Government told to 'get real' about roading costs

Contractors are furious at being blamed for a delay to a bypass southeast of Auckland needed to iron out one of New Zealand's deadliest stretches of road.

Transit NZ has postponed building the 7.2km bypass around Mangatawhiri on State Highway 2 by at least six months, after tenders due to be let by Christmas threatened to blow a $45.9 million budget.

As well as blaming soaring costs of construction materials, Transit regional manager Chris Allen said that plentiful work also meant road-building contractors were "finally making some good margins".

Contractors Federation chief executive Richard Michael yesterday denied this, saying margins remained tight throughout New Zealand, including on the booming Auckland motorway projects.

"It's certainly not a case of our industry being greedy - in fact I believe these margins are ultimately unsustainable and this can only lead to further delays."

He said it was time for the Government to "get real" about the true costs of projects such as Mangatawhiri, and to appreciate that contractors had to invest heavily to get to the starting line.

"For every $1 billion worth of contracts, the industry has to invest $200 million to $300 million in equipment and resourcing to make sure we can deliver."

Mr Michael called on the Government to join his industry in developing a 10-year infrastructure plan.

The Mangatawhiri stretch has claimed the lives of eight of up to 40 people killed in the past five years on the 35km section of highway between Pokeno and the turnoff to Thames.

Although Transit is working with several bidders to find ways to make the project fit the budget, approved by Government funding agency Land Transport New Zealand, construction is now unlikely to start before next spring.

Stephen Selwood, chief executive of Council for Infrastructure Development, also pointed to a delay by Land Transport NZ in granting almost $20 million needed to build a bypass around a notorious crash zone at Bell Block near New Plymouth.