Big road works benefit in $1b transport plan

The Victoria Park flyover is be replaced by a tunnel. Photo / Brett Phibbs

Big roading projects such as a $320 million motorway tunnel under Victoria Park in Auckland are on the fast track under a $1 billion transport funding stimulus announced by the Government yesterday.

The Waikato Expressway between Mercer and Cambridge, and a four-lane highway from Puhoi to Wellsford, are also nominated by Transport Minister Steven Joyce as possible beneficiaries of the boost to state highway funding over three years.

Mr Joyce said Auckland rail electrification and other important public transport projects would not be sacrificed for the new roads that he and Prime Minister John Key say are essential for economic growth.

Although the Government yesterday also confirmed it was abolishing regional fuel levies intended to pay for transport projects in several parts of the country - national tax rises will replace regional levies - Mr Joyce said the Government would pick up the slack on Auckland's $1 billion-plus rail electrification to ensure it went ahead.

That shifts the burden of electrification from Aucklanders to motorists everywhere, although the Government says all New Zealanders stand to benefit from an enhanced national highway network.

Mr Joyce acknowledged some cuts would be made in funding for other modes of transport such as seafreight and walking and cycling infrastructure - apart from the 3000km national cycleway championed by Mr Key as a way of creating jobs.

But he said these would be relatively minor readjustments to increases proposed by the previous Labour-led Government.

An "efficiency dividend" from the newly merged Transport Agency would also contribute to a $420 million re-allocation of funding, which is to be added to $258 million of new capital funding and $283 million for increases to national fuel taxes.

Labour's transport spokesman, Darren Hughes, accused National of being "ideologically rooted in tar-seal" and Green Party co-leader Russel Norman said the Government was defying international thinking by boosting a "dinosaur fossil-fuel economy".

Although Aucklanders will be spared a region fuel tax rising from 2c a litre this July to 9.5c in 2011, motorists throughout the country will be stung by a two-pronged increase in petrol and diesel tax.

An initial 3c increase to the existing petrol excise of 42.5c will be levied in October - as will an equivalent rise in road user charges for diesel vehicles. Another 3c increase will be imposed next year.

Although some of that will help the Government pay for Auckland's new electric trains, Mr Joyce said all regions would be entitled to bid for a share of enlarged highway funding of about $10.7 billion over 10 years.

Auckland Regional Council chairman Mike Lee said that although his organisation welcomed the Government's commitment to electric trains, the abolition of a carefully constructed regional fuel levy raised worrying questions over the future of other critical projects such as integrated public transport ticketing and the redevelopment of railway stations and ferry terminals.

Possible shortfalls included $35 million on the new Newmarket railway station, which is already under construction, and $31 million on a contract for new diesel trains needed before the network could be electrified.

Although the minister said the Transport Agency had agreed to consider urgent bids for extra funds required for projects which had already begun, Mr Lee feared the tightening economy would make it difficult to fill the gaps left by abolishing the regional fuel levy.

North Shore City Mayor Andrew Williams last night thanked the rest of New Zealand in advance for "their generous financial contribution" to sorting out his region's transport problems.

* Who gets what ... and how much

State highway construction funding boost

$1 billion over three years to about $3 billion, or $10.7 billion over 10 years.

Where will it come from?

$420 million from "non-state highway classes" of the national land transport fund.

$258 million in new Crown capital investment (likely to be borrowed).

$283 million from national fuel tax increases of 6c a litre in two instalments, starting on October 1.

Possible accelerated state highway projects favoured by the Government:

Northbound motorway tunnel under Victoria Park (Auckland) $320 million.

Extending four-lane highway from Puhoi to Wellsford $1 billion-plus.

Completing Waikato Expressway from Mercer to Cambridge $1 billion-plus.

Christchurch Southern Motorway $180 million (already committed in February stimulus package).

Projects still with a funding question mark:

Waterview motorway tunnels (Auckland) - $2 billion-plus.

Transmission Gully motorway (Wellington) - $1 billion-plus.