Developments impact CRL project  

Multi-billion dollar’s worth of property development  planned along the tunnel route through the CBD.

Multi-billion dollar’s worth of property development 
planned along the tunnel route through the CBD.

At the State of the Nation speech, Prime Minister John Key outlined government plans for several major Auckland transport projects, including the Rail Link and the East-West motorway connection.

Government stated that it will pay for half of the cost of the City Rail Link Project.

Government has made no definitive statements as to how it will do so, but Auckland’s Mayor Len Brown has stated that he is supported by the majority of Aucklanders in his quest to levy steeper road taxes as well as tolls, which could pay for half of the city’s $2.5 billion City Rail Link project. 

He said road tolls are part of a range of required transport funding options, and that in the long term they cannot be overlooked because government needs more money.

The city’s population is predicted to grow quickly, necessitating more infrastructure to accommodate it.

Key attributed increased commercial property developments downtown and rail usage for the governments turnabout on this project that has taken the back burner to electrification of the suburban rail network.

He has delivered an IOU and stated he is happy to work with Auckland Council and expedite business plans so council-funded work can begin in 2018. Previously government had only foreseen work commencing in 2020.

According to Economic Development Minister Steven Joyce the government, which has notable property holdings around the various stations, has to date distanced itself from road tolls and is keeping alternatives like debt and asset sales in mind. 

Currently officials who were happy to put the project on the back burner are also supporting its advent in 2018 as opposed to 2030 following politicians’ support for the project.

The support of officials was not unconditional and concerns cited include cost escalation, construction and timing. “These risks are potentially developing now given Auckland Transport’s recent progress on the project,” they wrote.

Recent progress refers to the start of the shallow section near Britomart in order to build the first section tunnels in conjunction with a higher-rise development they will pass beneath.

They also said the economic case remains weak, quoting a cost benefit analysis from 2011-12 that showed for every $1 spent the benefits would amount to 40 cents to 90 cents.

Auckland Transport said, using a different formula, the CRL would deliver $1.30 of benefit for every $1 spent.

The official advice noted a factor in supporting the earlier start is the multi-billion dollar’s worth of property development planned along the tunnel route through the CBD.

Minister of Transport Simon Bridges said there has been some conversations with developers eager for some certainty around the timing of the project.

Precinct Properties has a construction contract with Fletcher Construction for tunnels under Commercial Bay for the City Rail Link. This arose out of a development agreement with Auckland Council.

The Property Council has welcomed the government’s announcement to fund Auckland’s proposed City Rail Link two years earlier than initially planned.

Its CEO Connal Townsend says the announcement is a significant victory for Aucklanders.

“The City Rail Link was initially outlined in the Auckland Plan and we are pleased to see it move closer to being materialised. An underground rail link that connects to the wider network in Auckland has been debated for a century now.”

The City Rail Link provides much needed certainty for planned and ongoing public and private sector projects, which will grow and regenerate the CBD. It sends a positive signal internationally and nationally that Auckland is open for business after decades of significant underinvestment in its transport network.

“It is critical to ensure the Proposed Auckland Unitary Plan aligns with transport network plans and allows a strategy that produces desirable and well-connected communities with access to amenities,” said Townsend.

On this note, it is anticipated that Auckland’s rail network will require a further $1.4 billion in upgrades according to KiwiRail ($400 million required prior to the City Rail Link opening and $500 million to $1 billion after opening).