Auckland's mayor says his council will press on with plans for an inner-city rail tunnel, despite the Government rejecting its business case.
The 3.5km tunnel would create a rail loop linking the existing Britomart terminus with the suburban rail line at Mt Eden.
The Government says the Auckland Council's case for the $2.4 billion project exaggerates the benefits by at least three times. It does support the council continuing to secure the route for possible construction some time in the future.
The Government says the council over-estimates the effect the tunnel will have on transforming downtown Auckland and should explore other transport options more fully.
Mayor Len Brown has staked his political future on the project and says it will continue. He expects the tunnel to open in 2017.
Mr Brown says the council can afford to secure the route and gain consents over the next two years, during which time he believes the Government can be convinced of helping to fund its construction.
"I am totally confident that in the months and years ahead we will bring the Government on board with the strength of our argument and the clarity of our case and the determination of this council and our community that this is a project that is critical to Auckland's go forward."
A business case prepared for the Auckland Council argued that the tunnel would transform the downtown area and every $1 spent would deliver up to $2.30 in benefits.
But Transport Minister Steven Joyce has discounted the council's method of calculating benefits, and says more work needs to be done looking at other forms of transport.