The Government is increasing its investment in the New Zealand Upgrade Programme (NZUP) to support New Zealand’s economic recovery.

Over two thirds of the projects will proceed as announced despite increased costs due to COVID, with modifications being made to others.

“NZUP is already supporting over 1,000 jobs with 13 projects underway, helping to secure our economic recovery,” Grant Robertson said.

“COVID-19 has increased construction costs around the world, and we’ve done the work upfront to understand the impact on NZUP projects which were announced pre-pandemic.

“Fully funding the new estimated costs for every project would have cost up to $6 billion extra on top of the original $6.8 billion, so instead we’ve taken a balanced approach with a mix of additional investment and a handful of projects being re-scoped while also keeping a lid on debt.

“We are using an additional $1.9 billion set aside in the multi-year capital allowance to support our targeted investments – this is being used so we can keep delivering projects and creating jobs across the country to support our recovery,” Grant Robertson said.

Michael Wood said in light of the increased costs and climate commitments, it was important to take another look at the programme.

“Recognising the need to decarbonise our transport system, we’re rebalancing the package to increase investment in rail, public transport and walking and cycling.

“If we had proceeded with Mill Road as originally scoped, it would have cost up to $3.5 billion and at peak produced six tonnes of CO2 emissions a day. Instead, we’ve focused on delivering important safety improvements to Mill Road, upgrades to SH1 and rail, and new rail stations connected to public transport, walking and cycling infrastructure. This rebalanced package helps manage debt, reduces emissions and supports housing growth.

“The Marsden Point rail spur will be a strategic investment in Northland’s future prosperity, getting heavy trucks off the road to make the highway safer, and reduce emissions. We know safety on SH1 is a concern for locals, so there will be targeted safety upgrades, including median barriers, along the route.

“Meeting our commitment to decarbonising transport means that we have to start doing things differently. This re-balanced NZUP package shows our intent, and to guide future investment I intend to amend the Government Policy Statement on land transport to provide Waka Kotahi with the clarity it needs to make investments consistent with our country’s decarbonisation goals,” Michael Wood said.

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