Introduction
After Practical Completion, assets constructed or procured by CRL Ltd will be passed on to other parties (primarily Auckland Transport and KiwiRail Holdings Ltd) at the direction of the Sponsors. The Project will then enter a two-year defects liability period where the Link Alliance will remediate any defects in assets they have delivered.
Upon transfer of assets, the new owners will finalise their preparations for the commencement of operations before setting an Opening Day for passenger services on the City Rail Link.
Asset Completion and Transfers
As a special purpose vehicle established solely to deliver the City Rail Link Project, CRL Ltd will not own, operate, or maintain assets which are completed and delivered under the various Project contracts.
Instead, the Sponsors intend for all assets to be handed over to the ultimate asset owners, which will primarily be KiwiRail Holdings Ltd and Auckland Transport, but will also include Auckland Council (Healthy Waters) and Watercare.
The majority of infrastructure assets will be handed over following Practical Completion of C3. However, as of 30 June 2024, CRL Ltd has already transferred 19 assets with a combined asset value of $721 million (including most of the early works contracts: C6, the Ōtāhuhu and Strand portions of C8, C1 station works at Waitematā, C2 urban realm, and the NAL Down Main and Up Main) to five different asset recipients.
To achieve transfer of an asset, all documentation relating to that asset must be provided to the ultimate asset recipient to assist with the future operation and management of that asset. Documentation may include, for example, design drawings, operation and management manuals, contractor completion certificates, product and workmanship guarantees, and safety assurance reports.
Early transfer is beneficial to the ultimate asset owner because they are able to access, utilise, and operate the asset sooner, rather than waiting for Practical Completion of C3.
For the contractor, early transfer acts as formal recognition that the works are complete (except for minor “snagging” defects). The contractor is relieved of maintenance and insurance obligations, and the relevant defect liability period commences. Depending on the contract and complexity of the works, the defects liability period can be anywhere from 12 to 24 months. Over this period, the contractor is obligated to remedy defects identified by the asset owner.
With respect to some other completed assets (such as the C1, C2, and DSC tunnels), CRL Ltd has implemented a two-stage handover process. In the first stage, all Project documentation, including asset and cost information, is transferred to the ultimate asset owner. The second stage of full legal and financial handover will occur after Practical Completion. These selected assets cannot be handed over in a single stage prior to practical completion of the C3 contract because they are still an integral part of larger assets with ongoing works, and so the two-stage approach allows partial handover.
In addition to handing over all built and completed assets, any land and designations held by or for CRL Ltd must be transferred. CRL Ltd is currently undertaking a comprehensive land survey programme that is unprecedented in New Zealand in terms of scale and complexity. The Company is collaborating with Land Information New Zealand (LINZ) throughout the process to ensure the integrity of ownership and to protect the stations and tunnel infrastructure as well as the subsoil surrounding the infrastructure. This collaboration has allowed CRL Ltd and LINZ to explore survey innovations which will be helpful to the wider infrastructure industry going forward.
In November 2024, $59.5 million of service assets at Waitemata station (such as operations rooms and fire protection systems) were handed over to Auckland Transport. Further transfers are expected to be made in the coming months
