BP roundabout's $250m won't cover the full job

by Kim Bowden - May 28, 2024

The price tag may have more than doubled, but the scope of work has been reduced on a key road in and out of Queenstown that is becoming increasingly congested.

In April Minister for Transport Simeon Brown turned the first sod to begin construction works on State Highways 6 and 6A, announcing his government was committing $250 million to the planned project, up from the $113 million first budgeted.

However documents provided to Crux this week in response to a request for official information reveal despite the extra spend Queenstown commuters will receive less.

Prioritising the spend in a briefing document to ministers.

A briefing note delivered to Minister Brown and Minister of Finance Nicola Willis by the New Zealand Transport Agency on February 1 sought the Wellington decision makers endorsement of a "reduced scope Queenstown Package at an estimated cost of $250 million".

NZTA transport services general manager Brett Gliddon gave the ministers just a matter of weeks to make their call, warning the weather window for construction was short and contractors needed to be on tools by March or the project would experience significant delays.

"The impact of decisions made beyond February 2024 would have cost implications and delay completion time for the project by at least one year," he said in the February briefing.

The pair would not have been blindsided by the budget blow out.

Earlier briefings, in late November and early December, had already delivered the news the original 'Queenstown Package' was "unaffordable within the funding allocation".

The latest briefing reveals that more than a year ago, the transport agency had already begun looking at ways to cut costs by providing "the most important elements to achieve the travel choice and safety outcomes sought".

"The reduced package comprises the intersection of SH6/6A (BP intersection), the Frankton bus hub and the Howards Drive roundabout.

"These were assessed by NZTA to be the most critical parts of the package in achieving the strategic priorities for the Queenstown transport network.

"The Queenstown Lakes District Council and Otago Regional Council have agreed these prioritised package elements are the most important."

Mr Gliddon advised the ministers NZTA still considers all the upgrades originally flagged to be necessary, as funding allows, "given the fast pace of growth and ongoing transport challenges in Queenstown".

He told them peak day populations in the town are expected to almost double in two decades, from 103,000 in 2021 to 204,000 in 2051, and infrastructure investment "is critical to provide greater transport choice and public transport reliability to keep Queenstown and the local economy, including tourism, moving".

The briefing partly attributed the $250 million cost for a reduced package to:

  • a shorter construction season than most of New Zealand given the lower temperatures from May onwards
  • a limited resource pool requiring workers to be brought into the region; similarly materials, like concrete and bitumen
  • the lack of a viable long-term detour route meaning high traffic volumes of 36,000 vehicles per day needing access through the BP intersection
  • significant and disruptive work above and below ground as part of the project, including the complex relocation or replacement of multiple underground utility services and large-scale stormwater system upgrades

The ministers were told all elements of the project had been "interrogated on time, cost, and quality", and an independent cost reconciliation process had been undertaken "to ensure that the estimate delivers value".

Comments from the Ministry of Transport were also included in the briefing, although the ministry admitted to not being privy to the deal done between NZTA, the local council, and contractors and designers to deliver the project.

The works are being delivered for the New Zealand Transport Agency via the Kā Huanui a Tāhuna Alliance - the same alliance driving Queenstown's pricey, problem-plagued arterial road project.

In the briefing, comments from the ministry said that NZTA appeared to have "appropriate mitigation measures to manage costs" in regards to the highway works.

"These include a shared cost risk mechanism with Queenstown Package contractors that creates incentives for them to come in or under budget. However, we have not reviewed or had access to the alliance contract and therefore cannot provide further comment on this."

It was not made clear to reporters at the April sod-turning ceremony where Minister Brown announced the increased funding investment that the scope of works planned for Queenstown had changed.

Several media outlets reported at the time the $250 million project would deliver 18 sets of traffic lights to the stretches of road - as indicated in early plans - but the reprioritisation of work now means only five new sets of lights are locked in for delivery.



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