The total cost for Auckland's multi-billion dollar City Rail Link is still up in the air and Auckland Mayor Phil Goff and Finance Minister Grant Robertson say two contracts for the project are yet to be signed.
The pair went 18m below Albert St today near the Swanson St intersection for their first joint visit to the New Zealand's biggest rail project, saying more precise figures would be available only once tender prices came in and were evaluated.
"It's a fast-changing, challenging environment," Robertson said of the construction sector. "Two more contracts are to be let. We don't know where they're going to land yet. But the project is running on time which is good."
Goff also pointed to the true costs being revealed from the next tender phases: "The costs will come in with the tenders. The construction price index has been going up 7 per cent to 8 per cent a year and that does create cost pressures but we won't know for sure until we have signed the contract."
Goff said it was a project Auckland could not cope without: "More and more people are living in the CBD and working here".
Transport Minister Phil Twyford said the project would "transform" the lives of Aucklanders, doubling the existing rail network capacity and providing a level of modern high-frequency transport access people living throughout the city simply did not enjoy currently.
Deputy Mayor Bill Cashmore said: "It's always cheaper yesterday but a lot better tomorrow and with $1.3b annually in lost productivity due to congestion, this is part of the solution."
The Customs-Wyndham ECI Contractor 2 job is by Connectus, the McConnell Dowell/Downer joint venture, building the cut and cover tunnels under and along Albert St from Customs St to Wyndham St.
Contract 2 started in December 2015 with a 'pipe jack' component relocating a major storm water line in Albert St between Swanson and Wellesley Streets and strengthening and bridging a section of the Orakei Sewer Main at the intersection of Victoria Street and Albert St.
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Sean Sweeney, CRL chief executive, said that the $3.4b cost was based on base line assumptions arrived at in 2014.
"Things have changed. The construction sector has resourcing issues, particularly after the Canterbury earthquakes," Sweeney said.
"The currency is weaker than it was, even a year ago. That means tunnel boring machines and other materials and equipment could be more expensive. I don't want to speculate about cost, but some of the baseline assumptions have changed. I'm working my way through that. I didn't put the budget together. It was very thoroughly priced for the information available at the time. One of the first things I'm doing is re-looking at the baseline assumptions."
Timing is another issue: CRL is already running behind its timetable. Its own website says its request for tender process for the "C3" stage of the job - the tunnels and stations - was "expected to be released March 18". That hasn't happened, and now it's late August.
Sweeney attributed the delay partly to Fletcher Construction withdrawing after its Building + Interiors division lost nearly $1b on big projects.
Now, there are two remaining tenderers for the tunnelling work: the Spanish-headquartered CPB Contractors Pty; and a joint venture comprising Vinci, Downer, and Soletanche Bachy.
The [request for tender] for C3 will be released at the beginning of September and it's late because there was a procurement process which basically stalled. The board is considering going down the alliance line with C3," said Sweeney, who backed that approach.
Proposals from bidders will be evaluated by January or February and the successful tenderer will be announced around March or April next year, with work beginning around that time too - "ideally."
The project is due for completion by 2024.