Mayor seeks amendment in Draft 2015-2025 LTP

 

A more surprising presser hit our inbox(es) late this afternoon. It is on the City Rail Link and the start date for the main project (i.e not the enabling works).

From Auckland Council – specifically the Office of the Mayor:

Mayor proposes amendment to CRL timing in draft LTP

 

Following discussions with Audit NZ, the Mayor is proposing an amendment in Council’s draft Long-term Plan 2015-2025 on the timing for construction of Auckland’s number one transport priority – the City Rail Link (CRL). 

In its draft budget, Council has the CRL project commencing in 2015/16, based on an assumption government’s funding contribution for the project would also start next year, five years earlier than government has so far indicated. 

On Tuesday 9 December, council will consider changing the assumption of timing of the government contribution to 2018/19. This will mean enablement works of $280 million will still take place in the first three years of the plan, but construction will not start until 2018/19. This will also delay the completion date to 2023. 

Mayor Len Brown says: 

“We have a track record of success with central government when it comes to the CRL – we have moved them from a position of total opposition to one of commitment for funding half the project from the year 2020,” says Mayor Len Brown. 

“Yes, we still have to work with government on final timing, but I’m confident we can come to an agreement and get on and get this job done. 

“I understand why Audit NZ feel that we need to take a more conservative approach to our financial projections and I am proposing that we develop the LTP based on a later timing of government contribution.” 

Public consultation on the draft LTP begins January 23 next year. The final plan is due for adoption June 30, 2015.

—-ends—-

 

The extraordinary agenda can be seen here:

 

In highlights to that agenda:

In the 2012-22 LTP we assumed central government funding would commence from the year 2015-16 and the financial data for the 2015-25 LTP has carried that assumption through. The consultation document has been written with three alternative scenarios set out for public consideration:

• Option 1 – government funding starts in 2015/16 and project proceeds on original timelines
• Option 2 – government funding starts in 2018/19 – enablement works only for next three years and then construction starting in 2018/19
• Option 3 – government funding starts in 2020/21 – enablement works only for next three years, construction starts in 2018/19, backed by a firm commitment for government funding from 2020.

8. While all three scenarios are described in the public consultation document the LTP financials are currently built on Option 1.
9. Over the last couple of weeks, as staff have been preparing the consultation document for Governing Body sign off later this month, it has become apparent that Audit New Zealand’s view is that it would be more prudent to build the LTP financials on one of the alternative scenarios. In order to ensure we prepare a consultation document consistent with Audit New Zealand’s expectations, I am now proposing that we adopt Option 2 as the basis of our LTP financials.
10. This option will continue to keep the pressure on the Government to contribute funding earlier than the current commitment, but gives more time for us to work with it to achieve a common view. It also allows us to keep faith with our private sector partners by progressing the enablement works. While it delays the construction timing by a couple of years it has only a relatively minor impact on the financial situation.

Scenario One

Financial information

$ million Year ended 30 June	Prior years	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025	Total
Capital expenditure	178	156	267	432	438	425	481	102	-88			2,391
Government contribution	0	167	133	216	219	200	194	51	-44			1,137
CRL related closing debt	163	155	295	528	778	1,047	1,318	1,343	1,271	1,243	1,215

Assumptions

• Council proceeds with all project phases
• Central government contribution from 2015/2016
• Operational from 2020/2021

Financial impacts

• Closing group debt of $10.5 billion
• Interest to revenue ratio does not exceed 12%

 

Scenario Two

Financial information

$ million Year ended 30 June	Prior years	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025	Total
Capital expenditure	178	145	177	78	319	372	416	464	201	137		2,488
Government contribution	0	0	0	0	305	186	195	184	101	68		1,039
CRL related closing debt	163	316	510	614	658	882	1,081	1,340	1,428	1,490	1,487

Assumptions

• Council proceeds with only investigation and design, land purchases and enablement works for the next three years (total $400 million)
• Council funds the enablement works (about $280m of the $400m)
• Central government contribution from 2018/2019
• Full construction starts 2018/2019
• Operational from 2022/2023

Financial impacts

• Total capital expenditure is $97 million higher due to the inflation impact of spending later
• Government funding reduces by $98 million due to the self-funding of enablement works
• Closing group debt $272m higher than Scenario One ($10.8b)
• Interest to revenue ratio does not exceed 12%
• No difference to rates increases from Scenario One

 

……………

 

Again a simple explanation on how the City Rail Link works:

A Simple But Not Exhaustive Explanation of the City Rail Link

The City Rail Link and Auckland

As I explained to Rebekka’s dad the CRL works on the following premises:
As of current all Western Line trains run from Waitakere, Swanson and Henderson into Britomart on a trip that takes around an hour. Those trains must pass through Newmarket where there is a 3min stand down as drviers change ends to allow the Newmarket to Britomart leg of the trip.
The Western Line as a result mixes with the Southern Line and Onehunga Line trains causing congestion. To make matters worse those trains then get caught outside Britomart as they mix with Eastern Line Trains causing delays and congestion.The CRL would allow Western Line Trains from Mt Eden to travel down the 3.5km tunnel to Britomart skipping Newmarket and thus not running into Southern, Eastern and Onehunga Line Trains as a result. We also get two new stations on the CRL including Aotea which is going to be the busiest being in the middle of the CBD itself.

Time savings go from 60mins to about 43mins there about from Swanson to Britomart via the CRL as a result. You will still get Swanson to Newmarket services that will then continue either on to Onehunga or even Papakura – the South to West services.As the Western Line services are removed from the Newmarket-Britomart leg this frees track space for Eastern, Southern and Onehunga Line trains allow their frequencies to go from 10mins to 5mins in the peak of peaks. This means a train from Papakura every 5mins in the peak if so needed. Result? Capacity increases and the allowances of new lines such as Airport and the North Shore (Botany would be serviced by a Sky Train concept).
That is how the CRL works – it services the bulk of Auckland….

………….

 

Comment

So a 2018 start date for the main project with the enabling works to start as soon as feasibly possible.

That date I have widely touted as a start date for the main project (2017-2018) since I wrote my Auckland Plan submission in 2011. The logic moving the main start date to 2018 in the agenda paper seems consistent in part to the reasoning I used for a 2018 start date for the main project.

It is good to see (although other questions on why so long to move the main start date to 2018 do come up) the Mayor seeking the amendment for the CRL start date via the 2015-2025 Long Term Plan. Now to get the true alternative funding sources that are not extra rates nor tolls sorted by 2018….

Next move falls to us the ratepayer and conversely the Government as well for their funding share…