been negotiating a contract setting out how project costs will be shared, timing of payments and how the rail link will be owned and managed.

It is understood the Government and council have agreed to set up a special project vehicle to manage the project, called CRL Ltd in the heads of agreement.

Work on the City Rail Link started in June at the Britomart end where a cut-and-cover tunnel is being built under the old Downtown Shopping Centre and up Albert St as far as Wyndham St.

The project is due for completion in 2023.


The project is a huge win for Brown, who has faced serious reservations from the Government and opposition from some councillors.

Meanwhile, a new transport strategy for Auckland that went to Cabinet on Monday and is due to be discussed by councillors at a closed governing body meeting today, will be released tomorrow.

For the past year, the council and the Government have been working together on the strategy through the Auckland Transport Alignment Project (ATAP).

After Cabinet on Monday, Key said the ATAP report contained wide-ranging recommendations on how Auckland's transport needs would play out over the next 30 years.

City Rail Link


: From Britomart to Mt Eden


: 3.4km


: Final cost unknown but anywhere between $2b and $3b


: 50:50 Government and Auckland Council


: Work started in June 2016. Due for completion in 2023