Highways hit $1 billion roadblock

Rebuilding of the one-lane Kopu Bridge near Thames has been delayed three years. Picture / Derek Flynn

New Zealand roads are facing a more than $1 billion funding squeeze over 10 years, forcing wholesale project delays from Cape Reinga to Southland.

Government agency Land Transport New Zealand disclosed last night a shortfall of $400 million for roads it is expected to pay for in conjunction with local councils - on top of a $685 million deficit for fully-funded state highways.

But chief executive Wayne Donnelly emphasised the figures were subject to change within a $22 billion land transport funding forecast to 2016, his agency's largest ever.

And no sooner had Transit New Zealand issued a draft forecast at noon yesterday of $12.4 billion for state highway construction and maintenance, than Government ministers fired out media statements promising to shore up any gaps.

"The Government is not happy with the draft 10-year programme as released by Transit New Zealand today, and is working hard to ensure the state highway programme announced last August proceeds in full," said Acting Finance Minister Trevor Mallard.

National Party leader Don Brash called on the Government to borrow its way out of an "infrastructure crisis" given that roads would serve communities for generations to come.

Automobile Association spokesman Mike Noon said delaying projects was false economy, as costs would simply keep rising in the meantime.

Transit chief executive Rick van Barneveld said his agency's spending forecast was still 9 per cent higher than one issued in August, but a reduction in expected revenue combined with higher roading costs had forced it to defer projects.

"Many projects have been deferred on average by two to three years from Northland to Southland.

"Howls of anguish will be distributed fairly evenly across the country, because this is not an impact for which one particular location has been singled out."

As well as facing a potential $685 million shortfall from Land Transport NZ, his agency has to contend with cost increases of $150 million to $300 million, including materials and labour.

Transport Minister David Parker has set up an advisory group to consider how to shrink costs, and Finance Minister Michael Cullen has instructed officials to find ways of closing the funding gap, including issuing infrastructure bonds.

Auckland is seen elsewhere as receiving favoured treatment, given a reaffirmed Transit commitment yesterday to complete the region's 35km western ring route from Manukau to Albany by 2015 as its top priority.

Hamilton City Council transport committee chairman Dave Macpherson, whose organisation is considering suing Transit over a two-year delay to a key bypass, said the rest of New Zealand was being treated like poor cousins of Auckland.

But Mr van Barneveld emphasised that completing the ring route was dependent on a willingness of Aucklanders to accept tolls on the route, to make up an $860 million funding gap in their region.

He also dropped a bombshell on contractors waiting for their tenders to be assessed for a $210 million motorway link at the Manukau end of the route, by saying a construction start would be delayed until the next financial year unless more money became available.

Mr van Barneveld said the project was a high priority for reinstatement in this year's programme should more funds be indicated.

In the Waikato, Transit has indicated delays of two years to bypasses around Avalon Drive in Hamilton, Maramarua on the crash-alley of State Highway 2, and Cambridge.

A bypass from Horotiu to Te Rapa north of Hamilton has been delayed by three years, as has a replacement Kopu Bridge - scene of hair-tearing holiday-weekend bottlenecks at the gateway to the Coromandel.

Bypasses of Rangiriri and of Taupo have been delayed indefinitely.The final forecast is due to be confirmed in July, after public hearings in 16 cities and towns.

Although the Government promised in an agreement with New Zealand First to fully-fund a second Tauranga harbour bridge for $240 million, instead of part-financing it with tolls, that project has also been delayed until next year.