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NZTA negotiating on new cost of Transmission Gully – paying advance of $14m

News from NZTA
Waka Kotahi the NZ Transport Agency is making an advance payment to the builder of the Transmission Gully project to reflect the costs of the Covid-19 work shutdown.

Advance payments related to the Covid-19 shutdown have been made available on other Transport Agency projects.

The Agency is continuing to negotiate the full cost of the impacts of the Covid-19 shutdown with the contractor (Wellington Gateway Partnership) and the builder (CPB HEB Joint Venture) for Transmission Gully, and is advancing an interim payment of $14m, which will form part of any final settlement agreement.

Transmission Gully was scheduled to open by November. The shut-down under Level 4, the subsequent adjustment to work practices and the resulting lost time over the important summer construction season means the completion date will now extend well into 2021.

The contractor (WGP) and the builder (CPB HEB JV), have agreed to carry out a winter construction programme over the next six weeks whilst we agree on a new completion date, and discussions continue regarding the financial implications of the Covid-19 delays.

“We understand that people are keen to know when the road will be finished, and we are committed to seeing it open at the earliest possible date, and the winter works programme will help minimise further delays. However, the NZTA must take a considered approach to making any decisions that involve taxpayer money and that is why an agreement on the new opening date and associated costs is taking time,” says Transport Services General Manager, Brett Gliddon.

“The Covid-19 stand down period and subsequent work restrictions has caused longer delays than the five weeks of Level 4 due to the loss of valuable summer construction and some of that work can’t be resumed until the weather improves.

“The winter works programme will ensure the builder sources and brings onto site critical materials to allow the project to progress through the winter construction season. If materials, such as aggregate, are not sourced now there is a risk the materials may not be available later in the season and could cause further delays to the project’s completion.”

During the winter works programme Waka Kotahi, the contractor and the builder will investigate a new design for a different road surface which will improve the quality of the project and potentially allow it to be built more quickly.

New Zealand’s cold and wet winter doesn’t allow as much construction to take place as over summer months and as a result there will be a reduced workforce on site. The builder had planned for reduced staff numbers over winter for some time. The changes in staff numbers are seasonal, part of usual construction cycles and not COVID-19 related.

Under the PPP contract all operational decisions related to construction, including materials and the size of the workforce, sit solely with the contractor and the builder, CPB HEB Joint Venture and WGP, not Waka Kotahi.

Commercial negotiations on the full impact of Covid-19 are ongoing, and it is not appropriate for Waka Kotahi to make any further comment on these issues until the negotiations are completed.

“We understand the public interest in Transmission Gully and we will announce the new agreed completion date and further information when negotiations are complete,” Mr Gliddon says.

7 comments:

  1. Georgina Campbell, 29. May 2020, 18:36

    The 27 kilometre stretch of motorway has blown its budget, been bailed out by NZTA, suffered significant delays and been criticised for being run like a circus… is the PPP model to blame, or poor management of that model? [via twitter]

     
  2. TrevorH, 30. May 2020, 8:26

    There really needs to be an investigation into the NZTA’s and the Minister’s role in the management of the project.

     
  3. Peter S, 30. May 2020, 18:04

    Remember this was a National party project, so you know who to blame. NZTA are probably hamstrung by a contract that favours the construction consortium, who can cry poor every time there’s a setback.
    So much for an $800M road. With the 25 year maintenance contract and interest payments, it will cost the taxpayer well over 3 billion.

     
  4. Jamie, 31. May 2020, 7:32

    Really Peter it’s 2.5 yrs since the govt changed and you parrot a slogan which is an excuse for everything. Look at the minister in charge – he hasn’t delivered anything … light rail in akld by 2021, kiwibuild, let’s get wellington moving. It’s time to say no more excuses.

     
  5. Chris Horne, 1. June 2020, 10:57

    Waka Kotahi/NZ Transport Agency must be subject to a drastic overhaul. It has been a poor performer on several fronts:
    1. Failed to monitor the efficiency of a Nelson company which assesses the safety of truck tow-bars;
    2. Failed to monitor the efficiency of WoF checks by a Dargaville service station;
    3. Failed to fully compact the fill used to replace peat on the Kapiti Expressway, then failed to specify the correct road-surface coating;
    4. Failed to specify the standard of compaction of fill on the Transmission Gully Motorway, then failed to halt the use of a road-surfacing material which soon crumbled.

    When will the Agency become an arm of government we can rely on? It is time for urgent action by the Government.

     
  6. Richard Keller, 2. June 2020, 15:54

    Transmission Gully was mooted as far back as the 70s when the question of sustainability of road building was ignored, but by 1990 it was understood that road building was a trip to nowhere because of pollution and Co2 emissions. But the TG fantasy persisted, today relying on the notion that it is required for resilience. But resilience needs to be gained through a new approach with coastal fixtures.
    Whatever choice is taken to finish TG, the issues of climate change, earthquake resilience, and financing are going to involve discussions more real and frightening than we have seen up to this point, but with great opportunity if taken.

     
  7. Richard Keller, 8. June 2020, 10:41

    Now it’s the possibility of a Plan B for Wellington’s Transmission Gully roading project, that of getting in different contractors for much of the remaining work. This adds to the story in recent weeks of possible layoffs, compounding a lack of specialist skills lost during the lockdown.
    The issues of engineering, financing, and purpose have never been addressed properly which puts Wellington, and the whole nation really, into a bind. While an inland route has been talked about for a long time, by 1990 it was understood that road building was a trip to nowhere because of pollution and Co2 emissions. But the TG fantasy persisted, today relying on the notion that it is required for resilience. But resilience needs to be gained through a new approach with coastal fixtures.
    Whatever choice is taken to finish TG, the issues of climate change, earthquake resilience, and financing are going to involve discussions more real and frightening than we have seen up to this point, but with great opportunity if taken.