CRL announces revised cost for City Rail Link project in Auckland

WCN Editorial Team 18 Apr 2019 OCEANIA TRANSPORT INFRASTRUCTURE

City Rail Link Limited (CRLL) has announced an increase in the cost for the Auckland City Rail Link project from NZ$3.4bn ($2.3bn) in 2014 to NZ$4.42bn ($3bn).

CRLL has also announced Link Alliance as the preferred bidder for the C3 contract, the project’s largest package of works to construct underground tunnels and stations, and awarded the Early Works contract worth NZD75m ($50m).

CRLL attributed the increase in project cost to higher escalation, or construction inflation costs, and an increase in the contingency risk allowance for any future unplanned events.

After a comprehensive review of project costs, the cost has been revised and submitted to the Crown and Auckland Council, the project’s sponsors, for approval.

The Crown and Auckland Council are expected to announce their decisions regarding the endorsement of the revised cost in May.

CRLL CEO Sean Sweeney said: “The $1 billion cost increase on the previous $3.4 billion estimate made in 2014 reflects significant changes impacting the project in the past five years. No one could have foreseen the competitive pressures that have occurred in the construction industry over the past few years and the impact that has on costs, particularly for a project the scale and complexity of the City Rail Link.

“Eighteen months ago, the value of work in the infrastructure pipeline on both sides of the Tasman was $80 billion – the value of that work is now estimated at $230 billion.”

Sweeney said that the Link Alliance and a consortium comprising CPB Contractors, UGL, Beca, Jacobs New Zealand and McMillen Jacobs have submitted ‘world-class and competitive bids’ for the contract.

CRLL said that it has started negotiations with the Link Alliance to deliver the Early Works contract that includes work relating to design, consents, permitting, utilities and mobilisation, over a three-month period.

Auckland Mayor Phil Goff said: “The City Rail Link is a critical part of the changes we are making to reduce congestion and ensure we can move around our city. The CRL doubles the capacity of rail through Britomart and in peak hour will have the capacity to carry up to 54,000 passengers.

“The CRL will significantly reduce travel time from the west and the south. The cost of the tunnels and underground stations, two of the biggest parts of the project, was determined by a competitive tender process. The increased cost estimate reflects the increase in demand and costs for major construction projects across Australasia.”

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Image: CRL announces revised cost for City Rail Link project in Auckland. Photo: Courtesy of Auckland Council.

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