Rising costs eat crucial road fund

Auckland transport politicians fear roading cost rises may chew through a $1.62 billion funding package aimed at tackling their region's traffic woes.

Although Auckland state highway projects have enjoyed a general rise in the national priority queue in Transit NZ's latest draft 10-year plan, the agency reports alarming rises in both construction and maintenance costs before these are even off the drawing-board.

Hardest hit are six proposed projects for which total costs are estimated to have spiralled by $202 million in the past year to $769 million.

These include the would-be tolled motorway extension to Puhoi, the deviation of State Highway 18 through Hobsonville, the bypass of a notorious stretch of State Highway 2 at Mangatawhiri, and a duplicate Manukau Harbour crossing.

Transit national planning manager David Silvester also told Auckland's regional land transport committee yesterday of "significant" maintenance cost rises caused by greater volumes of heavy traffic and higher contractors' rates.

Their rates had risen "of the order of 15 per cent to 25 per cent on every tender" and heavy traffic numbers had grown 6.1 per cent for each of the past three years.

Transport committee economic development representative Chris Carr, who runs a road haulage company, said the increase in heavy traffic was a good sign as it reflected healthy economic activity.

But Rodney Mayor John Law said he feared all the extra $1.62 billion promised for Auckland transport projects over the next 10 years from Government funds and extra fuel tax "will be taken up in price increases".

Mr Silvester blamed the increases on higher prices for steel and other materials and costlier labour and transport.

"The increases are significantly outstripping CPI [the consumer prices index] and that's difficult to manage," he told the committee.

But he said Transit was trying to soften the blow by timing contracts to suit industry capacity and was preparing a report into the main drivers of price rises.

Former Automobile Association official Stephen Selwood, who retains his seat on the committee, feared the cost of widening the motorway bottleneck over Victoria Park may double from $160 million now that Transit was bowing to local pressure for a tunnel.

He warned that environmental mitigation costs would keep fuelling prices to the point that some projects may have to be traded off.

But transport committee chairman Joel Cayford said roads could no longer be pushed through communities without efforts to address environmental issues from the start, rather than waiting until later.

The AA is meanwhile concerned a review of Auckland's regional land transport strategy appears to favour public transport and "travel demand management" over what it says are the majority needs of car users.

No matter which of six packages of transport options is eventually chosen, about $3.4 billion is expected to be spent over the next 10 years on road maintenance, safety improvements and traffic management.

But the committee is wrestling over the allocation of another $7.3 billion among roads, public transport and demand management measures.

These include developing school and work-based travel plans and extending the region's minuscule cycling network, although "congestion" pricing to discourage road use at peak times is not being considered for the 10-year strategy.

A preferred strategy is expected to be chosen in April, followed by two months of community consultation and then public hearings in July and August.