The Government has confirmed it is considering using a public-private partnership to build the largest roading project undertaken in New Zealand to complete Auckland's Western Ring Route.
Finance Minister Michael Cullen said the Government preferred a "deep tunnel option" at a cost of $2 billion to minimise disruption.
The 5km tunnel to be built largely under Prime Minister Helen Clark's Mt Albert electorate should be completed by 2015 and would be called the Waterview Connection.
Dr Cullen said in a speech to the Auckland Chamber of Commerce the project could have significant benefits for the Auckland economy.
"We believe that the private sector has much to gain from Waterview and that the entire community - and the taxpayer - could have much to gain from involving the private sector in its construction.
Transport Minister Annette King said Sir Brian Elwood would chair a steering group to see whether the private sector should be involved and, if so, in what way.
Ms King said any partnership would not entail privatisation of the stretch of road to be built and the group would report back on options in June.
Material released by the minister said the completed project could be leased to a private sector company for up to 35 years and raised the possibility of tolls being charged.
The Waterview Connection is a proposed state highway extension in Auckland running from Mt Roskill to the Northwestern Motorway.
Once finished the Western Ring Route will be a single 48 kilometre motorway, bypassing the city and linking Manukau, Auckland, Waitakere and North Shore.
Ms King said Transit New Zealand would continue working on other aspects of the ring route while consideration was given to a private-public partnership for the Waterview Connection.
The Government has already passed legislation allowing the private sector to get involved in large infrastructure projects, but has never given one the go ahead.
Overseas the arrangement usually a private company building the project and then charging the Government or public for its use.