$850m Transmission Gully project gets green light
Construction of the Transmission Gully motorway north of Wellington has finally been given the green light, and its true cost has finally been revealed.
The Government today inked a public-private partnership deal that will see the first sod turned later this year, almost a century after the project was first mooted.
While resource consent was granted back in 2012, the motorway's fate was not assured until a contract had been hashed out with the Australian-led consortium that will build it.
Today's deal means taxpayers finally know how much the 27-kilometre four-lane link between Linden, south of Porirua, and McKays Crossing, north of Paekakariki, will cost them.
Construction works out to be $850 million in today's dollars, which is $25m less than it would have cost if the transport agency built the motorway
The Government will begin paying that off in yearly installments over 25 years once Transmission Gully is open to traffic in 2020.
But by the time inflation, interest and a quarter-century of maintenance costs have been added on top, taxpayers will have handed over about $3.1 billion.
The agency is still considering whether to toll the road in order to off-set some of that cost.
The New Zealand Transport Agency says Transmission Gully will save motorists 7.3 minutes heading south and 6.3 minutes heading north during periods of heavy congestion.
The road is also a key component of the Government's $2.6 billion project to build a 110km four-lane expressway between Levin and Wellington Airport, which will slash about 40 minutes off that journey during the morning peak.
Motorists will also enjoy a safer option than the existing coastal State Highway 1 route through Porirua and Pukerua Bay, which is prone to traffic accidents and closures.
The motorway will also provide Wellingtonians with a second route out of the capital in the wake of a natural disaster. The business consortium, known as the Wellington Gateway Partnership, is led by Australian company Leighton Contractors, owned by ASX-listed Leighton Holdings.
HEB Construction, InfraRed Infrastructure General Partnership, The Bank of Tokyo–Mitsubishi and the Accident Compensation Corporation (ACC) are the other members that will finance, design, build, operate and maintain Transmission Gully for 25 years.
It will be the first state highway project in this country to be built as a public private partnership.
The deal means construction can begin a year earlier than it would have if the transport agency built the motorway.
Construction will involve building 28 bridges, a number of complex interchanges and the movement of more than six million square metres of earthworks.
TRANSMISSION GULLY TIMELINE
June 5, 1919: First known mention of an alternative route for SH1 through Transmission Gully appears in The Evening Post newspaper.
1940s: American WWII soldiers stationed in New Zealand thought to have offered to help build it. Cost estimated at $210 million
1980s: Idea subjected to more thorough investigation
1996: Consent sought to include the proposed Transmission Gully route in local district plans.
2005: Government commits $405m to improve road transport between Linden and McKays Crossing. Independent review puts the cost at $1.1 billion.
2006: Greater Wellington Regional Council includes Transmission Gully in its 10-year transport strategy. Land Transport NZ approves $9.2m in funding for investigations.
2007: Early design and geotechnical work begins.
2008: Public consulted on preferred route.
December 2009: National Government commits to building Transmission Gully part of its $2.6 billion road of national significance project from Wellington Airport to Levin.
October 2010: Public consulted on design and environmental matters.
August 2011: Resource consent applications lodged by the transport agency and Porirua City Council.
October 2011: Government fast-tracks the process by directing applications to a board of inquiry.
June 2012: The board approves resource consent after a month-long hearing.
November 2012: Cabinet gives the transport agency approval to finance and build Transmission Gully using a public-private partnership.
January 2013: Expressions of interest are sought from the private sector to finance, design, build, operate and maintain the motorway for 25 years.
April 2013: Government announces the Wellington Gateway Partnership and the Positive Connection consortiums have been shortlisted.
Dec 2013: Wellington Gateway Partnership chosen as the Government's preferred bidder.
Today: Both parties put pen to paper on a contract confirming the cost, annual repayments and start of construction.