NZTA welcomes public-private partnership decision for Transmission Gully
The NZ Transport Agency is welcoming the Government's decision to allow the agency to undertake a Public-Private Partnership (PPP) to finance, build and operate the Transmission Gully portion of the Wellington Northern Corridor.
Transmission Gully, which links MacKays Crossing in the north with Linden in the south, is one leg of the 110-km Wellington Northern Corridor Road of National Significance, which is being developed as a four-lane expressway from Wellington Airport to Levin to enable economic growth, improve road safety and reduce traffic congestion.
NZTA Chief Executive Geoff Dangerfield said the 27-km Transmission Gully highway is a strong candidate for a PPP.
“Given the project’s size and complexity, it lends itself well to being delivered using a PPP. A PPP opens the door for private sector innovations that are not always achievable under traditional public sector procurement methods, and today’s decision gives us the certainty we need to move ahead and deliver the important economic and safety benefits of this project.
“Under a PPP arrangement we anticipate that construction of Transmission Gully will begin by late 2014 with the road completed and open by 2020.”
Mr Dangerfield said PPPs are a proven procurement model internationally for the successful delivery of large-scale infrastructure projects where specific outcomes can be established and measured - and where risks can be identified and transferred to the private sector.
Mr Dangerfield stressed that full ownership of the highway would remain with the public sector, and the nature of the contract to be used would provide a strong incentive for the successful PPP consortium to deliver the best possible results for road users.
“While a private sector consortium will be responsible for financing, designing, building, maintaining and operating the highway for up to 25 years, Transmission Gully will remain a public asset – it is never owned by the PPP consortium.
“The procurement model to be used will allow the NZTA to establish a performance-based contract based on very specific service, quality and value-for-money outcomes. The first payments will only be made to the contractor after the project has been completed to the standards set out in the contract, and any cost increases due to delays would be paid for by the contractor – not the public.”
Although tolling will not be specifically linked to the PPP contract for Transmission Gully, Mr Dangerfield said the Minister of Transport has requested that the NZTA investigate the merits of tolling the route.
Mr Dangerfield said tolling would offset some of the annual costs required to be met by the National Land Transport Fund, meaning more projects could be progressed across New Zealand.
“We will look into the details of the tolling scheme in the new year, and once complete we would consult with affected communities and stakeholders on any proposed tolling schemes. The Minister would separately approve any tolling scheme."
The NZTA will initiate a PPP selection process before the end of the year. A short list of PPP consortia is expected to be identified by April 2013 and, subject to final borrowing approval, a PPP contract will be awarded by mid-2014. Construction would begin by late 2014, and the highway would open for traffic by 2020.