The biggest challenges for Auckland's City Rail Link are likely yet to come, according to the watchdog on government spending.
Auckland City Rail Link progress on 22 December 2021. Photo: Supplied / City Rail Link
A report into the multibillion dollar project by the auditor-general's office says it will cost more than is budgeted and will take longer than expected, partly due to Covid-19.
The 3.4 kilometre twin tunnel underground rail link is expected to double the number of Aucklanders living within 30 minutes' travel of the city centre. But the report also says the CRL will likely face more disruptions due to supply chain delays and competition for workers.
Auckland Mayor Phil Goff agreed Covid-19 had a significant impact. He told Checkpoint that the pandemic has meant the project team has been either in lockdown or working under restricted conditions for 230 days. The result was that workers advanced about one metre a day instead of 20 metres sometimes.
However, there had been milestones such as the first tunnel breakthrough last December and the second one due in September.
Asked if the delays would add millions or billions of dollars to the $4.4 billion budget, Goff was adamant.
"I don't think it will be billions and I don't think the delay will be excessive... what it will cost specifically we don't know yet because there are negotiations going on between City Rail Limited and the Link Alliance which covers the different companies involved in the contract."
The Link Alliance is trying to recoup costs associated with the Covid-19 restrictions.
A welder working on a section of the City Rail Link. Photo: RNZ / Cole Eastham-Farrelly
Effective operating model
While costs might go up he was not expecting the kind of budget blowout that has occurred on some of the country's large infrastructure projects.
He said the operating model was effective with profits and losses shared equally between the two parties to the contract.
"It's worked out well as a model for us and I think that will help contain some of the cost increases."
Goff expected the project would be finished by the first half of 2025.
"I don't think it will be billions and I don't think the delay will be excessive" - Phil Goff
The auditor-general's report identified confusion over who was responsible for measuring the benefits of the project.
Goff said he was grateful for the tick of approval on the project's governance, and the officials and their delivery partners were working to address the concern over better quantifying the benefits. The first stage of this work was completed last month and the second phase would be done by early next year.
"What's been really good is that the auditor-general has been positive and constructive. He's given some good advice. We've taken that advice on board and we're implementing that advice in full."