Auckland's City Rail Link tunnel boring machine breaks through into Aotea station

The tunnel boring machine at Auckland's City Rail Link has broken through into the Aotea station construction site.

But while the milestone came early, engineers say the December 2024 completion will need to be pushed back by months.

Breakthrough - a seven-month-long underground mission finally accomplished.

"The tunnel boring machine has broken through here at Aotea station. This completes the first tunnel drive," City Rail Link CEO Sean Sweeney says.

That drive started at Mt Eden in May, broke into Karangahape station in October and has now finished next to Aotea square just in time for Christmas.

"It's a great credit to the team that we have broken through two months prior to what we were expecting," Auckland Mayor Phil Goff says.

Dubbed Dame Whina Cooper, the tunnelling machine's cut into the earth, removed spoil to the surface and installed concrete panels on the walls.

It's all part of a project that will create a 3.5km link between Britomart and Mt Eden.

When fully operational 54,000 passengers an hour will use City Rail Link stations at peak times with Aotea destined to be New Zealand's busiest.

But that won't be for some time yet. Despite today's early breakthrough, the City Rail Link says there's little chance the project will be completed in three years as originally planned.

"I haven't broken the news to the minister or mayor but considering we had a December 24 opening day and the rest of the project was shut down for six weeks that's highly unlikely," Sweeney says.

"At the moment we are talking months but how many we still have to work that through."

COVID-19's to blame with lockdowns causing havoc along with labour shortages and disruptions to global supply chains.

"I think everyone would understand that the impacts of COVID will create challenges on a large scale project like this and we will just carefully work them through with the City Rail Link team over the coming months," Minister of Transport Michael Wood says.

COVID's not just slowing the timeline, it's also derailing the budget.

"The heavy construction industry is experiencing about a 25 percent cost increase in materials. That's unheard of in New Zealand," Sweeney says.

"Three years ago when we were doing the planning for this job we were predicting 2 percent a year."

So has the $4.4 billion budget blown?

"I wouldn't go that far yet," Sweeney says.

A cost too for businesses above the tunnel who have lost customers and income due to construction and road closures.

"The current compensation package is in place for two years and we have always said towards the end of that period we would then review and have appropriate compensation going forward," Wood says.

Engineers are getting ready to reassemble the machine at Mount Eden where they'll turn it around and start boring a second tunnel next year.