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Green light for Transmission Gully PPP

Hon Gerry Brownlee
Minister of Transport

21 November 2012 Media Statement

Green light for Transmission Gully PPP

Transport Minister Gerry Brownlee says Cabinet has approved an application from the NZ Transport Agency to pursue a Public-Private Partnership (PPP) to finance and build the Transmission Gully highway, part of the Wellington Northern Corridor Road of National Significance.

“A Board of Inquiry appointed by the Minister for the Environment approved the resource consents and notices required for this project in June, and in August I requested the NZTA to assess the suitability of using a PPP procurement model to design and build the highway,” Mr Brownlee says.

“Following an extensive business case analysis, the NZTA determined that the project meets Treasury’s criteria for a PPP procurement model, and on that basis Cabinet has given the NZTA approval to finance and build the Transmission Gully highway using a PPP.”

Mr Brownlee says the decision will bring certainty to a project that has been on the books for many years, and allow the NZTA to move ahead to begin construction of the Transmission Gully project in 2014 and open the road by 2020, delivering the economic and safety benefits to New Zealanders within eight years.

“PPPs have a proven track record for delivering great results for large-scale infrastructure, and using a PPP makes good sense for Transmission Gully.

“The size and complexity of the project means it will benefit from the innovation the private sector will bring to the task.

“Because a private consortium will finance construction and the NZTA will repay the cost over 25 years, the road can be built now and the costs can be shared by those who will benefit from the project in the future.”

Mr Brownlee says the Government had signalled the likelihood of using a PPP arrangement to progress Transmission Gully as early as March 2009, when the Roads of National Significance Programme was first announced.

“An alternative state highway route into the capital through Transmission Gully has been talked about for decades, and this Government is committed to making it a reality.

“Today marks another step towards fulfilling that commitment and providing a safer and more reliable route in and out of the capital.

“The Wellington region has been waiting for Transmission Gully for over 70 years.

“Wellington is currently reliant on a two-lane highway that has trouble coping in peak times, and is vulnerable to closure in the event of crashes and natural disasters.

“Our capital city deserves better if it’s to reach its full economic potential, and the Transmission Gully route will help to unlock that potential.

“Transmission Gully will provide a safer, more secure strategic route in and out of Wellington that will cater for the increased traffic and freight demands that come with a growing city, and as part of the Wellington Northern Corridor it will dramatically improve travel times between Wellington and the lower North Island.”

Mr Brownlee says that while tolling will not be part of the PPP contract for Transmission Gully, he has requested the NZTA investigate the merits of tolling the route in order to offset some of the costs of construction.

“The NZTA will look into the details of a tolling scheme in the New Year, and a decision on tolling will be made separately; progressing Transmission Gully as a PPP is not dependent on tolling the route.”

Transmission Gully is part of the Wellington Northern Corridor Road of National Significance, which stretches from Wellington Airport and up the Kapiti Coast. The Wellington Northern Corridor is one of seven roads of national significance which the Government has identified as essential state highways which require upgrading to reduce congestion, improve safety and support economic growth.

For more information visit www.nzta.govt.nz/projects/transmission-gully/ppp.html

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