The City Rail Link has been in the headlines a bit recently so I thought I’d look at some of them.

First up, yesterday the NZ Herald ran this piece about the ongoing costs of the CRL.

Auckland ratepayers will be saddled with an estimated bill of $220 million each year to run and maintain the $5.5 billion City Rail Link once it opens in 2026.

The costs are outlined in more than 1000 pages of just-released documents for an extraordinary budget committee meeting on Wednesday where Mayor Wayne Brown will present his first “Mayoral proposal” for a new 10-year budget.

Bernard Orsman has always put quite a negative spin on news about the CRL and as usual from him you have to actually read down to the middle of the article to get the real details.

A summary table of the estimated annual costs to the council shows ratepayers will shell out $160m in interest on loans to build the project, $41m for depreciation, more commonly known as wear and tear; and $64m in operating costs to run the stations, extra rail services the project will enable and track charges from KiwiRail.

These costs come to $265m, but the net cost to ratepayers will be about $220m after $44m of revenue is taken into account, including some funding from Waka Kotahi NZ Transport Agency.

It’s notable that the CRL is the only project where capital costs are grouped with operational costs like this. Furthermore, the council has billions in other debts that it is paying – currently around $12.4 billion and it is expected to rise to around $18 billion by 2031. Even with the council on the hook for half of the costs of the CRL, that still only represents a portion of that debt, most of which is to fund other transport and water infrastructure projects. That Auckland would have to pay for it’s share is not new and has been part of the debate around the CRL all along.

What is more interesting is the operating costs to run the stations and additional rail services. That is $64 million per year, a lot of money sure, but it needs to be put in some context.

  1. The recent information released around the fare changes shows we currently pay around $150 million per year to run rail services, (including track access charges). So this represents around a 42% increase.
  2. But what that investment achieves is what is important and in that regard, the CRL is a game-changer. Prior to COVID, we reached around 22 million annual trips on the rail network. With changes from COVID and the rail network closures for repair works usage is currently just over 12 million but without the closures the network would likely have recovered at a similar rate as buses which would put it closer to 18 million trips.

    The CRL likely won’t even open till some time in 2026 but AT’s current modelling suggests usage will quickly rise to over 42 million trips by 2030 and without additional investment in the wider network, will hit capacity in the early 2030’s somewhere between 42 and 51 million trips. That means a 42% increase in operational costs for a doubling in usage.

    With additional (and expensive) investment in the wider network, AT estimate that by 2052, rail network usage could rise to over 76 million. That’s a massive increase, and higher than the more expansive networks in cities like Brisbane and Perth achieved pre-COVID too.

Putting these figures to the side a little bit, the reason for investing in the CRL was never for it to turn a profit – very few road or public transport projects do that. It has always been about the overall economic benefit that investment delivers. By enabling more people to get move around the region, and especially to/from the city centre, faster and easier it is good for improving access, good for reducing congestion, good for the climate and importantly, the CRL has already helped spur billions in private development.

We even saw a prime example of that just two weeks ago with Precinct Properties buying the downtown carpark, which they’ll replace with a development likely to cost billions. That simply wouldn’t have been practical to do without the CRL and it’s ability to move large numbers of people to and from the area.

There is a wider issue here and that is why the CRL is so expensive to begin with and the Herald also covered that last week.

New Zealand is the most expensive country in the world to build new infrastructure. That was the charge levelled yesterday by Sean Sweeney, chief executive of the City Rail Link (CRL).

“But,” said Sweeney, “I don’t just want to complain about it. I have some thoughts on how to fix it.”

In a keynote address at the NZ Rail 2023 conference in Auckland, Sweeney noted that the cost per kilometre for building a “metro” or rapid transit rail line in New Zealand is US$922.37 million ($1.493 billion). This is an estimate of the cost of the CRL.

But in the United States, where costs are also regarded as expensive, it’s a third less, at US$601.85m/km.

In Australia, it’s only US$321.43m/km, which is almost two-thirds less than the New Zealand figure. France gets the work done for less again: US$255.55m/km.

And Portugal, South Korea, Spain and Finland manage to build transit lines for around US$100m/km. More than nine times less than New Zealand.

In many of the low-cost countries, the contractors are the same as those that do the work here. The lead tunnelling contractor for the CRL was the French company Soletanche Bachy.

Sweeney’s figures come from research by the Transit Costs Project, a private research company attached to New York University’s Marron Institute of Urban Management.

There are actually other projects more expensive per km than the CRL but New Zealand comes out on top in part because the CRL is only NZ project in the Transit Costs list. That’s also a part of the reason why it’s so expensive to build in NZ too, we don’t do projects like this very often so we have no retained experience, either in the construction sector or public officials. He also cites issues with things like how risks are allocated.

“The prevailing approach has been to load risk on to the contractor, even when it’s unrelated to their work.”

He gave the example of contractors being required to carry the risk for “below ground” events. “But they don’t know the local geology. So either they have to take that risk and it could force them out of business, or they charge a higher price.”

“When I started at the CRL I had to argue very hard to prevent contractors being made to carry the risk of the Government changing the regulations. But we’re the Government!”


“Why should contractors have to accept that risk?”

Politicians and officials might believe they’re driving a hard bargain on behalf of taxpayers. “But,” said Sweeney, “because they load up their costs, we end up paying more.”

Finally, there has also been some commentary around when the CRL will be complete. Radio NZ reports:

Underground rail construction of Auckland’s City Rail Link (CRL) is 80 percent complete but there is no guarantee the November 2025 deadline will be met, the project’s boss says.

The CRL project is due to be handed over to Auckland Transport in November 2025.

Preliminary work on the 3.4 kilometre track, spanning four underground stations, from downtown’s Britomart to Mt Eden, began in 2016.

City Rail Link Limited chief executive Sean Sweeney told Nine to Noon there was still a huge amount of testing that needed to take place before the underground could be opened to the public.

“We’re responsible, basically, for handing over a railway that is able to be operated by Auckland Transport,” he said. “Once we’ve handed it over, they have to do a fair amount of work learning how to operate it so that it’s ready for public operations.”

While it might be making headlines now, this isn’t particularly new and Sweeney gave some more detail about it a few months ago. One such example was just how much driver training needed to take place, while still maintaining the existing schedules.

There’s a few more years of construction, testing and training still to go but the images and videos being put out by the CRL team do highlight that the stations and tunnels are really starting to look like a railway.

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  1. Feels like it’s taking so loooooong to complete

    Depressing the biggest paper in the country has someone like Orsman running PT into the ground with his boomer reckons

    1. Eh, once it is finished and running, everyone will claim they were always for it. National will probably cite “completing the long-awaited CRL” among their claimed successes at the next election.

      By the way, I think Robbie’s statue needs to go at the entry of the Aotea station!

      And, totally unironically, I think it should be flanked by a second statue of Len Brown.

      1. And if you go to Britomart the Plague at the Entrance has Jon Banks name on it , but no mention of Christine Fletcher or Les Mills who helped to get off the ground ,excuse the pun , and with this new Brown that is office he most likely will won’t his name in 3ft letters on the name plague to prove he was there to open it .

        But at least Robbie and Len had the foresight and wisdom for the tunnel

  2. Hi I believe that there are better things the council could be spending money on.b
    Such as local suburbs and rural parks and natural resorts .

    Start cleaning up this country and stop trying to dream up new ideas on how to charge people for things.

    Its time the council does their actual job and its time for the government to step in and put a stop to all this nonsense.

    This country needs to be looked after and maintained not developed , its already developed.

    1. “This country needs to be looked after and maintained not developed , its already developed.”

      I’d disagree even if we had 0 population growth. Because we need better public transport. And once you add population growth to that, we need things like the CRL.

      There’s never a real case for doing nothing. There’s only a case for doing the right or the wrong projects. The CRL is expensive, but sometimes you got to do that kind of think.

    2. What a nonsense comment Kelly. The former National government agreed to co-fund CRL with Auckland Council in 2016 because it generates massive benefits to Auckland and New Zealand.

    3. I suppose if Winston gets his way in eliminating immigration; David Seymour gets his way eliminating dense urban development and Chris Luxon gets his way freezing social values in the 1950’s then yes, Aotearoa is completely developed.

      Nothing will ever change ever again and everything will be perfect.

      I will be thrilled to see an end to road expansion and motorways funded from general taxation.

    4. Absolute Lols at Kelly W’s woman yells at cloud moment. Not actually worth responding to, reads like someone typed rant about local government into ChatGPT

      1. The old problem of whether to respond or not to someone who spouts falsehoods (or, less negatively, opinions you really disagree with). When I DO respond, I tend to do it by thinking of the “fence sitters” – people who read it, and might benefit from the counterpoint / missing context etc. I’m in a way not really responding to the person making the comment.

  3. Typical Orsman grumpiness.

    It would be entirely possible and accurate to say: “CRL financing costs will fall on Auckland because of the way the project was funded” but it’s much more fun to fill the Herald with clickbait, boomer wisdom and crocodile tears about “the poor old ratepayer” while downplaying the economic uplift arising from increased connectivity.

    1. Perhaps Orsman’s grumpiness derives from the fact that history has shown he was so wrong about the Northern Expressway.
      He tried, and failed, to demonstrate that it would be a white elephant even before it opened so now he has to try really, really hard to denigrate the CRL.
      Who knows what he’s trying to prove? His opinions on public transport carry little credibility.

      1. Orsman plays to his audience of grumpy conservatives. It doesn’t matter to him if he’s wrong as long as he confirms their prejudices and gets eyes on his articles. By the time the CRL is shown to be successful he’ll have moved on to his next cause.
        I’ve heard him interviewed on Radio New Zealand and he was very moderate in his his views since his audience there was completely different.

        1. Isn’t he a bestie of that other clown Mike Hosking the hatter of everything the great unwashed use , like PT and Bycycles use .

      2. I think you’re confusing Orsman with John Roughan, AFAIK it’s generally accepted it was largely Roughan that lead the white elephant campaign for the NZ Herald see e.g. and and this infamous column by Roughan

        Orsman was around Herald at the time and I suspect had similar views that he has now, but wasn’t as active in pushing them then as now. He mostly took off in the super city days AFAIK.

  4. Yes, it is taking a long time but there is a huge amount to do. The CBT Executive Committee was invited for a walk-through a month ago and was impressed by the number of workers busy at a vast array of trades. Although the tunnels are now in place they have still to complete laying of the western track and installing the overhead power supply. The three new stations are a hive of activity ranging from installing kilometres of cabling and other “invisible” services to the largest escalators in NZ and more prosaic lining work in the public concourses. I am disappointed in the slow pace of work but as they say “good things take time”. The plan is to run the first of many test trains on July 1 next year. All going well they could be ready to go live by the end of 2025 but Sean Sweeney (based on his Cross-Rail experience in London) is warning us that testing could drag on well into 2026 – though I think that is a worst-case scenario.

  5. On the question of operating costs – it is very dishonest to include the loan costs. The only way Len Brown could get John Key to agree to help with the CRL was to agree to a 50/50 cost share. Given a projected 4-year construction timetable Council could have afforded their share within existing budgets – albeit at the expense of deferring most other new capital spending during that period. Unfortunately the cost has more-or-less doubled and so has Council’s share – which has required extensive borrowing and hence the eye-watering finance costs. Government could have been more helpful by agreeing to fund some or all of the increased cost but doubled- down on the original cost-share – so there was a risk that the whole project would grind to a halt if Council did not take on more debt.

    1. Yes Graeme, very dishonest to include the interest costs.
      A few years ago when I was having a battle with AT that car park buildings were a hole that rate payers had to keep throwing money at, none of the financial results that they produced had any reference to interest costs. If so, every one of them would have been a loss making venture. It seems interest costs are included depending on whether you want something to either look good or bad.
      Mercifully the Downtown parking building has now been sold.
      Next up Victoria St? Maybe Andrew Krukziener, who knows the area might be a buyer, to see if he can make a better fist of it than he did with the Metropolis.

      1. Be good if we could have been topped up to the 60/40 deal LGWM was penciled in at. Which would have freed up a whole heap of money in the Council to not have to slash all sorts of things.

  6. Reply to Taka-Ite – the Victoria Street car park site is tricky being built directly over a volcanic crater. When building it the slip piles kept disappearing until they did a bit of basic research. Hochsteter marked a fumerole on his famous map of Auckland volcanos but 30 years later it was used as a rubbish tip for the growing city and filled up. When the city decided to build the car park building the engineering design ignored (or rather was ignorant of) the history and assumed that relatively shallow slip piles would be adequate – rather than the very deep bearing piles that were eventually required. A very expensive and embarrassing mistake. Any future developer needs to be aware of this.

    1. Very interesting, thanks. This week, Western Springs College students are studying volcanoes, and walking from Freyberg Square to Royal Oak, via Pukekawa, Maungawhau and Maungakiekie, (and experiencing the ease of getting there and back by public transport). The number of students mean they have split it into 5 separate trips.

  7. Would an accounting type person be interested in calculating the cost of motorway maintenance plus import cost of private motor vehicles plus carbon tax plus health system cost?

    These would add up to 220 billion per annum, the CRL is a drop in the motu compared to other infrastructure costs!!!

  8. I wonder if the Herald would ever do a piece on the cost of running the roading network, that’s right,l forgot,it is” free”,except for cycleways.
    Auckland could always try to function without the rail network,I,m sure there would be considerable savings to be made,may take a bit longer to get to work,but that time is “free” also.
    The Herald is only trying to survive in this “clickbait” world,”if it bleeds,it leads”,no eyeballs for “good news”. One day,it will realize it is a grown up news source,and will act accordingly,haven,t bought it for at least 20 years.

    1. Yep. I pay for Stuff on a monthly basis to support journalism (rather than have them depend all on ads and thus, clickbait) – but actively avoid the Herald. I know Stuff ain’t perfect, but at least it doesn’t feel like they have an axe to grind.

      1. Oddly, the print Herald seems better than the online version, probably because it’s missing the deluge of clickbait trash or at least puts it where it can be more easily ignored.

  9. I don’t think Boomer carries quite the offensive weight of Naner (one who resembles a banana).

    Still, I tend to avoid fruit based epithets as ad hominem attacks do tend to make you and your argument look stupid.

    1. oh, and I add: the venn diagram of people that take offense at the word “boomer” and people with a boomer mindset, is a circle

    2. Some of us boomers have been agitating for 21st century transport policies since the 1970s.
      Conversely, there are youngsters such as Simeon Brown MP, who agitate to take us back there.

  10. Boomer, just like snowflake, or woke is a lazy way of attempting to discredit someone’s point of view, but to even attempt to compare it to the N word … wow.

  11. Treasury put the Benefit Cost ratio of the CRL at 0.6. For every $1 spent on it returns 60 cents. Now the cost to keep it will be $220million per year. All they have to do is sell the Downtown carpark every six months for the lifetime of CRL.

    Cycle enthusiasts wonder why they can’t have cyclelanes? Well of course they can’t.
    It is because Len Brown spent everything and more on CRL.

    1. Ah, treasury. The agency that has such skill and unbiased views and systems about transport modes.

      And a real good one in there, Miffy. All we have to had to do is not build the CRL and we would have had cycle lanes everywhere! Yeah right.

      Both people who want bike lanes and the people who want better PT know that these kinds of comments are just trying to rile up people against each other, while the motorway building industry runs away with the money, laughing.

  12. “The average cost to operate, maintain and periodically renew 1km of urban road in Auckland is approximately $60,000 per year.”

    “There are over 7,000 km of roads in the Auckland region made up of motorways, arterial roads and local streets.”

    $420,000,000 per year. Four Hundred Twenty Million Dollars each year to just maintain Auckland roads.

      1. Taking a BCR on the maintenance of the entire road network would be a bit of a canard because it would be thrown off by the fact that simply having a road network is invaluable but the real question is the marginal cost/benefit of specific roads being maintained to a specific level of quality. E.g., the BCR of maintaining the lower volume rural roads to anything better than rather poor quality is probably very low whereas maintaining Great North Rd is probably rather high.
        The marginal benefit with respect to spend is probably not linear, i.e., you probably get about 80% of your benefits in the first 50% of spend. You could probably scale back the overall maintenance cost to a lower level of quality across the board, especially for local roads, without impacting the BCR much.

        1. “You could probably scale back the overall maintenance cost to a lower level of quality across the board, especially for local roads, without impacting the BCR much.”

          Maaaaaybe? I mean we don’t have icy winters in Auckland to “explode” pot holes because the water ingress freezes, expands and cracks the ground and the adjacent undamaged even more, but at some point the degradation due to increased storm events etc meeting decreased maintenance would start to run away in an increasingly exponential way, I would think. Especially on any road with any number of trucks causing pot holes to start with.

        2. Yes there must be a sweet spot somewhere. Our local road has huge holes that keep forming pretty quick after every fast patch up they do at night, most of the cars know about them and are avoiding them like in some third world country at the moment.

  13. Like other projects of this size, the government should come to the party and pay more of it, even 75% would help the burden on Auckland. Apart from that, the benefits will surely outstrip these cost share as it is.
    Yes agree with above, those roads are sure costing us, and repairs needed seem to be rising with adverse weather and other factors.

  14. Hoping that one of the benefits is that passengers with accessibility issues are treated with dignity. Is it going to take the opening of the CRL to ensure that the lifts and elevators at Henderson Train Station are working for more than a couple of days a year.

  15. Surely half the problem with this costing so much is because it was left so late, and some of it should have been done 50 years ago with iterations over the years.

    The same will be said about Lake Onslow/similar renewable storage scheme no doubt in 30 years when we are burning imported oil to power our EV network.

    1. “It doesn’t stack up on the BCR” Caveman economist about house building. “Look at the massive up-front costs!”

      1. Ha ha! See also:

        “No-one’s cycling across Auckland Harbour from Northcote to Herne Bay. The demand simply isn’t there. It will be too expensive”

    2. What we are getting now was planned over a 100 years ago and the Government of the day said it was to expensive then also , so they took that money and started to Wire up the Wellington Network , and the cost for Auckland with the tunnel and electricfication was around 400,000 pounds .

        1. I’ll use that station tomorrow on my way to the airport.

          Hopefully the CRL will open in 2026 – 100 years after the equivalent in Sydney.

        2. I didn’t use it much when I lived there, but I loved passing through that station on the train. Reminded me of London. Always evoked thoughts of how many people used it 70+ yrs before.

  16. “Modelling suggests” – imagine thinking models that consultants use and propose are worth trusting. I might as well pull out my crystal ball and tell the PT advocates on this blog some other wild assumptions and I’m sure they’ll lap it up as long as it fits their agenda.

    1. Those same models are used for roading projects. I would hate to think how badly you feel about those results if you have a problem with PT ones.

  17. Unfortunately I don’t think CRL is the only project in Aus+NZ where capital costs are grouped and conflated with operational costs to put a negative slant on the project by certain voices. The Suburban Rail Loop project in Melbourne has been the target of attacks of a similar nature recently, including a hatchet job from the Australian *NATIONAL BROADCASTER* for goodness sake where an economist was allowed to state, unchallenged “Construction cost altogether over time probably over $100bn and by the time you add in a bunch of running costs you’re starting to talk something closer to (emphasis in his voice) $200 billion dollars”; the Victorian government has only committed to the first stage which will cost $34.5bn and since when do we include operational costs (especially for a fully automated Metro line) for infrastructure in this way?

  18. Thanks Matt.

    “a 42% increase in operational costs for a doubling in usage.”

    Plus the economic benefits on top.

    Orsman writes nonsense in order to achieve ugly ends.

  19. My thoughts would be that the government should have paid for the whole CRL scheme.
    As the CRL is part of the main line national rail network, similar to the state highway network.
    If it was a local tram line or metro network then the cost should be on the council as it is part of the Auckland transport network,
    I think the real question is how will the council fund transport in Auckland, and should central government be involved in regional transport at all.
    It is extremely bizarre that a city like Auckland can’t have a say on its transport, we have to rely on the government for all of NZ to randomly drop proposals all over the country, leaving many parts of the country feeling left out while other parts get gold plated stuff that isn’t needed.

    1. The CRL is a spur of the the Eastern , Southern and NAL and like any spur that goes say into a Factory the build and upkeep is up to those that want it going into their site .
      And with the CRL nothing of KR’s can enter it so you will never see a Diesel powered Train of any sort going there . Which will mean oneday AT will have to get say a Battery / Electric powered Locomotive for any maintenance work that has to be done .

        1. And for using something like this could be ideal for the maintenance purposes if they can still get them , this was seen at the Glem Afton Bush Tramways society Workshop ;-

  20. The Crl is the biggest white elephant Auckland city has ever ventured down the road with. The route itself it nonsensical, who wants to go from Kingsland to the Britomart terminal, growth is out west and east and not with this crazy designated route.
    the city with its huge and rapidly expanding Asian culture, fails to recognise that these people like to drive their newly acquired automobiles and be seen in them, they don’t want a public train system, which reminds them of the systems they left behind before they immigrated here. Poor people travel by train, affluent people drive their cars.. end of….

    1. It’s about capacity genius, a through running network can have 48 trains per hour whereas the old network structure with a terminal can only run a total of 20 trains an hour.

      1. Kyle I wouldn’t call him a genius more like Brain dead after sitting in his tin can and sucking in the fumes around him from all the traffic jams he encounters .

    2. You sound like you have never travel on the Auckland Network , so do it sometime and then you will see how many Asians that do travel on the Trains . And those out East are most likely the ones you see always in Cars and possbily one day there will rail further East than Panmure .

      And for the CRL being a White Elephant , there will be no more waiting at Newmarket for all the Trains coming from the South before it then can move on .

      But then again you sound like you are a Mate of the New Fat Controller who also doesn’t like anything with Steel Wheels .

    3. “Poor people travel by train, affluent people drive their cars.. end of….”

      Someone tell the bankers of London, New York, Berlin and Singapore. They didnt get the memo that they should shun the most efficient form of transit. Better to sit in your car in congestion and watch the dollars roll in…

    4. I’m only part Asian so maybe I don’t count but what I actually think is WTF are developing countries like Malaysia where I cam from, with as flawed political systems, much smaller GDPs etc able to do public transport so much better than NZ? At the current rate, they’re probably even going to beat us at cycling facilities!

      I’m also fairly sure it’s a myth that all Asian immigrants are affluent. Yes given immigration policy etc, they aren’t at poverty levels, but they many are not affluent by any stretch of the imagination.

  21. I am often confused by the media and by those reading it.

    CRL is necessary and will be a gamechanger for current rail. We really needed it and I hoe they continue to develop commuter rail.
    However, that doesn’t mean its been managed well or that we have reasonable costs for building key infra in Auckland. We dont. The cost has been astronomical and I struggle to see why we have such enormous costs?

    You might say who cares. We all care because its our money and when projects costs this much it makes it harder for us to justify continuous development of Auckland PT infra. Not just hard, it makes it right darn impossible.

    I remember that when we brought Norwegians to assist with the build of a tunnel on the northern motorway (Norwegians – you know the western worlds most pricey labourers) they were surprised that we had such poor cost control and understanding of where to find cheap, high quality foreign construction companies, hence I reiterate my view that current New Zealand Transport (yes we have changed name again) needs to bring in managerial talent from outside the Anglosaxon world.

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