Transmission Gully project next PPP?

Part of the proposed Transmission Gully route State Highway 1 near Pauatahanui, north of Wellington.

Transport Minister Gerry Brownlee has signalled Wellington's planned $1 billion Transmission Gully project would be "ideal for a Public Private Partnership".

Brownlee has asked the NZTA to report to him on options for funding the planned 27km link between MacKay's Crossing and Linden, which will provide a more direct route for getting out of the capital on State Highway 1.

"Transmission Gully is consented so it can move forward much more quickly and is ideal for a PPP," Brownlee told the Herald.

"I've asked NZTA to investigate and they are putting together some big documents and I expect them to come back probably in October."

In June, an independent board of inquiry granted consent for the new inland highway, which will shave considerable time from peak-time journeys between Kapiti and Wellington. NZTA expects to begin construction in 2015 and complete it by 2021.

Brownlee sidestepped questions on whether the Government would consider Chinese capital participation through an alliance for Transmission Gully - something that has been mooted in infrastructure circles.

The Transport Minister also said he has asked NZTA for advice on different funding options for major roads.

Government revenues have dropped in response to the greater fuel efficiency in the modern New Zealand fleet. NZTA is expected to report back in October.

The Herald last week reported that the Government would remove the limits on NZTA's ability to borrow to ease a funding squeeze that threatened to delay the $9 billion roads of national significance programme.

The Transport Agency - which is funded via road user charges, fuel taxes, and vehicle registration and license fees - is currently permitted to borrow money to "manage its cashflow" or cover short-term funding shortages.

Brownlee told the Herald the borrowing ability was capped at $250 million. But he has introduced an amendment to the Land Transport Management Act that would remove the limit and allow the agency to borrow "to fund future land transport projects, subject to the agreement".

The Government is also preparing to make a decision on whether the Clifford Bay ferry terminal in Marlborough should go ahead.

A business case is being prepared, and Brownlee expects the Government to release its position in late September or early October.