The Australian engineering firm tasked with building Auckland City Rail Link's underground network has gone into administration.
The New Zealand arm of a troubled Australian engineering and infrastructure business remains working on New Zealand's largest infrastructure project, unaffected by woes across the Tasman.
Sean Sweeney, City Rail Link chief executive, said the New Zealand-registered company RCR Infrastructure (New Zealand) is in a joint venture to deliver a $50m contract as part of the $3.4b billion train tunnel project and nothing had changed.
Companies Office records show RCR Infrastructure (New Zealand) is not in voluntary administration despite its parent RCR Tomlinson in Australian suffering that fate.
Sweeney said nothing had changed with the New Zealand company contracted to CRL.
Australian-headquartered RCR Tomlinson yesterday went into voluntary administration with talk the huge business could be broken up.
"Administrators have not been appointed to RCR Infrastructure [New Zealand] which won the $50m contract with WSP Opus International," Sweeney said this morning.
In Australia, McGrathNicol has been appointed administrators for RCR Tomlinson and this afternoon Sweeney plans to meet McGrathNicol's Andrew Grenfell to discuss the situation.
He does not anticipate any change in circumstances and expects the contract to continue through to completion early next year.
"The work has not stopped. We have engaged RCR and Opus to deliver design solutions for the rail systems like power and controls. They're being paid to deliver that design at the moment and they're working on it today," Sweeney said.
The joint venture is understood to be around 75 per cent Opus staff.
Grenfell said today: "The New Zealand entities of RCR are not in voluntary administration. My Australian colleagues are running the Australian part of the business. The New Zealand entities are still under the control of local management and local boards."
Andrew Stevens is running RCR in New Zealand which has businesses registered in infrastructure, engineering and building products.
Opus and RCR Infrastructure (New Zealand) was awarded the contract last month to build the systems for the underground network, such as the tracks, signalling and control systems, in a joint venture with design partners WSP Opus.
The main contract for building the twin underground tunnels between the city end and Mt Eden station is due to be awarded by City Rail Link Ltd next year.
In a statement issued this morning, City Rail Link Ltd (CRLL) said "as is prudent, CRLL is assembling a range of contingency plans".
Sweeney told Newstalk ZB this morning that he had asked the New Zealand manager what their intentions were and was having that meeting later today. He said he would also be talking to the receiver.
In a statement, CRLL said the joint venture currently is 75 per cent staffed by WSP Opus.
Just two days ago RCR Tomlinson was advertising for staff to work on the Auckland rail project, which is the largest transport infrastructure project ever to be undertaken in New Zealand.
The project, due for completion in 2024, would allow the rail network to at least double capacity.
Yesterday a statement from RCR interim chief executive Bruce James said administrators from McGrathNicol had been appointed to the company and its subsidiaries.
James said directors took the step because the company was unable to secure extra funding.
McGrathNicol said it was assessing the business and urgently seeking funding from RCR's financiers.
In late August, the company conducted a A$100m equity raising at a heavily discounted price of $1 a share in an unpopular move because that diluted existing shareholders.
It has about 3000 employees here and in Australia and in August, managing director Paul Dalgleish quit just before the contractor wrote down A$57m from its Daydream and Hayman solar farms contract in Queensland.
McGrathNicol said in a statement it was urgently seeking funding and would commence a sales process shortly, raising questions for the company's staff.
"The administrators will work closely with RCR's employees, suppliers and customers to quickly stabilise operations and to determine the appropriate strategy for the business."
Just this week RCR Tomlinson posted an advertisement for a range of City Rail Link jobs, including a range of engineering and management positions.
At the time of awarding the contract, Sweeney said it was a "major milestone for a project that will deliver significant benefits for Auckland".
"The joint venture brings with it a wealth of experience both here and overseas and once again shows the calibre of talent wanting to be part of delivering this important project that will transform the way people move and live in Auckland," Sweeney said on October 11.
CRL, estimated to cost $3.4b, is a joint project between Auckland Council and the Government, sharing the costs 50:50.
Transport Minister Phil Twyford said he had asked for a briefing from CRLL and will continue to monitor the situation.
Auckland deputy mayor Bill Cashmore said this morning on social media that there were "options planned for just this kind of incident".
"Big projects are complicated and this is NZ's biggest project shared equally between the Crown and council through CRLL."
What is the City Rail Link?
The City Rail Link project.
• The CRL is a 3.45km twin-tunnel underground rail link up to 42 metres below the city centre transforming the downtown Britomart Transport Centre into a two-way through-station that better connects the Auckland rail network.
• The project allows the rail network to at least double rail capacity. New rail transport growth statistics suggest that by 2035, CRL stations will need to cope with 54,000 passengers an hour at peak travel times, rather than the original estimate of 36,000.
• It includes a redeveloped Mt Eden Station, where the CRL connects with the North Auckland (Western Line) and new underground stations - one mid-town at Wellesley and Victoria Sts provisionally named Aotea and at Karangahape Rd - provisionally named Karangahape with entrances at both Mercury Lane and Beresford Square • The CRL is designed to improve travel options and journey times. From Mt Eden Station it will take only three minutes to get to the uptown Karangahape Station, six minutes to the mid-town Aotea Station and nine minutes to the downtown Britomart Station.
• The CRL will extend the existing rail line underground through Britomart, to Albert, Vincent and Pitt Sts, and then cross beneath Karangahape Rd and the Central Motorway Junction to Symonds St before rising to join the western line at Eden Terrace where the Mt Eden Station is. Mt Eden Station will be significantly re-developed.
