Councillors Brewer, Quax and Wood have written to the Auditor General expressing their renewed concern that Council officers are acting with a recklessness that exposes ratepayers to considerable financial risk.
we invite you to also concern yourself with how Council is actually going to fund any significant operational shortfall going forward. Cost containment, both CAPEX and OPEX, will be the biggest challenge for the City Rail Link project, with ratepayers (not taxpayers) being the most exposed, given that the project remains council-led.
The cost of Auckland's most expensive project - the $2.5 billion City Rail Link (CRL) - has jumped to more than $3b.
Auckland Transport chief executive David Warburton says the project needs more money in the rail network that could easily take the "combined project cost" above $3b.
He understood that Prime Minister John Key was referring to additional investment in the rail network when he claimed last month the CRL will "almost certainly cost more than they thought".
Auckland Councillors Cameron Brewer, George Wood and Dick Quax
Saturday, 9 July 2016
City Rail Link costs escalate as councillors feared
Confirmation by Auckland Transport that the cost of the City Rail Link will undoubtedly rise to over $3 billion does not surprise three Auckland councillors who recently wrote to the Auditor-General outlining their concerns about the project and urging the Office of the Auditor-General to ensure a close oversight. The trio now wonder what the ‘no go’ point is with the CRL.
“This latest half a billion dollar cost escalation is exactly what we feared and hence why we wrote to the Auditor-General last month. We all know the original budget, but no one has any idea still of the full costs and risks and where both will fall. This is unprecedented given the sheer size of the project and the fact that construction has already begun. Our concerns lie with Auckland ratepayers – present and future,” says Auckland Councillor for Orakei Cameron Brewer.
Councillor for North Shore George Wood says councillors need to be given the full facts as to what is really known about the costs of this massive project. “The CFO of Auckland Transport promised councillors up-to-date figures by June and we’re still waiting. We’ve been kept in the dark for far too long. I believe it’s time to stand back and assess the Central Rail Link project and consider if Auckland can really afford to go into such a project where the costs are not finalised,” says Mr Wood.
Councillor for Howick Dick Quax says just three weeks ago a senior council official assured him that a cost blow-out on the City Rail Link was unlikely. “I have been warning of the very real possibility of a cost blow-out on the City Rail Link for some years now. Overseas experience has shown that urban rail projects almost always under estimate costs and over-estimate patronage. Sadly, it seems Auckland will be no exception to this rule,” says Mr Quax.
The three councillors said they were disappointed by the Auditor-General’s relatively dismissive response to their concerns and hope she will take heed of this latest development.
In short, what is lacking in local government is accountability for public money because of ineffective or non-existent checks and balances. It is to be hoped that the current review of Local Government Act will seek to address this lack of accountability and tighten the fiscal requirements of local government.
The CRL project is largely responsible for Council debt ballooning to $20,000 for every household in Auckland. Debt is at its the maximum permitted limit. As I have pointed out in numerous blogs, the CRL is bankrupting not only the city but has the potential to bankrupt each and every one of us. Worse still the CRL will do little or nothing to alleviate Auckland’s traffic woes. It is a symbol of Brown’s failed mayoralty and should be stopped right now.