Penny-pinching on land deals is costing us - minister

The budget for stage 2 of the Albany-Puhoi project went from $98 million to $364 million. Photo / Paul Estcourt

Government officials may have cost taxpayers more than they saved by haggling over compensation payments for land taken under the Public Works Act for some big projects, says a Government minister.

"In a number of cases, Government [officials] have 'nickelled and dimed' the compensation for some land - and the delay that has accordingly occurred has made the cost of the project blow out," the new Minister for Land Information NZ, Maurice Williamson, told a parliamentary select committee.

Mr Williamson, who took over the Land Information portfolio on Tuesday from now former MP Richard Worth, told the primary production committee that a more realistic attitude could have saved money on many projects.

Linz is taking part in a review of the Public Works Act. Mr Williamson told Parliament on Wednesday the act was reviewed in 2001 and Cabinet considered law changes in 2003, but deferred them. Further policy proposals were considered in 2005 but again deferred.

A review of the Public Works Act and the Land Act went to the Cabinet last year but was again put off.

"This Government is investigating whether compensation for landowners under the Public Works Act 1981 needs to be more generous," he said.

The French Government tended to pay compensation for land taken in road-building projects at a rate of up to twice the assessed value, because that saved costly delays of four or five years in starting construction.

"I would have thought a more realistic review of about how we make the compensation, without being silly, without going over the top, without paying people gold-plated ... needs to happen," Mr Williamson said.

"In a couple of roading projects I know about, had we been even slightly sensible in compensating the landowner, the cost of the total project would have been considerably less."

In the Albany-Puhoi stage 2 roading project, the original budget of $98 million blew out to $364 million, mainly because of delays, Mr Williamson said.

"If we had just gone and priced it quickly, yes, the landowners would have got a good deal out of it ... but it could have been by far the cheaper option."

Mr Williamson had been asked to comment on plans to pay compensation to farmers for having Transpower pylons run across their land.

"If Transpower was prepared to settle up really quickly and get it done, and get the project under way ..."

Auckland and Waikato farmers joined forces in 2006 to demand compensation from Transpower for access to their land to upgrade pylons running through farmland from Whakamaru in South Waikato to Auckland.

And in a similar case 57 South Island farmers threatened in 2007 to prevent a Transpower upgrade of power lines running over their land.

Transpower has previously told another select committee, dealing with commerce, that legislation would be needed for it to pay "enhanced compensation" to Waikato farmers when it builds pylons to carry new pylons to Auckland.

- NZPA