Millions in new costs add to Pūhoi to Warkworth motorway over-run

By Phil Pennington of RNZ

Waka Kotahi New Zealand Transport Agency has paid road builders millions more on top of the billion-dollar cost of the Pūhoi to Warkworth motorway.

Official information suggests $77 million has been paid to a Fletcher target="_blank">Construction alliance with Spanish giant Acciona, and there may be more to come.

Last year the claims, mostly over extra costs due to Covid disruptions in 2021-22, were put at $280m.

This week, they were put at $203m in the pre-election fiscal update.

Waka Kotahi told RNZ it had paid part of the claims, though did not say how much.

The rest - which it did not give a figure for - would be tested through a binding dispute process, it said.

The fiscal update said the agency “has not been presented with any evidence to indicate that a claim of that size would be supported by an independent reviewer”.

Fletcher’s annual report also shows it was working out the impact on its margin of 18 landslides and damage to the new motorway.

The public-private partnership (PPP) road north of Auckland opened in June, while still dealing with a slow-moving landslide pressing up against it, thought to have been triggered by the storms in February and March.

“Landslides do not give the contractor a right to additional compensation under the Project Agreement,” Waka Kotahi said.

The Pūhoi-Warkworth motorway. Photo / NZME

Earlier, construction costs for the 18km motorway were put at $709m plus two earlier settlement payouts - one for Covid, one for “historic” claims - together totalling $165m.

At its June opening, the cost was widely reported as $877m, and this is still how the estimated project cost appears on the official website.

“The more recent government-reported value of $1.05 billion for the project road also includes additional costs such as property purchased,” the agency told RNZ.

“Final costs will not be known until all claims for additional cost entitlement from the contractor have been resolved.”

Finishing-off work had still to be done, as of last month, including completing earthworks at the northern end where the biggest slip is, and finalising work on local roads nearby.

The PPP gives an alliance of Acciona and Higgins 25 years to manage and maintain the road.

The next stage through to Wellsford also faces slip-prone terrain. It is still caught up at the Environment Court.

Waka Kotahi said it was making good progress with one submitter who had appealed after the resource consents and Notice of Requirement processes began in 2020.

“No decision has been made on the contract model for the project.”

It did not expect any work to begin this decade.

At least two of the following triggers must occur for the Wellsford stage to get the go-ahead:

· Death and serious injury savings forecast from Dome Valley safety improvements not achieved within three years

· A 30 percent increase in total number of SH1 closure hours per year from 2018 levels

· A forecast of traffic volumes exceeding 25,000 per day

Other roading claims not related to PPPs total about $114m, up from $100m last year, the fiscal update said.

It showed a contingent liability for Waka Kotahi over contractual disputes totalling $317m in June, down from $431m in March.

- RNZ