Auckland rail link budget jumps $1 billion

The same day it was announced that a means of getting additional tax revenue was being ruled out – the CGT backdown – another announcement that a a project committed to will cost another $1 billion more than budgeted.

RNZ: Billion-dollar increase in cost of Auckland’s City Rail Link

The cost of building Auckland’s City Rail Link project has risen from $3.4 billion to $4.4b, it has been confirmed this afternoon.

City Rail Link chief executive Dr Sean Sweeney said a revised cost envelope for the 3.45 kilometre-long train line has been submitted to the Crown and Auckland Council for approval.

“The $1 billion cost increase on the previous $3.4 billion estimate made in 2014 reflects significant changes impacting the project in the past five years,” said Dr Sweeney.

“No-one could have foreseen the competitive pressures that have occurred in the construction industry over the past few years and the impact that has on costs, particularly for a project the scale and complexity of the City Rail Link.

“Last year, a decision was made to increase the scope of the project to accommodate longer, nine-car trains at stations. Planning today for a city that will be much bigger in the future reinforces the benefits the City Rail Link City will deliver to the way people travel, work and live in Auckland.

No one could have foreseen that increasing the scope of the project might increase the cost?

The extra cost will be split between the Government and Auckland City.

City Rail Link is now being constructed by the so-called Link Alliance – a group of six companies including Tonkin + Taylor and Downer NZ.

It said the revised higher cost came from four areas:

  • Contingency and escalation costs ($310m)
  • Construction costs ($327m)
  • Accomodating longer, nine-car trains ($250m)
  • Non-direct cost ($152m)

Auckland Mayor Phil Goff said tighter financial management will help fund the additional $500 million requested by City Rail Link Limited.

Like the tighter financial management campaigned on in the last election? Tighter still now?