City Rail Link Limited Annual Report 2020
Executive Report
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Contents Executive Report Foreword 1-2 CRL Ltd Board
3
Senior Leadership Team
4
Project Overview Project Benefits Statement of Performance
7-8 9-12
Project Delivery
13-18
Progress Highlights
19-20
Health and Safety
21-22
Sustainability and Social Outcomes
23-27
CRL Ltd as a Good Employer
28
Heritage 29 Development Opportunities
30
Communications and Engagement
31-34
CRL Mana Whenua Partnership
35-38
Financial Corporate Directory
41
Statement of Responsibility
42
Statement of Financial Performance
43
Statement of Financial Position
44
Statement of Changes in Equity
45
Statement of Cash Flows
46
Notes to the Financial Statements
47-66
Governance and Remuneration Disclosures
67-69
Audit Report
70-73
Executive Report
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
CONTENTS CONTENTS
AUDIT REPORT Mercury Lane construction is underway to build Karangahape Station
Executive Report
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Foreword City Rail Link Limited’s 2019-2020 Annual Report reflects a year of significant progress. Covid-19’s impact on the City Rail
This financial year the Link Alliance
sites to enable the project to regain
Link, the infrastructure industry
brought together a team of 1200
construction momentum.
and wider New Zealand should
from all over the world; obtained
not overshadow what has been a
crucial planning consents; relocated
huge and extraordinary year for New Zealand’s largest transport infrastructure project. Significantly, a project whose scale and complexity has not been seen in
underground utilities to clear the way for construction; and met tight deadlines for work start-ups at its three construction sites. Importantly, the transfer of key CRL Ltd staff into the Link Alliance team was completed
New Zealand demonstrated it could
successfully. The positive integration
respond with agility and flexibility to
of different working cultures will be a
the pandemic. It was able to maintain
significant contribution to meeting the
productivity and, after the lockdown,
challenges ahead.
make an immediate contribution to
All essential building blocks and
the country’s economic revival. Notwithstanding this, the pandemic
developments for a successful project were well in place before the
continues to have an ongoing impact
pandemic.
on the project - particularly due to
CRL was, like most of New Zealand’s
the current restrictions on skilled
infrastructure projects, affected
workers entering the country.
by efforts to contain Covid-19.
Additional costs and project delays
The nationwide lockdown meant all
are expected, however these cannot
CRL construction work stopped for
yet be determined.
five weeks. The lockdown did impact on
Developments since July 2019 were both rapid and agile and total project spend reached almost $1.3bn.
construction timetables but work still pushed ahead with critical tasks completed from home. This included building consents, designs, planning
CRL Ltd is making a more detailed evaluation of Covid-19’s long term impact on timings and costs. The outcome will depend on the health of the economy, how project suppliers are faring, and on international efforts to curb the virus and ongoing impacts of border restrictions. The full impacts will not be known until at least January 2021, assuming no resurgence of the virus in New Zealand. The year began positively when completion of the C6 contract for a stormwater drain diversion cleared the way for significant works at Mt Eden. The first stage of the C3 contract included removing around 30 commercial buildings and the upcoming closure of Mt Eden Station for two big pieces of work: construction of the southern portal retaining wall ahead of the project’s tunnel boring machine’s arrival later this year, and building the trench to connect CRL with the wider Auckland rail network.
City Rail Link Limited’s (CRL Ltd) new
and revision of the construction
Work is also well underway on C3’s
year began with the signing of the
programme to be delivered.
construction of the Karangahape and
Project Alliance Agreement with the
Foundations were laid for the project
Aotea Stations in central Auckland.
Link Alliance to deliver the substantive
to come out of the re-start blocks
C3 contract. The alliance will complete
quickly when the lockdown was lifted.
While the C3 programme continues
the tunnels from Mt Eden into
Even with a strong restart, the project
line is in sight for the two “foundation”
central Auckland, build the Aotea and
to accelerate, the construction finish
has needed to adapt further to meet
contracts – C1 (Britomart Station and
Karangahape underground stations,
the challenges of working in a Covid-19
Lower Queen Street) and C2 (the lower
and redevelop the existing station
environment. The Link Alliance
end of Albert Street between Customs
at Mt Eden.
introduced longer working hours at its
and Wyndham Streets).
1
Executive Report
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
At C1, the heritage-listed Chief Post
continues to be active in providing
Sustainability remains a core value and
Office building was successfully lowered
space to help promote artistic, cultural
CRL objectives included less reliance
on to new foundations, an operation
and social events.
on carbon fuels, reducing waste –
reflecting engineering innovation that will continue to be a feature of the project. Refurbishment of the historic building’s interior is underway, and in front of its main entrance Lower Queen Street is being paved for a traffic-free pedestrian plaza that will open up access to Waitematā Harbour. Street improvements continued as CRL Ltd continues to engage with businesses in Albert Street impacted by delays to the completion of C2 and introduced a Business Hardship Programme to provide rent assistance for those small retail businesses that qualify for support. Beyond the central city sites, the work by CRL Ltd and KiwiRail to improve rail access to the Ōtāhuhu Station is almost complete and collaboration continues with other network upgrades to maximise CRL’s benefits. CRL Ltd went beyond the boundaries of its construction sites to play a wider role in the development of Auckland’s future. Community engagement was an important part of the project’s year. One community-based highlight was last November’s Walk the Tunnel event from Britomart Station through a section of the CRL tunnels. All 10,000 event tickets were snapped up online within 15 minutes, reflecting strong
support and feedback it receives from its Community Liaison Groups, all stakeholders and from its Sponsors, the Crown and Auckland Council. It remains committed to be the best neighbour possible. The project also acknowledges that constructing the CRL can be disruptive and values the goodwill of the public whose support contributes to its success. CRL Ltd and the Link Alliance collaborated with Auckland Council and Auckland Transport to keep people informed and safe from the impact of construction on pedestrian and traffic access around the city and to minimise disruption. The project proudly accepted the WAFX Cultural Identity Award at the
salvaged materials were shipped to Tonga and Niue and an historic 19th century cottage was relocated to Waikato - and social outcomes. CRL Ltd celebrated the successful introduction of a Progressive Employment Programme initiative for rangatahi (young people). Encouragingly, the scheme has been adopted and expanded by the Link Alliance.
EXECUTIVE REPORT
part of C2’s urban realm programme.
The project acknowledges the
As the work programme accelerated so too did the focus on safety for both the public and CRL teams around busy city streets, live rail lines, and constrained construction environments. People remain at the heart of the CRL project. The project teams have worked hard and overcome unexpected challenges to advance a project that will benefit New Zealanders for generations to come.
prestigious World Architecture Festival in the Netherlands. Concept drawings for the stations representing historic and cultural ties Mana Whenua Iwi have with Tāmaki Makaurau won ahead
Dr Sean Sweeney Chief Executive Officer
of many other international entries. The invaluable contribution from Iwi continues to ensure Mana Whenua values are reflected in the CRL project. CRL Ltd welcomed the support it
Sir Brian Roche KNZM Board Chair
received from Iwi through the CRL Mana Whenua Forum.
interest and support in the project from Aucklanders. People across New Zealand voted to name the project’s tunnel boring machine after one of the country’s ground-breaking leaders, Dame Whina Cooper, an enduring champion of social and land rights for Māori. Children contributed to the artistic development of the project by submitting artwork that will line walls at the Aotea Station. The project
2
Executive Report
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
City Rail Link Limited Board
Sir Brian Roche
Russell Black
Karen Jordan
Director
Director
Sir Brian is involved with a number
Russell is a civil engineer with
Karen is a Fellow of the Chartered
of boards in the public and private
extensive client delivery management
Institute of Management Accountants
sectors and is currently Chair
experience on major infrastructure
and a project manager with over 20
of Waka Kotahi New Zealand
projects - predominantly urban and
years corporate general management
Transport Agency. He was the Chief
underground railways in Hong Kong,
experience in Financial Times Stock
Executive of the New Zealand Post
Singapore, London and China. Russell
Exchange Top 20 infrastructure
provides client governance and
companies. She has extensive
consultancy services on Australian
commercial operations and asset
urban rail projects.
management expertise; latterly
Chair
Group, and has been involved in a number of infrastructure projects.
with United Kingdom National Grid PLC across a ÂŁ1 billion per annum construction programme. Prior to moving permanently to New Zealand, she was Director of Contract Management for UK Defence, with responsibilities across a multi-billion pound project delivery portfolio.
Brian Harrison Director
Anne Urlwin Director
Brian has a legal background
Anne is a professional Director and
with extensive domestic and
chartered accountant with wide-
international experience advising
ranging governance experience,
corporates, financiers, multilaterals
including the infrastructure and
and government bodies on major
construction sectors. Her current
projects and infrastructure in a
roles include directorships of Steel
broad range of sectors. This includes
& Tube Holdings Ltd, Summerset
rail, road, aviation, ports, property
Group Holdings Ltd, Tilt Renewables
and public-private partnerships. His
Ltd and Precinct Properties New
roles have included managing and
Zealand Ltd, and she is Deputy Chair
executing complex projects with
of Southern Response Earthquake
responsibility for overall corporate
Services Ltd. Anne is a former
structures and governance,
director of Chorus Ltd, a former
procurement and contract
Chairperson of national commercial
negotiation, capital and debt
construction group Naylor Love and
structuring and analysis, and advice
has served on a number of central
on execution and risk allocation.
and local government entity boards.
3
She is an independent member of the New Zealand Defence Force Risk and Assurance Committee.
Executive Report
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Senior Leadership Team
EXECUTIVE REPORT
Left to right Sumi Eratne
Dr Sean Sweeney
Programme Delivery Director
Chief Executive Officer
Caroline Beaumont
Rob Mair
General Counsel
Russell McMullan General Manager Assurance and Integration
Steve Brunell Programme Performance & Controls Director
General Manager Health, Safety, Environment & Sustainability
Victoria Jessop General Manager Corporate Relations & Communications
Patrick Brockie Chief Financial Officer
Sandip Ranchhod Owner Interface Manager
4
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Project Overview Project Benefits Statement of Performance
7-8 9-12
Project Delivery
13-18
Progress Highlights
19-20
Health and Safety
21-22
Sustainability and Social Outcomes
23-27
CRL Ltd as a Good Employer
28
Heritage 29 Development Opportunities
30
Communications and Engagement
31-34
CRL Mana Whenua Partnership
35-38
5
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
PROJECT OVERVIEW
C1 workers restoring the Chief Post Office building 6
Project Benefits
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Project Benefits
City Rail Link delivering significant benefits for Auckland When it opens, the City Rail Link will provide a world class rail system to help an international city like Auckland grow further. The CRL is a 3.45 kilometre twin-tunnel
or car would require another three
rail station in New Zealand and will
underground connection between the
Auckland Harbour Bridges or 16 extra
feature tiles printed with thousands
redeveloped Britomart and Mt Eden
traffic lanes into the city centre. Better
of artworks from New Zealand
Stations. New inner-city stations;
travel choices will help to ease pressure
one underneath Albert Street with
children. The public space around CRL
on roads and create health benefits
entrances at Wellesley and Victoria
which includes cleaner air with more
stations are also being designed to
Streets provisionally named Aotea, and
people travelling on electric trains.
the other under Karangahape Road with entrances at Beresford Square and Mercury Plaza provisionally named Karangahape will also be constructed. The project’s benefits are many. It will eliminate the existing and inefficient “dead-end” rail service at Britomart Station and allow through trains to run underground in central Auckland. CRL will also double the capacity of Auckland’s rail network to carry up to 54,000 passengers an hour during morning and afternoon peaks times. To move the same number by bus
7
There will also be significant time savings for travellers and better connections across Auckland’s train network.
be community focused and visually stunning. CRL will become a catalyst for significant development of new commercial properties and thousands of homes to be built around its stations,
Once it is built, CRL will double the
providing people with better access to
number of people who live within 30
housing and employment opportunities.
minutes travel of New Zealand’s biggest employment hub, central Auckland. World class station designs unique to New Zealand will recognise the cultural and historic ties of Iwi to Tāmaki Makaurau. Aotea is set to become the busiest
As the largest infrastructure project in New Zealand, CRL is playing a key role in the economic stimulus response to Covid-19. It is a significant procurer of goods and services and will employ and upskill thousands of people throughout its lifespan.
Project Benefits
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
$
4.42
9car
billion
electric trains
capacity built
100 year
project cost
3
suburban stations improved
wider network improvements at The Strand, Ōtāhuhu and Newmarket
4
city precincts
with enhanced streetscape around stations and along Albert Street
CRL BENEFITS
LANE BUS
48
asset life
trains per hour
on Auckland’s network in peak travel times
3.45km twin track underground tunnels connecting Britomart to Mt Eden
2 New Stations under Albert Street and under Karangahape Road
42 metres
maximum depth of tunnels
8
Statement of Performance
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Statement of Performance
Construction of the temporary shaft in Mercury Lane that will provide access to the tunnels
This section describes the 2019-2020 progress made towards achieving the identified performance measures as outlined in the Statement of Performance Expectations. CRL Ltd has one output class and six output areas. The results reported within this section should be read in conjunction with the results reported against the Statement of Intent (SOI) on pages 13-18*. CRL Ltd’s performance against some Key Performance Indicators (KPIs), particularly with regard to Project Delivery, have been impacted by Covid-19 government imposed restrictions during Alert Levels 4, 3 and 2. During Alert Level 4 no construction work could be undertaken, and new health and safety protocols during Alert Levels 3 and 2 such as social distancing also impacted the speed of construction on CRL’s sites. Note 1.16 (v) in the Financial Statements provides a more fulsome description of the financial impact of Covid-19 on CRL Ltd.
Funding Envelope
KPI 2020
Actual 2020
Achieve fiscal efficiency
Meet delivery targets within approved
Achieved. Remained within the funding
Appropriation
budget for the project.
Provide 12-month forward cashflow
Achieved.
forecasts to manage funding calls Timely financial reporting of project costs
Achieved.
on a cost to complete basis Develop organisational efficiency measures Achieved. Agreed measure: “Meet Corporate Costs whole of life budget”. These costs remain within budget and are monitored monthly. Meet statutory and other agreed financial
Achieved.
reporting requirements
*Because the SPE and SOI were prepared at different times, some of the targets set out in the document do not align.
9
Statement of Performance
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Health and Safety
KPI 2020
Actual 2020
Build an underground rail link that is safe for constructors, operators, maintainers and users
An externally validated maturity assessment of the CRL Health and Safety Management System (HSMS) using the Risk Management Maturity Model (RM3) will achieve Level 3 (standardised) by June 2020
Achieved. An independent assessment of the Health and Safety maturity across CRL has achieved Level 3, ‘Standardised’. The CRL HSMS has undergone substantial revision to align with the requirements of RM3. This better reflects its organisational health and safety duties and the implementation of several recommendations from previous reviews.
Total Recordable Injury Frequency Rate (TRIFR) at or below 6 injuries per million hours worked
Achieved. Project TRFIR rate was 4.7 injuries per million hours worked. Increased health and safety monitoring and support have been put in place.
Zero WorkSafe New Zealand notified events
Not achieved. One WorkSafe notifiable event occurred in December 2019. Incident investigation was completed and corrective actions closed out.
95 per cent of incidents investigated Achieved. 100 per cent of incidents investigated and and assigned actions closed out closed out within agreed timescales. within agreed timescales Safety Assurance Summary Report for 2020 is well advanced, with draft to be distributed to stakeholders in August for review. This report is expected to be published in September 2020.
Sustainability and Social Outcomes KPI 2020
Actual 2020
Achieve sustainability excellence including social outcomes
Continued progress of C1 and C2 “Excellent” Infrastructure Sustainability (IS) “as built” rating
Achieved. C1 and C2 are on target to achieve ‘Excellent’ as-built rating. Final ratings will be confirmed after practical completion.
95 per cent of construction and demolition waste diverted from landfill*
Achieved. Over 99 per cent construction and demolition waste (including spoil) has been diverted from landfill for C1 and C2 over the last year.
25 per cent reduction in construction and operational energy related carbon*
Achieved. C1 and C2 construction energy related carbon is projected to be 59 per cent below the ‘base case’, or business as usual, upon completion. C1 and C2 operational energy related carbon is projected to be 25 per cent below the ‘base case’ upon completion.
10 per cent reduction in C1 and C2 embodied carbon of construction materials
Achieved. C1 and C2 contractors are achieving a 25 per cent reduction in embodied carbon of construction materials compared to the ‘base case’.
Deliver social outcomes pilot Achieved. Pilot programme successfully concluded in Progressive Employment Programme October 2019. with six rangatahi (young people) Issue Sustainability Annual Review
Achieved. Report for 2018/19 issued on the CRL website in December 2019.
*Other contracts such as C6 and C8 Ōtāhuhu were monitored but excluded from this reporting due to materiality.
10
STATEMENT OF PERFORMANCE
Publish annual safety assurance summary report by June 2020 to assure safety for operations, maintenance and users
Statement of Performance
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Project Delivery
KPI 2020
Actual 2020
Deliver a safe, operable and quality underground rail link in a timely manner
Agree C5 and C7 for inclusion
Not achieved. The contract variation to include the C5 and C7
as variation to C3 Alliance and
scope of work into the C3 Alliance is advanced, with formal
commence work on same by
inclusion of the variation forecast for October 2020. The
December 2019
delays are due to the complexities of the rail system works, integration with other works and Covid-19. Notwithstanding this, the C5 Mt Eden Single Line Early Works Contract was signed with KiwiRail and work is well advanced. A Development Agreement was executed with the Link Alliance for other early works across C5 and C7 in order to maintain momentum.
Commencement of C3 Alliance
Achieved. Construction on the C3 Alliance Early Works
on site January 2020 (Early
Contract commenced prior to January 2020. Early works
Works Contract underway)
are underway in several locations with building demolition completed and utility diversions well advanced. Design work is also underway.
Complete C8 Ōtāhuhu Station
On track. C8 Ōtāhuhu rail works are scheduled for completion
by September 2020
in August 2020 with the station works expected to be completed by September 2020.
Continued progress of C2
On track. C2 progress continues to programme despite
towards completion by
Covid-19 delays. The cut and cover tunnels are complete
December 2020 including
and works are progressing on the Public Realm enhancement
Public Realm works
along Albert Street from Customs to Wyndham Streets. The additional Public Realm works on Lower Albert Street between Customs and Quay Streets are being completed by Auckland Transport.
Continued progress of C1
Partially achieved. C1 tunnels are complete. Delivery of
towards completion by July 2021 works are now forecast for November 2021 (due to Covid-19 including Public Realm works
restrictions). Works associated with the reinstatement of the Chief Post Office building are due for completion in March 2021.
Oversite Development
KPI 2020
Actual 2020
Realisation of
Monthly report on progress of
Achieved. Monthly reports to Sponsors provided on time.
development potential
development opportunities
in and around CRL project sites
Delivery of development options Achieved. Development options presented to Sponsors to the shareholders by June 2020 in November 2019 with further report in April for decision making. Develop master plans for CRL
Achieved. Master plans presented to Sponsors in November
station precincts by June 2020
2019.
Commence community and
Not achieved. Engagement Plan provided to Sponsors in
stakeholder engagement by
November 2019. Further detailed work has been requested
June 2020
by the Sponsors before beginning community and stakeholder engagement.
Develop a CRL value creation and Achieved. Final Value Capture Strategy provided in April 2020. capture strategy by June 2020
11
Statement of Performance
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Community & Stakeholder Engagement
KPI 2020
Actual 2020
Deliver a high level of
Improved results from November 2018
Achieved. Colmar Brunton survey undertaken
communications and
public survey
July 2019 identified CRL as a hero project for
engagement
Auckland Council. Public awareness increased by 8 per cent from November 2018. Increased public participation through events
Achieved. 18 events held, 12 Community
(target 8), community liaison group meetings
Liaison Group meetings, 25+ stakeholder
(target 12), stakeholder presentations (target
presentations and 35+ site tours.
25) and site tours (target 25) Build positive profile of project with videos
Achieved. In excess of five social media posts
(target 10), social media (target at least 5 posts per week, 106 videos, 58 media releases and a week), proactive media releases (target 25)
12 community newsletters over the year.
and community newsletter (target 12) Positive partnership with Iwi through Mana
Achieved. 21 Mana Whenua hui held.
Whenua hui (target 10) Responsiveness (target 2 working days
Achieved. All enquiries acknowledged within
response to public enquiries)
two working days on average. STATEMENT OF PERFORMANCE
Output Class Cost of Service Statement – City Rail Link Development $(000) Revenue
Actual 2020
Total revenue Total expenses Net surplus/(deficit)
Budget 2020
Actual 2019
1,954
1,461
3,819
114,956
11,211
29,115
(113,002)
(9,750)
(25,296)
Auckland City Rail Link Non-Departmental Capital Expenditure The Crown is a 51 per cent shareholder of CRL Ltd and funds CRL Ltd on 50:50 basis with Auckland Council. The Crown and Auckland Council fund CRL Ltd by subscribing to equity in the company. During 2019-20 the Crown contributed $258 million against the revised appropriation of $275.101 million. This appropriation is to achieve construction and operational readiness of the CRL project. An explanation of the variances from budget can be found in note 15 of the Financial Statements within this Annual Report.
Assessment of Performance City Rail Link Limited
Actual 2020
Target 2020
Deliver the CRL project by 2024
Progressing activities described on pages 13 - 18 against
Project delivery
Statement of Intent (SOI) targets (taken from schedule 5 of
target met.
the Project Delivery Agreement (PDA))
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CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Project Delivery Delivering a quality, underground rail link in a timely manner. The project was initially split into nine delivery contracts, however these have been realigned into seven contracts with the planned combining of C3, C5 and C7. Five of the contracts are underway (C1, C2, C3, C8 and C9), and two (Downtown Shopping Centre (DSC) and C6) have been completed. The expected milestones agreed in the Project Delivery Agreement (PDA) and Statement of Intent (SOI) are included in this section with progress up to 30 June 2020 noted. The PDA provides more detailed project delivery dates than the SOI. The PDA and SOI originally anticipated design and construct contract models for contracts C3, C5 and C7. These have been changed to a proposed overarching alliance contract to be delivered by the Link Alliance. CRL Ltd remains compliant with all consent conditions obtained for successful delivery of the project.
Britomart Station
Completed: Queen Street
Aotea Station
Contract 6: Mt Eden Stormwater Main DSC: Downtown Shopping Centre
Under Construction: Contract 1: Britomart Station & Lower Queen St Contract 2: Albert St (Customs to Wyndham Sts)
Karangahape Station
Contract 3 - Alliance: Stations and tunnels Western Line connection --- Rail Systems Contract 8 - Wider network improvements (not shown): • Strand (completed) Mt Eden Station
• Ōtāhuhu • Newmarket Contract 9 - Britomart East
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CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
C1
Britomart Station/Lower Queen St contract delivered by Downer Soletanche Bachy Joint Venture (DSBJV) Scope: Creation of temporary Britomart Station passenger facility, construction of underground tunnels from Britomart Station to the DSC site, reinstatement of the historic Chief Post Office (CPO) building and streetscape enhancement around Britomart Station. The SOI target delivery date for this contract was July 2021. However, as a result of confirmed streetscape works and delays associated with the New Zealand Government Covid-19 Alert Level 4 shutdown and reduced productivity during Alert Levels 3 and 2, the contract delivery date has been moved to November 2021. In September 2019, the 108-year old CPO building was transferred back onto new, permanent foundations after the tunnel boxes underneath had been completed. This took several weeks because the transfer needed to be carefully staged in order to avoid damaging the building. With the CPO’s weight transferred, work to restore its interior is underway. C1 celebrated a significant milestone in May 2020 with the concrete poured for the roof of the CPO’s new basement area. This area is 14 metres beyond the CPO’s façade line in Lower Queen Street and will be used to house the additional equipment needed to run Britomart Station once the CRL is operating. the contractor has begun fitting out Britomart Station with mechanical and electrical works, station management systems and architectural finishes. Construction will continue through to early 2021. The contractor is backfilling Lower Queen Street to street level and will continue removing old concrete footpath and roadway around the station, connecting new utilities and building an enhanced public realm. Lower Queen Street’s transformation includes pavers designed from a whāriki pattern created by Mana Whenua weavers. The pattern represents a welcome mat for Auckland’s visitors from the sea and waves that represent Wai Horotiu meeting the Waitematā Harbour.
Thousands of people will be employed to plan, design and construct the CRL across the project’s lifetime
Milestone
Commence
Completion
Lower Queen Street streetscape enhancement
Underway
December 2020
Chief Post Office reinstatement and Britomart Station works
Underway
March 2021
Tyler, Galway and Customs Street streetscape enhancement
December 2020
November 2021
Target Delivery Date
Underway
November 2021
14
PROJECT DELIVERY
With the CPO’s basement and the entire ground floor now constructed,
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
DSC
Downtown Shopping Centre (DSC) delivered by Precinct Properties
Scope: Construction of CRL tunnels below the Commercial Bay retail and tower development site. This contract is complete.
C2
Milestone
Completion
Delivery Date
April 2019
Albert St (Customs to Wyndham St) delivered by Connectus Joint Venture (McConnell Dowell/Hawkins) Scope: Trenching and tunnelling from the DSC site (corner Customs and Albert Streets) to the Wyndham Street intersection on Albert Street, as well as the pipe-jack contract for the relocation of the stormwater main on Albert Street and strengthening the Ōrākei Main Sewer that intersects it. The C2 contract is on track for completion by its SOI target date of December 2020. The C2 tunnel boxes were completed and linked with the DSC section of tunnels in July 2019. Since then, Connectus has focused on backfilling above the tunnel boxes and re-building Albert Street’s urban realm. Streetscape enhancement began in September 2019 with the contractor completing works in block-by-block sections from Wyndham Street, moving north towards Customs Street. Three of six blocks were completed and returned to communities this financial year. New, wider paved footpaths make the area more pedestrian-friendly and mean that businesses may now offer extended outdoor dining. Underground utilities are also being replaced, future proofing them for years to come. A total of 23 mature native trees are planned for Albert Street, with eight planted this year. Milestone
Commence
Completion
Target Delivery Date
Underway
December 2020
Across C1 and the C2 contracts 94 per cent of nonconformity reports (NCR’s) have been resolved to date. We expect all NCRs to be resolved at contract completion.
Planting Albert Street’s urban ngahere (forest) has begun – with eight of 23 mature native trees including Totara, Golden Totara, Pohutukawa, Black Maire and Puriri now in the ground.
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CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
The C3 tunnels will be excavated by a tunnel boring machine (TBM) being designed and built by Herrenknecht, the German company that also built Alice, the TBM that created Auckland’s Waterview tunnels. It’s a tradition that a TBM cannot start work until it has a woman’s name to honour St Barbara, the patron saint of underground workers, and the CRL project’s newest TBM has been named Dame Whina Cooper. The diameter of the machine’s rotating cutter head is 7.15 metres and its total length will be 130 metres.
C3 A lliance
Tunnels and Stations package
delivered by the Link Alliance (Vinci Construction Grands Projets SAS, Downer New Zealand Limited, Soletanche Bachy International (NZ) Limited, WSP New Zealand Limited, AECOM New Zealand Limited, Tonkin & Taylor Limited, CRL Limited) Scope: Excavating tunnels on Albert Street from just south of underground stations (Aotea and Karangahape) and redeveloping Mt Eden Station (original C3 scope). Planned inclusion of original C5 scope (Western Line works, including connection of tunnels to existing live rail corridor environment and line-wide systems) and original C7 scope (rail systems integration, testing and commissioning from Britomart Station to Mt Eden Station). The Project Alliance Agreement was signed in July 2019, enabling the Link Alliance to mobilise quickly and begin C3 works. Signing the C5 and C7 Development Agreement with the Link Alliance in July 2019, as well as the C5 Mt Eden Single Line Early Works Contract with KiwiRail in December 2019 enabled critical works to get underway. A variation to the C3 contract to incorporate the C5 and C7 scopes is expected to be finalised in October 2020. This has been delayed because of the complexity of the scope of works and procurement processes. Demolition works and site clearance for Aotea, Karangahape and Mt Eden station sites began in October 2019 and are now largely complete. Before buildings were taken down, asbestos testing was
Some 610 metres of new cut and cover tunnels have been constructed
required and extensive work was undertaken to salvage reusable and recyclable materials.
underneath Albert Street from
At the Aotea site, Auckland Council’s Bledisloe Carpark was cleared
Wyndham Street to Customs Street,
to make room for the site compound and future station entrance.
under Commercial Bay, linking to
At Karangahape, sites were cleared at Mercury Lane and Beresford
underground tunnels at Lower Queen
Square. By far, the most extensive demolition and site clearing was
Street, and joining Britomart Station
required in Mt Eden, where around 30 buildings were removed to make room for the tunnel portal, C5 works and the Mt Eden Station rebuild. 16
PROJECT DELIVERY
Wyndham Street to the Western Line at Mt Eden, building two
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Utility diversions across all three Link Alliance sites has also begun. Although investigation was carried out beforehand to ascertain where utilities were located underground, surprises and unexpected utility placement continues to be a challenge. With some utilities placed over a hundred years ago, some inaccurately recorded, and some with tree roots growing in and around them, utility diversion continues to be delicate work. In Mt Eden, piling commenced in February 2020 to build the tunnel portal where the TBM will enter underground for its first drive. The portal will also become the permanent entrance to the CRL train line. The piling rig drills shafts up to 40 metres deep in some places. Once the shaft has been drilled, a retaining wall is created to form the ‘face’ of the tunnel portal. Piling at the Aotea Station site commenced in June 2020. When complete, the station will have over 400 piles, each around 20 metres deep. Work to build the first of Aotea Station’s diaphragm or D-walls also started in June. The station’s walls and roof are being constructed first and dirt will then be removed for the station’s platform enclosure. At the Karangahape site, noise enclosure construction began in June, over the top of the Mercury Lane access shaft. The shaft is almost at its full depth of 22-metres and will become a temporary access to the station and tunnels. The Dame Whina Cooper TBM is under construction in China and is expected to reach New Zealand’s shores in October 2020. The 1600-tonne TBM will be taken to Mt Eden where it will be re-assembled and is scheduled to start its first of two 1.6 kilometre underground excavations from Mt Eden to Aotea Station in mid-2021. It will have three jobs: excavating the tunnels, removing tunnel spoil and installing concrete segments to line the tunnels. Milestone
Commence
Completion
C3 Contract award for main stations and tunnels
Completed
July 2019
C5 Contract award for Western Line works
Underway
October 2020
C7 Contract award for system integration, testing and commissioning
Underway
October 2020
Target Delivery Date
Underway
December 2024
C6 Mt
Eden Stormwater Main
delivered by March Bessac Joint Venture Scope: Stormwater line replacement in Mt Eden, prior to the start of C3 works. Construction had been slightly delayed from the SOI target completion date of July 2019 due to adverse geotechnical conditions. The August 2019 delivery date for C6 was consistent with the revised date in the PDA. A 423-metre-long stormwater main, 17-metres below ground to replace an existing main that obstructed CRL’s path, has now been constructed. The $16.5-million contract was the first to be completed for the CRL project and the new main has been handed over to Auckland Council’s Healthy Waters team.
17
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Over the contract’s 17-month duration, a core team of 20 from March Bessac were involved in day-to-day construction operations, with a further 330 workers inducted onto the site over its lifespan. The new main was excavated by a micro-TBM named Jeffie, whose journey underground was completed in seven weeks. She excavated around 2000 cubic metres of spoil and, at the same time, installed 208 segments of new concrete pipe. Jeffie also used technology not seen in New Zealand before to navigate a tight underground curve accurately and avoid hard volcanic rock. After her incredible work on C6, Jeffie was repatriated to a new tunnelling project in Ecuador.
C8
Milestone
Commence
Completion
Delivery Date
Completed
August 2019
ider network improvements W delivered by KiwiRail and CRL Ltd Scope: Additional platforms and turn-back facilities at The Strand, Ōtāhuhu and Newmarket. The SOI delivery date for the C8 contract is November 2022, with the C8 Ōtāhuhu works on track for completion in PROJECT DELIVERY
September 2020. The detailed design for Newmarket Station is scheduled for completion in December 2020 and construction is scheduled to begin in early-2021. Potential works at Henderson, along with other options, are currently being reviewed by Auckland Transport.
C9
Milestone
Commence
Completion
The Strand delivery
Completed
January 2019
Ōtāhuhu delivery
Underway
September 2020
Newmarket design finalised
Underway
December 2020
Target Delivery Date
Underway
November 2022
Britomart East Scope: Additional connections, platform widening and track modification at the eastern end of Britomart Station required once the CRL is operational. A contract for early works has been signed with KiwiRail, with detailed design for phase 1 of works scheduled for completion by October 2020. Procurement for the main works is currently
The demolition of buildings at the
being finalised.
Mt Eden site to make room for the tunnel portal, C5 and the Mt Eden
Milestone
Completion
Station rebuild is complete
Detailed design for phase 1 finalised
October 2020
18
Progress Highlights
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Progress Highlights
July 2019
August 2019
September 2019
The financial year started with CRL
The project celebrated completion
The CRL project won the Cultural
Ltd, sponsors and a group of national
of C6 to construct a 423-metre-
Identity award ahead of hundreds
and international companies signing
long stormwater main, 17 metres
of other entries from more than
a Project Alliance Agreement, thus
underground at Mt Eden. This replaced
70 countries at an international
forming the Link Alliance. This meant
an existing main that was obstructing
architecture festival known as WAFX
that constructing the C3 works –
CRL’s path. A micro-TBM, explosives
(World Architecture Festival) in the
including tunnels, rail systems, and
to blast tough basalt, and pipe jacking
Netherlands. The project is the first
new and re-developed stations –
were some of the methodology used
from New Zealand to win the award.
could forge ahead.
during construction.
January 2020
February 2020
March 2020
The C2 contractor continued building
Sheet piling for the temporary access
The Wellesley Street West intersection
Albert Street’s urban realm. Workers
shaft at Mercury Lane began. A total
with Mayoral Drive and Albert Street
here are building the Kassal kerb and
of 92 sheet piles will be installed and
closed temporarily to all vehicle traffic
preparing the concrete pour for Albert
when it reaches its full depth, the shaft
so that the Link Alliance could begin
Street’s new look paved footpaths.
will be 22 metres deep and provide
building Aotea Station. The intersection
access to the tunnels for personnel
remains accessible for pedestrians and
and machinery.
local businesses.
19
Progress Highlights
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
November 2019
December 2019
Demolition and site clearance for C3
There was a fantastic public response
In Ōtāhuhu, CRL workers were
works in Mt Eden, Karangahape and
when the CRL project opened its
busy over Christmas and New Year.
Aotea began in earnest. In Mt Eden,
doors for the much anticipated Walk
They installed 400 metres of new
after ensuring that all salvageable items
the Tunnels event. All tickets were
railway line, four rail crossovers and
were removed from the buildings, the
snapped up within 15 minutes. This
constructed signals, wired over-head
first of 30 buildings were demolished.
event saw 10,000 people walk through
electrical lines and made excellent
400 metres of twin underground rail
progress on building the station’s new
tunnels below Britomart Station and
third platform. This infrastructure is
Lower Queen Street.
vital to enable more frequent train
PROGRESS HIGHLIGHTS
October 2019
services across Auckland’s network once the CRL is operational.
April 2020
May 2020
June 2020
Construction across all CRL sites
Dame Whina Cooper, a ground-
Construction of Aotea Station’s
resumed after the Government ended
breaking Māori leader, was chosen
permanent walls and vertical support
New Zealand’s four-week lockdown
by New Zealanders as the name
began. These reinforced concrete
to stop the spread of Covid-19. The
for the TBM that will dig CRL’s twin
walls – also known as diaphragm or
lockdown period, which began on 25
train tunnels. The TBM will begin its
D-walls – are being built with the help
March and lasted around five weeks,
journey in Mt Eden – tunnelling 1.6
of Sandrine, a 90-tonne hydrofraise
was spent planning the reopening of
kilometres to the Aotea Station site
machine.
sites, so that workers could resume
before being returned to Mt Eden to
construction safely.
make its second journey.
20
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Health and Safety
Health and Safety
CRL Ltd aims to build an underground rail link that is safe for contractors, operators, maintainers and users.
Covid-19 CRL Ltd’s first priority is to keep workers and the wider community safe.
This work was led by Construction Health & Safety New Zealand under the New Zealand Construction Accord.
After the Government lifted its five-
Ensuring strict health and safety
week Covid-19 lockdown and workers
protocols are adhered to has been
could go back on site, stringent health
an extraordinary undertaking, and
The delivery of the country’s first
and safety protocols were put in place
CRL Ltd is grateful to its construction
underground passenger railway
in line with the National Pandemic
partners for their commitment to the
presents significant health and safety
Management Plan. Protocols will
wellbeing of our people. Providing
challenges for all involved. It also
continue to be adjusted to whichever
clear expectations across the project
provides a welcome opportunity
Alert Level New Zealand is at. They
and the huge effort from all has meant
to help the construction industry
include health checks before entering
that construction on the project could
set a new benchmark for safety
the site, self-distancing, increased
restart quickly and successfully after
performance in New Zealand.
protective clothing and enhanced
the lockdown.
sanitising and cleansing regimes. As part of a broader response to the pandemic’s unprecedented challenge,
Mahia te mahi, hei painga hei oranga mo tātou katoa Our health & safety vision is to do the work for the good of everyone.
21
CRL Ltd has contributed to the design and development of the Covid-19 Health and Safety Standard and Vertical & Horizontal Construction Industry Health and Safety Protocols.
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Health and Safety
The CRL Health & Safety Strategy sets out how CRL Ltd, the Link Alliance and its suppliers work together to achieve industry-leading health and safety performance across the lifespan of the project through four key outcome areas. Enhance the Establish improved maturity of the health and safety safety, health and performance environmental measurement management systems CRL Ltd has adopted a new data
CRL Ltd has implemented a composite Health and Safety Performance Index measure which tracks a number of leading and lagging health and safety indicators, closely monitoring the implementation and success of the
CRL Ltd selected the Risk
management system for the efficient
Management Maturity Model (RM3)
collection and analysis of health, safety
to assess the maturity of its health
and environment data.
and safety management systems. benchmarking system and is well suited to large, complex railway infrastructure projects involving multiple contracts.
all active project construction sites to
measurement of health and safety
ensure that minimum health and safety
performance is the Total Recordable
requirements are being met.
Injury Frequency Rate (TRIFR). Over the last financial year, the average
The first annual assessment using RM3
TRIFR rate was 4.7 per million hours
has been completed and CRL Ltd has
worked on the CRL project, which is
achieved Level 3 of 5. Level 3 means
below the SPE target of 6.0 per
that CRL Ltd and its principal suppliers
million hours worked.
have adopted good practice into
The TRIFR for this financial year
systems and processes.
indicates that, overall, there is
safer working behaviours
broadly stable performance. However there were still a number of avoidable incidents this year which resulted in or could have resulted in injury.
CRL Ltd and its construction partners develop and promote practices aimed at better understanding and influencing safer working behaviours. ConstructSafe, a recognised, industryled minimum construction competency standard has been adopted. CRL Ltd
CRL Ltd continues to work closely with construction partners to ensure that lessons are learned from these
Enable continuous health & safety improvement
events and that meaningful and sustained safety improvements are adopted as a result.
CRL Ltd has established a project health
Over the last financial year, 100 per
and safety leadership group to ensure
cent of incidents resulting in, or which
is supporting the Link Alliance to implement a behavioural safety training programme as part of the project
relevant lessons from incidents are
could have resulted in injury, were
shared and improvements are adopted.
investigated. Relevant actions were
CRL Ltd also plays an active role in
closed within two weeks. For the
induction to ensure that all workers
several New Zealand construction
small number of actions that took
are equipped with the tools they
industry health and safety initiatives.
longer to close out, these were to
need to positively influence safety
Working in partnership with the
agreed timescales.
behaviours on site.
project’s supply chain, CRL Ltd has adopted the Mates in Construction
Injuries by Classification and Global TRIFR (per million hours)
1
8.7
2 7.2
1
5.9
1 5.4
1 0
programme. This programme aims to 15
July 2019
Sept 2019
Oct 2019
Nov 2019
Lost Time Injury
6.9 1
1 Aug 2019
2
Dec 2019
1 Jan 2020
2 7.9
1
7.5
6.7
1
1 Feb 2020
10
1
1 Mar 2020
Medical Treatment Injury
4.7
5
1 Apr 2020
May 2020
June 2020
0
provide help and support between Frequency Rate
Quantity
3
9.1
HEALTH AND SAFET Y
Support and embed
2
suppliers. CRL Ltd conducts regular inspections of
The current industry standard
RM3 is an externally validated safety
health and safety arrangements of
workplace peers for those experiencing mental health issues. It also aims to contribute to industry-led initiatives to tackle issues surrounding drug and alcohol misuse and their effects on workplace health and safety.
TRIFR 22
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Sustainability
Sustainability & Social Outcomes
A cottage built in the 1800s was salvaged and resettled into a new Waikato location
Sustainability, including social outcomes, is a cornerstone for CRL. The project is being designed and constructed to the highest sustainability standards. In the past year, CRL Ltd and its
To independently verify its
construction partners have
sustainability performance, the
demonstrated their continued
Infrastructure Sustainability Council
commitment to optimising the use
of Australia (ISCA) Infrastructure
of materials, energy and water,
Sustainability (IS) rating tool is used
striving for zero waste to landfill
across the project.
during construction and targeting
With C1 and C2 close to completion,
an “Excellent” Infrastructure
the project is on track to deliver on
Sustainability rating. The project also
targeted sustainability outcomes
continues to support opportunities for
across both contracts. This means
training, employment and supply chain
achieving an “Excellent” ‘as built’ rating
diversity during construction.
which can only be obtained once the
contracts reach practical completion. The IS rating tool is also being used by the Link Alliance to verify progress on its ambitious sustainability targets for C3. Because the C3 contract makes up 85 per cent of the entire project, the opportunity to achieve sustainability outcomes is equally as immense.
CRL Ltd’s sustainability objectives focus on
REDUCING RESOURCE CONSUMPTION
23
ZERO WASTE TO LANDFILL
SOCIAL OUTCOMES
MANA WHENUA
GOVERNANCE AND REPORTING
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Sustainability
Reducing resource consumption C1 and C2 contracts remain on
Although reuse initiatives have
track to achieve targeted reductions
resulted in water savings for both
in energy and materials-related
C1 and C2, savings have been more
greenhouse gas emissions (our
modest than projected. This means
carbon footprint).
initial targets of a 20 per cent water reduction for C1 and 30 per cent
The construction and operational
reduction for C2 are unlikely to be met.
energy related carbon footprint is
To date, CRL Ltd and its contractors
29 per cent below the ‘base case’,
have achieved an 8 per cent reduction
The water recycling system installed
exceeding the target of 10 per cent
for C1 in November 2018 has
reduction.
meant that to date, 41 per cent of
it h
in
case is projected to be 25 per cent,
C1
w
construction site water has come from
CRL Ltd and its contractors implemented a number of initiatives to reduce the project’s carbon footprint. This includes sourcing electricity
CP O
business as usual.
t he
materials compared to the base
of water use when compared to
non-potable sources. Potable water
w
in embodied carbon of construction
or
io
n
or business as usual. The reduction
ke
ru
sin
g re
c y c l e d w at e r d u r i n g
s co n
t ru
ct
use has dropped to an average of 56 kilolitres a month. SUSTAINABILIT Y
directly from the grid through continued use of a transformer rather than a diesel generator.
CARBON FOOTPRINT
Resource use for C1 and C2 to 30 June 2020 Materials emissions reduction
Target 12%
Energy emissions reduction
Target 30%
Water use reduction
Target 25%
Achieved 25%
Achieved 59%
Achieved 8%
Construction and demolition waste diverted from landfill
Target 90% Achieved 92% Target 95%
Spoil diverted from landfill
Achieved 98%
0
20
40
60
80
100
24
Sustainability
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Weekly sustainability inspection being conducted at C3’s Aotea Station site
Zero waste to landfill
Construction and demolition material
opportunities where materials that
to be 143 years old, was saved from
makes up around half of all waste to
might have been sent to landfill were
demolition and carried by truck to a
landfill in New Zealand. The sheer
salvaged and reused for communities
new location in Waikato.
scale of the CRL project provides
in New Zealand and in the Pacific.
an incredible opportunity to divert hundreds of thousands of tonnes of spoil, construction and demolition waste.
A second Pacific community, the island
Most of the salvaged material was
of Niue, was the destination for an
sourced from Mt Eden where more
old café saved from demolition at the
than 30 commercial buildings,
project’s Karangahape Station site.
workshops and small factories were
The café in Beresford Square was
On the C1 and C2 contracts, more
demolished. The buildings provided
dismantled section by section and
than 12,700 tonnes of waste has been
cupboards, desks, shelving, tables,
shipped 2,500 kilometres to Niue to
diverted from landfill for recycling or
doors, benches, toilets, drawers,
be reassembled as a café on a vanilla
reuse this financial year. Across all CRL
ceiling panels and carpet tiles.
plantation to help promote tourism on
materials were shipped to the Pacific
Diversion was achieved through a
Kingdom of Tonga and used there
number of initiatives. These include
to help rebuild cyclone-battered
diverting materials through Auckland’s
communities. Alongside the Tonga
Community Recycling Centres, gifting
shipment, salvaged items were used to
basalt rock from Mt Eden to Mana
help build a church in Auckland south.
e
Auckland’s oldest pioneer homes – a 19th century Kauri cottage in the
This year, CRL Ltd and its construction
path of the southern tunnel portal
partners also identified a number of
at Mt Eden. The cottage, believed
25
N iu
Kings to remediate the closed quarry.
involved the relocation of one of
to
spoil from both C1 and C2 to Three
One spectacular recycling operation
ed
with crushed concrete and sending
at
Whenua, backfilling the C2 tunnels
the remote island.
oc
has been diverted to date.
Two containers packed with salvaged
r
el
contracts, 314,293 tonnes of waste
Ca
fé a
t B er
esf ord Sq u are t
ha t
ha
e sb
en
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
SUSTAINABILIT Y
26
Social Outcomes
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Progressive Employment Programme intern who is now employed with the Link Alliance’s Health and Safety team
Social Outcomes The CRL project is committed to leaving a positive legacy for Auckland’s communities by delivering targeted training and employment, creating supply chain opportunities and by engaging its future workforce. This financial year, CRL Ltd and its
with three now employed within the
training opportunities provided to all
construction partners launched a
Link Alliance.
staff, the Link Alliance has invested in
Progressive Employment Programme (PEP). The programme provided training and job opportunities for Māori and Pasifika rangatahi (youth) to help them side-step barriers to joining the
The learnings from this pilot have been used by the Link Alliance to plan the next phase of the Progressive Employment Programme for Māori and
Māori leadership training for six team members. An additional four Māori and Pasifika staff have undertaken vocational training and three have
Pasifika rangatahi. The first cohort of
completed a Certificate of Competency
rangatahi will be welcomed onto the
so that they’re able to work within a
project in July 2020.
tunnelling environment.
Other employment opportunities
To achieve its social procurement
continue to be enhanced across
outcomes on the C3 contract, the team
the project, with CRL Ltd and its
is working with He Waka Eke Noa
construction partners continuing to
IT, carpentry, admin work, traffic
to encourage the wider inclusion of
strengthen and create relationships
management and others that form the
Māori and Pasifika businesses in the
with Auckland’s future workforce
basis of the infrastructure industry.
through tours, training and
construction industry supply chain.
Importantly, the PEP was also about
presentations to tamariki and rangatahi.
workforce. Six interns were provided with meaningful work experiences whilst receiving pastoral care and training. Under the PEP the interns were exposed to a wide range of jobs -
learning to be work fit – balancing life
Three Link Alliance construction contracts have been awarded this
The Link Alliance, which is the CRL
financial year to Māori and Pasifika
project’s largest employer, estimates
businesses with a value of over $1.2
Five of the interns were offered full-
that around 300 of its team are Māori
million.
time employment on the CRL project,
and Pasifika. Beyond the learning and
at work with life at home.
27
CRL Ltd as a Good Employer
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
CRL Ltd as a Good Employer
CRL Ltd’s Health and Safety team planted trees during a volunteer day
CRL LTD AS A GOOD EMPLOYER
CRL Ltd’s employees continue to oversee the CRL project and work together so that all of the project’s aspirations are realised and contracts continue to be delivered to a high standard. With the establishment of the Link
that CRL Ltd has a clear vision and
CRL Ltd remains committed to
Alliance this year to deliver the
purpose, and that they know how
ensuring it has the technical,
project’s largest package of works,
their role contributes to the success
commercial and financial expertise
CRL Ltd has undergone a major
of the project. The anonymous survey
shift in its employment strategy and
to deliver the project. It is important
also determined that employees enjoy
that the company retains skilled staff
coming to work and feel acknowledged
required at each project stage, is a
in their roles.
good employer and offers an attractive
During the Covid-19 lockdown, all CRL
place to work.
Ltd staff continued to work remotely
CRL Ltd continues to be incredibly
employee engagement. Around a third of the company’s employees are now embedded within the alliance. Although CRL Ltd staff are distributed between CRL Ltd’s sites and the Link Alliance’s, there is still a clear sense of unity. To ensure that the team remains tight, monthly briefings are held, a culture of wellness is being developed, opportunities to come together are created and individuals that reflect the company’s values are celebrated. CRL Ltd also continues to encourage its staff’s integration and collaboration with peers on both the traditional design and construct contracts and with the newly built Link Alliance.
from home, maintaining significant momentum on the project. Some teams met online every morning to check in and ensure teams could continue working cohesively and that people felt safe and well. Because of the ability to continue to work remotely during lockdown the project was in an excellent position to recommence construction and return to offices
proud of its calibre of staff. People are the soul of the organisation. As the project’s needs shift throughout its lifespan, CRL Ltd will continue supporting employees while they are with the organisation, and also support them to realise their aspirations when their work on the project is complete and they seek other opportunities.
quickly and safely once the lockdown was lifted. CRL Ltd’s leadership team will continue prioritising keeping staff
The latest employee survey found
safe and informed during the on-going
that staff overwhelmingly consider
Covid-19 pandemic.
28
Heritage
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Heritage
Bluestone seawall that dates back to the 1860s was found underneath Lower Queen Street during excavation
Over the past year a number of important relics have been unearthed by the project. These help us to understand Auckland’s historical past. While CRL will transform Auckland’s
At the Aotea Station site, an old well
Radiocarbon analysis found the tree
future it remains committed to
cut into virgin clay was discovered on
fragments were 28,000 years old,
protecting and showcasing its past.
the corner of Wellesley Street and
an exciting revelation because it also
Mayoral Drive by the Link Alliance.
dates the last Mt Eden eruption. Its
The well appeared to be unlined, and
discovery is helping scientists learn
its location indicates that it pre-dates
more about Auckland’s past before
the Salvation Army Hall that was
people settled here.
There are a number of heritage listed sites and buildings within our project corridor such as the centuryold, heritage Category 1 listed Chief Post Office building and a number of locations along Albert Street. Artefacts and relics from our past continue to be unearthed during excavation work. In May 2020, excavations in Lower Queen Street uncovered the old Customs Street seawall that dates to circa 1860s. The large basalt blocks were encountered while digging a tree pit in the southern end of Lower Queen Street near the intersection of Customs Street East. The seawall will be carefully protected during backfilling, and will be marked by a heritage placemat built into paving.
found nearby. The remains of the old Salvation Army Hall, including several brick foundation walls, two drains and a brick pile were uncovered by the Link Alliance team. An old boiler from around a similar
Ngarimu Blair says that the radiocarbon results were profound, and that these signs from our ancient past strengthen resolve to preserve and restore biodiversity left to us.
time was found at the Aotea Station site, half buried below the surface and surrounded by a concrete walls. It was 180 centimetres long and found with contaminated materials inside.
Ancient whau tree During her underground journey, micro-TBM Jeffie had an encounter with the remains of a tree recovered under an ancient lava field 15 metres below ground.
29
Ngāti Whatua Ōrākei spokesperson
28
,0 0
0y
e ar o
ld tre e fo
nM und i
tE
de
n
Development Opportunities
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Development Opportunities
“City Rail Link is the foremost transformational place-shaping project in Auckland�
Investment in CRL transport
This year, CRL Ltd delivered
infrastructure has unlocked an
development options to its sponsors
opportunity to develop exemplary,
as well as a value capture strategy and
sustainable urban growth on public
master plans for each station precinct.
- The Auckland Plan 2050
Together, CRL Ltd and its sponsors are
for community and stakeholder
creating a development programme
engagement can begin, as well as
for each precinct. Development
finalisation of a development response
programmes enable quality, compact
programme for the station precincts,
urban growth that maximises the
confirming next steps and appointing a
amount of residential, business
delivery partner.
landholding around CRL stations at Aotea, Karangahape and Mt Eden.
Now that the groundwork for oversite development has been laid, planning
and recreational spaces within walking distance of public transport infrastructure while leveraging off investment made in rapid transit.
30
DEVELOPMENT OPPORTUNITIES
Artists impression of built environment opportunities on Shaddock Street, adjacent to the redeveloped Mt Eden Station
Communications and Engagement
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Communications & Engagement Walk the Tunnels In November 2019, Aucklanders were
was safe and successful in collaboration
given a rare peek behind the hoardings
with Auckland Transport, Transdev,
to witness first-hand the progress on
contractors and emergency services.
the project. They were able to walk 400 metres through the first section of the tunnels adjoining Britomart Station. Extensive planning ensured the event
31
Around 10,000 people attended, with no health and safety issues or disruption to the train network.
Communications and Engagement
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
People are at the heart of City Rail Link. Whether it be the people who work on the project, our neighbours who are impacted as we deliver the project or the many people who will benefit significantly when it’s in place. The strategy for communications and
the benefits it will deliver, promote
CRL Ltd and its construction partners
engagement during 2020 has focussed
progress, listen even when agreement
continue to work with neighbours to
on more than just the spades and
cannot be reached, and to be a
build a positive relationship, be upfront
concrete on our construction sites.
good and active neighbour. CRL Ltd
about construction impacts, find ways
A primary objective has been to
continued to achieve this during
to mitigate these where possible and
engage and inform people at many
the Covid-19 pandemic by adopting
provide early notice so that people
different levels - to bring people on
innovative ways to reach people during
can prepare for what’s to come.
the project’s journey, show them
the different alert levels.
Core Communication Channels
5+
21
social media posts per week
Mana Whenua hui
58
media releases
12
site tours
up 8%
days 2 toworking acknowledge
21 Community Liason
enquiries
Kiwis name the TBM
Group meetings
ENGAGEMENT
stakeholder 25+ presentations
106 videos
events
community newsletters
35+ CRL awareness
18
Events
The New Zealand public was able
CRL Ltd and Link Alliance engaged
CRL Ltd shared the project through a
to have a say on the project’s
in an indepth process with New
number of events, including site tours
identity when the project launched
Zealanders to find an inspirational
and community presentations. Some
a nationwide search for the name
name for the TBM. After putting the
of our most popular events showcased
of a ‘ground-breaking’ New Zealand
call out, over 3,000 New Zealanders
both CRL’s engineering feats and
woman for the C3 tunnel boring
submitted a name. A panel then
historic elements.
machine (TBM). This was in keeping
narrowed the submissions down to
with the tradition that underground
Dame Whina Cooper, Dr Margaret
machinery is named after a woman in
Bradford, Antarctic Scientist, and New
acknowledgement of Saint Barbara, the
Zealand's first transgender member of
patron saint of miners and underground
parliament, Mayor Georgina Beyer.
workers.
During the Auckland Heritage Festival, CRL Ltd hosted historic walking tours along Albert Street. CRL Ltd also hosted a showcase event at the Shakespeare Hotel displaying the many
In May it was announced that New
historical artefacts unearthed during
Zealanders had chosen the name
construction works.
Dame Whina Cooper – a fearless campaigner for social justice and Māori land rights. This decision received widespread acclaim both here and overseas. CRL Ltd welcome the choice of a woman who inspired, was brave,
This summer a number of walking tours around the C1 site were provided with members of the public allowed behind the projects hoardings to see construction works first hand.
compassionate and fearless as its name St on
e
for the mechanical star of the project. Da
me
Wh
ina C
ap ooper Photogr
he
yJ db
oh
n
32
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Development Response
Disruption campaigns
CRL Ltd’s development response
CRL Ltd works closely with Auckland
programme helps its neighbours
Council, Auckland Transport and
maintain 'business as usual' as much
KiwiRail to ensure that the public
as possible. This included wayfinding
remains well informed on the project’s
to help people find their way to
impacts to travel and that steps are
businesses and creating events to bring
put in place to mitigate disruptions.
people into construction areas.
The Wellesley Street and Mt Eden
The project also promoted businesses through external communication channels, set up local businesses as suppliers and made the areas around businesses as clean and inviting as possible. Some highlights from 2020 included the open air art gallery on Wolfe Street, the lighting installation in Beresford Square, the Love Albert Street photography campaign and the C6 ‘thank you’ event in Mt Eden.
Business Hardship Programme In December 2019, CRL Ltd launched a Business Hardship Programme to provide financial relief for small retail businesses impacted by delays to C2 construction. This programme recognised that some businesses on Albert Street (between Victoria and Customs Streets) have experienced a greater length of disruption than
Station closure campaigns have been collaboratively developed to ensure that there was widespread understanding well in advance of the closures taking place. The Wellesley Street closure was implemented successfully in March and the Mt Eden Station closed in July 2020.
Community Liaison Groups The project’s four Community Liaison Groups (CLGs) are targeted forums with representatives from around project sites. The CLGs meet frequently to learn about upcoming works, review management plans, raise issues and concerns and work together to find ways to resolve these. Representatives on CLGs include residents, businesses, business associations and locally elected representatives.
originally planned. The programme is
Kids draw the CRL
based on rent assessments that look
While Covid-19 lockdown was in place
at the impact of construction delays
and we were all staying home to keep
on rent being paid.
New Zealanders safe, CRL Ltd decided
In March 2020, CRL Ltd moved quickly to establish an interim scheme to ensure businesses could still apply for funds while valuers were unable to complete assessments due to the Covid-19 lockdown.
it was the perfect time to get creative. It put a call out to tamariki across New Zealand to make artworks about where they imagine going on a train once the CRL is built. Their masterpieces will be printed onto tiles and installed within Aotea Station. So far, almost 7,000 incredible artworks have been received with room on the station's walls for thousands more.
33
Communication and Engagement
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
ENGAGEMENT Auckland-based artist Misery completing a mural on CRL hoardings. The mural was later sold to raise funds for an Oxfam water and sanitation project in Papua New Guinea 34
CRL Mana Whenua Partnership
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
CRL Mana Whenua Partnership
The CRL Mana Whenua Forum provides a structure to realise the partnership between Iwi Mana Whenua and CRL Ltd. CRL Ltd’s partnership with the eight
response for stations and their
rating tool’s sustainability criteria
Auckland Iwi on the CRL Mana Whenua
surrounds, artist approval, blessings
align with Te Ao Māori (the Māori
Forum (Forum) continues to add
and karakia, cultural value
world view).
integrity to the CRL project and benefit
incorporation into the ISCA manual
the project as a whole.
and input into the management
The Forum meets monthly and provides Māori mātauranga (knowledge) across
plan process.
This has resulted in a custom-made CRL IS manual, titled Mahi Rauora Aratohu.
ISCA rating to align with Te Ao Māori
This manual, which embeds cultural
Through each step of the sustainability
for the C3 contract and is being
journey, Mana Whenua input has been
used by the Link Alliance to guide
These include the Mana Whenua
sought. CRL Ltd worked closely with
its approach to sustainability during
narratives that lead the placemaking
the Forum to ensure that ISCA (IS)
design and construction.
relevant stages of the project. CRL Ltd’s relationship with Mana Whenua is demonstrated within areas of interest across five strategic pou.
values across the IS framework, was mandated in the tender documents
Karakia after Covid-19 lockdown ended RANGATIRATANGA Governance
WHAKAPAPA
Culture & Identity
TE TAIAO
Natural Environment
ORANGA Wellbeing
WHAI RAWA Economic
Ngāti Whātua Ōrākei led karakia to restart works across the CRL sites in Lower Queen Street, mid-city Aotea
We are exercising our role as a Te Tiriti partner across Tāmaki Makaurau
35
Our culture and identity is seen, heard, felt and celebrated across Tāmaki Makaurau
Te taiao, te wai and te hau in Tāmaki Makaurau are thriving and cared for
Our whānau in Tāmaki Makaurau are happy, healthy, thriving, and achieving
Mana Whenua strategic pou
We are an economic force in Tāmaki Makaurau at the whānau, hapū and iwi levels
Station, Mt Eden and Karangahape. The blessing of sites by Mana Whenua prior to construction resuming was a key part of ensuring those sites were safe for workers to return.
CRL Mana Whenua Partnership
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Station design principles Mana Whenua have gifted narratives for the design of stations and their immediate surrounds. The overall theme for the CRL project’s design concept is the Māori creation story. This is expressed through four key elements incorporated into each station design – sky element, earth element, threshold element which represents the stations' atua (deity) and the fourth element which separates sky and earth. The Forum agreed on seven Te Aranga principles which have been incorporated into the design framework.
Mana Paoa ki uta, Paoa ki tai, Paoa ki tua
Ngāti Maru
The need for relevant Mana Whenua groupings to have individual
and collective formal relationships with key stakeholders
Whakapapa/Whakamana
Names and naming as a means of reconnecting Mana Whenua
narratives to the place
Tohu
The acknowledgement of wider Mana Whenua cultural landmarks
Taiao
Bringing landscape elements, such as water, trees, birds, and insects, back into urban areas
Mauri toi Re-inscribing Mana Whenua narratives into built architecture,
landscape architecture and urban design
MANA WHENUA
Ahi kā
Exploring opportunities to facilitate a meaningful living presence
for Mana Whenua
Award winning station design For the first time, a New Zealand project won an accolade at the world’s biggest international architecture festival, WAFX. CRL received the 2019 World Architecture Festival WAFX prize for Cultural Identity through the designs created by Jasmax and Grimshaw in partnership with Mana Whenua.
Future Infrastructure Category. Kaitiaki for Te Ākitai Waiohua, Adrian Pettit, congratulated all involved for crystallising design that was not only indigenous and contemporary but is wholly reflective of Tāmaki Makaurau's unique point of difference; namely, Ngā Mana Whenua o Tāmaki Makaurau.
CRL was also a finalist in the World Architecture Festival Awards in the
Mt Eden’s new bridges The CRL Mana Whenua Forum has gifted a cultural narrative for the four rail bridges to be built in Mt Eden. The narrative is based on the volcanic atua Matāoho, who resided in the crater of Maungwhau (Mt Eden) and is associated with many of the volcanic features of Tāmaki Makaurau.
36
CRL Mana Whenua Partnership
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Te mahi tahi a CRL ki te mana whenua
Ko te Ohu Mana Whenua a CRL ka whakatinana i te hiahia kia noho tahi ngā iwi o te mana whenua ki a CRL. E whanake tonu ana ngā mahi a CRL
raranga i ngā pūmanawa ahurea ki roto
Mana Whenua kia hono ai ngā paearu
nā te mahi tahi ki ngā iwi e waru e
i te puka aratohu; ka mutu, ko te arahi i
toitū ki ngā whakaaro o Te Ao Māori.
whakakanohihia ana i te CRL Mana
te tukanga mahere whakahaere. E rima
Ko te hua i puta, ko te puka aratohu
Whenua Forum.
ngā pou rautaki o te noho tahi a CRL ki
motuhake a CRL, e kīia nei ko Mahi
te Mana Whenua.
Rauora Aratohu. Ka whakatō te puka aratohu i ngā
i ēnei hui ko te whakatō i ngā pūrākau
Te Hononga a ngā Paearu ISCA ki Te Ao Māori
a te Mana Whenua ki roto i ngā mahi
I ia wāhanga o te ora tūāoma
i te kirimana C3, otirā, e whai ana a
whakahou i ngā teihana tereina hei
toitūtanga nei, kua whai wāhi mai
Link Alliance i ngā tohutohu a te puka
wāhi pāhekoheko; ko te whakatau i ngā
te Mana Whenua ki te whakatō
kia toitū ā rātou mahi whakaahua,
ringatoi; ko te tuku i ngā takutaku; ko te
whakaaro. I noho tahi a CRL me te Ohu
hanganga hoki.
Ka hui a CRL i ia marama ki te whāngaia te mātauranga Māori ki tēnei kaupapa. Ko kapi mai ana i roto
pūmanawa o te Māori, ā, he mea hangā te puka ki ngā whakaritenga i puta
Ngā Karakia Whai Muri i te Rāhui Mate Karauna RANGATIRATANGA Governance
WHAKAPAPA
Culture & Identity
TE TAIAO
Natural Environment
ORANGA Wellbeing
WHAI RAWA Economic
Nā Ngāti Whātua Ōrākei ngā takutaku whakawātea i whakahaere kia timata anō ai ngā mahi ki ngā tari CRL i te tāmoremoretanga o te tiriti o Queen,
E whakamana ana mātou i tā mātou haepapa hei hoa Tiriti ki Tāmaki Makarau whānui
37
Ka kite, ka rongo hoki i tā mātou ahurea tuakiri ki a Tāmaki Makaurau whānui
E manaaki ana i te taiao kia ora ai te wai me te hau i Tāmaki Makaurau
He whānau harikoa, he whānau tōnui, he whānau ora ngā whānau o Tāmaki Makaurau
Mana Whenua strategic pou
He kaiwhāngai i te ōhanga ki ngā whānau, ngā hapū, ngā iwi hoki
i te teihana o Aotea, i te teihana o Maungawhau, o Karangahape hoki. He mahi whakahirahira te tuku a Te Mana Whenua i ngā karakia ki ngā wāhi nei e wātea ai ngā kaimahi ki te hoki atu ki te mahi.
CRL Mana Whenua Partnership
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Ngā Mātāpono Hoahoa mō ngā Teihana I tuku te Mana Whenua i ētahi kōrero hei tūāpapa mō ngā mahi whakaahua i ngā teihana tereina me o rātou wāhi katoa. Ko te kaupapa matua o ngā mahi whakaahua ko te ōrokohanganga o te ao ki tā te Māori titiro. Ko te whakatinanatanga mai o tēnei ka kitea i ngā wāhanga e whā o te āhua o te teihana – ko ngā wāhanga ka tohu i te rangi, i te whenua, i te atua o taua teihana, ka mutu, ka tohu i te wehenga o Rangi rāua ko Papa. I whakaaehia e te Ohu Mana Whenua ngā mātāpono e whitu e kīia nei ko Te Aranga hei arahi i te tauira whakaahua.
Mana Paoa ki uta, Paoa ki tai, Paoa ki tua
Ngāti Maru
Me whai piringa ōkawa ngā rōpū Mana Whenua, te tangata
rānei ki te hunga whaipānga
Whakapapa/Whakamana
Ko te mahi tapa ingoa e hono ana i ngā pūrākau a te Mana Whenua
ki te wāhi
Tohu
Te whakamana i ngā tohu whenua o te mana whenua
Taiao
Whakahokia ngā āhuatnga o te wai, o ngā rākau, o ngā ngārara
hoki ki ngā tāone
Mauri toi Whakairohia ngā pūrākau a te Mana Whenua ki te hoahoanga
o ngā whare me ngā māra i ngā tāone
MANA WHENUA
Ahi kā
E kimi ana i ētahi kōwhiringa kia mana ai te noho tahi ki te
Mana Whenua
Te Toa Hoahoa ā-Teihana Koinei te wā tuatahi kua whakawhiwhia
Infrastructure) i kōkirihia i te marama o
a Aotearoa ki tētahi tohu whakahirahira i
Hakihea, 2019.
te hui nui taioreore o te ao mō ngā mahi hoahoanga, o WAFX. I riro i a CRL te taonga mō te tuakiri ahurei o te Ahurei Hoahoa ā-Ao mō ngā mahi i whakairohia e Jasmax rātou ko Grimshaw, ko te Mana Whenua hoki.
I whakanuia e te kaitiaki mō Te Ākitai Waiohua, e Adrian Pettit, te hunga i whakatinana i te hoahoa – kia iwi taketake te hanga, kia kite i ngā āhuatanga o nāianei, kia whakaatu hoki i te motuhaketanga o ngā mahi; te noho
I eke hoki a CRL ki ngā whiringa whāiti
tahi ki Ngā Mana Whenua o Tāmaki
o Te Ahurei Hoahoa ā-Ao mō te
Makaurau.
wāhanga Angaanga Anamata (Future
Ngā Piriti Hou o Maungawhau Kua tākohatia e te Ohu Mana Whenua o CRL tētahi kōrero mō ngā piriti e whā ka hangaia ki Maungawhau. E hāngai ana te kōrero pūrākau ki te atua, ki a Matāoho, i noho ki te rua o Maungawhau, te atua e hono ana i ngā rangitoto o Tāmaki Makaurau whānui.
38
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Financial Statements, Notes and Governance and Remuneration Disclosures Corporate Directory
41
Statement of Responsibility
42
Statement of Financial Performance
43
Statement of Financial Position
44
Statement of Changes in Equity
45
Statement of Cash Flows
46
Notes to the Financial Statements
47-66
Governance and Remuneration Disclosures
67-69
Audit Report
70-73
39
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
FINANCIAL
Mature trees have been planted along Albert Street as part of C2 urban realm works 40
Financial Report
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Corporate Directory
Board
Sir Brian Roche
Chair
Russell Black Brian Harrison Karen Jordan Anne Urlwin
Senior Management
Bankers
Sean Sweeney
Chief Executive Officer
Caroline Beaumont
General Counsel
Patrick Brockie
Chief Financial Officer
Steve Brunell
Programme Performance and Controls Director
Sumi Eratne
Programme Delivery Director
Victoria Jessop
GM Corporate Relations and Communications
Rob Mair
GM Health, Safety, Environment and Sustainability
Russell McMullan
GM Assurance and Integration
Sandip Ranchhod
Owner Interface Manager
Bank of New Zealand Queen Street Auckland ANZ Albert Street Auckland
Auditor
Audit New Zealand on behalf of the Auditor-General
Registered Office
Level 2, Coffey House 25 Teed Street Newmarket Auckland 1023
Solicitors
Bell Gully Buddle Weir Chapman Tripp
41
Financial Report
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Statement of Responsibility
We are responsible for the preparation of City Rail Link Limited (the Company’s) financial statements and statement of performance, and for the judgements made in them. We are responsible for any end of year performance information provided by the Company under section 19A of the Public Finance Act 1989. We have the responsibility for establishing and maintaining a system of internal control designed to provide reasonable assurance as to the integrity and reliability of financial reporting. In our opinion, these financial statements and statement of performance fairly reflect the financial position and operations of the Company for the year ended 30 June 2020.
Sir Brian Roche KNZM Chair 22 September 2020
Anne Urlwin Director 22 September 2020
FINANCIAL REPORT
42
Financial Report
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Statement of Financial Performance for the year ended 30 June 2020
Note
Actual
Actual
2020
2019
$(000)
$(000)
276
2,528
1,566
1,287
112
4
1,954
3,819
3,598
4,645
Professional services
486
1,176
IT expenses
183
640
General expenses
3,051
1,833
Insurance expenses
4,314
386
Credit losses and allowances
(97)
45
Lease payments
233
451
2, 3
3,764
7,255
4
-
2,407
Third party works
1.7
35,530
10,277
Capital expenditure write-offs
2, 3
24,459
-
4
39,435
-
114,956
29,115
(113,002)
(25,296)
-
-
(113,002)
(25,296)
Revenue
Rental revenue Interest revenue Other revenue Total revenue
Expenses
Employment expenses
Depreciation and amortisation expenses
11
Impairment expenses
Vested asset expense Total expenditure
Deficit for the year
Other comprehensive revenue and expense Total comprehensive revenue and expense for the year
This statement is to be read in conjunction with the notes to the financial statements. Refer to note 15 on page 62 for comparatives to budget.
43
Financial Report
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Statement of Financial Position as at 30 June 2020
Note
Actual
Actual
2020
2019
$(000)
$(000)
Assets Cash and cash equivalents
5
41,962
5,236
Trade and other receivables
6
14,187
8,247
Prepayments
6
7,232
86
63,381
13,569
927,374
553,495
31,709
-
Total current assets
Capital work in progress
4
Prepayments Property, plant and equipment
2
134,105
153,106
Intangibles
3
338
821
Total non-current assets
1,093,526
707,422
Total assets
1,156,907
720,991
Liabilities 7
58,921
26,146
Current employee entitlements
8
1,138
888
7, 11
146
253
Total current liabilities
60,205
27,287
Total liabilities
60,205
27,287
1,096,702
693,704
1,268,280
752,280
(171,578)
(58,576)
1,096,702
693,704
Related party payables
Net assets
FINANCIAL REPORT
Accounts payable and accruals
Equity Contributed capital
16
Retained earnings Total equity
This statement is to be read in conjunction with the notes to the financial statements. Refer to note 15 on page 63 for comparatives to budget.
44
Financial Report
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Statement of Changes in Equity for the year ended 30 June 2020
Retained earnings
Contributed capital
Total
$(000)
$(000) Note 16
$(000)
(58,576)
752,280
693,704
(113,002)
-
(113,002)
Contributions on settlement transfer
-
-
-
Funding received for B class share issues
-
516,000
516,000
Balance at 30 June 2020
(171,578)
1,268,280
1,096,702
Balance at 30 June 2018
(33,280)
622,280
589,000
Total comprehensive revenue and expense for the year
(25,296)
-
(25,296)
Contributions on settlement transfer
-
-
-
Funding received for B class share issues
-
130,000
130,000
(58,576)
752,280
693,704
Balance at 30 June 2019 Total comprehensive revenue and expense for the year Owner transactions:
Owner transactions:
Balance at 30 June 2019
This statement is to be read in conjunction with the notes to the financial statements. Refer to note 15 on page 63 for comparatives to budget.
45
Financial Report
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Statement of Cash Flows for the year ended 30 June 2020
Note
Actual 2020 $(000)
Actual 2019 $(000)
507
2,379
(92,062)
(22,004)
1,545
1,287
(90,010)
(18,338)
(380,525)
(157,212)
(8,650)
(3,990)
(89)
-
(389,264)
(161,202)
516,000
130,000
516,000
130,000
36,726
(49,540)
5,236
54,776
41,962
5,236
41,962
5,236
41,962
5,236
Cash flows from operating activities Cash received from customers Cash paid to suppliers and employees Interest received Net cash from operating activities
Cash flows from investing activities Acquisition of capital work in progress Acquisition of property, plant and equipment Acquisition of intangibles Net cash from investing activities
Cash flows from financing activities Proceeds from issue of share capital
16
Net cash from financing activities
Net (decrease)/increase
Closing cash
FINANCIAL REPORT
Opening cash and cash equivalents
Made up of Bank balances Total cash
5
This statement is to be read in conjunction with the notes to the financial statements. Refer to note 15 on page 64 for comparatives to budget.
46
Financial Report
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Notes to the Financial Statements 1. Statement of accounting policies 1.1 Reporting entity City Rail Link Limited (the ‘Company’ or ‘CRL Ltd’) is a Crown Entity, registered under schedule 4A of the Public Finance Act and is domiciled in New Zealand. The Company was incorporated on 13th April 2017. The Company is owned by the Crown (51% shareholder through the Minister of Transport and Minister of Finance) and
PBE IPSAS 37 - CRL Ltd entered into a Project Alliance Agreement (PAA) with Other Alliance Participants (OAPs) to collaborate and share the risks and responsibilities in delivering the CRL. The CRL assets become the property of CRL Ltd on payment for those assets. Management considered the guidance in PBE IPSAS 37 and determined that the arrangement between CRL Ltd and the OAPs is not a joint arrangement from an accounting perspective. The PAA
Auckland Council (49%).
is not a joint venture as it is not structured through a separate
The Company’s purpose is to govern and manage the delivery
of a joint operation as CRL Ltd and the six OAPs do not share
of the City Rail Link project. CRL Ltd commenced operations with effect from 1 July 2017. The financial statements of the Company are for the year ended 30 June 2020. These financial statements were authorised by the CRL Ltd Board on the date specified on page 42.
1.2 Basis of preparation The financial statements have been prepared on a going
vehicle. Further, the arrangement does not meet the definition the rights to the assets and obligations for the liabilities arising from the arrangement. CRL Ltd and the OAPs only share the benefits of cost underruns and the risks of cost overruns in certain agreed circumstances. OAPs refers to the Link Alliance participants Vinci Construction Grands Projets S.A.S, Downer New Zealand Limited, Soletanche Bachy International (NZ) Limited, WSP New Zealand Limited, AECOM New Zealand Limited and Tonkin & Taylor Limited.
1.4 Cash and cash equivalents
concern basis and the accounting policies have been applied
Cash comprises cash at bank and short-term deposits with a
consistently throughout the year. The financial statements
maturity of three months or less.
of the Company have been prepared in accordance with the requirements of the Crown Entities Act 2004, which includes the requirement to comply with generally accepted accounting practice in New Zealand (NZ GAAP) and the Companies Act 1993. The Company is a Public Benefit Entity (PBE) for financial reporting purposes and reports under Tier 1 PBE standards. The financial statements are presented in New Zealand Dollars ($’000), which is the Company’s functional currency and have been prepared on an accrual and historical cost basis.
1.5 Financial instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets Financial assets were initially recognised at fair value. Trade and other receivables are usually received within 30 days of recognition. We actively manage unpaid debtors beyond 30 days. After initial measurement, such financial assets are
1.3 New and amended standards and interpretations
subsequently measured at amount due less an allowance for
PBE IPSAS 34-38 replaces the existing standards for interests
Financial liabilities
in other entities (PBE IPSAS 6-8). These new standards are effective for annual periods beginning on or after 1 January
credit losses.
Financial liabilities are classified as payables. The Company’s financial liabilities include trade and other payables.
2019. CRL Ltd has applied these new standards in preparing
Trade and other payables are unsecured and are usually paid
the 30 June 2020 financial statements. The adoption of these
within 30 days of recognition. Due to their short-term nature
standards has had no financial reporting effect on CRL Ltd.
they are not discounted.
47
Financial Report
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
A financial liability is derecognised when the obligation under
be measured reliably. The majority of capital expenditure will
the liability is discharged, cancelled or expires.
remain as ‘Capital Work in Progress’ for the duration of the
1.6 Capital work in progress (WIP)
project. Subsequent expenditure
CRL Ltd capitalises those costs directly attributable to the
Subsequent expenditure is capitalised only if it is probable that
construction of the project. These are captured under Capital
the future economic benefits associated with the expenditure
Work in Progress in Note 4 below. CRL Ltd also capitalises a
will flow to the entity. Repairs and maintenance costs are
portion of the overhead costs that is deemed to be required
recognised as expenditure as incurred.
to support the construction of the actual physical works. This allocation of cost is reviewed regularly to ensure the method adopted remains appropriate for the stage of the project. When discrete assets within the project are completed there is an agreed handover procedure to the new recipient of the asset. The asset is then removed from CRL Ltd’s WIP and
Depreciation Land, buildings and subterranean land held for the development of rail tunnels and stations are not depreciated. All other assets (including temporary buildings constructed) are depreciated on a straight-line basis over the useful life
vested to the new owner.
of the asset. Depreciation is charged at rates calculated to
1.7 Third party works
residual value over its remaining useful life.
In the 2020 financial year CRL Ltd funded work undertaken by KiwiRail Holdings Limited, on the KiwiRail Holdings
allocate the cost or valuation of the asset less any estimated The estimated useful lives of buildings, property, plant and equipment are as follows:
Limited network at Ōtāhuhu, Mt Eden and Britomart East.
Land and buildings
Not depreciated
As part of the overall project, CRL Ltd will undertake or fund
Temporary buildings
4 years
construction work, such as that at Ōtāhuhu, Mt Eden and
Subterranean land
Not depreciated
Britomart East across the wider Auckland rail network. This
Furniture and fittings
5 years
will enable the network to manage the larger volumes of rail
Office equipment
5 years
passengers arising from the completion of the project. The
Computer hardware
5 years
nature of the work done, and the ownership of the assets constructed, means that they do not form part of the CRL Ltd assets, in accordance with NZ GAAP.
1.8 Third party funding CRL Ltd may receive additional funding from third parties (which may include the Sponsors and related parties) for the existing scope. The third party funding is used to reimburse
methods are reviewed, and adjusted if appropriate, at each financial year end. Derecognition An item of property, plant and equipment is derecognised upon disposal, demolition or when no further future economic benefits or service potential are expected from its use or disposal.
CRL Ltd for the works so that CRL Ltd is kept financially
Gains and losses on disposals are determined by comparing
neutral.
proceeds with the carrying amount. These are included in
1.9 Property, plant and equipment
NOTES TO THE FINANCIAL STATEMENTS
construction of agreed specific works that are in addition to
The assets’ residual values, useful lives and amortisation
surplus or deficit.
Property, plant and equipment consist of land, buildings, temporary buildings, subterranean land, furniture and fittings, computer hardware and office equipment. Recognition and measurement Property, plant and equipment is measured initially at cost. Cost includes expenditure that is directly attributable to the acquisition of the items. The cost of an item of property, plant and equipment is recognised only when it is probable that future economic benefit or service potential associated with the item will flow to the Company, and if the item’s cost can
48
Financial Report
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Impairment of non-cash generating assets
1.10 Intangible assets
For non-financial, non-cash-generating assets, CRL Ltd
Intangible assets acquired separately are measured on initial
assesses at each reporting date whether there is an indication
recognition at cost.
that a non-cash-generating asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, CRL Ltd estimates the asset’s recoverable service amount. An asset’s recoverable service amount is the
Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses.
higher of the non-cash-generating asset’s fair value less costs
The Company has no internally generated intangible assets.
to sell and its value in use.
The useful lives of intangible assets are assessed as finite.
Where the carrying amount of an asset exceeds its
Intangible assets with finite lives are amortised over their
recoverable service amount, the asset is considered impaired and is written down to its recoverable service amount.
useful economic lives and assessed for impairment whenever there is an indication that the intangible assets may be
In assessing value in use, CRL Ltd has adopted the
impaired.
depreciation replacement cost approach. Under this approach,
The amortisation period and the amortisation method for an
the present value of the remaining service potential of an asset is determined as the depreciated replacement cost of the asset. The depreciated replacement cost is measured as the reproduction or replacement cost of the asset, whichever is lower, less accumulated depreciation calculated on the basis of such cost, to reflect the already consumed or expired service potential of the asset. In determining fair value less costs to sell, the price of the asset in a binding agreement in an arm’s length transaction, adjusted for incremental costs that would be directly attributed to the disposal of the asset, is used. If there is no binding agreement, but the asset is traded on an active market, fair value less cost to sell is the asset’s market price less cost of disposal. If there is no binding sale agreement or active market for an asset, CRL Ltd determines fair value less cost to sell based on the best available information. Impairment losses are recognised immediately in surplus or deficit. For each asset, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, CRL Ltd estimates the
intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits or service potential embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in surplus or deficit as the expense category that is consistent with the function of the intangible assets. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in surplus or deficit when the asset is derecognised. Software The Company holds several computer software packages for internal use, including purchased software. Purchased software is recognised and measured at the cost incurred to acquire the software. A summary of the policies applied to the Company’s intangible
asset’s recoverable service amount. A previously recognised
assets is as follows:
impairment loss is reversed only if there has been a change
Intangible asset
Useful life
Amortisation method
Software
5 years
Straight-line basis
in the estimates used to determine the asset’s recoverable service amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable service amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such a reversal is recognised in surplus or deficit.
49
1.11 Leases The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement at inception date. The substance of the arrangement depends on whether the fulfilment of the arrangement is dependent
Financial Report
on the use of a specific asset or assets or the arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement. Company as a lessee Operating leases are leases that do not transfer substantially
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Rental revenue Rental revenue arising from operating leases on investment properties is accounted for on a straight-line basis over the lease term and is included in revenue in the statement of financial performance due to its operating nature.
all the risks and benefits incidental to ownership of the
Outstanding customer receivables are monitored monthly
leased items to the Company. Operating lease payments are
and balances >30 days are followed up for recovery. As at
recognised as an operating expense in surplus or deficit on a
30 June 2020, there were 5 (2019: 24) property debtors
straight-line basis over the lease term.
with outstanding balances. Of the 5 debtors with outstanding
Company as a lessor Rent received from an operating lease is recognised as income on a straight-line basis over the lease term. Contingent rents are recognised as revenue in the periods in which they are earned.
1.12 Employee benefits
balances, 3 debtors have a portion of their balance which is >30 days. The balance of each debtor was assessed individually as to collectability and no provision for credit losses or allowances have been accounted for as a result. Interest revenue Interest is received on the cash held at bank and short-term
Liabilities for wages and salaries (including non-monetary
deposits maturing within less than three months. Interest
benefits) and annual leave are recognised in surplus or deficit
income is included in revenue in the Statement of Financial
during the periods in which the employees rendered the
Performance.
related services, and are generally expected to be settled within 12 months of the reporting date. The liabilities for these short-term benefits are measured at the amounts expected to be paid when the liabilities are settled. Expenses for sick leave are recognised when the leave is taken and are measured at the rates paid.
1.13 Equity Equity is made up of accumulated comprehensive revenue and expense and contributed capital. Accumulated comprehensive revenue and expense is the Company’s accumulated surplus or deficit since the formation Contributed capital represents the transfer of project costs based on a Settlement Agreement between the Crown and Auckland Council as well as shares issued to the shareholders, the Crown and the Auckland Council for funding of the project. 1,000 Ordinary shares were issued for the contributed
City Rail Link Limited is a Public Entity in accordance with the Income Tax Act 2007 and consequently is exempt from the payment of income tax. Accordingly, no provision has been made for income tax. Items in the financial statements are presented exclusive of GST, except for receivables and payables which are presented on a GST inclusive basis. Where GST is not recoverable as input tax, it is recognised as part of the related asset or expense. The net amount of GST recoverable from the IRD is included as part of receivables in the statement of financial position. The net GST paid to, or received from, the IRD, including the GST relating to investing and financing activities, is classified as a net operating cash flow in the statement of cash flows. Commitments and contingencies are disclosed exclusive of GST.
capital with B class shares being issued for funding. Each funding share represents one New Zealand dollar.
1.14 Revenue Revenue is recognised to the extent that it is probable that the economic benefit will flow to the Company and revenue can be reliably measured. Revenue is measured at the fair value of the consideration received. The following specific recognition criteria must be met before revenue is recognised.
50
NOTES TO THE FINANCIAL STATEMENTS
of the Company.
1.15 Tax
Financial Report
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
1.16 Significant accounting judgements, estimates and assumptions The preparation of the Company’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could
• The condition of the asset based on the assessment of experts employed by the Company • The nature of the asset and its susceptibility and adaptability to changes in technology and processes • Changes in the market in relation to the asset • The estimated useful lives of the asset classes held by the Company are listed in notes 1.9 and 1.10 v) Covid-19
result in outcomes that require a material adjustment to the
On Wednesday 25 March 2020 New Zealand entered
carrying amounts of assets or liabilities affected in future
into Alert Level 4 (full lockdown of non-essential services).
periods.
All construction activity on CRL Ltd sites was ceased
i) Judgements In the process of applying the Company’s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements: ii) Operating lease commitments – Company as lessor The Company has entered into commercial and rental property leases on its property portfolio. The Company has determined, based on an evaluation of the terms and conditions of the arrangements, such as a lease term not constituting a substantial portion of the economic life of a property, that it retains all the significant risks and rewards of ownership of these properties and accounts for the contracts as operating leases. The bulk of these properties have been demolished in preparation for the new stations being constructed on these sites. iii) Estimates and assumptions The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, which have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Company. Such changes are reflected in the assumptions when they occur. iv) Useful lives and residual values The useful lives and residual values of assets are assessed
accordingly. Level 3 commenced on 28 April 2020, and construction activity could recommence albeit with selfdistancing and other new health and safety protocols required. CRL Ltd moved to Alert Level 2 on 14 May 2020 and finally Alert Level 1 on 8 June 2020, when construction activity could restart without restriction. During all alert levels critical design, planning and consenting work could continue which enabled the project to restart quickly. Contract Types CRL Ltd has entered into three types of contracts that are subject to Covid-19 claims and each form of contract has been reviewed for Covid-19 cost impact: i) Construct Contracts (per NZS3910 form of contract) for C1, C2 and C8 Ōtāhuhu Station Works; ii) Cost reimbursable in the form of Funding Agreements with KiwiRail Holdings Limited for C8 Ōtāhuhu Track Works and C5 Mt Eden Single Line Early Works (MESLEW); and iii) Project Alliance Agreement (PAA) with Link Alliance for C3 At 30 June 2020 CRL Ltd has paid Covid-19 related claims totaling $2.5m (excluding GST) across the C1, C2 and C8 Station works contracts. These are based on assessments by the engineer to the contract. The claims received and paid are contract variations for extension of time and costs caused by the change in law and per the terms of NZS3910 Conditions of contract for building and civil engineering construction which is the standard form of contract used in the New Zealand construction market. All claims paid under NZS3910 contracts will be capitalised in the year they are incurred.
using the following indicators to inform potential future
CRL Ltd’s cost reimbursable contracts are currently the
use and value from disposal:
form of contract used for work performed by KiwiRail. All work undertaken by KiwiRail is treated as Third Party Works and is expensed in the year they are incurred. Total claims are still being finalised.
51
Financial Report
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Per the PAA with the Link Alliance, CRL Ltd has paid Covid-19
vi) Business Hardship Programme
claims of $9.6m (excluding GST) to 30 June 2020. CRL Ltd
The Business hardship programme was launched in
is yet to receive all claims and negotiation of these claims is
December 2019. The programme was set up to provide
considered commercially sensitive. All claims paid and accrued
assistance to small retail businesses that have been
under the PAA will be capitalised in the year they are incurred.
directly impacted by the delay to completion of the C2
Notwithstanding, the full cost impact of Covid-19 is yet to be finally determined across CRL Ltd’s construction contracts. At this stage the expectation is that such costs will be able to be accommodated within the existing project budget. The claims not yet received will represent costs incurred in CRL Ltd’s financial statements for 2020/21. CRL Ltd expects to incur further Covid-19 costs (for example delays related to access to skilled workers from offshore) which are not able to be quantified at this stage.
contract works within the Albert Street Impact Zone between the Victoria and Customs Street intersections. vii) Asset transfers As CRL Ltd completes certain contracts it may transfer separable assets relating to enabling works (including assets related to a number of utility services) for the CRL to the Sponsors or their subsidiaries as those assets are commissioned for use. However, the ownership of the majority of CRL Ltd’s key assets will stay with CRL Ltd
The assessment of the impact of Covid-19 on CRL Ltd’s Statement of Financial Performance and Statement of Financial Position is set out below based on information available at the time of preparing the financial statements.
until the completion of the Project. Therefore, they will remain as CRL Ltd capital work in progress until that time. Per PBE IPSAS 37 Joint Arrangements CRL Ltd continues to be classified as a joint venture (as opposed to joint operation) by the Sponsors as the ultimate ownership of the CRL assets is yet to be determined. Any separable assets transferred prior to project completion will transfer without compensation and hence will be treated as a vested asset in the period in which the asset transfer occurs. CRL Ltd will recognise a vested asset expense on transfer of the asset.
Financial Statements
Covid-19 Assessment
Rental revenue
There has been no material impact on rental revenues due to Covid-19. The rental revenue budget for 2020/21 is materially lower due to demolition of the majority of the buildings purchased.
Trade receivables
CRL Ltd has reviewed trade receivables and does not expect any credit losses resulting from Covid-19. The majority of trade receivables consist of GST refunds. Plant and equipment are stated at historical cost less depreciation and impairment. CRL Ltd has
and equipment
completed an impairment assessment and concluded that no impairment is required. This is
NOTES TO THE FINANCIAL STATEMENTS
Property, plant
supported by updated land valuations obtained late 2019. Property is valued at historical cost and consists largely of land values post major building demolition work completed this financial year. Capital work
CRL Ltd capitalises those costs directly attributable to the construction of the project including
in progress
payments to contractors for construction works, resource consents and compliance requirements. CRL Ltd has completed a review of these costs and concluded that no impairment is required. Capital work in progress is measured at lower of cost or net realisable value.
Third party works
These are works in progress by KiwiRail Holdings Limited. All Covid-19 related costs are included in these third party works costs. CRL Ltd has completed a review of these costs and concluded that no impairment is required.
Proceeds from issue
The Crown and Auckland Council (the “Sponsors”) provide all funding for the project. The Crown has
of share capital
made appropriation for funding for 2020/21 (per Vote Transport). Auckland Council has budgeted the required funding for CRL Ltd in 2020/21. The Sponsors remain committed to meet all currently forecast funding requirements of the project until project completion.
52
Financial Report
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
2. Property, plant and equipment 30 June 2020
Subterranean land
Land and buildings
Temporary buildings
Furniture and fittings
Office equipment
Total
$(000)
$(000)
$(000)
$(000)
$(000)
$(000)
4,465
141,102
13,580
601
517
160,265
(24)
(97)
-
-
5
(116)
8,841
-
-
-
16
8,857
-
(23,907)
-
(437)
(58)
(24,402)
13,282
117,098
13,580
164
480
144,604
Balance at 1 July 2019
-
-
6,790
228
141
7,159
Depreciation for the year
-
-
3,395
71
101
3,567
Disposals and demolitions
-
-
-
(208)
(19)
(227)
Balance at 30 June 2020
-
-
10,185
91
223
10,499
13,282
117,098
3,395
73
257
134,105
Subterranean land
Land and buildings
Temporary buildings
Furniture and fittings
Office equipment
Total
$(000)
$(000)
$(000)
$(000)
$(000)
$(000)
754
140,913
-
565
470
142,702
(177)
177
13,580
-
-
13,580
3,888
14
-
36
51
3,989
-
(2)
-
-
(4)
(6)
4,465
141,102
13,580
601
517
160,265
Balance at 1 July 2018
-
-
-
110
41
151
Depreciation for the year
-
-
6,790
118
100
7,008
Balance at 30 June 2019
-
-
6,790
228
141
7,159
4,465
141,102
6,790
373
376
153,106
Cost Balance at 1 July 2019 Transferred/reclassified assets Additions Disposals and demolitions Balance at 30 June 2020
Depreciation
Net book value at 30 June 2020
30 June 2019 Cost Balance at 1 July 2018 Transferred/reclassified assets Additions Disposals and demolitions Balance at 30 June 2019
Depreciation
Net book value at 30 June 2019
Land and buildings disposals include the impact of building demolitions. These demolitions were required to allow Link Alliance works to commence, particularly at Mt Eden. There are no items of PPE where title has been restricted or that have been used for security against liabilities.
53
Financial Report
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
3. Intangibles Software
30 June 2020
30 June 2019
$(000)
$(000)
1,237
1,237
(420)
-
817
1,237
Balance at 1 July
416
169
Amortisation for the year
199
247
(136)
-
Balance at 30 June
479
416
Net book value at 30 June
338
821
30 June 2020
30 June 2019
$(000)
$(000)
Balance at 1 July
580,591
423,125
Transferred assets
(39,435)
-
-
(13,594)
Additions
413,314
171,060
Balance at 30 June
954,470
580,591
27,096
24,689
-
2,407
27,096
27,096
927,374
553,495
Cost Balance at 1 July Disposals Balance at 30 June
Amortisation
Disposals
There are no intangible assets where title is restricted or pledged as security for liabilities.
4. Capital work in progress Capital work in progress is measured at the lower of cost or net realisable value.
Cost
Transfers to PPE
Balance at 1 July Impairment for the year Balance at 30 June Net book value at 30 June
Capital Work in Progress costs include payments to contractors for the actual construction works, resource consents, compliance requirements and costs incurred in the design, procurement and supervision of the works. CRL Ltd also capitalises a portion of the overhead costs that it deems is required to support the construction of the actual physical works. Examples of these overhead costs include CRL Ltd staff costs and operating costs such as rent and utilities. For 2020 the total value of overhead costs capitalised is $10.3m (2019: $10.9m). CRL Ltd reviews its capital work in progress bi-annually to identify any impairment of the carrying value of its assets. Transferred assets refers to those assets transferred (vested) to the Sponsors on contract completion (see note 1.16 (vii)). Two such assets were transferred to Auckland Council in 2020.
54
NOTES TO THE FINANCIAL STATEMENTS
Impairment
Financial Report
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
5. Cash and cash equivalents Cash comprises cash at bank and short-term deposits with a maturity of three months or less. 30 June 2020
30 June 2019
$(000)
$(000)
4,462
5,236
Short-term deposits
37,500
-
Total
41,962
5,236
Cash at bank
Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the Company and earn interest at the respective short-term deposit rates. Deposits are placed with Bank of New Zealand and/or ANZ Bank New Zealand Limited. Both banks have AA- long-term credit ratings from Standard & Poor’s and Fitch rating agencies. While cash and cash equivalents at 30 June 2020 are subject to the expected credit loss requirements of PBE IFRS 9, no loss allowance has been recognised because the estimated loss allowance for credit losses is trivial.
Reconciliation of operating surplus with net cash from operating activities 30 June 2020
30 June 2019
$(000)
$(000)
(113,002)
(25,296)
3,764
7,255
Increase in provisions
(97)
45
Interest accrued (not received)
(21)
-
Write off on property, plant & equipment
24,459
-
Vested asset transfer
39,435
-
-
2,407
(44,691)
(2,350)
143
(399)
(90,010)
(18,338)
Surplus/(deficit) for the year Adjustments for: Depreciation and amortisation
Impairment of capital work in progress
Working capital movements: (Increase) in accounts receivable, prepayments and other assets (Decrease) in accounts payable, accruals and other liabilities
Cash generated from operating activities
55
Financial Report
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
6. Trade and other receivables Short-term receivables are recorded at the amount due, less an allowance for credit losses. CRL Ltd applies the simplified expected credit loss model of recognising lifetime expected credit losses for receivables. In measuring expected credit losses, short term receivables have been assessed on a collective basis as they possess shared credit risk characteristics. These have been grouped based on the days past due. Short term receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include the debtor being in liquidation. 30 June 2020
30 June 2019
$(000)
$(000)
Trade receivables
5,906
2,976
GST receivable
8,260
5,404
21
5
7,232
86
-
(138)
21,419
8,333
Sundry receivables Prepayments Expected credit loss
As at 30 June, the aging analysis of trade receivables was: $(000)
$(000)
$(000)
$(000)
0 - 30 days
30 - 60 days
60 - 90 days
>90 days
Trade receivables 30 June 2020
5,894
-
-
12
Trade receivables 30 June 2019
2,031
17
785
143
There have been no changes in the estimation techniques or significant assumptions used in measuring the loss allowance during the reporting period. Related party receivables relate to reimbursable expenses as agreed by contract with Auckland Council as per normal arms length transactions. Prepayments relates to insurance premiums paid in advance for the works undertaken by Link Alliance over the estimated life of the works. The insurance provides for contract works, public liability and professional indemnity insurance.
Accounts payable and accruals represent liabilities of goods and services provided to the entity that have not been paid at the end of the financial year. Accounts payable and accruals are classified as other liabilities, and are measured at amortised cost. Note
30 June 2020
30 June 2019
$(000)
$(000)
2,713
3,321
146
253
56,208
22,825
59,067
26,399
Trade payables Related parties payables
11
Sundry payables and accruals
Terms and conditions of the above financial liabilities: • Trade payables are non-interest bearing and are normally settled on the 20th of the month following • Related party payables mainly relate to accruals for Land & Property Specialist Services & rates invoices for quarter 4 not yet received from Auckland Council • Sundry payables and accruals are non-interest bearing and have an average term of three months
56
NOTES TO THE FINANCIAL STATEMENTS
7. Accounts payable and accruals
Financial Report
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
8. Employee entitlements 30 June 2020
30 June 2019
$(000)
$(000)
Annual leave
551
438
Accrued salaries and wages
587
450
1,138
888
9. Commitments and contingencies Operating lease commitments - Company as a lessee The Company has entered into commercial leases. These leases have an average life of between three and five years, with renewal options included in the contracts. There are no restrictions placed upon the Company by entering into these leases. Future minimum rentals payable under non-cancellable operating leases as at 30 June are, as follows: 30 June 2020
30 June 2019
$(000)
$(000)
Less than one year
1,046
1,383
One to five years
3,608
3,283
-
-
4,654
4,666
More than five years
Operating lease commitments - Company as a lessor The Company has entered into commercial and rental property leases on its property portfolio consisting of the Company’s buildings. These non-cancellable leases have remaining terms of between one and three years. Each lease includes a clause to enable upward revision of the rental charge on an annual basis according to prevailing market conditions. Future minimum rentals receivable under non-cancellable operating leases as at 30 June are as follows: 30 June 2020
30 June 2019
$(000)
$(000)
Less than one year
119
264
One to five years
198
897
-
-
317
1,161
More than five years
Commitments At 30 June 2020, the Company had commitments of $1.598b (2019: $147.391m) relating to the project (in relation to capital work in progress). The increase in commitments primarily reflects the execution of the C3 contract with Link Alliance but also changes in other construction contracts. Contingencies As at 30 June 2020, CRL Ltd is a party to various claims and sundry disputes. Where it has been assessed that the likelihood of having to make a payment meets the recognition criteria for a provision, this has been included in the financial statements (2019: $Nil). There is the likelihood of additional claims for Covid-19 costs. The settlement of these claims is likely to be made in the 2020-21 financial year. The expectation is that such costs will be able to be accommodated within the existing project budget.
57
Financial Report
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
10. Financial assets and liabilities and financial risk management The table below summarises the maturity profile of the Company’s financial liabilities which show the timing of the cash outflows and the maturity profiles of financial assets held by the Company which are readily saleable or expected to generate cash inflows to meet the cash outflows of the financial liabilities. The amounts disclosed are undiscounted contractual cashflow. 30 June 2020
30 June 2019
$(000)
$(000)
Cash
41,962
5,236
Receivables
13,159
2,929
55,121
8,165
59,067
26,399
59,067
26,399
Financial assets (at amortised cost)
Financial liabilities (at amortised cost) Financial liabilities
30 June 2020
Carrying amount
On demand
Less than six months
Six to twelve months
Total contractual cashflows
Non derivative financial assets
$(000)
$(000)
$(000)
$(000)
$(000)
Cash
41,962
4,462
37,500
-
41,962
Receivables
13,159
-
8,925
4,234
13,159
Total non derivative financial assets
55,121
4,462
46,425
4,234
55,121
Financial liabilities at amortised cost
59,067
-
59,067
-
59,067
Total non derivative financial liabilities
59,067
-
59,067
-
59,067
Net contractual cashflows
(3,946)
4,462
(12,642)
4,234
(3,946)
Carrying amount
On demand
Less than six months
Six to twelve months
Total contractual cashflows
$(000)
$(000)
$(000)
$(000)
$(000)
Cash
5,236
5,236
-
-
5,236
Receivables
2,929
-
2,929
-
2,929
Total non derivative financial assets
8,165
5,236
2,929
-
8,165
Financial liabilities at amortised cost
26,399
-
26,399
-
26,399
Total non derivative financial liabilities
26,399
-
26,399
-
26,399
(18,234)
5,236
(23,470)
-
(18,234)
Non derivative financial liabilities
30 June 2019
Non derivative financial liabilities
Net contractual cashflows
58
NOTES TO THE FINANCIAL STATEMENTS
Non derivative financial assets
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Financial Report
The Company’s risk management policies identify and analyse the risks faced by the Company and set appropriate risk levels and controls to monitor those risks. i) Market risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk. ii) Credit risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party, by failing to discharge an obligation. The Company is mainly exposed to credit risk from its financial assets, and the maximum exposure to credit risk at balance date is represented by the total amount of financial assets in the statement of financial position: • Cash and cash equivalents • Trade receivables The Company manages credit risk by analysing the credit worthiness of its customers, including external ratings if available. Deposits are placed with Bank of New Zealand and/or ANZ Bank New Zealand Limited, both with long-term AA- credit ratings by Standard & Poor's and Fitch ratings agencies. iii) Liquidity risk Liquidity risk is the risk that the Company will have difficulty with meeting the obligations associated with its financial liabilities. The entity’s approach to managing liquidity is to ensure that it has sufficient liquidity to meet its liabilities when they are due. Funding will be made available upon request in a prescribed format from the shareholders of the Company and therefore the Company has no significant exposure to liquidity risk. iv) Counterparty risk Counterparty risk is the likelihood or probability that one of those involved in a transaction might default on its contractual obligations. CRL Ltd has a number of key contractual counterparties. We receive financial information from and regularly monitor the financial creditworthiness of these counterparties to ensure there is no risk of disruption to the project and that those counterparties being able to continue to satisfy their current and future commitments under their contracts with CRL Ltd. In reviewing financial creditworthiness we consider financial performance (including rating agency reports where available) of both the counterparty and as applicable their parent.
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11. Related parties a) Key management personnel Key management personnel include the senior management team and the Board of Directors. 30 June 2020 Remuneration and benefits: Senior management Directors
30 June 2019
Number of personnel
$(000)
Number of personnel
$(000)
10
3,495
13
3,756
5
294
5
294
3,789
4,050
Key management personnel did not receive any remuneration or compensation other than in their capacity as key management personnel. If the number of personnel were reported as FTE the number of Senior Managers would have been 10 FTE (2019: 11 FTE). The Company did not provide any compensation at non-arm’s length terms to close family members of key management personnel during the year. The Company did not provide any loans to key management personnel or their close family members. No Directors received compensation or other benefits in relation to cessation (2019: $Nil). b) Employment expenses 30 June 2020
30 June 2019
$(000)
$(000)
1,403
1,849
245
238
1,673
1,754
277
804
3,598
4,645
Salaries and wages KiwiSaver employer contributions Actual leave taken and other costs Other employment related costs
CRL Ltd capitalises a portion of employment expenses and hence the employment expenses shown above are net of capitalisation.
Severance payments The total termination amounts paid by the Company to this employee was $23k (2019: $523k).
Redundancy payments No termination benefits relating to redundancy amounts were paid in 2020 (2019: Nil) as a result of the reorganisation of the Company. The total redundancy amounts paid by CRL Ltd to employees was $0 (2019: Nil). c) Related party transactions and balances Related party transactions other than remuneration of key management personnel All related party transactions that the Company entered into during the year occurred within normal client/supplier relationship and under terms equivalent to those that prevail in arm’s length transactions in similar circumstances. CRL Ltd also funded work by KiwiRail Holdings in relation to C8 Ōtāhuhu (track works), C5 Mt Eden single line early works and C9 Britomart East. The terms of these agreements were on an arms length commercial basis.
60
NOTES TO THE FINANCIAL STATEMENTS
Termination benefits relate to severance amounts paid to 1 employee (2019: 5) as a result of the reorganisation of the Company.
Financial Report
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Balances at year end 30 June 2020
Due from
Owed to
$(000)
$(000)
-
-
5,020
146
5,020
146
-
-
1,260
253
1,260
253
Crown Auckland Council
30 June 2019 Crown Auckland Council
12. External auditors remuneration 30 June 2020
30 June 2019
$(000)
$(000)
3
97
245
193
Audit New Zealand fees paid for the audit of the financial statements - Prior Year
-
52
KPMG audit fees for the audit of 1 July opening balance transfer
-
3
248
345
Audit New Zealand fees paid for the assurance audit of projects C3 and C7 Audit New Zealand fees paid for the audit of the financial statements - Current Year
13. Capital management CRL Ltd’s capital is its equity, which comprises capital and accumulated surplus/(deficit). Equity is represented by net assets. CRL Ltd is subject to the financial management and accountability provisions of the Crown Entities Act 2004, which impose restrictions in relation to borrowings, acquisition of securities, issuing guarantees and indemnities, and the use of derivatives. CRL Ltd manages its equity by prudently managing revenues, expenses, assets, liabilities, investments and general financial dealings to ensure the company effectively achieves its objectives and purpose.
14. Subsequent events Since the balance date on 30 June 2020, CRL Ltd has continued negotiations with the Link Alliance as the preferred contractor for the C5 and C7 contracts. The C5 contract is for the connection of tunnels into the existing North Auckland Line live rail corridor environment and the C7 contract is for rail systems, integration, testing and commissioning from Britomart to Mt Eden Station. It is expected that finalisation and execution of these contracts will occur imminently. No adjustments have been made to these financial statements. The C5 and C7 contracts in aggregate, will be major transactions for the purposes of the 2021 financial statements. On 11 August 2020 the New Zealand Government announced that from midday, 12 August 2020, Auckland would return to Covid-19 Alert Level 3 and the rest of New Zealand to Alert Level 2 for three days. These alert levels were subsequently extended to 11.59pm, 30 August. Following this, Auckland moved to Alert Level 2.5 while the rest of New Zealand remained in Alert Level 2. On 14 September the New Zealand Government extended Alert Level 2 until 21 September for all regions except Auckland which remained at Alert Level 2.5. On 21 September the New Zealand Government lowered the Alert Level for Auckland to Level 2 effective from 11.59pm on 23 September and the rest of New Zealand to Level 1 effective from 11.59pm on 21 September. No adjustments have been made to the financial statements.
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15. Explanation of major variances against budget Major variations from the Company’s budget figures are explained below:
Statement of Financial Performance and Statement of Other Comprehensive Revenue and Expense 30 June 2020
Budget
Actual
Variance
$(000)
$(000)
$(000)
255
276
21
1,206
1,566
360
-
112
112
1,461
1,954
493
Employment expenses
5,516
3,598
1,918
Professional services
1,445
486
959
IT expenses
1,016
183
833
General expenses
1,688
3,051
(1,363)
415
4,314
(3,899)
-
(97)
97
Lease payments
654
233
421
Depreciation and amortisation expenses
477
3,764
(3,287)
Third party works
-
35,530
(35,530)
Capital expenditure write-offs
-
24,459
(24,459)
Vested asset expense
-
39,435
(39,435)
Total expenditure
11,211
114,956
(103,745)
Surplus/(deficit)
(9,750)
(113,002)
(103,252)
Total comprehensive revenue and expense
(9,750)
(113,002)
(103,252)
Revenue Rental revenue Interest revenue Other revenue Total revenue
Expenditure
Insurance expenses Credit losses and allowances
Expenses were higher than budgeted by $103.8m (2019: $13.7m). This variance is due to three key factors: (i) the unbudgeted transfer of completed assets C6 pipejack and C2 SP2 stormwater pipe vested to Auckland Council (and further vested to Healthy Waters); (ii) Third Party Works payments made to KiwiRail Holdings Limited which were budgeted under Capital Work in Progress; and (iii) Capital expenditure write-offs due to building demolitions which were required to enable the C3 works. Budgeting for 2020/21 seeks to factor in such asset and expense flows.
62
NOTES TO THE FINANCIAL STATEMENTS
The Company’s net deficit was $103.2m higher than budgeted (2019: $12m).
Financial Report
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Statement of Financial Position 30 June 2020
Budget
Actual
Variance
$(000)
$(000)
$(000)
Cash and cash equivalents
41,385
41,962
577
Trade and other receivables
6,446
14,187
7,741
699
7,232
6,533
48,530
63,381
14,851
897,586
927,374
29,788
-
31,709
31,709
166,278
134,105
(32,173)
573
338
(235)
Total Non-Current Assets
1,064,437
1,093,526
29,089
Total Assets
1,112,967
1,156,907
43,940
Accounts payable and accruals
34,138
58,921
(24,783)
Current employee entitlements
729
1,138
(409)
Related party payables
193
146
47
Total Current Liabilities
35,060
60,205
(25,145)
Total Liabilities
35,060
60,205
(25,145)
1,077,907
1,096,702
18,795
1,137,280
1,268,280
131,000
(59,373)
(171,578)
(112,205)
1,077,907
1,096,702
18,795
Assets Current Assets
Prepayments Total Current Assets
Non-Current Assets Capital work in progress Prepayments Property, plant and equipment Intangible assets
Liabilities Current Liabilities
Net Assets
Equity Contributed capital Retained earnings Total Equity
CRL Ltd’s net assets were higher than budgeted for the following reasons: (i) insurance premium prepayment of $38.9m (CRL Ltd paid insurance costs upfront for the expected period of the C3/5/7 contract); (ii) work by the Link Alliance on the C3 contract was greater than had been budgeted and; (iii) trade receivables higher by $6.6m due to invoicing for cost recoveries of additional works. This asset increase offsets an increase in accounts payable (due to higher Link Alliance monthly spend) and building demolition write-off from property, plant and equipment.
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CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
Statement of Cash Flows 30 June 2020
Budget
Actual
Variance
$(000)
$(000)
$(000)
210
507
297
(23,188)
(92,062)
(68,874)
1,206
1,545
339
(21,772)
(90,010)
(68,238)
(323,963)
(380,525)
(56,562)
(18,934)
(8,650)
10,284
(99)
(89)
10
(342,996)
(389,264)
(46,268)
Proceeds from issue of share capital
385,000
516,000
131,000
Net cash from financing activities
385,000
516,000
131,000
Net (decrease)/increase
20,232
36,726
16,494
Opening cash and cash equivalents
21,153
5,236
(15,917)
Closing cash
41,385
41,962
577
Bank balances
41,385
41,962
577
Total cash
41,385
41,962
577
Cash flows from operating activities Cash received from customers Cash paid to suppliers and employees Interest received Net cash from operating activities
Cash flows from investing activities Acquisition of capital work in progress Acquisition of property, plant and equipment Acquisition of intangibles Net cash from investing activities
Cash flows from financing activities
Made up of:
64
NOTES TO THE FINANCIAL STATEMENTS
The Company’s cash flows reflect the higher levels of expenditure that were incurred during the year. The major unbudgeted cash outflows were for insurance costs for C3 and a higher level of progress and spend made by the Link Alliance on C3. This increased level of cash expenditure was financed by an increase of $131m in share issuance and funding by the shareholders.
Financial Report
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
16. Equity Equity is measured as the difference between total assets and total liabilities. Equity is classified into the following components. – Contributed capital (Ordinary shares) – Surplus/(deficit) – Funding received for B class shares Shares Ordinary Shares: The initial shareholding for the creation of CRL Ltd comprised 1,000 ordinary shares. Ordinary shares related to the initial set up of the company, have voting rights attached but no par value. There have been no movements in ordinary shares. The shareholding was split as per the table below. B Class Shares: Shareholders receive 1 share for every dollar of funding received. Funding is applied for on a quarterly basis supported by future forecast cash requirements. All B class shares are authorised, issued and fully paid. They have no voting rights attached. Minister of Finance
Minister of Transport
Auckland Council
Total number of shares
Total value of shares $(000)
255
255
490
1,000
108,932
108,933
217,865
79,137,561
79,137,561
158,275,122
316,550,244
316,550
-
-
-
-
-
129,000,000
129,000,000
258,000,000
516,000,000
516,000
-
-
-
-
-
208,137,561
208,137,561
416,275,122
832,550,244
832,550
Ordinary Shares 2020 Number of shares Total value of shares ($000)
435,730
B Class Shares 2020 Shares issued 1 July 2019 Shares issued relating to prior year Shares issued during the year Shares paid not yet issued Total B Class Shares 30 June 2020 Total Contributed Capital 2020
1,268,280
Minister of Finance
Minister of Transport
Auckland Council
Total number of shares
Total value of shares $(000)
255
255
490
1,000
108,932
108,933
217,865
Shares issued 1 July 2018
32,345,784
32,345,784
64,691,568
129,383,136
129,383
Shares issued relating to prior year
14,291,777
14,291,777
28,583,554
57,167,108
57,167
Shares issued during the year
32,500,000
32,500,000
65,000,000
130,000,000
130,000
-
-
-
-
-
79,137,561
79,137,561
158,275,122
316,550,244
316,550
Ordinary Shares 2019 Number of shares Total value of shares ($000)
435,730
B Class Shares 2019
Shares paid not yet issued Total B Class Shares 30 June 2019
Total Contributed Capital 2019
65
752,280
Financial Report
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
17. Accounting standards and interpretations issued but not yet effective The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Company’s financial statements are unlikely to have an impact on the Company’s financial position, performance, and/or disclosures. PBE IPSAS 41 Financial Instruments was issued in March 2019. This standard supersedes PBE IFRS 9 Financial Instruments, which was issued as an interim standard. It is effective for reporting periods beginning on or after 1 January 2022. Although CRL Ltd has not assessed the effect of the new standard, it does not expect any significant changes as the requirements are similar to PBE IFRS 9. PBE IPSAS 41 Amendment was issued in February 2020. These amendments are in relation to PBE Interest Rate Benchmark reform. CRL Ltd has chosen not to early adopt PBE IPSAS 41. There are no significant changes expected upon adoption in January 2022. PBE FRS 48 replaces the service performance reporting requirements of PBE IPSAS 1 and is effective for reporting periods beginning on or after 1 January 2021. CRL Ltd has not yet determined how application of PBE FRS 48 will affect its statement of performance.
NOTES TO THE FINANCIAL STATEMENTS
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Governance and Remuneration Disclosures 18. Directors' interests Directors made the following entries in the Directors’ Interests Register pursuant to section 140 of the Companies Act 1993 during the year ended 30 June 2020. Director
Board/Committee Memberships
Sir Brian Roche (Chair)
Became a Board Member of Kāinga Ora - Homes and Communities from 1/10/19 - 31/12/19 Became Panel Member of Review of the NZ Health & Disability System
Karen Jordan
Ceased as Chair of Waimea Water Ltd
Anne Urlwin
Became a Director of Precinct Properties New Zealand Ltd Ceased as a Director of One Path Life (NZ) Ltd Became a Director of Cigna Life Insurance New Zealand Ltd
Russell Black
No changes
Brian Harrison
Ceased as Director of Secure Future Wiri Holdings Ltd Ceased as Director of Secure Future Wiri Ltd
19. Directors' remuneration
(included in General expenses in the Statement of Financial Performance) 30 June 2020
30 June 2019
$(000)
$(000)
Sir Brian Roche (Chair)
98
98
Russell Black
49
49
Brian Harrison
49
49
Karen Jordan
49
49
Anne Urlwin
49
49
294
294
20. Directors' meeting attendance During the year 12 Board, 3 Audit & Risk Committee and 2 People & Remuneration Committee meetings were held. Attendance by each Director was as follows: Board Meetings
Audit & Risk Committee
People & Remuneration Committee
Total Meetings held
12
3
2
Sir Brian Roche (Chair)
11
3
2
Russell Black
12
3
2
Brian Harrison
12
3
2
Karen Jordan
12
3
2
Anne Urlwin
12
3
2
21. Indemnities and insurance In accordance with section 162 of the Companies Act 1993 and City Rail Link Limited’s Constitution CRL Ltd has provided a deed of indemnity to Directors for certain activities undertaken in the performance of CRL Ltd’s functions. CRL Ltd has taken out Directors’ and Officers’ Liability and Professional Indemnity insurance cover during the financial year in respect of the liability or cost of Directors and employees.
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22. Information used by Directors There were no notices from directors requesting to disclose or use Company information received in their capacity as directors that would not otherwise have been available to them.
23. Employee remuneration bands The number of employees, contractors or former employees and contractors who received remuneration and other benefits exceeding $100,000 during the year to 30 June 2020 are specified in the following table. Remuneration includes salary, any performance incentive payments, redundancy payments, employer contributions to superannuation, health and insurance plans, motor vehicle and other sundry benefits received in their capacity as employees or former employees of the Company or payments to Contractors at their agreed rates in their capacity of filling roles that would otherwise have been filled by an employee. 30 June 2019
Number of employees
Number of employees
$100,000 - $109,999
1
4
$110,000 - $119,999
5
3
$120,000 - $129,999
6
5
$130,000 - $139,999
2
6
$140,000 - $149,999
6
1
$150,000 - $159,999
2
3
$160,000 - $169,999
2
2
$170,000 - $179,999
4
4
$180,000 - $189,999
2
2
$190,000 - $199,999
2
2
$200,000 - $209,999
3
2
$210,000 - $219,999
1
2
$220,000 - $229,999
1
2
$230,000 - $239,999
1
4
$240,000 - $249,999
1
1
$250,000 - $259,999
1
1
$260,000 - $269,999
1
-
$270,000 - $279,999
1
-
$290,000 - $299,999
-
1
$300,000 - $309,999
3
1
$330,000 - $339,999
-
1
$350,000 - $359,999
1
-
$360,000 - $369,999
1
1
$380,000 - $389,999
-
1
$400,000 - $409,999
1
-
$550,000 - $559,999
-
1
$690,000 - $699,999
1
-
49
50
68
GOVERNANCE AND REMUNERATION DISCLOSURES
30 June 2020
Financial Report
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
24. Chief Executive and Executive remuneration Number of Personnel
Fixed Remuneration
Short Term Incentive
Other Benefits
$(000)
$(000)
$(000)
Sean Sweeney (Chief Executive) FY20
1
610
82
-
FY19
1
550
-
-
FY20
9
2,885
-
103
FY19
12
3,205
-
29
Executive remuneration (excluding CEO)
The Chief Executive's short term incentive was based on 2018/2019 performance. Other benefits paid to the executive team relate to KiwiSaver employer contributions. If the number of personnel were reported as FTE the number of Senior Managers would have been 10 FTE (2019: 11 FTE).
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Independent Auditor’s Report To the readers of City Rail Link Limited’s financial statements and performance information for the year ended 30 June 2020 The Auditor-General is the auditor of City Rail Link Limited (the company). The Auditor-General has appointed me, JR Smaill, using the staff and resources of Audit New Zealand, to carry out the audit of the financial statements and the performance information, including the performance information for an appropriation, of the company on his behalf.
Opinion We have audited: •
the financial statements of the company on pages 43 to 69 that comprise the statement of financial position as at 30 June 2020, the statement of financial performance, statement of changes in equity and statement of cash flows for the year ended on that date and the notes to the financial statements including a summary of significant accounting policies and other explanatory information; and
•
the performance information of the company on pages 9 to 18.
In our opinion: •
the financial statements of the company on pages 43 to 69: ¡
•
•
its financial position as at 30 June 2020; and
•
its financial performance and cash flows for the year then ended; and AUDIT REPORT
¡
present fairly, in all material respects:
comply with generally accepted accounting practice in New Zealand in accordance with Public Benefit Reporting Standards; and
the performance information on pages 9 to 18: ¡
presents fairly, in all material respects, the company’s performance for the year ended 30 June 2020, including: •
for each class of reportable outputs: •
•
its standards of delivery performance achieved as compared with forecasts included in the statement of performance expectations for the financial year; and its actual revenue and output expenses as compared with the forecasts included in the statement of performance expectations for the financial year; and 70
CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
•
•
¡
Financial Report
what has been achieved with the appropriation; the actual expenses or capital expenditure incurred compared with the appropriated or forecast expenses or capital expenditure; and
complies with generally accepted accounting practice in New Zealand.
Our audit was completed on 22 September 2020.This is the date at which our opinion is expressed. The basis for our opinion is explained below, and we draw attention to the impact of Covid-19 on the company. In addition, we outline the responsibilities of the Board and our responsibilities relating to the financial statements and the performance information, we comment on other information, and we explain our independence.
Emphasis of matter – Impact of Covid-19 Without modifying our opinion, we draw attention to the disclosures about the impact of Covid-19 on the company as set out in note 1.16(v) on pages 51 and 52 of the financial statements and on page 9 of the statement of performance.
Basis for our opinion We carried out our audit in accordance with the Auditor-General’s Auditing Standards, which incorporate the Professional and Ethical Standards and the International Standards on Auditing (New Zealand) issued by the New Zealand Auditing and Assurance Standards Board. Our responsibilities under those standards are further described in the Responsibilities of the auditor section of our report. We have fulfilled our responsibilities in accordance with the Auditor-General’s Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of the Board for the financial statements and the performance information The Board is responsible on behalf of the company for preparing financial statements and performance information that are fairly presented and comply with generally accepted accounting practice in New Zealand. The Board is responsible for such internal control as it determines is necessary to enable it to prepare financial statements and performance information that are free from material misstatement, whether due to fraud or error. In preparing the financial statements and the performance information, the Board is responsible on behalf of the company for assessing the company’s ability to continue as a going concern. The Board is also responsible for disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless there is an intention to merge or to terminate the activities of the company, or there is no realistic alternative but to do so. The Board’s responsibilities arise from the Crown Entities Act 2004 and the Public Finance Act 1989.
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Responsibilities of the auditor for the audit of the financial statements and the performance information Our objectives are to obtain reasonable assurance about whether the financial statements and the performance information, as a whole, are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit carried out in accordance with the Auditor-General’s Auditing Standards will always detect a material misstatement when it exists. Misstatements are differences or omissions of amounts or disclosures, and can arise from fraud or error. Misstatements are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of readers, taken on the basis of these financial statements and the performance information. For the budget information reported in the financial statements and the performance information, our procedures were limited to checking that the information agreed to the company’s statement of performance expectations. We did not evaluate the security and controls over the electronic publication of the financial statements and the performance information. As part of an audit in accordance with the Auditor-General’s Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. Also: We identify and assess the risks of material misstatement of the financial statements and the performance information, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
•
We obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control.
•
We evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board.
•
We evaluate the appropriateness of the reported performance information within the company’s framework for reporting its performance.
•
We conclude on the appropriateness of the use of the going concern basis of accounting by the Board and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements and the performance information or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
AUDIT REPORT
•
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CITY RAIL LINK LIMITED ANNUAL REPORT 2019 - 2020
•
Financial Report
We evaluate the overall presentation, structure and content of the financial statements and the performance information, including the disclosures, and whether the financial statements and the performance information represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with the Board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Our responsibilities arise from the Public Audit Act 2001.
Other information The Board is responsible for the other information. The other information comprises the information included on pages 1 to 8 and pages 19 to 42, but does not include the financial statements and the performance information, and our auditor’s report thereon. Our opinion on the financial statements and the performance information does not cover the other information and we do not express any form of audit opinion or assurance conclusion thereon. In connection with our audit of the financial statements and the performance information, our responsibility is to read the other information. In doing so, we consider whether the other information is materially inconsistent with the financial statements and the performance information or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on our work, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Independence We are independent of the company in accordance with the independence requirements of the Auditor-General’s Auditing Standards, which incorporate the independence requirements of Professional and Ethical Standard 1 (Revised): Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing and Assurance Standards Board. In addition to the audit we have carried out a performance audit of the City Rail Link project’s governance arrangements which are compatible with those independence requirements. Other than the audit and the performance audit, we have no relationship with or interests in the company.
JR Smaill Audit New Zealand On behalf of the Auditor-General Auckland, New Zealand
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AUDIT REPORT
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CRLL0312 Annual Report 2019-2020
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