Ōtaki to north of Levin highway cost doubles to $2.1b, construction yet to start

Work on the Peka Peka to Ōtaki Expressway at Te Horo, Kapiti Coast – a section of the expressway that will be extended to north of Levin. Photo / Mark Mitchell

A lower North Island highway has more than doubled in cost in just six years – despite not having even begun proper construction.

NZTA Waka Kotahi confirmed the Ōtaki to north of Levin highway’s budget had been increased to $2.1 billion, with the agency’s board agreeing to provide an extra $427 million to keep the road on track.

Transport Minister Chris Bishop hit out at the previous Government for the cost escalations, noting it was included in the beleaguered NZ Upgrade Programme.

“This road was originally costed at around $800m in 2020 under the previous Government. Like all the NZ Upgrade projects, it was basically costed on the back of an envelope very quickly so [then-Finance Minister] Grant Robertson could announce projects at the start of election year.

“Ironically, many of these projects were ones that Labour had cancelled in the first place when coming to office in 2017,” Bishop said.

“Our Government is committed to the road as it will deliver substantial safety benefits and unlock business and housing growth.”

The Greens’ transport spokeswoman Julie Anne Genter told the Herald that going ahead with the road after another cost escalation was an example of “the coalition Government ploughing ahead with a highway at any cost”.

She said the Wellington region would be better served by “rail investment, along with safety improvements to the existing roads”.

The new figure was first reported by BusinessDesk, owned by Herald publisher NZME.

The road is a link in the Kāpiti Expressway, which connects the capital with the lower North Island.

The highway began as a proposal to take the expressway to Levin and beyond. The expressway is a road of national significance project and was built in stages. It links the Transmission Gully motorway with a string of four-lane, grade-separated projects along the Kāpiti coast.

It was funded to the tune of $817m in 2020 as one of the NZ Upgrade infrastructure projects by the then-Labour Government.

That programme was fraught and most of its road projects increased in cost in the space of just months. By 2021, some of the upgrade projects were dropped, others were scaled back, while others had additional money tipped into them to keep them on track.

The Auditor-General later criticised the upgrade programme for being hurried with a focus on announcing projects quickly – in many cases before up-to-date business cases could be completed.

The Ōtaki to North of Levin highway was one of the lucky roads to get additional funding to stay on track, with Labour increasing its budget to $1.5b.

In May 2025, NZTA went out to the community with some cost-saving proposals as it had escalated to around $1.7b. Those cost-saving proposals were mainly rejected.

BusinessDesk reported these changes were rejected because rescoping aspects of the project would have required reconsenting, which could have caused significant and costly delays.

An NZTA spokesman said the agency’s board opted to put extra money into the project because “it considers it a high priority relative to other initiatives included in the National Land Transport Programme”.

“The road will be tolled, as announced by the Government in December 2024, with revenue raised and returned to the National Land Transport Fund, which will include the maintenance for Ō2NL [Ōtaki to north of Levin],” he said.

Genter, who has criticised the NZ Upgrade roads since they were announced – despite being an associate transport minister in the Government that announced them – warned that tolling would not cover close to the full cost of the road.

“This project won’t get the test of paying for itself with tolls,” she said, noting a submission made by the Infrastructure Commission to the Transport and Infrastructure Select Committee last month.

That submission said that for a road to completely pay for itself it needed to cost about $32m a km, save motorists 15 minutes and have about 40,000 vehicles travel on it a day.

This highway costs about $85m a km and is expected to have more than 20,000 vehicles travel on it each day by the late 2030s, according to NZTA business cases.