Project Auckland: Rail delays will cost ratepayers up to $278m

An artist's impression of the underground rail station to be built on Albert St.

The Government and the Auckland Council are at loggerheads over a start date for the $2.4 billion underground City Rail Link, and the clash could add $278 million to ratepayers' share of the cost.

The council voted 14-6 yesterday to defer a start on the project to 2018 after a warning from Auditor-General Lyn Provost about the timing of the Government's contribution.

Shortly after the council moved the start date from 2016 to 2018, Transport Minister Simon Bridges told the Herald the Government remained committed to a 2020 start date.

"The Government would consider an earlier start date only if it becomes clear that Auckland's CBD employment and rail patronage are growing faster than expected. All indications are that this is unlikely to occur."

This is a blow to Mayor Len Brown, who was confident of reaching an agreement with the Government to negotiate an earlier start date given "enabling works" on the mega transport project are due to start in 2016 and only 18 months to two years separate the two funding parties on the main contract.

There is a costly impact for ratepayers from the Government not making a contribution from 2015, which the council assumed in early drafts of a new 10-year budget.

The cost of the council fully funding the $280 million enabling works from 2016 and inflation costs mean the project will cost ratepayers an extra $200 million if the Government begins contributions in 2018, and $278 million for a 2020 start date.

The enabling works involve digging "cut and cover" tunnels from Britomart and then through Albert St to Wyndham St to clear the way for redevelopment of the Downtown shopping centre in the path of the 3.5km rail link to Mt Eden.

Mr Brown told yesterday's governing body meeting that the Auditor- General considered a 2015 start too much of a stretch.

"The Auditor-General is looking for greater clarity and more reasonableness on the timing in bringing the Government to the table and getting its assurance on its commitment to funding."

The mayor has broad support on the council to negotiate an early start, but a group of right-wing councillors wants to hold off for a 2020 start.

North Shore councillor George Wood said he heard the other side of Mr Brown's claim that people just want to get on with the rail link.

"This is a very big project and we have got to make sure we get the financials correct."

The council believes it will hit rail patronage targets of 20 million rail trips before 2020 and is not far off achieving a 25 per cent growth in CBD employment numbers.

The costs of delay

2015 start
$1.25b - Auckland Council
$1.14b - Government
2018*
$1.45b - Auckland Council
$1b - Government
2020*
$1.528b - Auckland Council
$960m - Government
*Figures based on when the Government begins contributions