High inflation resulting in increased labour and material costs are seeing a budget increase for our Central Interceptor project to continue construction of a giant wastewater tunnel from Māngere Wastewater Treatment Plant to *Grey Lynn.
The original $1.2b budget to build a main tunnel plus two links sewers, 16 shafts and associated infrastructure was drawn up in 2018, with construction commencing in 2019. Additional work has been added to the project scope since the contract was awarded, which resulted in a revised budget of $1.319B. These include extending the tunnel from Western Springs to Grey Lynn, connections to service new developments in Mt Roskill, along with enabling the western isthmus water quality improvement programme (in conjunction with Healthy Waters).
Unprecedented inflation since late 2021 has resulted in a 15.5 per cent forecasted increase of $204m to complete the works, bringing the total budget to $1.523b, which was approved by our Board on 7 November. The increase covers construction of the tunnel to Tawariki St, Grey Lynn (due for completion mid-2026) and includes provision of $109m to address the impacts of ongoing inflation to the end of the project. This is based on current inflation forecasts. If cost increases are less than predicted, then the full provision won’t be utilised.
Central Interceptor executive programme director Shayne Cunis says construction is progressing safely and efficiently across all 16 sites, with 72 per cent of work now completed: “Hiwa-i-te-Rangi our tunnel boring machine has broken through to a shaft in May Rd, Mt Roskill and is more than halfway on her 14.7km journey to central Auckland. We’ve completed one link sewer and will finish the first drive for a second link sewer at the end of the month. Milestones are coming thick and fast.
“We absorbed the costs incurred through the Covid-19 pandemic and we had an allowance for inflation within the original budget, but the level of inflation that has been experienced, it became clear that these rising costs would exceed our budget allowance. Additional funding will come from within our resources and not Auckland Council and will allow us to complete the project as planned at the end of 2026.”
The Central Interceptor tunnel will connect with combined stormwater/wastewater networks in older suburbs such as Blockhouse Bay, Mt Roskill, Grey Lynn and Mt Albert, taking flows to Māngere Wastewater Treatment Plant for processing, resulting in an 80 per cent reduction in wet-weather discharges into local waterways. It is the largest wastewater infrastructure project in New Zealand history.
* Earlier this year, we received resource consent to extend the main tunnel to Pt Erin to capture combined stormwater and wastewater flows from the Herne Bay/S Mary’s Bay neighbourhoods. The additional 1.5km Grey Lynn-Pt Erin extension (requiring an additional 12 weeks’ of tunnelling) will create a total overall new length of 16.2km and will be costed separately to the $1.523b.