Former Wellington MP Peter Dunne was a leading advocate for the Transmission Gully highway, now delayed and suffering a cost blowout. He argues all will be forgotten when motorists reap its benefits.
When the first sod was turned on the Transmission Gully highway project in September 2014 then Transport Minister Gerry Brownlee observed hyperbolically that “probably no infrastructure project in this country’s history has been so talked about or so eagerly awaited.”
Transmission Gully, so named in 1924 because of the transmission lines slung along it, has long been talked of as a major alternative route into Wellington. It is a 27-kilometre-long gully linking Linden, just north of Wellington to McKays Crossing, north of Paekakariki.
As early as 1919 the then MP for Otaki advocated the development of the route as a memorial highway to the soldiers lost in World War I. The Americans had reportedly offered to build the highway during World War II to facilitate access to their military camp at McKays Crossing, but the perhaps apocryphal story is that the offer was declined by the Transport and Public Works Minister Bob Semple because he owned land just north on the Kapiti Coast and did not want to be accused of advancing his own interests.
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In the late 1980s renewed interest in the project led the Labour Government to set aside some exploratory funding in its 1990 Budget but that did not survive the incoming National government’s expenditure cuts after 1991. However, local agitation did not cease. The “Do It Now” petition which I organised as a local MP in 1999 attracted more than 25,000 signatures in just a few weeks, and there was a similar response to a “Why Are We Waiting?” campaign by the Evening Post newspaper in the early 2000s.
Funding, not engineering challenges, was the major stumbling block in progressing Transmission Gully. The project was likely to be expensive and did not achieve a sufficiently high benefit/cost ratio rating, according to the measures of the time. Alternative funding streams would be required. In that regard, there was an important provision in the confidence and supply agreement between Labour and UnitedFuture in 2002 “that new transport legislation is introduced and passed that includes provisions for alternative funding options to facilitate the accelerated development of new roading infrastructure.”
This was a clear and deliberate reference to Transmission Gully and the possibility of a public private partnership for its development, so much so that local Labour MPs were more than happy to join me, with picks and shovels, at the site for a photo-op to mark the imminent start to Transmission Gully!
But a further four years were to pass before the Labour-led government announced in the 2006 Budget that funding had been set aside for the investigation and preliminary design work for Transmission Gully, to enable a construction start by 2011/12. In 2007 the government introduced legislation to provide for regional fuel taxes to be imposed and dedicated to regional projects like Transmission Gully, if necessary. Investigatory and preliminary design work led to the government announcing in mid-2008 it had identified cost savings of around $275 million, and that it was proceeding to the next phase of the project’s development.
Following a review of all major projects, the new National-led government announced in 2009 a $2.2 billion plan to develop a four-lane expressway from Levin to Wellington Airport, including Transmission Gully, over the following 10 years. The project formed part of the government’s Roads of National Significance strategy and would be funded through a variety of methods including possible tolling and public private partnerships. Tauranga’s Eastern Motorway and Transmission Gully were seen as the most likely candidates for a public private partnership, with the government indicating to the New Zealand Transport Agency in August 2012 that it “was open” to Transmission Gully being developed on that basis, as the country’s first public private partnership.
In September 2014, the first sod was turned on Transmission Gully. The project was a contract between the Wellington Gateway Project and the New Zealand Transport Agency to “design, construct, finance, operate and maintain” the highway for 25 years after its expected five years construction period. At that stage, it was valued at $850 million, considerably less than the billion dollar-plus price tags assumed in earlier years.
Completion would be by April 2020 and, for a long time, everything appeared to be on schedule. The century-plus wait for Transmission Gully seemed to be over at last, and Wellingtonians who had felt resigned to a “not in my lifetime” feeling about Transmission Gully were finally beginning to feel optimistic. However, a combination of natural factors (the consequences of the 2016 Kaikoura earthquake and poor weather) and construction delays because of an apparent under-estimation of the complexity of some of the engineering issues began to push the completion date back steadily. By September 2019, the New Zealand Transport Agency had started warning that meeting the April 2020 date was in doubt. The final straw was the outbreak of the Covid19 pandemic in March 2020 which saw the project put on hold altogether, and many overseas workers involved returned home.
The combination of natural factors, construction and engineering difficulties, and the sudden absence of overseas workers (raising significant workforce issues if the project was to proceed while the country’s borders were closed, and the overseas workers could not return) was bad enough. But at the same time, a legal dispute broke out between the New Zealand Transport Agency and the Wellington Gateway Project over aspects of the contract, exacerbated by the high penalty payments the contractors were being subject to for every day the project was delayed.
With nothing happening, it was hardly surprising that in August 2020 the Government asked the Infrastructure Commission to review the project, including how realistic the original price was, and whether all relevant risks had been appropriately identified and taken into account. Given the extraordinary circumstances that had accompanied the construction of Transmission Gully since 2014, and the fact that it was the country’s first public private partnership, it was hardly surprising that the findings would be critical.
Most of the criticisms are procedural, relating to the calculation of its affordability and the consenting process, rather than whether Transmission Gully should proceed at all. Significantly, the review contains no criticism of the concept of public private partnerships. Moreover, the reviewers note the New Zealand Transport Agency “has embraced positively and diligently” their findings and are ensuring that the country’s next public private partnership – the Puhoi to Warkworth project – is following them.
However, the most telling criticism relates to the setting of the original $850 million price which the review considered unrealistically low, although the details of how it was set remain mysterious. During the 2000s, under both Labour- and National-led governments, there had been strong moves to reduce the projected costs as much as possible to boost its affordability, with NZTA and its predecessor, Transit New Zealand actively involved in such work. Even so, the $850 million figure, while very welcome at the time, had seemed somewhat low to long-time Transmission Gully observers. A real-time price tag closer to the current projection had always seemed more likely.
When the Transmission Gully public private partnership project was being developed the issue was no longer whether the highway should be built, but how. During the 2000s both governments had committed to building Transmission Gully with the focus shifting to how it could be financed. In that context, it is noteworthy that between 2007 and 2014 under both governments, Transmission Gully had oscillated from being potentially funded by regional fuel taxes and tolls, to the Land Transport Fund, and eventually to a public private partnership.
Now, as Wellingtonians wait in hope for a new opening date for Transmission Gully, the lesson for the development of major infrastructure projects – like Auckland Light Rail, the subject of this column a couple of weeks ago – remains as strong as ever. Desirable and worthy as they may be (and none has been more so for the Wellington region in the last century than Transmission Gully!) the biggest imperative in their development will always be ensuring they proceed on the soundest possible financial basis.
Although, when people finally get to drive over Transmission Gully and enjoy the projected travel-time savings, that is likely to be the last thing on their minds.