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City Rail Link Limited Statement of Intent For Financial Years 2018 â€“ 2025

CityRailLink.co.nz

CityRailLink

INTRODUCTION

This Statement of Intent (SOI) sets out the activities

and objectives of City Rail Link Limited (CRLL)

for the period 1 July 2018 to 30 June 2025.

Sir Brian Roche Chair

28 June 2018

CRLL Statement of Intent

Anne Urlwin Director

Te Waka Tūhono - Connecting our history and our future

PURPOSE This Statement of Intent outlines the purpose of City Rail Link Ltd (CRLL), which is to manage the delivery of a 3.45km underground railway and stations to enhance public transport in Auckland and contribute to the city’s and the nation’s economic growth. CRLL will also undertake some other limited and associated works to maximise the benefits of the City Rail Link (CRL) and the efficiency of the rail network. It will take a best for Auckland and best value for money approach to delivery, acknowledging the 100-year design lifespan of the project. The project is well advanced in the central city and construction will extend further afield as future contracts are awarded. The next two-year period will focus on procurement of these contracts and the following four on the completion of initial works and the delivery of the remaining works. The statement describes this comprehensive programme of work to help deliver on both Auckland Council and New Zealand Government directions.

CRLL is focused on ensuring it has the people, policies and positive relationships needed to deliver a world-class infrastructure project for Auckland.

CRLL Statement of Intent

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CityRailLink.co.nz

ABOUT CITY RAIL LINK LIMITED Auckland is growing and it is estimated the city’s population will increase by about one million people in the next 25 years. This growth is accompanied by a growing trend towards the use of public transport. Recent trends indicate more people coming to the city centre on public transport than private vehicles. Train patronage has increased steadily year after year and proximity to the rail corridor has become a selling point for real estate. CRLL commenced operations on 1 July 2017 to manage the delivery of the City Rail Link, a significant investment in transport infrastructure for Auckland that will help it cope with current and future growth, improve access to the city centre and act as a catalyst for development. This investment includes 3.45km of underground railway, two new city stations, the redevelopment of two existing stations, the creation of new platforms and stabling and train turnback facilities at four other locations on the railway network. CRLL’s establishment followed an agreement by Auckland Council and the New Zealand Government to jointly fund the project. The Council and Government are the shareholders of CRLL as well as its sponsors. CRLL’s primary objective and purpose is to manage, deliver and complete the CRL project in accordance with the Project Delivery Agreement (PDA). It has been established with the understanding that its primary purpose is to deliver the project and that it has a finite life span. The sponsors also wish to work together in relation to the wider benefits associated with the project, any future rail investment and the ownership and operating structure of the wider Auckland transport network. The CRL is required to remediate land within the project footprint upon completion and integrate the infrastructure into the urban realm. This provides opportunities for optimising development and the potential for value capture. CRLL will submit a proposal to its sponsors on master planning and value capture opportunities for the project as a matter of priority.

CRLL Statement of Intent

OBJECTIVES OF THE CITY RAIL LINK The CRL is a significant infrastructure project to enhance the capacity and performance of Auckland rail services and add to the quality of life in Auckland.

CRL’s OBJECTIVES: Improve transport access into and around the Auckland City Centre for a rapidly growing Auckland

Improve the efficiency and resilience of the transport network of urban Auckland

Significantly contribute to lifting and shaping Auckland’s economic growth

Provide a sustainable transport solution that minimises environmental impacts

Contribute positively to a liveable, vibrant and safe city

Contribution to Sponsor priorities Contribution to Government priorities The CRL contributes to a number of government priorities, including: • D raft Government Policy Statement on Land Transport 2018/19 – 2027/28 • Ministry of Transport’s overarching priorities of supporting economic growth and productivity, delivering value for money and improving safety • Treasury’s focus on higher living standards and social investment • Ministry of Business, Innovation and Employment’s, policy on skills, innovation and productivity in the building and construction sector • Ministry for the Environment’s NZ Waste Strategy, action on climate change objectives and greenhouse gas reduction targets • Ministry of Social Development’s outcomes, including more people are in sustainable work and out of welfare dependency • Maori Economic Development Strategy

CRLL Statement of Intent

Contribution to Council priorities Auckland Council has identified seven priority outcomes in its existing Auckland Plan and the CRL contributes to all of them.

AUCKLAND’S VISION THE WORLD’S MOST LIVEABLE CITY OUTCOMES: WHAT THE VISION MEANS IN 2040

A fair, safe and healthy Auckland

A green Auckland

An Auckland of prosperity and opportunity

A well connected and accessible Auckland

A beautiful Auckland that is loved by its people

A culturally rich and creative Auckland

A Māori identity that is Auckland’s point of difference in the world

Contribution to other Auckland objectives The CRL also contributes to the social and economic objectives in other community and council plans. These include:

Strategic direction • • • •

Draft Long Term Plan 2018-2028 Auckland’s Economic Development Strategy Auckland’s Arts and Culture Strategic Action Plan Low Carbon Auckland

Spatial • • • • •

ity Centre Masterplan 2012 C The Downtown Framework Aotea Quarter Framework The Karangahape Road Plan 2014-2044 Newton Eden Terrace Plan 2016-2046

Transport strategic direction • A uckland Regional Land Transport Plan 2018-2028 (being consulted on now) • Auckland Transport Alignment Project • Auckland Central Access Plan

RISK MANAGEMENT The CRLL board and management will encourage a culture that is risk aware and will seek to understand and mitigate risk where it is identified. CRLL will maintain an active and regularly updated register of strategic and operational risks, managing these risks through an agreed management process with oversight from management and the board.

CRLL Statement of Intent

FUNCTIONS AND OPERATIONS The CRLL board provides governance and assurance that management is delivering the project in accordance with its objectives. The Chief Executive has appointed a leadership team to provide direction and oversight to the activities of CRLL. CRLL is responsible for delivering New Zealand’s first underground passenger rail project. This includes consenting, land acquisition/disposal, community engagement, procurement and management of the contracts required to complete the project. CRLL will work with key stakeholders to deliver the objectives set out above. The project is divided into a series of workstreams and the team structure is amended progressively to match the evolving requirements of the project through its lifecycle. CRLL’s activities are guided by policies and procedures that ascribe to effective corporate discipline. The project’s key operational activities comprise nine construction contracts, four of which (C1, DSC, C2 and C6) are underway: CONTRACT

DSC

CONTRACTOR

SCOPE

Awarded in July 2016 to Downer Soletanche Bachy Joint Venture

Creation of temporary Britomart station passenger facility and construction of tunnels from below Britomart to former Downtown Shopping Centre (DSC) site

Precinct Properties

Constructing the CRL tunnels below its retail and tower development site

A cut and cover contract awarded in June 2016 to Connectus (McConnell Dowell /Hawkins) Joint Venture

From DSC to the Wyndham St intersection on Albert St and the pipejack contract (separable portion) awarded in December 2015 for the relocation of a stormwater line on Albert St and strengthening of the Orakei Main sewer that cuts across Albert St

TBC

Tunnels from just south of Wyndham St to North Auckland Line at Mt Eden and stations (Aotea, Karangahape, Mt Eden)

TBC

Connection of tunnels into existing North Auckland Line live rail corridor environment

Awarded in December 2017 to March Bessac JV

Stormwater replacement in Mt Eden prior to start of C3 and C5 works

TBC

Rail systems, integration, testing and commissioning from Britomart to Mt Eden Station

TBC

Additional platforms and turnback facilities at Otahuhu, Newmarket, The Strand and Henderson

TBC

Additional connections and stairs, platform widening and track modifications at the eastern end of Britomart once CRL is operational

CRLL Statement of Intent

Communication and Engagement In addition to its shareholders, CRLL has critical relationships with other key parties and is committed to open and honest communication. These relationships include Auckland Transport, KiwiRail and its operators, Mana Whenua, adjacent property developers and other interested parties named in consent conditions. CRLL also works closely with property owners, business and residential neighbours, and those who have a focus on the wider community and the business and development potential of Auckland, including the New Zealand and international construction industry. Affected property owners have been a core focus for the project through the planning and design phases and the ultimate users of the CRL tunnels and stations are front of mind in the design and operation of the CRL. The CRL has established three key communication principles for its interaction with external parties. These are: â€˘ Proactive Communication CRL will inform people affected by the project in such a way that they hear from the project before they hear about it from any third party. It will provide information rather than sit back and wait for people to come to it with inquiries. Information will demonstrate that CRLL is being upfront and transparent about what is proposed and provide as much certainty as possible while acknowledging that detail relating to construction methodology may not be finalised. â€˘ Language and Style Communications will be straightforward, fact based, clear, engaging and interesting. Jargon and bureaucratic language will be avoided. â€˘ Responsiveness Responses will be timely, full, helpful, frank and as detailed as possible. They should demonstrate that CRLL is listening, even if agreement cannot be reached. There will be investment in face-to-face communication and personal attention.

Sustainability Vision CRLL has a focus on designing, constructing and operating the CRL to the highest sustainability standards and aims to set the benchmark for delivering sustainable infrastructure in New Zealand. It has adopted the ISCA (Infrastructure Council of Australia) rating tool and to date is the only New Zealand project to be awarded two leading ratings; one each for C1 and C2 works. Sustainability includes both social and environmental elements and underpins the project from conception, design and planning through to construction. Materials, energy and water use is being monitored, and the project has an aspirational target of zero waste to landfill. CRLL will seek to create opportunities to contribute to society through the delivery phase by maximising training and employment opportunities, building capacity and upskilling the workforce.

CRLL Statement of Intent

ORGANISATIONAL HEALTH & CAPABILITY Health and Safety As a Crown entity operating in a construction environment, CRLL will be a leader in health and safety and ensure compliance with the Health and Safety at Work Act 2015. CRLL is committed to a culture that holds safety as a core part of the company’s identity. It will do this through a belief, culture and system that reinforces an approach whereby no task is too important or so urgent as to preclude Health and Safety. It will do this through: • t he board and management modelling behaviours that they expect from CRLL and contractors • e stablishing best practice health and safety approaches in the field and in the office environment, monitoring adherence to these practices and taking immediate corrective actions, if required • e nsuring that CRLL, and those who are working for CRLL, meet all health, safety and environmental regulatory obligations. Albert Street trench

Capability Development CRLL will support its staff to achieve the company’s objectives and purpose by: • d eveloping the team for their current roles, providing flexibility to move staff to other roles within the company and preparing staff for their next career steps • r egularly reviewing the capability of its people to align the available skills with the requirements of the project development lifecycles • achieving high levels of staff engagement • providing a safe environment for staff • d eveloping skills required to achieve the company’s objectives in a cost-effective manner • providing staff with reliable, secure and cost-effective technology • providing a sound financial and internal control environment.

“No task is too important or so urgent as to preclude Health and Safety.”

Ensuring CRLL is a Good Employer The successful delivery of the project will depend on the technical, commercial and financial expertise of CRLL. CRLL wishes to attract and retain skilled staff by being a good employer and offering an attractive place to work, with a culture that is valued by employees and supports the company to meet its objectives.

CRLL Statement of Intent

ASSESSING PERFORMANCE CRLL has an established baseline of project costs developed under the governance and management of Auckland Transport and summarised in the PDA. Reporting against the baseline will assist management and the board to implement the project and keep its shareholders informed of progress. CRLL will report regularly to the shareholders, and to the sponsors, as set out in the PDA.

OUTCOMES, TARGET AREAS AND MEASURES Health and Safety Outcome Every person employed, contracted, involved or in contact with the project has a right to be protected from health and safety risks and to come under no adverse harm as a result of being associated with the project. CRLL shall consider NZ health and safety and rail safety legislation as minimum standards and shall endeavour to provide a model health and safety regime for the project that is subject to continuous improvement. The handover of the railway to its operators is undertaken to support world-class operational safety performance.

Target Areas CRLL Corporate H&S has the following target areas: • CRLL wellbeing score • Delivery of an annual Health and Safety Plan. CRL Project Construction H&S has the following target areas for its contractors: • An agreed percentage of compliance with all construction health & safety audits • An agreed percentage of incidents are investigated and reported, and actions assigned and closed out within two weeks • Total Recordable Injury Frequency Rate (TRIFR) recorded on a 12 month rolling average. The actual targets for 2019 are set out on page 5 of the Statement of Performance Expectations (SPE).

Measure • • • •

Percentage of completed CRLL staff annual wellbeing surveys Quarterly audit compliance report score (%) by contract Percentage of incidents investigated and reported, and actions assigned and closed out within two weeks Number of injuries as measured by TRIFR.

CRLL Statement of Intent

Sustainability and social outcomes Outcome CRLL will use procurement to evaluate contractors’ understanding of sustainability, including social outcomes, when tendering for CRL contracts, and the contracts themselves will set out CRLL’s requirements around sustainability performance. CRLL will work collaboratively with eight Mana Whenua to reflect and respond to cultural values. CRLL has a Social Outcomes Strategy and will work with delivery partners to achieve training and employment outcomes for those experiencing barriers, disadvantage or discrimination in the labour market and to promote social innovation through procurement. CRLL will continue to form, develop and strengthen relationships with Mana Whenua, government agencies, community groups and education providers to address skills shortages so its future workforce is ready when jobs become available.

Target Areas Across the life of the Britomart (C1) and Albert St (C2) contracts, CRL has four key sustainability targets: • • • •

An “Excellent” Infrastructure Sustainability (IS) rating Aspiring to zero waste to landfill Optimise carbon footprint Monthly reporting to track progress.

For future works, CRL’s contractors will be expected to deliver on the four key aspects of the social outcomes strategy: • Employment – maximising training and employment opportunities for those experiencing barriers or disadvantage, with a focus on Mana Whenua, other Māori, Pasifika and youth • Training – building capacity and capability in the workforce by upskilling and reskilling • Social innovation – creating supply chain diversity by providing opportunities for Māori and Pasifika small and medium-sized enterprises, social enterprises and socially innovative businesses • Future workforce – developing Aucklanders’ skills and knowledge of construction infrastructure and career opportunities through collaboration with local schools, communities, training providers and other agencies CRLL will also be working to deliver on the strategy.

Measure • • • • • •

IS score Energy-related greenhouse gas emissions and embodied carbon of materials (tCO2e) Percentage of waste diverted from landfill Number of new recruits from target group Number of training interventions Dollar spend with Māori and Pasifika small and medium size enterprises and socially innovative businesses

CRLL Statement of Intent

Project Delivery Outcome Deliver a quality underground rail link in a timely manner.

Target Areas • Contract target dates are set out below. The actual targets for project delivery for 2019 are set out on page 5 of the SPE. CONTRACT

STATUS

TARGET COMPLETION DATE

In construction

Jul-2020

DSC

In construction

Jun-2018

In construction

Nov-2019

Procuring

Mid 2024

Procuring

End 2023

In construction

Apr-2019

Procuring

Mid 2024

In construction

Jan-2020

Construction by C7

Oct 2025

• Resolve all open Non-Conformity Reports (NCR)

Measure • Actual completion date against target date • Percentage of resolved NCRs

Funding envelope Outcome Achieve value for money through fiscal and budgetary prudence and efficiency.

Targets • Track monthly, quarterly and yearly budget in relation to the level of activities agreed • Meet statutory and other agreed financial reporting agreements

Measures • Percentage of variance between actual and budget • Explanation of major variances against budget as part of CRLL’s notes to the financial statements included in its annual report

CRLL Statement of Intent

Communication and engagement Outcome • Mana Whenua value the engagement process and view it as best practice • Stakeholders and the community have had a range of formal and informal opportunities to engage with the project and have been heard • There is ready access to information about the project and its benefits and impacts that is current and intelligible • Inquiries have been responded to promptly and any issues resolved

Targets • • • •

Meet relevant designation conditions Be accessible and responsive Provide regular and current information Provide opportunities for engagement

Measure • • • • •

Track quarterly and annual information provision and events Social media presence and engagement Compliance with consent conditions One working day response to public inquiries Mana Whenua feedback through minutes

OTHER STATUTORY REPORTING REQUIREMENTS Governance and Organisational Form Incorporated under the Companies Act 1993, CRLL is a majority-Crown-owned entity and is listed under Schedule 4A of the Public Finance Act 1989 and Part 2 of Schedule 1 of the Ombudsmen Act 1975. In addition, the Public Finance Act 1989 applies several provisions of the Crown Entities Act 2004 to CRLL, as if it were a Crown entity under that Act. CRLL’s shareholders are the Crown, acting by and through the Ministers of Finance and Transport and the Auckland Council. The Crown holds 51% of the voting shares in CRLL, while Auckland Council holds the remaining 49%. CRLL is not a Council Controlled Organisation. CRLL has had the project transferred to it as at 1 July 2017, with each shareholder contributing 50% of the cost to date. Funding will continue by way of equity contribution on a 50/50 basis.

CRLL Statement of Intent

Board of Directors The CRLL board is committed to a high standard of corporate governance and regulatory compliance in guiding and monitoring CRLLâ€™s activities. It has five directors appointed by the shareholders, following Cabinet and Auckland Council Governing Body approval. The board will carry out its accounting, reporting, risk management and responsibilities in accordance with legislation and the directors will comply with their obligations under the Companies Act 1993, the Crown Entities Act 2004, the Public Finance Act 1989 and other relevant legislation. The chief executive, who is accountable to the board, has responsibility for the management, operation and administration of CRLL. The company has a suite of policies that underpin its objectives and mandate and provide a link to day-to-day company operations.

Shareholders CRLL maintains relationships with its shareholders in a manner which respects their roles, responsibilities and expectations.

Crown Entities Act Requirements CRLL is subject to various sections of the Crown Entities Act as set out in its constitution, including the collective duties of the board to the Crown and shareholders, interface with the Companies Act 1993, directions from ministers to support a whole of government approach or under statute, provision of information, employment; and restrictions on financial products, borrowing and giving of guarantees and indemnities.

Other Statutory Requirements In addition to the Crown Entities Act, Companies Act 1993 and Public Finance Act 1989, there are various other acts that apply to CRLL, including the Anti-Money Laundering and Countering Financing of Terrorism (Requirements and Compliance) Regulations 2011, Crown Organisations (Criminal Liability) Act 2002, Hazardous Substances and New Organisms Act 1996, Land Transport Management Act 2003 and Public Audit Act 2001. CRLL is committed to complying with its obligations under all legislation. Under the Public Audit Act 2001, the Controller and Auditor-General is the auditor of CRLL.

ADDITIONAL INFORMATION Sponsors Agreement Project Delivery Agreement These documents and more information on the project and the company are available on CRLâ€™s website, www.cityraillink.co.nz

CRLL Statement of Intent

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