
The disestablishment of the Ministry of Transport鈥檚 work on the听Auckland Light Rail project听will likely cost millions of dollars spent over six months and will involve the disposal of property and land, and settling obligations - a Government Cabinet paper has revealed.听听
It comes after an alleged $228m has already been spent on the project without a metre of track laid.听听
The听Auckland Light Rail (ALR) project was officially scrapped by the new Transport Minister Simeon Brown听on January 14, 2024, who cited the project would have cost taxpayers $15 billion, with advice showing the cost could increase to $29.2b. The commitment to scrap ALR was part of the National government鈥檚 100-day Action Plan.听听
The Cabinet paper proactively released yesterday by the Ministry of Transport (MOT) has revealed that 鈥渆xisting funding鈥� to ALR Ltd will be 鈥渟ufficient to fund鈥� its disestablishment.听
Minister of Transport Simeon Brown. Photo / Alex Cairns听
The Cabinet paper lists that of the $153.4m operating expenditure in the ALR Ltd budget, $33.6m is available. Only $302,000 of ARL Ltd鈥檚 $26m in capital injection appropriation is left available. And $98m of ALR Ltd鈥檚 $131m strategic land acquisition appropriation budget is left available.听
The Cabinet paper adds up $178.5m in the ALR budget that has been spent.听
When Brown announced the project was being scrapped in January he cited $228m in funds spent on the project that has been in the planning stages since 2017.听
鈥淭he previous Government committed to building light rail to Mt Roskill within four years of being elected,鈥� Brown said.听
鈥淎fter six years and over $228 million spent on the project, not a single metre of track has been delivered and congestion has only worsened in the city.鈥�听
It is not clear where the extra $49.5m which Brown identified as having been spent on the project has come from - on top of the $178.5m identified in the Cabinet paper - to reach the $228m figure.听
The $98m in remaining land acquisition budget will be returned to the Crown, the Cabinet paper says.听
The Cabinet paper states that MOT expects an 鈥渁dditional amount of up to $33.6m鈥� will be returned to its budget, but that 鈥渢he amount returned will depend on the costs of disestablishing ALR Ltd鈥�.听
This projection means the ALR disestablishment process could still cost millions of dollars, based on the remaining budget of the project that is still unspent and the rate at which ALR Ltd. had been spending money.听
Auckland Light Rail will be separated from other road users to minimise disruption. Photo / Supplied听
Auckland Light Rail 鈥� indicative route. Photo / Supplied.听
Figures released in April last year showed taxpayers were forking out $1.2m a week to keep the wheels turning on the Auckland project.听
ALR was paying about $920,000 a week to two engineering companies to plan and design the central city-to-airport light rail project and a further $310,000 to its own contractors and consultants.听
鈥淭he best way to stop work on the ALR project is to change the purpose of ALR Ltd from a focus on developing the project鈥檚 business case, to managing an orderly disestablishment,鈥� the Cabinet paper says.听
鈥淥fficials expect that it could take up to six months to substantively complete the disestablishment process.鈥�听
Background in the Cabinet paper on the ALR also details disagreements on the design of the infrastructure project.听
鈥淭he project has faced challenges to progress. The ALR Sponsors were not unanimous on whether the tracks should be built above or below ground. The project recently missed a significant milestone of lodging the Notice of Requirement to protect the corridor, because the ALR Ltd board did not think it was appropriate to make that decision at that time.鈥�听
A recommendation of the Cabinet paper is also to make changes to ALR Ltd鈥檚 board so it can 鈥渟upport the new purpose鈥� of disestablishment.听
This will involve: 鈥渞educing its size to 2-3 directors [which may involve the need to remove or appoint new directors depending on the skills of existing directors and their willingness to continue on the board]鈥�.听
The Minister of Transport is invited in the paper to report back to Cabinet on the progress of disestablishing ALR Ltd 鈥渋ncluding the future of its land holding and disposition of its other assets and the settlement of obligations and liabilities鈥� by the end of March 2024.听听
In the听lead-up to the 2017 election, then Labour leader Jacinda Ardern promised to build a 20km light rail line听from the city to the airport as a priority.听
She said the light rail from Wynyard Quarter to Mt Roskill within four years, followed by light rail from Mt Roskill to the airport and light rail to West Auckland within 10 years.听
Tom Dillane is an Auckland-based journalist covering local government and crime as well as sports investigations. He joined the Herald in 2018 and is deputy head of news.听
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