27 Jan 2016

Will PM confirm Auckland rail link funds?

6:43 am on 27 January 2016

Government funding for the country's biggest transport project is expected to be confirmed today, locking in the construction dates for Auckland's $2.5 billion City Rail Link (CRL).

Auckland City believes a new rail tunnel and two new downtown stations will transform the city centre.

Auckland Council believes a new rail tunnel and two new downtown stations will transform the city centre. Photo: AUCKLAND CITY

The Prime Minister John Key is expected to announce a commitment, ensuring major works on the rail line under the city's downtown area can begin up to two years earlier than the government's current conditional support for a 2020 start.

An announcement is expected during his first major speech of the year in Auckland today.

The Auckland Council has just begun three years of work on the initial stage of the project, which it is funding itself.

But it has been negotiating for 18 months to close the two-year gap between that work and the government's current conditional nod to co-fund major tunnelling from 2020.

The council believes the 3.5km tunnel and two new downtown stations will transform the city centre, and allow new electric commuter trains to run more frequently and cut journey times.

Second major shift

The announcement expected today would signal the second major shift in the government's position towards the CRL in five years.

Auckland mayor Len Brown at the gathering of graffiti agencies in Auckland.

Auckland Mayor Len Brown championed the Central Rail Link during his 2010 election campaign. Photo: RNZ/Kim Baker Wilson

The project was championed by Auckland Mayor Len Brown during his 2010 election campaign but was initially met with a sceptical response from the Beehive.

During the campaign, then-Transport Minister Steven Joyce linked talk of billion-dollar projects to a full moon.

In December 2012, his successor, Gerry Brownlee, dismissed a major report on transport access to Auckland's CBD, saying "this valiant attempt to make the CRL stack up struggles to make the case".

In April 2013, a Ministry of Transport briefing to Mr Brownlee was also cool: "We conclude that the evidence does not support a case for construction of the City Rail Link by the council's desired timeframe of 2021, but that the case becomes stronger closer to 2030."

Prime Minister John Key

Prime Minister John Key, centre, had said there was room to negotiate an earlier start for the government's support of the project. Photo: RNZ / Alexander Robertson

However, just two months later, Mr Key announced the government would support the project - but not until 2020 and only if a business case supported the investment.

Mr Key said an earlier start could be considered if rail patronage grew to 20 million trips a year and downtown worker numbers grew by 25 percent, or 24,500, from 98,000 in 2012.

He told RNZ at the time that there would be further conversations about the project.

"I think there's a bit of negotiation, a bit of give and take. We're saying at the moment - 2020, there's a bit of optionality to go a bit sooner, let's see how it goes, we'll have some discussions."

Since then, rail patronage has risen sharply to 15.4 million trips in the year to December 2015 - a jump of almost 23 percent in a year.

The council was initially pessimistic about the employment target but has since said actual job growth of 8000 combined with new planned commercial office space made it more achievable.

Need for commercial certainty - council

A major part of the argument for an earlier start to the project involves a string of major commercial property developments planned on, or near, the route of the rail link.

The start of the initial stage last December was driven by the need to build the Britomart end of the tunnels that would pass under Precinct Properties' imminent $680 million Commercial Bay project.

Other big developments planned along the Albert Street rail tunnel include an office block on the former site of the New Zealand Herald's offices and NDG's 52-storey tower, which would link into the Aotea underground station.

An artist's impression of the proposed PwC Tower at Commercial Bay

An artist's impression of a proposed tower at Precinct Properties' Commercial Bay. Photo: Supplied

From the council's perspective, uncertainty about when - or whether - the government would fund the project's major tunnelling works also made it impossible to start negotiations with the firms that would build them.

The construction of the main tunnel section of the CRL is expected to take four years beyond the completion of the council-funded initial stage in 2018.

Details still uncertain

It was not clear whether today's announcement would commit funding from 2018 - or from 2020 but with the government sharing the interest cost of council borrowing to bridge the two-year gap.

RNZ News understands either option would be welcomed by the council, giving it sufficient certainty to move into top gear on a project it ranks as its top strategic priority.

The council's current project timetable had envisaged a start on the major tunnelling works in 2018 but the government's current position would have put that at risk.

Mr Key's speech was also expected to advance several other Auckland transport projects.

That could include funding for long-debated roading projects such as the Penlink highway off the Whangaparaoa Peninsula, the east-west link across the city's southern suburbs and, perhaps, new projects serving future residential growth areas.

The speech might also detail further investigation of a new Waitemata Harbour crossing.

The prime minister yesterday declined to give details - other than to say his speech would focus on infrastructure, not just projects in Auckland.