CRL Ltd Statement of Intent (SOI) 2019

City Rail Link Limited Statement of Intent For Financial Years 2019 – 2025

CityRailLink.co.nz

CityRailLink

INTRODUCTION This Statement of Intent (SOI) is submitted by the Board of Directors of City Rail Link Limited (CRLL), pursuant to the Crown Entities Act 2004, and sets out the activities and objectives of CRLL for the period 1 July 2019 to 30 June 2025.

Sir Brian Roche

Anne Urlwin

Chair

Director

30 June 2019

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CITY RAIL LINK LIMITED | Statement of Intent

Te Waka Tūhono - Connecting our history and our future

PURPOSE This SOI outlines the purpose of 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 project) 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 CRL project.

The CRL project is transformational and will support redevelopment of Auckland’s inner-city area from mid-city to Mt Eden for the next 50 years. The CRL project commenced with early works along the CRL project corridor in June 2016 and by 2024 will have achieved practical completion.

This SOI describes the CRL project’s 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.

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Redeveloped Britomart Station

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Auckland Waterfront

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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 are 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 its first year as an operating company on 1 July 2017. It was established to manage the delivery of the CRL project, 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 twin tunnel underground railway, two new city stations, the redevelopment of two existing stations, the creation of new nine-car 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 CRL project. Auckland Council and the Crown are the shareholders of CRLL as well as its sponsors (with the Crown acting through Ministers of Finance and Transport).

CRLL was established with a finite life span. It has one key objective, which is to manage the development, procurement, delivery and completion of the CRL project. CRLL will also contribute to the wider social and economic outcomes associated with the CRL project, in accordance with the Project Delivery Agreement (PDA).

The sponsors also wish to work together in relation to the wider benefits associated with the CRL project, any future rail investment, and the ownership and operating structure of the wider Auckland transport network.

The CRL project 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. In 2020, CRLL will submit a proposal to its sponsors on master planning and value capture opportunities for the CRL project as a matter of priority.

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CITY RAIL LINK LIMITED | 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 project contributes to a number of priorities under key themes: • Building a productive, sustainable and inclusive economy • Improving the wellbeing of New Zealanders and their families • Providing new leadership by Government The CRL project also contributes to objectives in other government plans and strategies. These include: • Government Policy Statement on Land Transport 2018/19 – 2027/28 • Auckland Transport Alignment Project 2018 • M inistry 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 • M inistry of Business, Innovation and Employment’s policy on skills, innovation and productivity in the building and construction sector • M inistry for the Environment’s NZ Waste Strategy, action on climate change objectives and greenhouse gas reduction targets • M inistry of Social Development’s outcomes, including more people in sustainable work and out of welfare dependency • Māori Economic Development Strategy to 2040

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Contribution to Auckland Council priorities Auckland Council identified six priority outcomes in its Auckland Plan 2050 for Auckland to continue to be a place where people want to live, work and visit. The CRL project contributes to all of them.

AUCKLAND’S VISION OUTCOMES: WHAT THE VISION MEANS IN 2050

Belonging and participation

Māori identity and wellbeing

Homes and places

Transport and access

Environment and cultural heritage

Opportunity and prosperity

The CRL project also contributes to social and economic objectives in other community and council plans.

These include:

Strategic direction • 10-Year Budget 2018-2028 • Auckland’s Economic Development Strategy • Toi Whītiki Arts and Culture Strategic Action Plan • Low Carbon Strategic Action Plan • Waste Management & Minimisation Plan 2018

Spatial • City Centre Masterplan 2012 • The Downtown Framework • Aotea Quarter Framework • The Karangahape Road Plan 2014-2044 • Newton Eden Terrace Plan 2016-2046

Transport strategic direction • Auckland Regional Land Transport Plan 2018-2028 • Auckland Transport Alignment Project 2018 • Auckland Central Access Plan

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CITY RAIL LINK LIMITED | Statement of Intent

RISK MANAGEMENT The CRLL Board and management encourage a culture that is risk aware and 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.

FUNCTIONS AND OPERATIONS The CRL project is divided into a series of workstreams and the team structure is amended progressively to match the evolving requirements of the CRL project through its lifecycle.

CRLL’s activities are guided by policies and procedures that ascribe to effective corporate discipline.

The CRL project comprises a number of packages of work, namely: CONTRACT

WORKS

DSC

Completed construction of City Rail Link tunnels below Precinct’s retail and tower development site

C1*

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

C2*

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 Ōrākei Main sewer that cuts across Albert St

C3♦

The design, supply, construction and installation management of key work disciplines across the full geographic area of the CRL project from just south of Wyndham St to the North Auckland Line at Mt Eden and two new underground stations (Aotea and Karangahape). Works include design and construction of tunnels and Aotea and Karangahape stations, connection of tunnels into existing North Auckland Line live rail corridor environment, and rail systems, integration, testing and commissioning from Britomart to Mt Eden Station. C5 and C7 to be included in the C3 Alliance.

C5

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

C6*

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

C7

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

C8*

Additional platforms and turnback facilities at Ōtāhuhu, Newmarket, The Strand and Henderson.

The Strand has been completed and Ōtāhuhu forecasted for completion Q3 2020

C9

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

*Denotes construction underway. ♦ The procurement of the C3 contract is scheduled for completion in July 2019, with contract award to occur in September 2019.

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OVERSITE DEVELOPMENT CRLL will govern and manage the development of a work programme that will provide options for the sponsors to consider in terms of maximising the development opportunities associated with investment in the CRL project.

The work programme has two key elements: • The completion of a comprehensive development programme for the wider station precincts, confirming the preferred timing/phasing of next steps • The development of a delivery strategy and the identification and potential appointment of delivery partners for development opportunities on the CRLL owned sites CRLL will report to the sponsors on progress of the oversite development programme on a monthly basis.

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 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 CRL 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 project.

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CITY RAIL LINK LIMITED | Statement of Intent

CRLL has established three key communication principles for its interaction with external parties. These are:

• Proactive Communication CRLL will inform people affected by the CRL project in such a way that they hear from the CRL project before they hear about it from any third party. CRLL 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.

• Language and Style Communications will be straightforward, fact-based, clear, engaging and interesting. Jargon and bureaucratic language will be avoided.

• Responsiveness Responses will be timely, full, helpful, frank and as detailed as possible. Responses will demonstrate that CRLL is listening, even if agreement cannot be reached. There will be investment in face-to-face communication and personal attention.

SUSTAINABILITY CRLL aims to achieve sustainability excellence by being careful with the resources the project uses, optimising our carbon footprint, avoiding waste and leaving a positive social and cultural legacy for Auckland.

The use of materials, energy and water will be optimised across the entire lifecycle of the project, from design through to construction and operation, and the project has an aspirational target of zero waste to landfill.

CRLL will also seek to create opportunities to contribute to society through the delivery phase by maximising training and employment opportunities, creating greater diversity in the supply chain and upskilling the workforce.

The project’s sustainability performance will be externally verified using the Infrastructure Sustainability Council of Australia (ISCA) rating tool.

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ORGANISATIONAL HEALTH & CAPABILITY 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 • developing 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

ENSURING CRLL IS A GOOD EMPLOYER The successful delivery of the CRL project will depend on the technical, commercial and financial expertise of CRLL. It is important that CRLL retains skilled staff, is a good employer and offers an attractive place to work.

Consistent with the State Services Commission’s Government Expectations of Employment Relations in the State Sector, CRLL employer policies also aim to ensure that CRLL respects its equal-opportunity and diversity responsibilities.

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CITY RAIL LINK LIMITED | 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 assists management and the Board in implementing the project and keeping the Sponsors informed of progress.

CRLL announced, in April, a revised cost envelope for the CRL of $4.419 billion. The revised figure reflected significant changes impacting on the Project in the past five years that included a rigorous examination by CRLL of costs, changes to the project’s scope, and a competitive construction environment. The CRLL’s two sponsors, the Crown and Auckland Council, endorsed the additional funding requested by CRLL. CRLL reports regularly to sponsors, as set out in the PDA. CRLL also reports to its shareholders on a quarterly basis as a Crown entity.

STRATEGIC AREAS - OUTCOMES, TARGET AREAS AND MEASURES Health and Safety Outcome CRLL’s health and safety vision was suggested by Mana Whenua. It is a Māori proverb credited to Te Puea Herangi.

Mahia te mahi, hei painga hei oranga mo tātou katoa ‘To do the work, for the good of everyone’ CRLL has one overarching outcome for health and safety: to build an underground rail link that is safe for constructors, operators, maintainers and users.

CRLL’s approach to achieving this objective is to adopt activities that enables CRLL to be a highly engaged and highly informed organisation.

CRLL will clearly articulate the health and safety requirements necessary to achieve industry leading health and safety performance and will support and facilitate the introduction of activities designed to continuously improve health and safety performance, in partnership with its suppliers.

CRLL will work closely with suppliers to ensure its health and safety requirements are being met and actively seeks to ensure any identified shortcomings are addressed.

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Target Areas Four priority areas are identified where CRLL will work with suppliers to drive health and safety improvements: • Enhance the maturity and effectiveness of safety, health and environmental management systems • Support and embed safer working behaviours • Establish efficient and effective means of assuring health and safety performance • E nable continuous health and safety improvement through promoting best practice and sharing lessons learnt CRLL will develop an annual health and safety improvement programme aligned to priority areas and produce an annual progress review report.

Measures • Maturity assessment of CRLL H&S Management System using Risk Management Maturity Model (RM3) • Total Recordable Injury Frequency Rate (TRIFR) • P ercentage of incidents investigated and reported, and actions assigned and closed out within agreed timescales • Number of WorkSafe New Zealand notified events

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CITY RAIL LINK LIMITED | Statement of Intent

Project Delivery Outcome Deliver a safe, operable, and quality underground rail link in a timely manner.

Target Areas • C ontract target dates are set out below. The actual targets for project delivery are set out on page 5 of the Statement of Performance Expectations.

CONTRACT

STATUS

TARGET COMPLETION DATE

Completed

April 2019

C1

In construction

July 2021

C2

In construction

Dec 2020

C3

Procurement completed

End 2024

C5

Under negotiation

End 2024

C6

In construction

July 2019

C7

Under negotiation

End 2024

C8

In construction

Nov 2022

C9

Not yet commenced

Oct 2025

DSC

• Resolve all open Non-Conformity Reports (NCR)

Measures • Actual completion date of each contract against target date • Percentage of resolved NCRs.

Oversite Development Outcomes CRLL will work in partnership with Sponsors to realise the development potential of: • The public land above Aotea, Karangahape and Mt Eden stations • Opportunities within the wider station precincts • Opportunities within the wider corridor, including enabling linkages with other transport modes

Target Areas • K ey target areas to achieve the ‘oversite development’ outcomes that CRLL is accountable will be confirmed with the Sponsors, specifically development options and programme for wider precincts and corridor • Development approach for CRL station precincts • Community and stakeholder engagement • CRL value creation and capture strategy

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Measures • Monthly reporting on development opportunities • Development options to be presented to sponsors

Funding envelope Outcomes Deliver the project within the approved funding envelope and achieve value for money through fiscal and budgetary prudence and efficiency.

Target Areas • Meet delivery targets within approved Appropriation • Track monthly, quarterly and yearly budget in relation to the level of activities agreed • Timely financial reporting on project costs and cost to complete • Forward looking cashflow forecast to manage funding cause • Improved organisational efficiency • Meet statutory and other agreed financial reporting agreements

Measures • M ajor variances against budget as part of CRLL’s notes to the financial statements included in its annual report • Project spend versus approved Appropriation • Organisational efficiency benchmarks • Timely financial reporting

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CITY RAIL LINK LIMITED | Statement of Intent

Sustainability and social outcomes Outcome The CRL will be designed, procured and constructed in a manner that places a priority on creating the greatest long-term environmental, social and economic value from the considerable resources needed to deliver the project. This will result in: • An asset that has a carbon footprint optimised over its 100-year design-life • A construction process that minimises the amount of waste sent to landfill • T raining and employment opportunities for those experiencing barriers, disadvantage or discrimination in the labour market • S upply chain opportunities for Māori and Pasifika small and medium size enterprises and socially innovative businesses

Target Areas The project will focus on reducing operational and construction resource consumption, strive for zero waste to landfill through construction and deliver on CRLL’s social outcomes strategy.

Across the life of the Britomart (C1) and Albert St (C2) contracts, CRLL has four key sustainability targets: • An “Excellent” Infrastructure Sustainability (IS) rating • Aspiring to zero waste to landfill • Reducing carbon footprint compared to externally verified base line monthly to track progress • Monthly reporting to track progress In addition to the above, CRLL’s suppliers will be expected to deliver on the four key aspects of the social outcomes strategy: • E mployment – maximising training and employment opportunities for those experiencing barriers or disadvantage, with a focus on Mana Whenua, mataawaka, Pasifika and youth • Training – building capacity and capability in the workforce by upskilling and reskilling • S ocial innovation – creating supply chain diversity by providing opportunities for Māori and Pasifika small and medium-sized enterprises, social enterprises and socially innovative businesses • F uture workforce – developing Aucklanders’ skills and knowledge of construction infrastructure and career opportunities through collaboration with local schools, communities, training providers and other agencies

Measures • IS score • Energy-related greenhouse gas emissions and embodied carbon of materials (tCO2e) • Percentage of construction and demolition waste diverted from landfill • Number of new recruits from Mana Whenua, other Māori, Pasifika and youth • Number of training interventions • Dollar spend with Māori and Pasifika small and medium size enterprises and socially innovative businesses

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

Target Areas • Meet relevant designation conditions • I ncreased public participation through events, community liaison group meeting, stakeholder presentations and site tours • B uild positive profile of the project with videos, social media, proactive media releases and community newsletters • Be accessible and responsive • Provide regular and current information • Positive partnership with iwi through Mana Whenua hui

Measures • Track quarterly and annual information provision and events • Social media presence and engagement (newsletter, posts, videos) • Compliance with consent conditions • Maximum working day response to public inquiries • Mana Whenua feedback through minutes and hui • Public surveys

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, and Auckland Council holds the remaining 49%.

CRLL is not a Council Controlled Organisation.

Each shareholder contributes 50% of the cost of the CRL project by way of equity contribution.

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CITY RAIL LINK LIMITED | 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 CRLL’s activities. The Board is made up of five non-executive 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.

Board Committees To aid the Directors in carrying out their duties, the Board has two standing committees. These are the: • A udit and Risk Committee, which provides recommendations, counsel and information on accounting, reporting, risk management and responsibilities under legislation • P eople and Remuneration Committee, which provides advice and recommendations on remuneration and human resources policies for CRLL

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 2004 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 2004, 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.

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ADDITIONAL INFORMATION • Sponsors Agreement • Project Delivery Agreement These documents and more information on the project and the company are available on CRL’s website www.cityraillink.co.nz

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CITY RAIL LINK LIMITED | Statement of Intent

CRLL0245 Statement Of Intent 2019-2025

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