Bump in the road: What the Delta outbreak means for Transmission Gully opening

A lone worker inspecting a section of Transmission Gully during lockdown. Photo / Mark Mitchell

ANALYSIS:

Transmission Gully will almost certainly not be opening in a month's time on September 27 as scheduled. But it's not the first time Wellingtonians have been given a completion date for the billion-dollar motorway, only to be let down.

When Prime Minister Jacinda Ardern announced the country was going into lockdown after a case of Covid-19 was discovered in Auckland, Transmission Gully's fate felt sealed.

So it was no surprise when Transport Minister Michael Wood told a select committee earlier this week that alert level 4 restrictions would likely impact the completion date of the road.

The four-lane motorway is being built through a public-private partnership (PPP), the Wellington Gateway Partnership (WGP), with CPB Contractors and HEB Construction subcontracted to carry out the design and construction.

Whether the road would open in September was already in question prior to the current Delta outbreak.

A Greater Wellington Regional Council report from earlier this month raised concerns about the number of outstanding resource consent requirements for the project.

It said there was a risk the 44 tasks in need of sign-off would not be sorted out in time, leading council chairman Daran Ponter to say he was nervous.

But even before that it was clear Waka Kotahi NZ Transport Agency did not share the builder's confidence the road was going to open on time either.

The agency dedicated an entire press release to just how much work was left to be done on the road in a short window of time.

It's too early to say how long the opening date of Transmission Gully will be delayed for.

Transmission Gully was meant to open on September 27. Photo / Mark Mitchell

During alert level 4 restrictions essential activities are allowed to be carried out to ensure security, safety, and environmental protection.

Today Cabinet will consider any alert level changes for areas outside of Auckland. The Prime Minister will announce any decisions at 3pm.

But it's unclear what any move to alert level 3 would mean for Transmission Gully.

Wellington Gateway Partnership CEO Sergio Mejía said they were working with subcontractors to determine what site works could be safely re-started under those restrictions.

"A decision to recommence any activity on site must consider NZ Government Covid directions, covid hygiene, physical distancing and operational health and safety requirements."

As Wood pointed out to the Transport and Infrastructure Select Committee, the length of the lockdown doesn't necessarily equate to the length of any resulting delay to the road opening.

Furthermore, a new completion date will not be set until after negotiations between Waka Kotahi and the builder have come to a conclusion.

Late time the entire country was in lockdown in 2020 these negotiations started about halfway through alert level 4.

An announcement outlining the settlement and new completion date wasn't made until August 21.

That's about four months of negotiations.

This time around the country went into lockdown when the road was 98 per cent complete.

Truck and trailer units parked alongside a section of the Transmission Gully project during lockdown. Photo / Mark Mitchell

All parties involved are probably hoping any negotiations won't be as painful.

The other big question is whether a delay to the road opening will result in penalties for the builder.

The builder is liable for $250,000-a-day in damages if the road doesn't open on time.

Furthermore, $7.5 million of a $145.5m settlement covering the cost impacts of the last lockdown will not be paid out if the road is late.

But Waka Kotahi has confirmed alert levels 3 and 4 trigger the force majeure clause in the contract.

This is sometimes referred to as an "act of god" event. It means something has happened outside of the affected party's control, like Covid-19, and is relieved from contractual obligations as a result.

Waka Kotahi transport services general manager Brett Gliddon said he suspected the current Covid-19 outbreak would result in the road's opening date being moved out.

"There will be some costs associated with that", he said.

This suggests more settlement money will be involved, on top of the hundreds of millions of dollars Waka Kotahi has already paid out to the builder.

National's transport spokesman Michael Woodhouse has rightfully asked for assurances any settlement will be exclusive to the impacts of Covid-19 and will not cover any other issues the builder was already facing.

Brett Gliddon has confirmed any negotiations would be "solely" focused on the fallout from Covid-19.

"It won't be about giving them relief for other losses they've incurred on the project, if they've incurred them, or time relief for activities that they haven't done in accordance with the project."

The construction of Transmission Gully doesn't get any special treatment in a pandemic just because Waka Kotahi is involved.

It has been disrupted just like other businesses, projects, and lives.

But Covid-19 is not the first bump in the road for this 27 kilometre motorway.

The public will expect the partnership to be kept on a tight leash in the final hurdle to open the long-awaited road.