The Prime Minister John Key is expected to commit to funding half of Auckland’s $2.5 billion City Rail Link (CRL) two years early as part of an update on the government’s position on Auckland’s infrastructure.
BusinessDesk understands that Key will commit to the government’s $1.25 billion co-funding of the CRL project in a speech to the Auckland Chamber of Commerce on Jan. 27.
In 2013, the government agreed to fund the CRL 50:50 with Auckland Council but not to provide its share until 2020.
It also said the government would consider an earlier business case and construction start date if it became apparent that Auckland’s CBD employment and rail patronage hit thresholds faster than current growth rates suggested.
The two thresholds were rail patronage hitting 20 million trips a year before 2020 and a 25% increase in Auckland CBD employment over the then current level – half the increase predicted in Auckland Transport’s City Centre Future Access Study.
Neither threshold has been met at this stage although rail trips are forecast to hit the 20 million mark by the end of this year. Patronage increased 22% in 2015 to more than 15 million trips a year.
Employment in the Auckland CBD including Grafton and Newton has grown 7.6% to just under 105,000 in 2015 from 98,000 in 2012 but is still well short of the certain trigger.
But another factor understood to have tipped the government’s decision to fund the project earlier is the amount of private sector property projects planned or underway along the CRL’s inner city route where it would cost a lot more to incorporate the rail link at a later stage than during construction.
These include Precinct Properties’ Commercial Bay development on the site of the Downtown Mall, which straddles Lower Queen Street and Albert Street, at the first stage of the rail link, and New Development Group’s 52-level NDG Tower in Albert Street, which is at the site of the rail project’s Aotea Station.
Auckland Council estimates the current office developments planned will add a 22,000 employees over the next seven years.
The CRL will link Britomart Station in downtown Auckland with the existing western line at Mt Eden station, allowing trains to run both ways through Britomart.
The council has been working closely with Key, Finance Minister Bill English, and Transport Minister Simon Bridges on the urgent need for the CRL given rising rail patronage and congestion at Britomart already causing delays.
Bridges, the current duty minister during the parliament’s summer break, told BusinessDesk that the Prime Ministers speech is under preparation, and “comment about its content is simply speculation”.
Preliminary work on the CRL started last month, and BusinessDesk believes it’s unlikely the council would have forged ahead without a firm commitment from government that its share of the funding would kick in before 2020.
The Auckland Council’s new Long Term Plan passed last year was based on the construction of the CRL beginning in 2018 with completion in 2022 which would require the government to commit to funding in 2018.
Auckland Chamber of Commerce chief executive Michael Barnett told BusinessDesk that Key’s address would cover the issue of infrastructure funding for the region, similar to the June 2013 speech to the chamber’s membership in which he confirmed joint funding for CRL.
“I’m expecting a significant funding package similar to what Key gave in June 2013 and that he will use this occasion to say ‘ok, we can pay more certainty to some projects’. What we have at the moment is so conditional, it’s difficult for plans to be put in place,” says Barnett.
Barnett says the other projects he expected Key to comment on included the East/West Connections plan that would improve connections between Onehunga and Mt Wellington which are heavily used by industry.
