Roading projects blow out by $2 billion

Materials matter when it comes to constructing roads. Photo / NZME

An investigation by BusinessDesk across 14 roading projects has found final costs that were more than $2 billion – or 49 per cent higher – than the initial public estimates.

Problems with the supply of aggregate road surfacing material and poor planning of pipelines are major factors contributing to roading budget blowouts, the investigation found.

Wayne Scott, the chief executive of the Aggregate and Quarry Association NZ (AQA), said the problem with New Zealand road-building project announcements could be summed up in a question that politicians always leave unanswered: where is all the aggregate supposed to come from?

“We see this all the time, particularly with those projects requiring large quantities of [aggregate] material; there’ll just be this assumption that it’s going to be available,” he said.

Problems with aggregate are symptomatic of wider issues around infrastructure pipelines and planning, which affect all infrastructure projects.

Martin Glynn, public policy spokesperson for the Automobile Association, says while NZ does build a lot of roads overall, the problem is they are not necessarily part of a consistent pipeline of work.

This means, depending on what year it is, firms are either rapidly shedding capacity or scrambling to build it.

“We turn the tap on and off an awful lot.”

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