Transmission Gully vs Auckland City Rail Loop

Many on the left claim that the PPP model used for Transmission Gully is responsible for the fact it opened late, and cost more than budgeted.

But I think that is ideology speaking, not analysis.

So I saw an article this week on the Auckland City Rail Loop (which is not a PPP) and thought it would be useful to do a comparison.

The CRL was estimated to cost $2.5 billion and then up to $3.4 billion when funding was finalised.

Then it rose to $4.4 billion and no one expects it will stay at that level.

But already it has cost 76% more than first budgeted. It will probably end up at over $5 billion.

Transmission Gully went from $850 million to $1.25 billion – a 47% increase, and that is final.

The lesson is Government often under-estimates the cost of construction projects. This is not unique to PPPs.