15 Jan 2015

Knowledge gap in Auckland rail saga

2:10 pm on 15 January 2015

In trying to understand the seemingly shifting sands of Auckland's proposed $2.5 billion City Rail Link, remember London Underground's mantra - "Mind the Gap".

An artist's impression of an underground station on the City Rail Link, which will be built under QE2 Square.

An artist's impression of an underground station on the City Rail Link, which will be built under QE2 Square. Photo: SUPPLIED

The gap, in this case, is a knowledge gap. The gap between what we see being played out in public, and what is going on behind closed doors, between the Auckland Council, and the Government and its agencies.

The reminder of the significance of knowledge gaps was the Government's announcement in June 2013 that it would commit to sharing the cost from 2020 of a project it had publicly poo-poohed.

This was widely regarded as a sudden and unexpected change of tack by the Government. It wasn't.

A month earlier in a Radio New Zealand "Insight" documentary on the relationship between the Council and Government, I pointed to the mayor Len Brown's unexplained confidence that there may be eventual agreement.

In making that programme I followed the mayor and his deputy, Penny Hulse, on one of their routine diplomatic missions around the Beehive.

Mr Brown recently described that process of convincing a publicly-reluctant Government as having run for 12-18 months. It involved meetings between city officials and their ministry and agency counterparts, and between himself and senior ministers including the Prime Minister, John Key.

That June 2013 milestone for the 3.4km rail tunnel under Auckland's CBD, appeared to have been disregarded or forgotten by many councillors during December's debate over a decision which on the face of it, delays the start of the project by three years.

Mr Brown's main centre-right opponent Cameron Brewer praised the mayor's achievements of mid-2013, but at the same time urged the council to fall in line with the Government's 2020 start-date for major works. In doing so, ditching the council's stance promoting a 2018 start

The debate was triggered by the mayor having to back down from wanting the council's draft 10-year budget to fund a full-scale start to the City Rail Link in the 2015/16 year.

The Auditor General Lyn Provost had provided informal feedback as the budget was being pulled together that committing to a 2015/16 start without agreement from the Government was unreasonable.

The mayor and a majority of councillors read the smoke signals and moved the funding out by three years to a compromise date of 2018/19. That buys more time to haggle with the Government, and puts it on the other side of the next three-yearly review of the Long Term Plan, at which point it could further delay if needed.

From left, Auckland Transport chair Lester Levy, rail link project manager Steve Hawkins, Mayor Len Brown and council chief executive Doug McKay discussing the route recently.

From left, Auckland Transport chair Lester Levy, rail link project manager Steve Hawkins, Len Brown and former Auckland Council CEO Doug McKay discuss the central rail route in 2013. Photo: RNZ

It's a move which looks costly for ratepayers. All of the preparatory worked before the first turn of the tunnelling machine's bore, is done with borrowings and the interest costs get lumped onto the final price of the project when it's completed. The longer the time from start to finish, the bigger the snowball effect of interest costs, and of inflation due to work happening in later years.

That at least is the case if absolutely nothing changes in the next four years. That is unlikely. Remember June 2013.

There are no clear signals as to whether the Government will reconsider its decision to fund only from 2020, without certain rail patronage and downtown employment targets being met earlier.

Rail patronage is rising on a track which would hit the Government's annual target for 20 million rail trips on time. The growth in employment in the CBD is also rising, and councillor Chris Darby describes it as being "within the margin of error" of a path to reach the target.

An assessment on employment growth for the council by PriceWaterhouseCoopers was less optimistic. The Auditor General when appearing before the council described that target as "challenging"

What is known is that the same lobbying process that produced June 2013, is continuing. The council is arguing the decreasing ability of the Britomart terminus to turn around trains on time.

The level of commercial property activity waiting in the wings along the proposed CRL route, and the economic and transport benefits of building the CRL as soon as possible are being emphasised.

The mayor Len Brown also wants to discuss with the Government in the New Year the concept of negotiating transport funding for a longer term package of projects. This may include back-dating Government contributions for early work on the project, currently due to be fully-funded by ratepayers.

Councillors debating how this should be reflected in the Long Term Plan's finances have been in an unenviable position. Some want the council budget to reflect the publicly-known position of the Government.

Others seem more relaxed about leaving room for ongoing negotiation with the Government, and having the ability to re-jig the budget again in 2018 if in fact nothing does change.

auckland trains

Auckland rail. Photo: Auckland Transport

In the meantime, this is what the path for the project, on the ground, looks like.

2016 sees the likely start of "enabling works", the digging of a trench from the Britomart terminus, across Queen Elizabeth Square, under Precinct Properties' proposed new development, and up Albert Street to Wyndham Street.

That could take up to two years. The main tunnelling works - the subject of the funding debate, are not able to be started before 2017, regardless of when a cheque might arrive from the Government.

That means even a 2018/19 start would be a delay of perhaps only a year or 18 months.

And the costs? Cynics fear a blow-out which they consider inevitable on a major project of this scale.

Insiders, pin hope on the rapid progress of tunnelling technology which could lower the cost by the time work begins in earnest.

Council budgets require dates and prudent sum of money to be committed to big projects like the CRL. Politics and the world of civil engineering can overturn those assumptions, for better or worse.

When following where this is all going, Mind The Gap.

Get the new RNZ app

for ad-free news and current affairs