Work on the new $5.25 million roundabout at Te Puna is due to start in May and could reduce the number of crashes at the spot by as much as 80per cent.

The NZ Transport Agency yesterday announced the contract had been awarded to Downer.

The two-lane roundabout would replace the Te Puna/ Minden Rd intersection just north of Tauranga.

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Subject to approvals and property purchase, preliminary work was due to start in May and would be split over two construction seasons with work due to be completed by mid-2017. The agency's acting Bay of Plenty highways manager, Chris Young, said the new roundabout would make it safer and easier to travel as traffic volumes increased on State Highway 2.

"Roundabouts naturally slow traffic and reduce the chance of head on or side impact crashes, reducing the risk of death or serious injury if someone makes a mistake and crashes.

"Our data shows that changing a T-intersection to a roundabout reduces death and serious injury crashes by 90 per cent, while the total number of crashes reduces between 25 to 80 per cent."

The cost of the project including preliminary works and property purchase will be $7.5 million.

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The Te Puna Memorial Hall will be deconstructed later this year to make way for the new roundabout.

The roundabout was part of a $12 million package of works that had been rolled out to boost safety on State Highway 2 while a long-term plan was finalised.

"The majority of crashes on this road are head-on and run off road," Mr Young said.

"While we cannot necessarily prevent someone making a mistake and having a crash, we can create a more forgiving road environment so that people don't pay for a mistake with their lives."

More than $5 million worth of safety improvements had been carried out on the road between Bethlehem and Waihi during the past two years including 10km of guard rail.