Statement of Performance Expectations Targets and Measures for 2022-23 The performance targets and measures (targets) for 2022-23 have been established by CRL Ltd management with input from the CRL Ltd Board and Sponsors. These targets are considered relevant in providing to stakeholders and readers of this Statement of Performance Expectations a strong indication of progress of the project across both construction and non-construction activities.
Disclosure of judgements and assumptions In preparing the Statement of Performance Expectations CRL Ltd has made judgements on the application of the reporting standards and has made estimates and assumptions concerning the future. The estimates and assumptions may differ from the subsequent actual results. Covid-19 continues to have a significant impact on the project both in costs and time (past, present and into the future). These impacts include a disrupted supply chain and skilled labour shortages. CRL Ltd is still assessing and determining the impact of Covid-19.
Performance Measures We discuss below some of the changes to the targets from the prior year and in particular new targets. We note which of the targets below are externally verified and any linkages between financial statements and service reporting. Service reporting will be addressed in CRL Ltd’s Annual Report through the comprehensive Project Overview. With Project Delivery, the performance targets and measures (“targets”) reflect the build stage of the project with early works contracts now complete and with most major works being delivered by the Link Alliance (C3/5/7) apart from the C8 Newmarket and C9 Britomart East works. Project delivery performance targets all relate to these Link Alliance works with C8 and C9 completion expected beyond FY23. As the majority of the Link Alliance works only fully complete towards the end of the project, we have selected key milestones within each of the station works that are expected to be completed within FY23. Measuring interim
key milestones helps provide a useful indication of project momentum within the overall construction programme. Health and Safety is fundamental to the project’s activities and this year we have added a further measure to reflect this. The Health and Safety Performance Index (HSPI) provides CRL Ltd and Link Alliance an overall metric that measures a number of leading and lag Health and Safety indicators that are combined to provide an overall indication of performance. The HSPI was developed in the UK and is used on other major international projects. The chosen score of 80 (out of 100) is based off international standards and represents a stretch target for the NZ construction industry. The supporting data for the HSPI score is provided by Link Alliance and reviewed by CRL Ltd. In addition, CRL Ltd are targeting an increased number of areas achieved in the risk management maturity model (RM3). RM3 provides a system to assess and facilitate continuous improvement of CRL and our construction partners health & safety management systems with results externally reviewed. The RM3 model and progress will be detailed in the CRL Ltd Annual Report. The Funding Envelope targets are unchanged. The appropriation of $514m represents the Crown’s 50% share of the total budgeted funding for FY23 of $1,028m. This amount reflects the peak construction year for the project and whilst difficult to be precise with construction spend due to challenges with Covid, supply chain disruption and any unforeseen construction challenges this remains a relevant target for the project and to facilitate budgeting by our Sponsors. The actual project funding is recorded in the CRL Ltd financial statements Statement of Cashflow. It is also important that CRL Ltd continues to maintain a tight discipline over corporate costs. The Sustainability and Social Outcomes are measures consistent with prior years with CRL Ltd continuing to work towards sustainability excellence but now fully focused on the Project Alliance Agreement with Link Alliance for the C3 works. The project’s sustainability performance is externally verified using the Australian based
City Rail Link Limited | Statement of Performance Expectations
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