Construction News

Tue August 20 2019

Related Information

Vinci lands NZ rail link as cost rises by $1bn

18 Apr The developer of the Auckland City Rail Link in New Zealand has announced a Vinci-led team as the preferred bidder for the main package and has said that the overall project cost has risen by NZ$1bn (£515m).

City Rail Link announced a revised cost for completing the entire project of NZ$4.419bn at the same time as naming its preferred bidder for the contract to build the underground tunnels and stations.  

The preferred bidder for the C3 contract, the Link Alliance, is made up of Vinci Construction Grands Projets, Downer NZ, Soletanche Bachy International NZ, WSP Opus (NZ), Aecom New Zealand and Tonkin & Taylor. It beat a consortium of CPB Contractors, UGL (NZ), Beca, Jacobs New Zealand and McMillen Jacobs.

The C3 (main stations and tunnels) contract is the largest of all the CRL contract packages. It includes construction of twin rail tunnels, construction of two underground stations and rebuilding Mt Eden station.  The City Rail Link is the largest infrastructure project undertaken in New Zealand. 

CRL will now start negotiations with the Link Alliance to deliver the NZ$75m Early Works Contract over a three-month period. The contract includes work relating to design, consents, permitting, utilities and mobilisation.

CRL Ltd’s chief executive Dr Sean Sweeney said that after a rigorous and comprehensive review of project costs,thea revised cost envelope has been submitted to the project’s sponsors – the Crown and Auckland Council - for approval. Decisions by the Crown and Auckland Council regarding their endorsement of the revised cost envelope are expected in early May.

“The $1 billion cost increase on the previous $3.4 billion estimate made in 2014 reflects significant changes impacting the project in the past five years,” he said. “No-one could have foreseen the competitive pressures that have occurred in the construction industry over the past few years and the impact that has on costs, particularly for a project the scale and complexity of the City Rail Link. Eighteen months ago, the value of work in the infrastructure pipeline on both sides of the Tasman was $80 billion – the value of that work is now estimated at $230 billion.”

He added that a decision was made last year to increase the scope of the project to accommodate longer, nine-car trains at stations. Other factors contributing to the revised cost envelope are higher construction inflation costs and an increase in the contingency risk allowance for any future unplanned events. “Put together, they have all helped add costs to the project overall. Keeping a growing city moving is a serious challenge, but when we complete the City Rail Link it will double the number of Aucklanders within 30 minutes travel of the CBD [central business district],” he said.

The revised cost envelope reflects higher costs in four key areas: contingency and escalation costs (NZ$310m); construction costs (NZ$327m); accommodating longer, nine-car trains (NZ$250m); non-direct costs (NZ$152m).

Got a story? Email news@theconstructionindex.co.uk

MPU

Latest News

Click here to view more construction news »