Delays, cost blowouts hit transport upgrades

WELLINGTON: The Government’s $8.7 billion New Zealand upgrade transport package is flashing red, according to Waka Kotahi NZ Transport Agency, which now suggests several projects may not be delivered on time and on budget.

The upgrade programme was a $12 billion package of infrastructure investment announced in 2019, about half of which was allocated to transport.

The cost exploded in its first year, causing the Government to cut some of the most expensive projects and tip in additional funding of $1.9 billion in 2021.

Monthly reports from Waka Kotahi to Transport Minister Michael Wood show the package has been getting more delayed and more expensive since at least January.

Each month, individual projects are assigned a green, amber or red colour which indicates the ‘‘health’’ of the project. Each project has a cost, time and ‘‘overall health’’ rating.

A southern project now tagged ‘‘red’’ is the $115 million package of Queenstown projects which had an ‘‘updated interim cost estimate’’ that was above the baseline funding allocation.

The $655 million Papakura to Drury road, the $1.5 billion Otaki to north of Levin road and the $162 million Hutt Valley Melling Interchange are also now listed as red.

The details were released under the Official Information Act to Act New Zealand.

In January, the overall health rating for the programme was ‘‘amber’’, and most projects were given an ‘‘amber’’ rating.

Of the projects, seven were amber, four were red, four were green, and three had no rating.

By May, the number of amber projects had dropped to six, the number of green projects had fallen to one, and the number of red projects had more than doubled to 10.

Waka Kotahi warned this was trending in the wrong direction.

‘‘Last month we advised that the overall health rating for the programme was trending towards red and this worsening trend continues,’’ the report said.

The ‘‘red’’ rating reflected ‘‘programme wide cost pressures’’ and other issues, although these other issues were redacted.

Elsewhere in the briefing it warned cost pressures were being driven by the war in Ukraine, oil and shipping costs and labour costs rising.

Act transport spokesman Simon Court said the documents showed Labour was ‘‘failing to deliver anything other than inflated budgets and project delays’’.

‘‘Labour’s inability to deliver a project on time and under budget is a disaster for taxpayers.

‘‘Inflation is caused by too much money chasing too few goods.

‘‘When the Government throws around cash like this, it drives up the cost of everything,’’ Mr Court said.

He suggested the projects would be helped by Act’s RMA replacement proposal which he argued would speed up the process of consenting. —