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Media release: NZ Transport Agency
The NZ Transport Agency has welcomed the Government’s decision to allow the Agency to finance, design, build, manage and maintain the Puhoi to Warkworth motorway through a Public Private Partnership (PPP).
Transport Agency Chief Executive Geoff Dangerfield said it was a significant step towards improving the safety, reliability and resilience of State Highway 1 between Northland and the upper North Island freight triangle of Auckland, Waikato and Tauranga.
In September 2014, a Board of Inquiry confirmed approval of the Transport Agency’s application for designation and resource consents for the project. Mr Dangerfield said the Puhoi to Warkworth project seeks to procure a PPP contract that would deliver a value-for-money motorway which will assist economic growth in Northland.
“The imperative is to achieve this and deliver a motorway that will provide greater resilience, improved road safety and journey time reliability, and a better connection for freight, tourism and motorists.
“A PPP contract will likely see the PPP consortium operate and maintain the motorway for the 25 years that will follow the anticipated six-year period to build the motorway.” He said PPPs are a particularly suitable procurement method for delivering great results for large-scale and complex infrastructure.
“Using a PPP for key infrastructure projects will open the door for private sector innovations that are not always achievable under traditional public sector procurement methods. “PPPs allow specific outcomes to be established and measured – and for risks to be identified and transferred to the private sector.
“An outcomes-based PPP for the Puhoi to Warkworth project will also allow great flexibility within the designation to achieve optimised innovative outcomes.” Mr Dangerfield said that under a PPP, full ownership of the motorway will always remain with the public sector. “The nature of the contract to be used will provide a strong incentive for the successful PPP consortium to deliver the best possible results for road users.”
The next steps in the PPP procurement process for the project will see a shortlist of PPP consortia expected to be identified by the third quarter of 2015, which will be followed by the selection of a ‘preferred bidder’ by mid-2016, and the awarding of the PPP contract in the last quarter of 2016. These timeframes are indicative only and may be subject to change. Tentatively, construction of the Puhoi to Warkworth motorway, under a PPP arrangement, could possibly start in late 2016 with the road completed and open by 2022. Mr Dangerfield said no decision has been made on tolling for the Puhoi to Warkworth route but should the motorway be tolled, the Transport Agency would retain responsibility for tolling.
“The public would be fully consulted on any tolling proposal which must also obtain Ministerial approval,” he said. He said the Transport Agency would continue to consider PPPs for other large-scale and complex infrastructure projects which could potentially benefit from the innovation and value-for-money that can be achieved through a PPP approach. The first state highway in New Zealand to be delivered through a PPP is the Transmission Gully (MacKays to Linden) project in Wellington. In July 2014, the Transport Agency signed a PPP contract with the Wellington Gateway Partnership (WGP).
Work on Transmission Gully began in September last year, and the motorway will be open for traffic by 2020. In late 2014, the Transmission Gully motorway project was named the ‘2014 Asia-Pacific PPP Deal of the Year’ by two international project finance publications (Project Finance International [PFI] and IJ Global). In addition, the project was highly commended at the Infrastructures Partnerships Australia (IPA) National Infrastructure awards in March 2015.
Visit the project website.
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Media release: Transport minister Simon Bridges
The construction of the Pūhoi – Warkworth Highway that will connect Northland and Auckland has moved a step closer, Transport Minister Simon Bridges says.
“Cabinet has approved the NZ Transport Agency (NZTA) to move to the next stage of procurement as a Public Private Partnership (PPP) to finance, design and build the project,” Mr Bridges says.
NZTA will invite private sector companies to put forward proposals for financing, designing and constructing the highway, with a view to awarding a PPP contract in October 2016.
“The private sector will have the opportunity to bring innovative design, operation and risk management to deliver the project more effectively than traditional procurement methods.
“If, however, the private sector can’t offer value for money, NZTA would instead revert to a more traditional procurement model. Construction without a PPP would likely begin around two years later than under a PPP,” he says.
“The Puhoi to Warkworth project is the first section of the Ara Tūhono – Pūhoi to Wellsford Road of National Significance. This critical link will provide opportunities for economic and social development in Northland, providing a better connection for freight, tourism and motorists.
“The Puhoi – Warkworth project is the second Road of National Significance section to be considered for a PPP. The first, Transmission Gully, will open in 2020, with the PPP model allowing its construction to commence while freeing up around $1 billion of Crown funding for investment in other transport projects,” Mr Bridges says.
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Media release: Winston Peters NZ First Leader Member of Parliament for Northland
Transport Minister Simon Bridges’ announcement that the Puhoi to Warkworth Highway is to be put out to tender as a public-private partnership doesn’t even contemplate a highway outside of the Auckland super city boundaries, says New Zealand First.
“In other words, what happened to the Puhoi to Wellsford super highway promised by National in the recent Northland by-election? says New Zealand First Leader and Member for Northland Rt Hon Winston Peters.
“The Prime Minister, Mr Key, allowed Mr Bridges to make that promise during the by-election knowing there was an absence of engineering plans and costings.
“However, as things now stand the public-private partnership option for a lesser highway is an enormously expensive option.
“Claiming that it will ‘free up $1 billion of state funding for other projects’ is just more smoke and mirrors,” says Mr Peters.
“Of serious concern is that the government is able to borrow at much lower interest rates than private interests, who will immediately pass the costs on to users.
“Any examination of Mr Bridges’ press release demonstrates how loose the government is with forward costings. For example, how will the PPP option free up $1 billion?”
Media release: NZ Automobile Association
The AA has welcomed today’s decision by the Government to allow the Puhoi-Warkworth Road of National Significance (RoNS) to be delivered through a public-private partnership (PPP). The new stretch of road is expected to be built between 2016 and 2022, and the PPP would likely see the successful consortium manage and maintain the highway for the next 25 years.
“It’s great to see the project move into the next phase,” said AA spokesman Barney Irvine.
“Doing it as a PPP provides an excellent chance for innovative approaches and value-for-money results, and that’s exactly what we want to see.”
Mr Irvine added that the project offered important road safety, travel-time, and resilience benefits, and would play an important role in increasing economic activity in Northland.
“Anyone who has driven this road over the last few years, and witnessed the ever-increasing volume of truck traffic, knows that it’s much more than a road for holiday traffic,” said Mr Irvine.
“This is Northland’s economic and social lifeline to the rest of New Zealand.” The Government expects a shortlist of PPP consortia to be identified by the third quarter of this year, a preferred bidder to be selected by mid 2016, and the contract to be awarded by the last quarter of 2016.
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