What Transmission Gully court settlement means for awaited 110km/h speed limit

• Next steps for a higher 110km/h speed limit on Transmission Gully will be considered next year.
• NZ Transport Agency Waka Kotahi is now responsible for completing the road after a court settlement.
• The road’s cost is expected to remain $1.25 billion.

A higher 110km/h speed limit on Transmission Gully will be considered next year after a court case over the billion-dollar motorway was settled confidentially.

The 27km motorway out of Wellington was not technically finished when it finally opened to the public in March 2022 but it was still safe to drive on.

After years of budget blowouts and delays due to Covid-19, severe weather events, and the Kaikōura earthquake, there was a desire to get the road open and iron out the rest later.

These incomplete works ended up being the subject of legal action in the High Court after NZ Transport Agency Waka Kotahi’s (NZTA) expectation these should be completed to the standard in the project’s contract.

The unfinished work also prevented a higher speed limit on the road from being considered.

Transmission Gully was 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.

Transmission Gully viewed from McKays Crossing. Photo / Mark Mitchell

A recent settlement of these legal disputes means NZTA is now responsible for finishing the road, providing more certainty.

Transport Minister Simeon Brown told the Herald it would take about two years to complete the road.

He said NZTA would consider next steps to increase the speed limit on Transmission Gully from 100km/h to 110km/h in 2025.

“Transmission Gully was started by the previous National Government, who ensured it was designed and constructed to a high safety standard, with two lanes in each direction, and a mostly straight alignment.”

No one had died in a crash on the road since it opened, Brown said.

“I want to ensure that Kiwis and freight can get to where they want to go quickly and safely. That means increasing speed limits on roads that are built to a high safety standard.”

A NZTA spokesman said the court settlement included a three-month transition phase when more detailed planning to finish the road will be undertaken.

“We expect to have better estimates on timeframes for project completion once this phase is finished. However, our initial estimate for completion of works and close-out of consenting and compliance matters is approximately two years.”

A speed management review was dependent on several factors, the spokesman said.

These included technical and safety assessments, minor completion works and community consultation.

“Until then, the speed limit on Transmission Gully remains at 100 km/h.”

What was included in the court settlement?

The Transmission Gully project has been restructured, including a commercial settlement, and all previous disputes and differences between the parties have been resolved.

NZTA commercial delivery national manager Andrew Robertson said the agreement was in the best interests of taxpayers and the Government.

It meant the litigation before the High Court has ended, he said.

“This settlement gives NZTA responsibility for project completion and involves it taking a more significant role in ongoing operations and maintenance.

“It also removes the uncertainty that ongoing, and potentially lengthy, legal proceedings would bring. Quite simply, it allows us to move forward with certainty.”

Transmission Gully during construction. Photo / Mark Mitchell

CPB Contractors and HEB Construction will exit the project and a company called Ventia will continue to operate and maintain the motorway for 25 years after it’s completed.

Quarterly repayments to WGP will continue to be made to repay the capital it raised to build Transmission Gully.

Cost of road unaffected

The changes do not increase the cost to taxpayers.

The NZTA spokesman said the parties have agreed to binding non-disclosure requirements.

“This means specific details on the settlement sum received by NZTA/Waka Kotahi cannot be disclosed.

“However, we can confirm the settlement does not bring increased costs for the taxpayer and the completion cost of Transmission Gully is expected to remain $1.25 billion.”

Former Prime Minister Dame Jacinda Ardern opened Transmission Gully in 2022. Photo / Mark Mitchell

The motorway was initially supposed to cost $850 million but settlements in which NZTA has paid the builder, because of issues such as the Covid-19 lockdowns, pushed the cost up to $1.25b.

Ventia will also be contracted to complete some capital works, to standards set by NZTA.

This will be funded out of existing funding allocations set aside for the project in the 2024/27 National Land Transport Programme.

Public private partnership redeemed

An interim review of the road was released in 2021. Then Finance Minister Grant Robertson said the PPP established under the previous National Government lacked proper rigour and consideration.

“The review found there was a lack of transparency as to how key PPP decisions were being made, less than ideal consenting risk management, a non-PPP scheme design used in the PPP procurement, and the price was set far too low from the beginning.”

However, a post-construction review summary, released earlier this year, found that while aspects of the PPP model could have been done better, the model alone was not to blame for the project’s challenges.

“We believe nearly all of the key events and risks that we identified could have happened under any procurement model,” the review said.

Transmission Gully was first talked about more than 100 years ago and forms part of Wellington’s Northern Corridor which includes the Peka Peka to Ōtaki expressway and the Mackays to Peka Peka motorway.

The Ōtaki to north of Levin road is the next instalment in this corridor with construction due to begin late next year and completion due in 2029.

Georgina Campbell is a Wellington-based reporter who has a particular interest in local government, transport, and seismic issues. She joined the Herald in 2019 after working as a broadcast journalist.