A major multibillion-dollar Auckland roading project has been "rebalanced" after cost estimates more than doubled in a year to slash projected carbon emissions and divert funds into active transport.
Estimated costs for South Auckland's Mill Rd project had more than doubled in a year, from $1.4 billion to $3.5b, forcing a rethink along with for the wider NZ Upgrade Programme which had also ballooned from an original $6.8b to over $12.8b.
Mill Rd, which was to be a 21.5km arterial route, was expected to provide an alternate road between Manukau and Drury, running parallel to the east of State Highway 1.
It was costed originally at $1.4 billion, but Transport Minister Michael Wood said today this had ballooned up to $3.5b.
Manurewa-Papakura councillor Daniel Newman, slammed the Government's decision to effectively can the Mill Rd Highway, saying South Auckland residents and commuters cannot trust the Government to commit to delivering vital transport infrastructuure.
Newman said using climate change as an excuse for not delivering with the deficit in Auckland's roading network confirms that people cannot trust the Government to keep its promise.
"The Mill Rd project needs to be done in full. More delays will merely serve to blow out the land acquisition and construction costs even more than what we are currently seeing."
National has also come out strongly against the Mill Rd changes, leader Judith Collins saying it will leave "South Aucklanders fighting gridlock for decades to come".
Mill Rd is one of six projects in the ugrades programme, announced in February last year, that have been substantially changed after huge cost blowouts Wood has put down to Covid-19 and "red hot" construction industry.
At the launch of the NZ Upgrade Programme, Prime Minister Jacinda Ardern denounced the former National Government for not delivering the projects during its nine years in office.
"We have modernised these projects, we are funding them and we are delivering them," she said.
The Government has now added $1.9b to last year's programme, with the remaining 26 projects going ahead as planned.
Construction was expected to start on Mill Rd in 2022 and be completed by 2028, the biggest project in the programme, focused almost entirely on North Island projects.
In changes announced today, Wood said in light of the increased costs and climate commitments, it was important to take another look at the programme.
"Recognising the need to decarbonise our transport system, we're rebalancing the package to increase investment in rail, public transport and walking and cycling.
"If we had proceeded with Mill Road as originally scoped, it would have cost up to $3.5 billion and at peak produced six tonnes of CO2 emissions a day.
"Instead, we've focused on delivering important safety improvements to Mill Road, upgrades to SH1 and rail, and new rail stations connected to public transport, walking and cycling infrastructure."
Wood said not proceeding with the original four-lane upgrade, reduced to two, was not "shortsighted". The biggest concerns in that area were about safety, he said, and the wider projects including extra train stations would increase sustainable transport choices.
Over 47 per cent of New Zealand's greenhouse gas emissions come from transport, which had increased 90 per cent over the past 30 years, Wood said.
The Climate Commission's draft report, and final recommendations to be unveiled next week, calling for transformational changes in New Zealand's emissions profile, meant rethinking such transport projects, Wood said.
"This rebalanced package helps manage debt, reduces emissions and supports housing growth."
Over two-thirds of the projects in the programme will proceed as announced, despite increased costs due to Covid-19, with modifications being made to others, Infrastructure Minister Grant Robertson said.
"NZUP is already supporting over 1000 jobs with 13 projects under way, helping to secure our economic recovery," Robertson said.
"Covid-19 has increased construction costs around the world, and we've done the work upfront to understand the impact on NZUP projects which were announced pre-pandemic.
"Fully funding the new estimated costs for every project would have cost up to $6 billion extra on top of the original $6.8 billion, so instead we've taken a balanced approach with a mix of additional investment and a handful of projects being re-scoped while also keeping a lid on debt.
"We are using an additional $1.9 billion set aside in the multi-year capital allowance to support our targeted investments – this is being used so we can keep delivering projects and creating jobs across the country to support our recovery."
Robertson said he was concerned about the accuracy of the original estimates given they had nearly doubled in a year, but that was "the nature of largescale horizontal infrastructure projects".
"Costs can escalate."
The vast majority of the projects were in the North Island, with less than $500m allocated for the South Island.
Robertson said they were not ignoring the South Island, rather this specific upgrades programme was focused in particular on major urban areas experiencing growth. The South Island had seen investment in other roading and rail programmes, he said.
Other projects that have seen cost blowouts include the Ōtaki to north of Levin highway, from $817 million to $1.5b, which the Government has committed to funding.
Wellington's Melling Interchange will also go ahead as planned, with costs increasing from $258m to $420m in a year.
Also included in the package is a $685 million cycling and walking bridge across the Waitematā Harbour.
Wood said a lot of work had gone into that making that cost estimate as robust as possible, although he could not guarantee it would not increase in the future.
The new bridge is to become part of the Northern Pathway, which will extend dedicated cycling and walking routes to Esmonde Rd on the North Shore, with connections to Northcote and Takapuna. The pathway will cost an additional $100 million.
Wood said the Government was also looking into a temporary walking and cycle option using an existing lane on the bridge. He also signalled the next crossing to be announced would likely be focused on public transport and be a tunnel.
The Marsden Point rail spur, part of a $700m investment, would be a strategic investment in Northland's future prosperity, getting heavy trucks off the road to make the highway safer, and reduce emissions, Wood said. The investment gave no indication about the future port options though, he said.
Looking ahead Woods said Waka Kotahi would be making sure make all its investments were consistent with the country's decarbonisation goals.
Collins said Government's "fixation on walking, cycling, and forcing people out of their cars is out of touch with modern New Zealand".
Green Party transport spokeswoman Julie Anne Genter said they welcomed the Waitematā Harbour crossing and other "rebalancing" towards walking and cycling, but warned new highway investment puts the response to the climate change emergency at risk.
She said there needed to be more investment in transformational inter-regional rail services, public transport and safer walking and cycling infrastructure in communities.
"We are fast running out of time to address the climate emergency, and right now we must be focused on investing in low-carbon transport rather than pouring more money into a few over-priced sprawl-inducing stretches of motorway.
"The most expensive highways in this package will encourage more driving and urban sprawl, which is not only bad for the climate but also takes over highly productive food-growing land near our major cities."
Auckland Mayor Phil Goff said while two projects had been scaled back there were "big wins", nearly $4b worth of projects.