Goff running spin over massive cost blows out on CRL

There is no reason to come out talking about the cost of building the CRL increasing unless you know it is going to increase and want to soften the blow.

Here comes the hard truth that I have been talking about for some years: the CRL will cost vastly more than what was originally touted. You may recall that I said it would be between $4b and 4.5b.? ?

With Mayor Goff stating ahead of any announcement that construction costs have been rising at 7 to 8% per annum it does not take a rocket scientist to work out that over the last five years since the 2014 costing of $3.5b the cost to construct ballooned by at least $1.4 billion on a crude calculation basis.

But don’t let construction inflation fool you. That’s merely an excuse for the rising costs. That this news is coming from politicians ahead of tender announcements suggests that they are already well aware of the issue.

The fact is that the costs are much higher because they were always under-estimated. Additionally Auckland Council has changed the specifications and added new stations, and I’d suggest that the programme for construction is much longer than forecast.

I’ve consistently said that Auckland Council was fudging the numbers to get it to happen. Their cost benefit analysis was found to have fundamental formula errors. I never believed that the tunnel would cost $3.5 billion and I once stated it could rise to over $5 billion.

I allege that Auckland Council always knew that their budget was suspect. They committed to the early works despite having no funding to complete the project, hoping that they would squeeze the Government into sharing the costs. Frankly, the Government ought to have said no.

And with ballooning costs there are now more reasons to stop this project before it gets out of hand. Ballooning costs now won’t be stemmed. With contractors wanting principals to carry the risk you can sure bet that extensions of time and variations will see this project lose its head.

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