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Rail agency Ontrack says it was close to abandoning a major Auckland project - a 1.1km trench through New Lynn - before controlling a threatened $50 million cost blowout.
Even with a radical new design to contain costs, it still expects to add $20 million to a budget of $140 million.
Waitakere City is contributing $20 million of that, having persuaded the Government to dig the trench to help remove serious traffic bottlenecks by laying duplicate rail tracks beneath - rather than across - heavily congested roads.
Mayor Bob Harvey said after Finance Minister Michael Cullen approved the project that it would save the town from being "devastated" by increasing traffic volumes queuing back from the notorious Clark St rail-crossing roundabout.
His city intends spending a further $53 million on roading improvements above the trench, and Auckland Regional Council will pay $12.55 million towards a new below-ground railway station.
But although Ontrack signed the main development contract on Friday with a Fletcher Construction-led consortium, senior official Ted Calvert says the project was in doubt before the company provided a new design to reduce the threatened cost blowout.
"We don't like to deliver projects over budget, so from Ontrack's point of view we weren't willing to proceed with the project at that stage," he said.
He blamed the cost increase on having to build the trench as an enclosed "dry" structure, to guard against any protracted legal challenges from property owners, and on deeper bedrock and poorer clay than envisaged.
He said project engineers were confident of minimal ground settlement from a more open structure, but foresaw difficulties persuading neighbours to share their confidence.
The deeper bedrock would also have meant much larger and costlier walls than expected, of up to 45m below the surface, before the Fletcher consortium provided a new scheme by which the trench would be built as a reinforced-concrete box structure to be supported by long piles.
Mr Calvert said although the setback had delayed the project by six months, he expected major construction to start in September-October for completion in about mid-2010.
