Brown has got the city into huge debt to help pay for his toy but as yet the company he hoped would bale him out, the government, hasn’t said how much the taxpayer is prepared to cough up. Councillor Cameron Brewer has pointed out on social media, as have I on several occasions, getting Auckland into a black hole of debt is just the beginning. There is far worse to come.
It was great to see the Mayor dancing and waving on TV tonight. However tomorrow he needs to address the $100m-plus per annum OPEX hole the CRL creates (once its built) for Auckland's ratepayers according to our own LTP [Long Tern Plan] forecasts. That's equivalent to about a 7 percent rates increase for all Aucklanders just to keep it running. As for the CAPEX to construct it, council's debt to revenue ratio couldn't cope with it, so motorway tolls will also form a big part of the Mayor's press conference tomorrow. I trust he's having one??
Mr Brewer says cost containment will be the biggest challenge for the City Rail Link project with ratepayers not taxpayers still most exposed given it remains council-led.
“Let’s not forget that in 2005 the City Rail Link was reported to cost from $500m. By 2010 it hit $2 billion and despite dropping Newton Station it’s now forecast to cost over $2.5 billion.
“Given the expected cost went up five-fold over the past decade, future cost escalation remains a real worry. There are plenty of international case studies which show massive blow-outs when it comes to large scale rail and tunneling projects.”
Mr Brewer says another concern for ratepayers is the fact that Auckland Council’s long-term operational budget forecasts show that once built, the City Rail Link will require an operational subsidy of over $100m each and every year – and that’s after receiving NZTA subsidies and passenger farebox revenue. Where is that money going to come from each and every year, he asks.
This is what happens when personal vanity and poor political choices take precedent over careful cost benefit analysis and business sense. The CRL white elephant is neither cost efficient nor effective in terms of getting the city moving. In other words it should never be built.