21 Feb 2013

Transmission Gully taxpayer cost 'trebles' under PPP

9:48 pm on 21 February 2013

The New Zealand Transport Agency has confirmed to a parliamentary committee that a Public Private Partnership for the Transmission Gully project would cost the taxpayer three times as much as if the agency built the road itself.

NZTA chief executive Geoff Dangerfield appeared before the Transport and Industrial Relations committee on Thursday to discuss the new road, north of Wellington.

Cabinet papers show that if a private consortium builds the new highway, the New Zealand Transport Agency would pay service payments totalling about $2.4 billion over 25 years.

The agency says that means Transmission Gully can be built more quickly.

If the agency built it itself, it would cost about $1 billion, plus ongoing maintenance.

Labour MP Phil Twyford questioned whether the Public Private Partnership is value for money.

"The real question for the motorist and the taxpayer is, are you prepared to cop a tripling of the cost - is $3.4 billion a reasonable price to pay for a $1 billion motorway? I don't think it is."

Mr Twyford said the Government has blown its budget for new motorways and now has to find new ways of funding them.

Geoff Dangerfield said the $1 billion is one-off construction cost and the other a long term financing cost.

He acknowledged the cost would be trebled, but said taxpayers also get the benefits earlier.