TRANSPORT
October 2021 - January 2022
Auckland have impacted on their ability to meet the contractually agreed opening date of 27 September 2021,” Waka Kotahi general manager of transport services Brett Gliddon says. It has faced hurdle after
hurdle since construction began in 2015, with re-laid section, Covid-19, environmental breaches, and corporate conflicts all plaguing the project. Work has resumed on the project under the appro-
priate health and safety protocols since the move to alert level 3, then alert level 2, in Wellington. However, these new delays, on top of the risk that already existed around achieving the contractually
agreed opening date, mean it is clear that the motorway will not be ready to open on September 27. The partners are working together to understand the full impacts of the lockdown and restrictions on the
Interim review reveals weaknesses in PPP procurement process Transmission Gully has long been a dog of a project, says Greater Auckland’s Matt Lowrie. “From it’s poor initial business case, to it being made a Public Private Partnership (PPP) that would see taxpayers forking out over $3 billion over the coming decades and then having cost blow out after cost blowout and a range of other issues,” he says. “In August last year, then Ministers of Transport (Phil Twyford) and Infrastructure (Shane Jones) announced an urgent review of the project. That review was released and it’s damning for both the previous government and Waka Kotahi.” The review recommends updating aspects of the national Public Private Partnership (PPP) Guidance and that Waka Kotahi implement changes related primarily to the management of future PPP projects. A PPP is a long term contract between a client and a private sector consortium to design, build, finance and maintain an asset, with the client retaining full ownership of the asset, explains former Infrastructure New Zealand Policy Director, 48 infrastructurenews.co.nz
Hamish Glenn. “Bundling all these activities in one package for an asset lasting 30 years is extremely complex, so PPPs tend to be used for large projects where the benefits can be shown to outweigh the costs. Seven PPPs have been signed in New Zealand. Each of the five operational contracts was delivered on budget for the Crown. “The Government launched this review following concerns that the PPP model used to procure Transmission Gully had not performed as intended,” Glenn says. “It’s important to note that Transmission Gully successfully passed all the value for money tests designed to protect the taxpayer from project time and cost overruns, or assets which do not meet essential community needs. “But what the interim review shows is that there were several issues in the process, including that original cost estimates for the project were too low, encouraging bidders to seek out ways to reduce costs which did not necessarily provide best value, and that PPP project
governance can be strengthened. “It is important that these recommendations are quickly implemented to maintain confidence across the general public and industry that the model provides a viable infrastructure procurement option. “New Zealand has a very large nation-building investment programme ahead. Use of private capital to manage public cashflows, inject innovation, attract international expertise and better allocate risk is critical to successful delivery. “PPP is one such way to leverage private investment to achieve public outcomes. The review recommendations ensure that PPPs continue to provide decision makers with a genuine option to deliver major infrastructure,” Glenn says. Chief Executive of the New Zealand Infrastructure Commission, Ross Copland says they will implement the recommendations directed by the Minister for Infrastructure. “The lessons learned from the Transmission Gully Interim Review will be valuable for future PPP projects and other major project procurement,” says Copland.
