$24 billion? Government keeping higher cost for Auckland light rail under wraps

The Authorities’s $14.6 billion price ticket for gentle rail in Auckland is a tough estimate with ministers maintaining a better determine below wraps.

One state of affairs may see the worth balloon to $24b.

Final Friday, Finance
Minister Grant Robertson and Transport Minister Michael Wooden unveiled the Authorities’s most popular possibility for gentle rail operating in tunnels from Wynyard Quarter to Mt Roskill after which continuing at avenue degree to the airport.

They mentioned the brand new line could be designed, consented and constructed by the early 2030s at a value of $14.6b.

What they didn’t say is the fee is a P50 determine, which suggests there’s a 50 per cent likelihood the fee will find yourself larger.

Within the simply launched Indicative Enterprise Case for gentle rail, ready by the unbiased Gentle Rail Institution Unit final yr, is a better P95 value determine, which has a 5 per cent likelihood the fee will find yourself larger.

“The Base Estimate figures are more likely to improve through the design improvement, these are contained throughout the present P50 estimate, with the out flip value (last completion value), more likely to be contained throughout the P95,” mentioned the enterprise case.

The P95 determine has been redacted from the enterprise case.

However buried within the 185-page enterprise case is a line that claims the P50 determine may find yourself being 60 per cent larger, taking the fee to $24b, or $1b per km to construct gentle rail by 2033.

In an announcement, Wooden didn’t deny the P95 value may very well be as excessive as $24b, saying the bottom value of the undertaking is $10.4b with inflation and the potential for elevated design and building prices is constructed into the $14.6 determine.

“The subsequent stage of the undertaking, the Detailed Enterprise Case, already underway, will supply extra correct estimation of prices,” he mentioned.

Wooden mentioned P50 has been used because the central value estimate for the indicative enterprise case as the perfect indicator of the undertaking prices at this stage of improvement. That is consistent with customary NZ Transport Company apply, he mentioned.

“Releasing the P95 value at this stage of the undertaking would additionally prejudice the undertaking’s business place because it enters into the procurement part of the undertaking,” Wooden mentioned, saying the institution unit doesn’t but have an in depth design and all the prices are topic to massive contingencies.

“When the detailed design is accomplished, the vary of prices may have lowered significantly from the place it’s immediately, based mostly on an elevated degree of design info, estimating accuracy, escalation accuracy and worth engineering,” the minister mentioned.

Nationwide’s transport spokesman Simeon Brown mentioned Wooden is dreaming to assume he can ship gentle rail throughout the $14.6b introduced final week.

“This undertaking will undoubtedly blow out with the undertaking more likely to value way more than the $8000 per family nationwide that the Authorities is already committing to the undertaking,” he mentioned, saying Auckland’s primary transport undertaking is a second harbour crossing.

World provide chain constraints, excessive inflation, entry to expert employees and merchandise like metal rising about 50 per cent up to now yr are contributing to a pointy rise in building prices.

The sunshine rail possibility chosen by the Authorities from three choices may have about 18 stations, with trains operating each 5 minutes.

Will probably be able to carrying 12,000 individuals per hour, which the Authorities says is 4 instances extra passengers than could be carried on a devoted busway or “trackless trams”.

The ministers mentioned the “hybrid” system had been chosen over two different choices – gentle rail at avenue degree costing $9b and light-weight metro above or beneath floor costing $16.3b. It is because it had larger carrying capability, was much less disruptive and higher aligned to a linked-up fast transit transport community, they mentioned.

Robertson, who has the job of rustling up $15b or extra for the undertaking, mentioned it could be simple to go together with the cheaper possibility, however he had change into satisfied the popular possibility from the institution group higher met the wants for an built-in fast transit plan.

He mentioned the Authorities will fund the “lion’s share” of the $15b undertaking and take a look at different choices, together with “worth uplift” – a cost on companies and developments that profit from the undertaking – and a few sort of focused price.

The ministers additionally introduced they’re bringing ahead planning for a second Waitematā Harbour crossing with public session on choices beginning this yr, with a most popular possibility chosen in 2023.

This may embrace selecting a route, deciding on tunnels or one other bridge, and confirming what transport modes will be capable of use the crossing.