Transmission Gully legal costs mount while Wellingtonians wait for road

The Transmission Gully construction site at Wainui Saddle. Photo / Mark Mitchell

While Wellingtonians have waited year after year for Transmission Gully to be built, lawyers have lined their pockets with $1.7 million worth of taxpayer money.

The 27-kilometre motorway is behind schedule and will now cost $1.25 billion after massive budget blowouts.

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

NZTA Waka Kotahi has confirmed it spent $1,757,410 for lawyers and legal related costs on the PPP since the contract was signed in 2014.

The figures were revealed in response to a written parliamentary question by Green Party transport spokeswoman Julie Anne Genter.

Genter said the experience of Transmission Gully showed PPPs should not be used for delivering large transport infrastructure projects.

"The public private procurement model was touted as a way to save money, but it has proven to be extremely costly.

"It's $1.7 million that could be going to actual improvements in infrastructure rather than to lawyers."

Green Party co-leader James Shaw with transport spokeswoman Julie Anne Genter. Photo / Dean Purcell

NZTA has been left with no other option but to negotiate major settlements with contractors after Covid-19, the Kaikōura Earthquake, and severe weather events.

These settlements have sent the cost of the project skyrocketing from $850 million to $1.25 billion.

A Waka Kotahi spokesperson said NZTA has taken a careful and considered approach to reach a settlement agreement earlier this year which closed all contract claims and issues.

Those most recent negotiations concluded to the tune of $208.5 million.

The agency noted the $1.7 million spent in legal costs represented 0.14 per cent of the overall project cost, which was not unusual for large capital projects.

"Waka Kotahi is confident that these costs have been necessary to ensure that project delivers value for money for road users and taxpayers."

When Transmission Gully opens, about 25,000 vehicles are expected to use it each day. Photo / Mark Mitchell

Genter said every cent counted.

"If you went around to most councils who are trying to invest in infrastructure, a million dollars means something."

New Transport Minister Michael Wood said he was keeping an eye on the project and he planned to visit the site in early 2021 to get the view from the ground.

"While it's unfortunate the contract the previous National government signed off on allowed for these legal costs to be incurred, I know Waka Kotahi has worked hard to get the project back on track."

Meanwhile a review overseen by the Infrastructure Commission into the project is underway.

Minister of Transport Michael Wood. Photo / Mark Mitchell

It will investigate how Transmission Gully was awarded for the agreed price and whether it was actually realistic.

Wood said he was looking forward to the completion of the review next year, which "should shed some light on the issues the project has faced."

The road is scheduled to open in September 2021.

National's transport spokesman Michael Woodhouse said it was difficult to comment on whether the legal fees were reasonable without knowing what was budgeted for and why the fees were incurred.

"What the taxpayer should be concerned about is the $400 million blowout in project costs on the Labour Government's watch, much of which it was advised by NZTA it had no liability to pay.

"It's a pity the Government didn't take the legal advice it paid for on this matter. They should be explaining that, rather than blaming National."