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Council-Government agreement on CRL signed

Another milestone was reached on the City Rail Link (CRL) yesterday with the government and the council signing their first official agreement to work together and jointly fund the project. The Heads of Agreement (HoA) sets out how the two parties will work together to come up with a more detailed ‘sponsors’ agreement which is likely to be signed off next year. It also gives some broad details on how the council and government will fund and oversee the project. One good thing is that Auckland Transport now seem to be filming events like this so you can watch the announcement below

The good news on funding is that the government has agreed to pay for 50% of the cost of the CRL including the work already underway – although given Auckland contributes an estimated 36% to the economy it actually means Auckland picks up about 68% of the overall cost. There is a small caveat that the crown doesn’t have to fund any financing costs including interest that are incurred before July this year but I suspect that’s not going to be major in the grand scheme of things. Although it does sound like it means that cost of the hundreds million+ of property purchases for the project will be fully borne by Auckland rather than shared by both parties.

The outcome is far better than some feared which would have seen the government only pay for 50% of the remaining costs after the early works or as indicated in January, they might allow the project to proceed but only provide funding from 2020 onwards. Much was made in the media yesterday about the cost of the project with most reporting it had blown out to $3.4 billion but as is often the case in these situations it is a bit alarmist. The government has stated they think it will cost somewhere in the range of $2.8-3.4 billion and reflects more detailed design work that has taken place. Len Brown’s comments were to remind that the project cost of $2.5 billion was always +/-20%. The cost the government and council will ultimately target to pay is something that will be worked out as part of the more detailed sponsors agreement. Of course a lot will depend on how the tender contracts go.

Below is the project scope showing what is expected from the project – being the CRL and stations in the city plus a few other small upgrades elsewhere on the network.

crl-heads-of-agreement-project-scope

 

To oversee the project, they will separate out the CRL team from Auckland Transport and form a company called City Rail Link Ltd (CRLL) which will manage and deliver the project. The HoA states the government will have a 51% shareholding in the company vs 49% for the council and is very clear to point out that it won’t be a council controlled organisation. That makes me wonder if there was some legal or governance reason for the shareholding split.

crl-heads-of-agreement-crll-structure

The structure also means that both parties will benefit from ‘opportunities arising from the project’. As we know both the Wellesley St and Mercury Lane entrances have been designed for buildings to be built above the station entrances so those are likely to be some of the currently unbudgeted opportunities.

The signing of the agreement took place on on Victoria St where a 18m deep hole is being dug so a small tunneling machine can be launched as part of the task of moving the services. The hole is currently 13m deep so still has a little way to go. The photo below is from EmergingAuckland and there are more in the galleries – plus of many other projects.

 

While on the topic of the CRL, I came across this image from Auckland Transport showing the layout of Karangahape Rd Station

k-rd-axonometric-west

And in another piece of CRL news, Auckland Transport announced yesterday that the Albert St tunnels contract had won a sustainability award

The City Rail Link (CRL) has been awarded a ‘Leading’ Infrastructure Sustainability (IS) Design rating by the Infrastructure Sustainability Council of Australia (ISCA), the highest possible achievement in the IS scheme.

The rating to Auckland Transport is for the design and construction planning (with Connectus) of Contract 2 – Albert Street tunnels and a stormwater diversion.

To award a rating, ISCA considers project performance across six themes: Management & Governance; Using Resources; Emissions, Pollution & Waste; Ecology; People & Place; and Innovation.  The process the CRL has undertaken to engage and partner with Mana Whenua to embed cultural values into an industry recognised sustainability framework has been acknowledged as a ‘world first’ innovation.

40 comments to Council-Government agreement on CRL signed

  • Brian

    One more step towards completion. Great!

  • Stuck in Traffic

    Can we now look at expanding the network to the airport, shore and Botany?

    • David B.

      We certainly can. Well done to all involved for getting to this milestone, including Len Brown who has persisted with the project all the way through.

  • Stuart Donovan

    congrats (and thank you) to all involved, including Auckland Council, Auckland Transport, and the Government.

  • Buttwizard69420

    Wait so are the trains now not part of the budget? I’m confused. They’ve always been a part of the project cost – does that suggest we might get them sooner?

  • Dendel

    I try to not gloat but: Suck it, Dinosaurs! This is HAPPENING

    (you are welcome to use it once it’s built tho – the trains are roomy enough even for people who have fought it for a decade).

    • Greg N

      Scaremongering and concern trolling.

      This is precisely the reason why there is a separate company formed, and its not a CCO, and its totally outside of both AT and AC. And is 51% controlled by the Government
      The days of politicking from the likes of Rankin to try and delay this project, now its underway are over.

      As Goff said the other day, he will do a PPP to build it if needed.

    • mfwic

      This is someone who saved the Council money by putting back the date they paid their staff. Problem was the staff who had mortgage payments going out got screwed.

    • Nothing David Rankin says should be treated as anything but waffle. Anybody can get something published on Scoop.

  • Adam W

    What is the Newmarket Crossover?
    And I take the turnbacks are new platforms that terminate at these stations?

    • Greg N

      Hmm,
      Crossovers? Describing The whiffly-waffly councillors and MPs, who opposed the CRL from the get go, but now have changed their minds since the Government decided to fund it?

      Turnback? Those local [generally former] councillors and MPs and PMs who all opposed CRL but who will be turning up in droves to each and every CRL opening ceremony proclaiming it was all their idea all along and they supported CRL from the Get-go.

      Seriously, Newmarket crossover is where the tracks leave/join the main track near Grafton. One of the tracks [the outer one] has to cross the other one [inner track] to do so.

    • JC Jones

      The Newmarket crossovers in question are a new set of turnouts at three or for locations around Newmarket which will allow trains to cross between lines and platforms in ways that are not possible now. Allows for bypassing faults and breakdowns, more efficient running patterns and reduced congestion. More useful pre-CRL than post.

      Turnback is not really the correct term. They’re third platforms at Henderson and Otahuhu. Yes they can be used to turn terminating services back to town, but they will ultimately be used mainly for extra services, versatility in scheduling and to let express services pass stopping services.

      • MFD

        “They’re third platforms at Henderson and Otahuhu. Yes they can be used to turn terminating services back to town, but they will ultimately be used mainly for extra services, versatility in scheduling and to let express services pass stopping services”

        I presume that there are passing loops associated with those platforms. Using such loops to hold a stopping service while an express service passes is great for the express passengers but will have a negative impact for those on the stopping service. It will be interesting to see how it pans out. If they can make it work reliably I imagine that the express services will be very popular.

        • JC Jones

          Otahuhu extra platform is on the loop. Henderson’s is a terminal platform leading onto the shunt or the mains. Express would start/end there so no passing needed. Mt Eden and Newmarket junctions would/could offer the passing opportunity while stopping services do passenger work. Parnell’s low frequency and the extra Strand crossover may also give passing opportunities. Tamaki loop and later 3rd main extensions give Eastern line express crossing points. Details not yet revealed.

  • mfwic

    That is great news. Now they can add back all the costs they held back on to get the thing approved. Just like the Aotea Centre, Vector Arena, South Eastern Arterial, North Harbour Stadium, Bruce Mason Theatre and pretty much every other project local government gets involved in.

  • Faye van Tilburg

    Is the north Shore in the Auckland area now, doesn’t seem to be – do you expect us to pay for this too when you don’t do anything for the NS – like another crossing, or likewise – A lot of us wouldn’t use your new facility???

  • Graeme Easte,

    Can we get clarity on the new numbers announced by Bridges. Do they come from the Ministry of Transport or similar or are they based on information from Auckland Transport who have actually been working on the project? Are the numbers in present day dollars or future (discounted or inflation-proofed dollars)? How much is for the ancillary stuff (work on network improvements and suburban station upgrades) that lies outside the Mount Eden to Britomart link itself? This last is important because we keep ignoring this kind of thing with motorway projects – for example the Waterview-Connection will cost (only) $1.4 billion but the flow on effects have driven another $500 million or so in improvements on SH16 (widening NW Motorway from St. Lukes to Henderson) – and now they have started a last minute change that will add an extra lane to the Hillsborough section of SH20 to avoid potential traffic congestion causing tailbacks into the southbound tunnel – but because this work is outside the designation for the Waterview-Connection it will not be counted as part of that project but it is definitely a consequential expense that should be attributed to it.

    • No info on what year the $ are dated to. But included are station expansions at Henderson and Otahuhu, and track work at Newmarket and Quay Park. The station expansions are principally for the west/south infrequent short runner, so really no more part of the CRL than work anywhere on the m’way network is part of Waterview. Ironically these works are for the only service that won’t use the CRL!

  • Graeme Easte,

    Perhaps the most important number is the Government’s 51% shareholding in the new company to run the project. Two things arise from that – Government will get to appoint a majority of the directors (say 4 of 7) and also therefore in effect appoint both the chair of the board and the chief executive officer. So the project moves from being an Auckland one to a Government one. The second thing is that if there is a dispute, or even a relatively minor point of difference, then Government appointed directors will have the deciding vote. So for example if costs blow out by a significant amount, we might find that the whole project is being recalibrated/delayed, or some important features are deleted or done on the cheap to cut costs. Let us hope that we get the right team to run this company – i.e. people with relevant knowledge and experience in overseeing large construction projects – not just a bunch of government yes-men or corporate bean counters who “know the price of everything and the value of nothing” [to quote Oscar Wilde]. Hopefully events will prove me wrong but watch this space.

  • grant drabble

    2 questions really,when do they order more trains, and the otahuhu platform is being built now?

  • Could we please also have one director with urban form and customer focus on there too? It’s not just a complex construction task; it’s also city shaping task. Transport infrastructure is literally a means to an end, not an end in itself.

  • Gster

    “The HoA states the government will have a 51% shareholding in the company vs 49% for the council and is very clear to point out that it won’t be a council controlled organisation. That makes me wonder if there was some legal or governance reason for the shareholding split.”

    See section 6(1) of the LGA.

  • Jeff T

    That 51% shareholding is a worry, particular as the Auckland area will put up most of the absolute dollars.

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