Work Begins on Finding Best Route for $2bn Highway

The Herald reports that:

Early community consultations are expected on route preferences for a new “road of national significance” costing up to $2 billion between Puhoi and the north of Wellsford.

That follows the Transport Agency’s awarding last week of a contract worth to $12 million for route investigation work on a proposed 38km link, entailing a four-lane extension of the Northern Gateway toll motorway to Warkworth and a dual-carriage expressway beyond that.

The investigation, by engineering and environmental specialists Sinclair Knight Mertz, is expected to take 15 months, but agency acting regional director Tommy Parker said he would be “disappointed if we are not talking about [route] options before about the middle of the year”.

 The Transport Agency fudges the poor economics of the project by saying:

…the figures were calculated by discounting the benefits at a standard 8 per cent each year after the road opens, a rate it sees as more appropriate to short-term projects.

It says if a 4 per cent discount rate could be used to reflect the longevity of the road, the economic returns could rise to $2 for every $1 spent.

I actually feel a bit for the NZTA here, basically being forced to justify a totally uneconomic project to satisfy the whims of the Minister of Transport.

Leave a comment