Budget blowout: Cost of Auckland's City Rail Link increases by $1 billion

City Rail Link Ltd (CRL Ltd) has announced a budget increase of $1 billion for completing the Auckland City Rail Link project.

The project will now total $4.419 billion.

CRL also named its preferred bidder for its contract to build the underground tunnels.

CRL Ltd’s chief executive, Dr Sean Sweeney, says after a rigorous and comprehensive review of project costs, a revised cost envelope has been submitted to the project’s sponsors – 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,” says 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, he said.

“Eighteen months ago, the value of work in the infrastructure pipeline on both sides of the Tasman was $80 billion – the value of that work is now estimated at $230 billion.

“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.

“Put together, they have all helped add costs to the project overall. Keeping a growing city moving is a serious challenge, but when we complete the City Rail Link it will double the number of Aucklanders within 30 minutes travel of the CBD,” he said.

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The Auckland project was expected to cost the Government and Auckland Council $3.4 billion, but it’s gone up significantly. Source: 1 NEWS

Dr Sweeney says CRL Ltd’s own cost review underwent a rigorous examination by two international assessors to ensure the project delivers the best value for money for Aucklanders.

Auckland Council and the Crown are expected to announce their decision regarding their endorsement of the revised costs in May.

After what has been described as an “exhaustive competitive” tender process, the Link Alliance has been announced as the preferred bidder for the C3 contract.

“The project is already well underway at Lower Queen Street/Britomart, Albert Street and Mt Eden, and momentum will continue. CRL Ltd will now work with the preferred bidder to get the Early Works Contract underway as quickly as possible.

“This keeps us on track to have this transformational project in place and delivering significant benefits for Aucklanders at the end of 2024,” he says.

Transport Minister Phil Twyford blamed in-part the previous Government for the blowout. 

"The re-costing exercise has shown that the last Government did not set aside enough money for inflation and cost escalation. On top of that, competition created by a surge in large-scale infrastructure projects throughout Australasia has driven up construction costs."