Wow what a day (why do these days always happen when I’m busy with other stuff)

If you haven’t heard already, the government has announced that it will pay for half of the City Rail Link although it appears with a delay of 5 years. Here what some of the media outlets are saying.

NZ Herald

Prime Minister John Key has confirmed that Government will back a city rail loop in Auckland, but will delay the start of construction by five years.

Mr Key also suggested the $2.86 billion project could be paid for with proceeds from asset sales.

He told media this afternoon: “The Government is prepared to back the building of the central business rail loop in Auckland.

“We want to do that on a slower scale than the one preferred by the council. That is we’re likely to start the project in 2020.”

Auckland Council wants the construction to begin in 2015/16.

A spokesman for Mayor Len Brown said the Government had agreed to pay half of the project’s estimated $2 billion price. The rest would be funded by Auckland ratepayers.

Transport Minister Gerry Brownlee hinted this morning that a major transport announcement, related to the rail link project, would be made in the city this Friday.

“The Government is going to make, through the Prime Minister, announcements around a number of issues on Friday in Auckland.”

Asked if this signalled a change of heart by Government, he said: “It’s not a U-turn, it’s a loop.”

TVNZ

The Prime Minister has confirmed the Government will support the Auckland rail loop.

John Key’s confirmation follows hints from Transport Minister Gerry Brownlee earlier today.

The project won’t start until 2020 and the Government isn’t ruling out funding coming from the future investment fund, which uses the proceeds from the partial sale of state-owned assets.

ONE News deputy political editor Jessica Mutch said earlier the Government is “signalling that they will back a rail loop for Auckland central city”.

Mutch said it was a change in position for the Government, but ONE News understands that Auckland Council will not be getting exactly what it wants out of the deal.

TV3

3 News has learned the Government has decided to put taxpayer funding towards an underground rail tunnel linking Britomart and the central suburbs.

Prime Minister John Key is set to make the announcement on Friday, but multiple sources – including a very senior source in the Beehive – have confirmed the Government’s support.

The $2.86 billion project will be the most expensive transport project in New Zealand. Auckland ratepayers will pay some and the Government will now put in a huge chunk.

It is understood Mr Key will make the announcement at a speech to the Auckland Chamber of Commerce, which is a supporter of the rail link. Today Mr Key’s office would only confirm the speech will be on “Auckland issues”.

Sources say the “billions of dollars” in Government investment will not only be for the rail link, but for a transport plan billed as a “massive” step-change for the city’s transport.

It is an about-face for the Government, which has never outright refused to support the project but has been lukewarm about it until now.

Transport Minister Gerry Brownlee has repeatedly said he remains unconvinced about the necessity of the link, which would run underground from Britomart to Mt Eden.

What is interesting is the suggestion that there will be more than just the CRL announced. I had always suspected that if National supported it that they would delay the construction date so the news that it has happened hasn’t surprised me. Really the devil is in the details and so we will have to wait till then to find out exactly what is being proposed. To me it still wouldn’t surprise me if we were to see an alternate route/s or the CRL tied in to some other projects.

Interestingly the Young Nats have posted this on their twitter feed (although for it to be geographically correct the uni station would need to be on the other side of Queen St).

There will be plenty more to discuss over the coming days and while I think we still need to be starting construction in 2015, this is at least a significant improvement from the previous stances and the government should at least be given some credit for finally coming to their senses and supporting the project. Even if it has only taken 80 odd years.

Edit: a bit of fun in parliament about this today

Edit 2: Some worthwhile interviews on the topic from Duncan Garner

Len Brown

John Key

Some very interesting comments from Key. Very clear that this was a political decision.

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86 comments

  1. Yes, lets give credit where it is due.

    Really excited to see what else is in the announcment. Now the rail flood gates have opened – rail to the airport?

  2. Very interesting. IMO this is National taking a bet that they’ll win next year’s election, but lose the one after that when the opposition would fund the CRL anyway. And instead of using money from the transport budget (which would ideally reduce the amount spend on new motorways), they’re planning to fund it from … asset sales. This is a win, sure, but it’s a win by calculated semi-surrender to Auckland Council, the Greens, Gen Zero, Labour and the rest of Auckland.

  3. Isn’t this just firming up their previous position that they will fund it but not before 2020? I would much rather have seen this funded within this or the next parliamentary term which amounts to a real promise.

  4. Rail to the Airport and the CRL would be fecking fantastic. I am actually amazed that they have decided to do it. CANT.WAIT.FOR.FRIDAY.

      1. Ah, screw the paranoia for once. And you can’t help but say that this particular piece of ad-lib / spin wording is marvelouslly skilled:

        “Asked if this signalled a change of heart by Government, he said: “It’s not a U-turn, it’s a loop.””

  5. Good news, good decision National, looking forward to the details in the announcement friday.
    Well done to the many people and organisations who have raised the profile of this project, myth busted and worked hard for a long time to get to this stage.

  6. Very interested to hear about the rest of this “step-change” in transport policy for Auckland.

    What’s the bet the 5yr delay is so commencement of a more “deserving” road project can be fast-tracked first? Second harbour crossing? Eastern motorway?

    1. I think you are 100% correct. That is the one I would pick.
      Remember, the Government has just passed a law giving them strategic control of Auckland Transport. They can set the agenda for any transport project in Auckland now.

      Another thought is a PPP will build and operate it for 25 years.

      How easy would it be for the government to privatise any part of the rail network? Apart from Kiwirail who actually owns the assets?

      There is no mythical pot of gold for them to dip into – or else there won’t be a budget surplus next year, remember?

  7. Need to push line delay due to RONS projects. If Puhoi-Warkworth delayed instead we could have CIty Rail Link built now.
    Also pushing this back pushes rail to Airport/Mangere, Mt Roskill, North Shore and decent Onehunga frequency back 5 years too.

  8. Luke-warm yay. It feels less like the government embracing the potential of the project, and more like they’ve calculated how long they can delay it while not saying they’re actually opposed. Like KLK, I’m waiting to find out if there are barbs in the details (“But we’re going to spend $5 billion on the second Waitemata Crossing first!”). I guess we should be grateful the government appears to be admitting the project will have some value, at some point in time.

    1. They admitted that “the project will have some value, at some point in time” when they started talking about funding it at 2030. This isn’t much of a win, because it’s still seven years away when construction really needs to start in half that time.

  9. I’m concerned about the announcement overall… Will this make it more politically difficult for Auckland Council to press forward on current timetable, with the promise of government funding if it’s delayed?

  10. The 5 year delay is not good news for property owners. Especially interesting for the Downtown Shopping centre. The council may have to build a several 100m section through here much sooner if Precinct want to redevelop the site with the consented tower before 2020, which is highly likely.

  11. Len Brown’s response (http://www.aucklandcouncil.govt.nz/EN/newseventsculture/OurAuckland/mediareleases/Pages/LenBrownWelcomesGovernmentSupportForCityRailLink.asp) includes the following:

    “The route will pass through three downtown stations – Aotea, Karangahape and Newton , making its way through Albert Street, across Karangahape Rd to upper Symonds Street linking to the Western line and the Southern line.”

    So unless John Key is REALLY doublecrossing the Council, the route isn’t going to change that much.

    1. It’s the delay, and other yet to be announced projects that are the dead rats we are being asked to swallow here.

      The delay really will be a problem… I can’t see the peaks being anything other than saturated pretty much by 2016 with the clever New Network directing bus users to trains and the lovely new trains also attracting more users…. We already have 10 minute frequencies from Papakura at the peaks and while the new trains are bigger this is the limit until the CRL is built. The Western and Eastern Lines have more slack but there’s no chance this can be put off till 2025/6…. another decade; impossible.

      1. Yes, I think the delay is primarily to suit short term electoral calculus and give cover to those on the centre-right who had consistently argued against it. It also gives an opening to the opposition to campaign on an earlier start date. Nonetheless, the project is gathering unstoppable momentum, and I would bet on a start date prior to 2020 being more likely than not, especially post electrification and integrated ticketing – the CRL will seem like a no-brainer then. And what will the price of oil be in 2017?

        1. Yes that’s the game. Now no excuses for AT to slacken off pressure on themselves to build the foundations of a fantastic New Network knowing that the CRL will be there sooner or later to grow into.

      2. My question is: if the Government says “we’ll pay half in 2020”, what’s to stop the council saying “fine, if we can get that in writing, we’ll pay our half right now and get ‘er going”?

        1. If Auckland Council gets a firm commitment out of the government for funding in 2020, why not run a short term debt financing scheme and stick to Len’s schedule?

        2. Certainly Precinct Properties may wish to get on with developing their Downtown site earlier than 2020 and there’s no reason that Council couldn’t coordinate the necessary CRL construction of the tunnels through here once the developed design is finished through a govt. infrastructure loan.

      3. I support this project, even though I am not an Aucklander. However, I definitely don’t want the government to be blowing it’s budget when we’re finally back on track to surplus. Yes, the money should come out of the holiday highway but National won’t back down on that.

        A project like this is an incredibly long term enduring structure – the extra 3-5 years will be well used to concrete funding sources, technologies, designs, community input, doing a robust contracting out process and so on. Is 3-5 years going to make that much of a difference, realistically? Just be happy that National finally has seen sense in doing it and now the project will definitely get going in the next decade, no matter who is in Government.

        1. They’re blowing a great deal more on uneconomic duplicative highways. 13 billion in the near term, that’s more of the threat to our accounts. Especially as this spending reinforces auto-dependency and keeps us addicted to our 8 billion plus annual oil import bill…. and the rest

      1. 7 years before they even start. WTF??

        Plenty of time to add more delays. It’s what National does to policy it doesn’t like. Look at the 2013 to 2016 delay they added for air quality compliance.

        I wouldn’t trust this government to organise a piss-up in Mangatainoka.

        1. Absolutely agreed Patrick. This is to shut up the opposition.Probably something to do with internal polling in Auckland seats as well. This is not a road to Damascus moment for them. This is Machiavellian. The road doesn’t go to Damascus. It still goes to Puhoi.

        2. Bingo, Matt and Patrick. They’ve knocked out a pillar of the Greens and Labour’s next election campaign and they didn’t have to spend a dime. It was always going to get built as soon as they went out of government, so they’ve essentially removed it from the election equation.

        3. Actually Matt, not Machiavellian but Joycean. Clumsy, stupid, interfering move probably aimed at garnering party funds and votes in Auckland Central as well as responding to Sky City’s apparent interest in the scheme, which is, of course, connected to the first objective. The provincial hicks comprising the National party couldn’t be Machiavellian even if they tried. But certainly brutal and opportunistic.

    1. This sounds kind of positive but the cynic in me totally agrees with Matt. After 5 years of a John Key led government nothing is ever as it seems and this seemingly sensible offer could be as hollow as the proposed tunnel itself. The CRL could well be kicked for touch by then anyway given some manufactured unforeseen circumstances because in reality there was no solid guarantee they would commit to it anyway. It may even be used as a bargaining tool over other unpalatable policies of Nationals. If you are going to sup with the devil ……….but in the interim National will crow about this as if it were mission accomplished.

    2. The glass is half full in my opinion:

      – National have agreed the project has merit, albeit not before 2020
      – No government in NZ has won more than three consecutive electoral terms
      – National has already won two terms
      – Elections due in 2014, 2017, 2020

      It is highly likely there will be a change of government prior to 2020. That government needs to get digging the CRL ASAP to make it impossible for the project to be stopped by any future change of government. Unfortunately the local $2 shop does not stock tunnel boring machines.

  12. Oh, anyone else follow through the implications of the “Future Investment Fund” being used for this?

    “Sorry, other communities, you can’t have your school/hospital/other-important-facility, because we’re having to spend all this money on trains for Auckland.”

    The FIV was meant to be for paying for social infrastructure. A billion-ish dollars from that fund is a lot of social infrastructure.

    1. Saying the money is from the FIF means the govt can claim they’re not creating extra debt. Then pressure Council to also not increase debt by, you guessed it, selling those tasty local assets our rentiers want to get their hands on.

        1. Ah- Thanks Doloras (and others who added to the list), there’s a Council Property sell off at the mo, $100m worth from memory, i thought you were referring to that..

          Save our Port! Airport, power shares, and 51%s!!!

  13. We have a Clayton’s Rail Link.

    More fool you if you think the Govt has actually committed to anything, and if you think the Govt would actually pay for this out of taxes (they are going to use a Public Private Partnership where the losses are socialised and the profits are privatised).

  14. I’m wondering whether the Government is supporting it just so it can sidetrack others from the “Holiday Highway”.

  15. @Matt, rew: starting work in 2015, while it might be good to have this project started early, I think the 2015 boat sailed on the 27th November 2011

    I don’t think that it would be possible for Labour/Greens to get the project started before 2016, probably more likely 2017,

    If the Government changed in 2014, the first budget to allocate spending is 2015, you would not seriously be able to call for tenders before this date as no government money would be able to spent on it, and no one would want to do anything “subject to funding being made available)

    This is a Major project and I doubt any of the large construction companies would want to put time money and effort into QSing scoping budgeting and arranging sub contractors before they had confirmed that there actually was a contract to chase.

    1. AT is going through the process of getting the designation right now. If the government changes at the next election, it’ll be just in time to bring funding forward as the designation finishes and planning commences. No construction couldn’t start before the next election, and shouldn’t even if it could, but the construction could be started a whole hell of a lot sooner than 2020 if there was central government money available right now. Even if it was just being guarantor of Council debt so that tenders could be sought it would be a huge improvement.

  16. as both Loop and Link start with L, maybe it should be re-branded the “City Rail Connector” or something that described the project better

    Phil Twyford was thoroughly enjoying himself in an apparently non-malicious manner

    1. Yeah I like Phil in that stupid bear pit; he never looks like he takes the game too seriously; low on malice. That was pretty good natured, I reckon he got the tone just right because it is still basically a good thing.

    2. The formal name will eventually be applied by KiwiRail, and the New Zealand Geographic Board. My guess is that it will become part of the North Island Main Trunk, just as Britomart did in 2003.

  17. Why can’t the council still get work started in 2015 as they are paying half after all? Still good news

    1. Because they’d be savaged for risking enormous money on an unsure bet. That said, this announcement still may mean Council is able to be much more active on making this shovel-ready, at the very least.

        1. Nothing is guaranteed until it’s in a Budget, and not even then if there’s an election. Although this project would be safe from being terminated by an incoming Labour/Greens government, that’s not a universal truth.

      1. Give me a shovel, I’d start digging tomorrow, right after I go all Guy Fawkes on that Downtown Shopping Centre. (Note to any law enforcement reading this, or Prism operative: I am merely expressing the wish to remove aforementioned building rapidly, this is not a threat to public order.)

  18. Wow! A monster u turn.
    I agree it’s sensible to be wary of this announcement. Still it’ll get even more kiwis used to the idea of the CRL.
    now it really is a question of when rather than if. It’s put a smile on my face at least.

  19. Just caught TV ONE 6pm..

    The party line split on terminology where National calls it a “loop” and Labour/Greens call it a link seems to be continuing.

    I also noticed that all of TV ONE’s on screen vox pops suggested people had no real idea why the loop was necessary – one thought the money would be better spent extending the rail network further out of Auckland, another thought it a bit expensive if it was just going to be duplicating the Link bus, etc. Message still isn’t getting through – and a missed chance actually for AT or the Council to make the news and explain what the real wider benefits were in the midst of all the other hoopla.

  20. but we should not be selling off assets like the Port and airport that return dividends to the People of Auckland, let those assets benefit ALL Aucklanders, not just a larger number of private shareholders

  21. Here are my thoughts.

    This is a blatant vote grab for next years election. National want to start construction in 2020. Does anyone seriously think National will still be in power then? I even doubt they think they will. Its an empty promise they won’t have to keep and they know it. All they are trying to do is get Aucklanders votes next year.

    Even in the unlikely event National is still in power in 2020, having lived through the past five years of National government, I have no doubt whatsoever that they would bring out an excuse not to fund it. They have been vehemently opposing this project since they came to power, disregarding it at every single turn. At every oppurtunitiy, insulting the Greens, Labour and the Council with the silly little train loop. Suddenly, they love it. It stinks! U-turn of the century indeed.

    The rail link needs to be BUILT by 2020, so this is way too late.

    Aucklanders should not be fooled by this. If you want the rail link to be built in time for it to be needed, if you even want it built at all, National is not the party to vote for.

      1. Assume the blue corner would have conducted internal polling and seen a fair portion of the opposition vote is swayed by their support of city public transport infrastructure. Great way to obtain some of that vote by creating the image of doing something. Imagine they will be all over the new EMU arrival as well, with photo ops to make it appear that public transport is being invested in.

        The downturn in the Australian economy has probably created a few scares as well – the safety valve might not be there in a few years and therefore the population for Auckland may trend massively upwards if a portion of the diaspora comes back. Find it bizarre in New Zealand how the transport decisions are so polar and slow – W. Australia with the blue parties in power for example is proceeding with the Metro Area Express project pretty rapidly.

        The news clips explain why people are so uninformed generally – picture of a circle loop, few decent questions asked and a certain reporter with a really grating accent who makes you want to change channel! A big thank you to this blog for explaining the reality.

  22. Friday’s announcement will be pokies on the new trains and tax breaks for manufacturers of tunnel boring machines

  23. Great news. It had to happen one day for the city to keep moving forward and keep up with other cities similar in size. It is a long way away, but progress is happening. Slowly.

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