Construction of the B2B (Baypark to Bayfair) Project is progressing closer to its 2023 completion date, with work on a flyover at Bayfair underway. Photo / Mead Norton
The cost of major Bay of Plenty state highway projects has almost doubled - going from $632 million to $1.2 billion - because of shortages in materials, the impact of Covid-19 and other delays.
Only one of the eight projects, costing $10m or more, remains on budget and on time.
Figures provided through the Official Information Act revealed one of the highest increases from Waka Kotahi NZ Transport Agency's original budget involves Stage 1 of Tauranga's Takitimu North Link project, which swelled from a budget of $286m in 2018 to $655m.
Asked for reasons behind the cost increase, transport agency national manager of infrastructure delivery Mark Kinvig said there had been significant changes to the project since it was first approved.
"Takitimu North Link is going to deliver to a significantly different scope than was planned ... there have been changes in specifications for roading projects, such as design and safety standards, consenting and environmental requirements ... and increased sized requirements for construction zones for earthworks and embankments.
"These factors, along with the additional space for the walking and cycling path and associated earthworks and safety features, contributed to an increased scope and cost adjustment."
These also included increased construction costs including higher prices for materials and resources, the Climate Change Commission's recommendation for halved transport emissions by 2035, and "significant risks" such as international price escalation prompting the need for "larger contingencies to manage cost risks", Kinvig said.
"Like the rest of New Zealand and other parts of the world, we continue to face challenges related to the impacts of Covid-19, a constrained labour market, supply chain issues and cost escalations."
The budget for Tauranga's longsome B2B (Baypark to Bayfair) project also soared, more than doubling from its 2017 budget of $120m to $262m.
The Bay of Plenty Times has previously reported on unforeseen ground conditions and pedestrian and cyclist enhancements increasing the budget and completion date, which was now late 2023 instead of 2020.
Kinvig said there was "significant ground strengthening works" needed for the B2B "and an extensive amount of reprogramming work" was done in 2020 as a result of the issues with the ground conditions.
Asked for examples of increased costs of construction materials, transport agency regional manager of transport services Jo Wilton said the price of diesel, a key input in construction projects, had almost doubled in the past year.
"Another key road construction material, bitumen, is at a 10-year high. Steel is also driven by similar international demand and shipping constraints, where the local price has risen by more than 30 per cent over the past year," Wilton said.
Western Bay of Plenty mayor Garry Webber has long advocated for greater investment from the Government in State Highway 2 between Tauranga and Katikati and felt the increased TNL cost was ultimately worth it.
"If you go back to the original $200m or so, that was quite some considerable time ago and it was more of an estimation than a fully calculated, financially analysed project," Webber said.
"This is the [result of] normal escalation."
The route had "many issues" including challenging and swampy geotechnical terrain and bridges, Webber said.
"The thing that heartens me the most is at least they are going to do it. We are past the talking stage. It's great the project is progressing to be completed by 2026."
Construction on the project began in May.
The 2019 budget for SH2 Waihī to Ōmokoroa safety improvements also increased, rising from $101m to $169m. Its completion date has been delayed a year from 2024 to 2025.
This was because of an increased scope of the project, approved in December 2021, to include extra infrastructure.
In Rotorua, a 2016 budget for SH33 Te Ngae Junction to Paengaroa was $30.4m and this was expected to be completed by June 2021. Now, the project has cost $39.6m and won't be done until March 2023.
An Ōkere Falls resident, who would not be named, said he had not seen consistent work on the SH33 project and the increased cost and delayed completion date "was destined to happen".
"I'm not seeing regular progress. There's about a 50m stretch of a footpath to be done; they started it before Christmas. Two weeks ago, a digger came and dug a part of it up, put fill in and rolled it but didn't complete it. We've had heavy rain and the top surface has been washed away, so they have to do that again.
"They are not working on this from start to finish."
The resident had little faith the current cost and completion date would remain.
"If they got stuck in, they could finish it in a week. Will it be finished by March 2023? Who knows?"
Another Ōkere Falls resident, also declining to be named, echoed such concerns, saying they would like to see a better effort in getting the project completed.
"I just want them to get it done and for me to see people there every day, not once every two weeks or so."
When concerns about the Ōkere Falls section of the project were raised in April, transport agency regional manager of infrastructure delivery Jo Wilton said it had incurred additional costs as a result of Covid and supply issues, weather and extra safety barriers and lighting also caused a delay.
The 2017 budget for Stage 1 of an SH30 Eastern Corridor Connect project also increased, going from $21.9m to $26.4m.
This was because of the Te Ngae Rd and Hamiora Place showing signs of extreme distress prompting intervention, extra work on identifying utility services, and accommodating stakeholders.
The SH30/33 Te Ngae Junction project which began in October 2020 is still expected to be completed in February 2024 but its budget has increased from $6.3m to $6.6m.
Minister of Transport Michael Wood said the Government was committed to supporting the effective movement of people and freight around the Bay of Plenty, which these projects were aiding.
He had visited the Takitimu North Link and was pleased with progress, he said.
Asked where the extra money was coming from to cover the escalating costs, and what this meant for projects not approved, Wood said: "The Government has already allocated increased contingency and put in place processes to help manage cost pressures across all New Zealand Upgrade Programme projects in mid-2021."
Costs were expected to be managed within the overall fixed funding for the upgrade programme "and ministers have regular discussions with Waka Kotahi about the impact the changing cost may have".
There was no budget change to the SH30 Eastern Corridor Stage 2 which began in September 2020 and was meant to be completed in June 2023. It is now expected to be completed in November 2023.
The SH2 Wainui Rd to Ōpōtiki project which began in March 2016 is the only project with no change to its budget or timeline. It is still expected to be completed in May 2025 and there has been no change to its budget of $32m.
