Wellington Scoop

Transmission Gully: urgent review of delays and cost increases

TG overbridge

In its announcement last week that there’ll be another delay to the opening of Transmission Gully, the NZTA held back the final cost of the new road till the last sentence of its lengthy release. It then revealed that the highway is now costing $1.25billion, but it didn’t mention that the the initial budget was $850million. The huge cost increase was of immediate concern to the government, which called for an urgent review.

Joel Maxwell reported in the DomPost:

Transport Minister Phil Twyford said the Infrastructure Commission had been asked to oversee an urgent and wide-ranging review into the project. “It appears the agreement signed up to by the former government was loose and failed to protect taxpayers’ money. It seems to have been rushed through without the necessary due diligence being carried out.” He said Wellingtonians and taxpayers “deserve to know exactly what has happened”… He said while the settlement provided certainty about the cost and completion date, “it’s simply not good enough that this project has repeatedly had delays and increased costs”.

The DomPost quoted the NZTA’s transport services general manager Brett Gliddon as saying Covid-19 was classified as a “force majeure” event in the contract – triggering new negotiations with the Wellington Gateway Partnership, its contracted builder CPB-HEB, and highway maintenance company Ventia.

In Friday’s announcement, the NZTA said it will make a compensation payment of $145.5m to CPB-HEB, as well as $12.5m to Gateway, and $5m to Ventia. The NZTA has also agreed to add $45.5m to the contract for a different type of pavement to be used on about nine unsealed kilometres of the road. This would allow work to continue through winter, and could be done by New Zealand contractors, rather than the overseas contractors previously expected to do the work.

RNZ’s Charlotte Cook reported that the negotiations have taken five months and have forced NZTA to fork out another $208 million – which includes changing the design – to get the troubled road back on track. A large chunk of that payment is covering the costs to lay a thick asphalt on one third of the road, which is an expensive variation to the initial plans. Her report adds:

Brett Gliddon said Transmission Gully had taught NZTA things, but was unable to explain what those lessons were. “I think I’ll start by saying there’s obviously lessons to learn on this job. So we will have to look at all of those lessons as we finish it to see how we can do things better.”

If NZTA can’t identify what went wrong, we’ll stand by for the question to be answered by the government’s urgent review.