Transmission Gully a public-private partnership

Last updated 13:21 21/11/2012

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Transmission Gully

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Transmission Gully users may still have to pay a toll despite a public-private partnership paying for the $1.3 billion highway.

Transport Minister Gerry Brownlee announced today that he had given the NZ Transport Agency consent to pursue private funding for the planned 27-kilometre, four-lane link between Linden and McKay's Crossing north of Wellington.

The deal would allow construction to start in 2014 - a year earlier than expected - with completion in 2020.

NZ Transport Agency chief executive Geoff Dangerfield said that while tolling will not be specifically linked to the PPP contract for Transmission Gully, Mr Brownlee still wanted the agency to investigate its merits.

Tolling would offset some of the annual costs required to be met by the National Land Transport Fund, which is made up of road-user charges and fuel taxes.

''We will look into the details of the tolling scheme in the new year, and once complete, we would consult with affected communities and stakeholders.''

Mr Dangerfield said Transmission Gully was a strong candidate for a PPP, given its size and complexity.

A private sector consortium would be responsible for financing, designing, building, maintaining and operating the highway for up to 25 years, but full ownership would remain with the public sector.

The Transmission Gully contract would also be performance-based, Mr Dangerfield said.

''The first payments will only be made to the contractor after the project has been completed to the standards set out in the contract, and any cost increases due to delays would be paid for by the contractor - not the public.''

The annual payments are likely to be in the order of $120 to $130 million per year.

A short list of PPP consortia is expected to be identified by April next year and, subject to final borrowing approval, a contract will be awarded by mid-2014.

The Transmission Gully project was first mooted almost a century ago. After decades of political wrangling, it received consent from an independent board of inquiry in June.

It will shave 10 minutes off motorists' peak-time journeys between Kapiti and Wellington and provide an alternative major route out of the city in the event of a natural disaster.

The current design and construction cost estimate is roughly $1 billion, in 2020 dollars. But under the debt-funding arrangements of a PPP, the cost upon completion will likely be about $1.3 billion, including accumulated interest during the construction phase.

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Contact Michael Forbes
Transport and metro reporter
Twitter: @michael_forbes

- The Dominion Post


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