Gully funding shortfall 'to get worse'

Last updated 23:59 11/07/2008

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A $600 million shortfall that needs to be found before bulldozers can move on Transmission Gully will continue to grow the longer the highway remains on the drawing board.

The Government has committed $405 million to the project and has indicated it could use a public-private partnership to help fund the road, but local governments will still face a massive bill.

National leader John Key hinted yesterday that his party would consider sinking more government cash into the Gully route if elected.

Wellington Mayor Kerry Prendergast says the highway can-not be built unless millions more in central funding is poured into the project. Though local mayors back the route, they say a new funding formula is needed to get it built.

Chris Olsen, chief executive of Roading New Zealand, which represents roading contractors, said the longer the shortfall remained, the bigger it would become.

Rapidly increasing diesel costs would push the 26-kilometre highway's price up, he said.

"In terms of escalation in costs, the biggest risk would be the earthworks at Transmission Gully. That component would use huge quantities of fuel for the scrapers and the bulldozers," he said.

"If the price of diesel continues to go up and stay high, then that would be one of the most significant issues on the cost escalations. Bitumen could be significant as well. But who knows what it will be by the time construction comes."

Transit New Zealand issued yesterday its slimmed-down preferred version of the proposed highway, a route that is $275 million cheaper than the old designation. It moves the highway a step closer to being built, but a major funding hurdle remains. Local councils have to find $600 million by the end of next year, a funding gap that will continue to grow as inflation and material and construction costs increase.

Transit has lowered the highway's cost by trimming one major intersection and a two-kilometre viaduct that would have crossed the Ohariu Fault and cost hundreds of millions more dollars.

Mr Key said there was a "reasonably substantial shortfall" that needed to be met. His party, if elected, would look at increasing the Crown contribution.

"It's a possibility. We need to put it into the mix. It's a big issue and obviously things can move around. There's got to be a point where it works."

National would also introduce a greater use of debt-funding and relax provisions for public-private partnerships for major projects such as Transmission Gully.

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"I think it can be built. A solution is going to have to be found."

The Greens say that the solution is to mothball the highway altogether. Transport spokeswoman Sue Kedgley said money should be invested in public transport instead, and co-leader Russel Norman said increasing petrol costs would make the highway a "white elephant".

"The Gully route is an insatiable drain on transport funds and no one is willing, or able, to stump up such vast amounts of money," Ms Kedgley said.

- © Fairfax NZ News