The New Zealand Transport Agency (NZTA) has estimated that the construction of 14 major roads could cost between $22.5 billion and $32 billion. This high-level cost assessment was recently confirmed by transport officials, following earlier leaks to the media regarding these figures.
In February, the New Zealand Herald reported on a document from the NZTA indicating that 17 roading and public transport projects could cost between $30.9 billion and $46.6 billion. This estimate is significantly higher—potentially double—than what the National Party proposed during their 2023 election campaign, which has raised concerns about a potential fiscal shortfall of $24 billion.
Following a request for similar information under the Official Information Act by BusinessDesk, NZTA initially declined to release the latest cost estimates, prompting a complaint to the Ombudsman. Although early indications suggested support for NZTA’s position, the agency later published the cost estimates on its website, clarifying that these figures may not accurately reflect current costs and omitting three major public transport investments and projects related to recovery and resilience.
The alternative northwest state highway in Auckland has been estimated to cost between $2.5 billion and $4 billion, making it one of the most expensive projects outlined by the NZTA.
Photo source: NZTA
The Infrastructure Commission advised ministers regarding the draft Government Policy Statement (GPS), expressing concerns about the prioritisation of Roads of National Significance (RoNS) and the scale and affordability of the 17 RoNS and 11 Roads of Regional Significance that NZTA is tasked with delivering.
According to the commission, “this represents a massive forward delivery programme that will not be affordable within current forecast revenue.”
Meanwhile, Transport Minister Simeon Brown emphasised the economic and transport efficiency benefits of the RoNS program, highlighting the necessity for alternative funding and financing mechanisms to support the government’s work agenda. He also pointed out significant spending plans from the previous administration. In response to leaked figures, he said, “As Minister of Transport, I have already made a number of decisions to rein in the previous government’s reckless and unfunded spending commitments.”
“This has included scrapping Auckland Light Rail, which was expected to cost up to $29b and, after six years and $228m, had failed to deliver even a metre of track.”
Additionally, he terminated the Let’s Get Wellington Moving project, which he described as an expensive initiative that failed to benefit the capital city.
To generate these estimates, NZTA adjusted previous project figures from 2013 to 2023 to reflect June 2023 prices, taking into account construction-cost inflation and other relevant factors. The agency noted that several elements could influence actual costs, including project scope, timing and phasing, potential increases in labour and material costs, ground conditions, market capacity, and modifications to statutory approvals, such as those introduced by the Fast-track Approvals Bill.
The cost estimation document released by NZTA indicates that the provided estimates are still subject to additional review and analysis, and the agency has requested that specific figures related to the projects not be referenced.
In a note accompanying the document’s release, NZTA stated, “The indicative cost ranges reflected cost escalation, changes in standards, and uncertainty from the projects’ early stage of development.”
After the government’s release of GPS 2024, the estimates may not accurately reflect the current costs for each project. NZTA is in the process of developing investment cases for all these projects to ensure they align with the scope expectations outlined in GPS 2024.