The Government's transport packages in Auckland and Wellington face cuts if the Government fails to plug a hole in Waka Kotahi NZTA's funding.
Officials warned a lack of funding could embed a "run to failure" approach, leading to increasingly cracked and potholed roads, which could see 30-40 additional deaths or serious injuries on state highways by 2024 unless spending was increased or speed limits were tightened.
The information was contained in a briefing released to the Herald under the Official Information Act, which warned of funding pressures - the pressures were eventually addressed with the Government handing Waka Kotahi a $2 billion loan.
But before that loan was confirmed, Waka Kotahi warned lack of funding would mean an "overall deterioration" of assets and "increased backlog in maintenance and renewal activities" which would require more investment in the future.
Bridge and structure renewals would need to be cut by a fifth, increasing the chance bridges would become unsafe and would need to be closed. Footpath repairs and replacement would also be cut by a fifth, meaning more "cracked and uneven surfaces" for pedestrians.
The key issues are the higher construction costs and lower revenue for Waka Kotahi - though low revenue is not mentioned in this specific paper.
Waka Kotahi earns about $4 billion a year from fuel taxes and road charges, which it reinvests in things like roads and public transport.
As the economy decarbonises, Waka Kotahi has warned that more people driving EVs and taking public transport will shrink its revenues at the same time road maintenance and public transport subsidy costs increase.
These concerns came to a head in May 2021, as Waka Kotahi was putting together its three-year funding plan for 2021-24.
Waka Kotahi warned the Government that declining revenue expectations and increased costs in everything it was funding would put pressure on it to meet its funding commitments.
The organisation then briefed ministers that it was considering funding the increased cost of public transport, while underfunding the increased cost of road maintenance.
For an organisation often accused of over-funding roads at the expense of public transport, putting public transport first was an unlikely decision.
The paper showed Waka Kotahi wanted to fully fund a 16 per cent increase in the cost of public transport services - essentially subsidies for councils to run their buses and trains. Waka Kotahi said while this represented 100 per cent of the required cost of public transport subsidies that would be needed to keep the public transport system "at current levels".
It would come at the cost of local road and state highway maintenance, which would be given funding equivalent to just 93 and 88 per cent respectively of what is believed would be needed to maintain service levels.
Officials warned that these funding decisions had "the potential to significantly impact our ability to meet investment expectations and Government commitments in 2021-24 for Road to Zero, ATAP and Rail Network Investment Plan, and LGWM [Let's Get Wellington Moving]".
The Government's loan to Waka Kotahi will only help it meet its costs over the course of the 2021-24 funding plan.
However, what happens beyond then is up in the air. The Government has said it will review Waka Kotahi's funding model, helping it shift to something more sustainable - possibly switching all road users to the road user charges system.
Green Party transport spokeswoman Julie Anne Genter said it was concerning Waka Kotahi was presenting the main funding conflict as a trade-off between public transport service funding and road maintenance, when so much spending was occurring in new road building.
"In this paper, it's a trade-off between public transport and maintenance of local roads and state highways when the big spending is in new capex [capital expenditure] and land acquisition for new roads, which are going to require more maintenance funding in the future.
"Arguably that's where the trade-offs should come: between maintenance and expansion," she said.
Genter said that while she was happy public transport services funding was not considered for cuts, the Government should actually be looking to expand it.
But National's transport spokesman David Bennett disagrees. He said the decision shows Waka Kotahi's desire to sacrifice roads for the Government's preference of public transport.
"The Government is fixated on public transport at all costs. Their public transport agenda is to override any other form of transport," Bennett said.
"They are hell-bent on maintaining public transport at the expense of the roading network."
Waka Kotahi makes funding decisions independently but is guided by the Government's priorities - in this case, public transport.
Bennett warned that a "failure to maintain state highways will mean a deferred $1.5b-$2b in costs to deal with deteriorated state highways", citing figures in the briefing.
Transport funding cuts would be particularly bad news for Wellington's $6.4b Let's Get Wellington Moving (LGWM) programme, which is funded jointly by the Government, Wellington City Council and the Greater Wellington Regional Council.
Earlier this year, the Government warned Wellington's councils were struggling to fund their 40 per cent stake in the programme - and now a Waka Kotahi briefing from May has warned Waka Kotahi, responsible for the Government's share, will struggle to keep its side of the bargain if its revenues decline as expected.
This could complicate talks around which of the four Let's Get Wellington Moving transport packages Wellingtonians want to build, which are believed to vary significantly in cost.
The Auckland Transport Alignment Project (ATAP) could also be put under pressure, although it has the advantage of Auckland Council's share being funded by the Auckland regional fuel tax.
The most serious concern is in the area of local road maintenance - these are roads that are not part of the state highway network.
Waka Kotahi was considering underfunding them by $159m - and giving councils $394m less than they thought they needed.
Waka Kotahi warned this would lead to "overall deterioration in network condition and an increased backlog in maintenance and renewal activities".
It said there was an "increased risk of asset failures" and death, mainly due to "reduced skid resistance".