Auckland?s Rail loop projected to lose money, yet Wellington policy wonks are getting behind it

Even though government officials have given a tentative thumbs up to?the?rail loop there are still questions over its value.

Government officials have had a change of heart on the Auckland Council’s $2.5 billion City Rail Link, dropping their previous lack of enthusiasm only after the politicians decided to support it.

Papers obtained by RNZ News show officials who once saw little merit for the project starting before 2030 now support it getting underway 12 years sooner.

In July 2013, when Prime Minister John Key announced for the first time that the government backed the project, but with conditions, the Ministry of Transport was advising against an early start.

“We conclude that the evidence does not support a case for construction of the CRL by the council’s desired timeframe of 2021, but that the case becomes stronger closer to 2030,” said a Minister of Transport briefing dated April 2013.

Last month Mr Key went a step further, removing the previous funding conditions, and promising a half share from 2020, in a way that would give the council certainty to start building the main tunnels in 2018. ?

By then, a joint Treasury and Ministry of Transport cabinet briefing, released to RNZ News, showed official advisors had got in behind.

“On balance we consider the disadvantages are outweighed by the merits of enabling the Auckland Council to provide funding certainty for the project,” they wrote.

The support of officials was not unconditional.

“As one of the biggest transport infrastructure projects to be undertaken in New Zealand, there are considerable risks attached to the CRL; eg cost escalation, construction and timing“.

“These risks are potentially developing now given Auckland Transport’s recent progress on the project,” they wrote.

Yes the costs have already blown out…and Kiwirail have put their hands out for more money too.

The papers have had the detailed list of risks deleted. The “recent progress” refers to the commencement of the shallow section near Britomart, in order to build the 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 – 90 cents.

That is not cost-benefit…it is cost-limitation.


-Radio NZ