Analysis: The construction of the Christchurch Northern Corridor is nearing completion. It was described as a $240 million project at the time that the construction contract was awarded in 2016. Now that it’s nearly done, is the spending on track? Where is the money going, and who’s paying the bills?
I recently wrote about the benefits that the Christchurch Northern Corridor is expected to deliver. The cost to construct this project is also of public interest. Having reviewed the NZ Transport Agency’s 2011 Final Scheme Assessment Report, and made follow-up inquiries with both NZTA and the Christchurch City Council, I’ll discuss the project’s costs as best I can.
What was the original budget?
The 2011 NZTA report has a project expected estimate cost of $246.8 million. This was for the proposed scope at that time, which did not include a full-length walking/cycle path or a third southbound lane over the Waimakariri River. More significantly, this was for the NZTA’s portion of the project, and excludes the Christchurch City Council’s costs for works south of QEII Drive (known at that time as the Northern Arterial Extension and the Cranford Street Upgrade). The high-level breakdown of the NZTA’s 2011 estimate is:
- Property acquisition costs (around $61 million)
- Design & documentation (around $8 million)
- Construction (around $177 million)
The Christchurch City Council’s Long Term Plan (LTP) for 2009-2019 had $26.7 million allocated to the Northern Arterial Extension and the Cranford Street Upgrade. When the LTP was updated in 2015, the Council voted to remove funding for what by that time was described as a $50 million project. A subsequent article broke this figure down into $24.5 million of Council spending and $25.5 million from the NZTA.
By 2016, the Council’s position had shifted again, and it was reported that the LTP might be amended to include $76 million for the Council’s parts of the project. The amended LTP with this extra spending was subsequently adopted in June 2016. (The figures in that Plan’s detailed Capital Programme only seem to add up to around $65 million. Either way, this appears to be a substantial increase on the previously-reported Council budget of $24.5 million.)
What are the latest financials?
The NZTA has recently advised me that the forecast construction cost through to completion of the entire CNC project is $255m (excluding professional fees & property purchases), with the final cost split between NZTA & CCC yet to be agreed.
In response to a query to the Council, I’ve been informed that Council’s actual spending to date is $24.5 million (as of 16 May 2019), and the total forecast spend through to completion is $53.7 million. These figures appear to include professional fees and property purchase costs as well as direct construction costs.
Is the spending on track?
The short answer: it’s hard to tell based on the information released, but probably? The Council’s figures seem particularly hard to follow ($24.5 million? $76 million?) and I haven’t seen a breakdown into construction/property/fees etc. I didn’t receive a particularly illuminating response to my request to Council for a reconciliation between LTP figures and current/forecast spending.
I understand from the NZTA that the previous/original construction cost estimate for the whole project (excluding property & fees) was $240 million. Given that the project is being delivered some years later* than originally estimated, and with a larger scope, a current forecast of $255 million is probably not unexpected.
* Calculating costs on a multi-year project can get increasingly complicated due to the time value of money. The 2011 estimate assumed 3 years of construction starting on 1 Jan 2014. The actual construction period is approximately 2017 to 2020.
Question for readers
Do you expect the public to be kept up to date on the costs of a project of this size? How often, and in how much detail?
4 thoughts on “Calculating the cost of the Christchurch Northern Corridor”
The public should be regularly reminded of how tax and ratepayer funds are spent. It should not take an OIA request to elicit unclear and/or incomplete information. The data should be clearly reported with at least quarterly updates. Based on your piece it sounds like the project will push $340 million once professional fees and land acquisition costs are included.
Who and how many benefited from this extravagance?
Thanks Simon. I am surprised that it’s not easier to get clear figures – I’m sure there must be regular financial reporting internally within NZTA / City Council.
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