Hon Steven Joyce
Minister of Transport

12 May 2009
Media Release

Affordable options available for Waterview Connection

Transport Minister Steven Joyce says the NZ Transport Agency has identified more cost-effective options for the completion of Auckland’s Western Ring Route, meaning the previous government’s expensive debt-funded twin tunnel option will not go ahead.

In January the Minister asked officials to investigate alternative options for building the Waterview Connection after a business case prepared for the previous government released in December showed the total cost of the project would be $2.77 billion.

The $2.77 billion figure was made up of $1.98 billion for construction of the tunnels, $240 million for associated work on State Highway 16 and $550 million for finance costs during the project construction period.

“The NZ Transport Agency has reviewed all options and has found that the Waterview Connection, together with the same amount of associated work on State Highway 16, can be built for considerably less, at an expected cost of between $1 billion and $1.4 billion, depending which of the options is taken,” says Mr Joyce.

“Given these numbers and the increased government commitment to state highway investment through the National Land Transport Fund, the government now anticipates the Waterview project being built using the fund. This means it won’t be financed by borrowing, as envisaged by the previous government.

“In addition, all of the options being considered by the NZ Transport Agency would be built with wide enough shoulders to allow for easy widening to three lanes in each direction.

“An appropriate comparison, therefore, is between the top cost of $1.4 billion and the $3.16 billion price of the previous government’s twin three lane tunnel option.

“The NZ Transport Agency’s Board is meeting today to consider the three alternative options and will announce its preference tomorrow, once it has had the opportunity to make first contact with those directly affected.

“A thorough consultation process on the form of the selected option will then commence before a final decision is made.”

Mr Joyce says he is sorry the people of Waterview face further uncertainty while the design of the road is decided.

“I am working with the NZ Transport Agency to provide certainty as soon as possible.

“My preference is for a Waterview Connection that can be delivered at a fair price to the country with minimal ongoing impact on the community.”

The Waterview Connection is part of one of the seven Roads of National Significance the government has singled out as essential routes that require priority treatment. It is the last link to complete the Western Ring Route, linking Manukau, Auckland, Waitakere and North Shore while bypassing State highway 1 and the Auckland Harbour Bridge.

Waterview Connection – Questions and Answers

What are the more affordable options for building the Waterview Connection?

The NZ Transport Agency (NZTA) reviewed all previous and some new options for this project, looking at surface roads as well as opportunities to put some of the route underground.

This review identified several options that are cost effective, allow for future growth and balance the strategic need to complete the Western Ring Route with concerns about local impacts. As well as costing significantly less, they could also be built 12-18 months earlier than the twin tunnel option.

The final decision on which option to build rests with the NZTA Board. The board will meet on 12 May to select a preferred option. The NZTA’s first step after that will be to work with the community and Auckland City Council to look at how the scheme can be best designed to integrate the motorway with the surrounding area.

What are the costs of the different options?

Depending on what option is taken up, costs of constructing the project could range from $1 – 1.4 billion. This includes factoring in work for capacity increases associated with connecting State highway 16 with State highway 20.

What does this mean for the proposed twin tunnel option that had been agreed on previously?

The Cabinet yesterday resolved that it would not provide extra funding for the Waterview Connection, making the previous twin-tunnels option unaffordable.

The decision was made on the basis that there are more affordable options that can be funded from within the National Land Transport Fund (NLTF) with the costs met by road users.

How did this decision come to be made?

In January this year the Minister of Transport asked officials to investigate alternative options for building the Waterview Connection. This request was in response to the very high cost of the proposed twin tunnel option estimated to be $2.77 billion (in 2015 dollars).

The twin tunnel option was unfunded by the previous government and in the current economic environment it is even less affordable now.

The NZTA reviewed all previous and some new options for building the Waterview Connection that might make construction less costly.

On the basis that there were affordable options that can be funded through the National Land Transport Programme, the Government has decided not to provide extra funding for the project. It is therefore not possible for the twin tunnel option to proceed.

How does this affect the timeframe for construction of the Waterview Connection?

Depending on the final scope of the project it could be possible to begin construction in 2011 and complete the project within about four years.

As a Road of National Significance this is expected to be progressed under the call-in process of the new provisions of the Resource Management Act which will significantly speed up delivery of the project.

How will the construction of the Waterview Connection be funded?

A lower cost option of between $1 billion and $1.4 billion can be funded through the NLTF. The NZTA Board makes decisions on funding from the NLTF.

Where is this extra money coming from?

The revised Government Policy Statement on Land Transport Funding (GPS) commits almost $1 billion in additional investment into the State highway network over the next three years. Over the next 10 years, $10.7 billion will now be invested in the state highway network.

This additional investment means that a lower cost Waterview option is affordable to be funded through the NLTF.

How can this option be so much cheaper?

The main reasons why the alternative options are cheaper are that construction costs for building alternative options will be cheaper than for building twin tunnels and the more affordable options are also within New Zealand’s current expertise and available equipment Total costs will also be lower as no debt financing will be required.

Will the current Waterview alignment change?

The path of the route differs between options the NZTA Board will be considering but they all broadly follow the current Waterview alignment.

The NZTA Board is not considering reverting to the previously investigated Rosebank option, which is more expensive.

ENDS

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