New tolls will be explored for New Zealand’s most-tolled region under a new agreement between Western Bay of Plenty councils and the Government.
The long-discussed Katikati Bypass is also on the agenda, earmarked for funding from asset sales.
The Western Bay of Plenty city and regional deal signed today at Bay Oval outlines a 10-year partnership delivering housing and transport projects.
Deputy Prime Minister David Seymour, Infrastructure Minister Chris Bishop and Local Government Minister Simon Watts signed the regional deal – the Government’s second after Auckland’s agreement last month.
The local parties are the Tauranga City, Western Bay of Plenty District and Bay of Plenty Regional councils.
The deal aimed to align how central and local government plan, fund and deliver infrastructure, after what leaders said had been years of disconnect between the two.
Bay of Plenty Regional Council chairwoman Matemoana McDonald said the agreement was an important milestone but warned its success would depend on continued collaboration.
“There are very difficult waters that lie ahead of us.
“We have to be grateful that we have had the opportunity to enter this deal today, but the more important thing that we must remember is that if we don’t work collaboratively and if we don’t join hands, this is not going to work.”
She said this was an opportunity to make a “glowing example” for the rest of the country.
The deal identified three major growth corridors centred on the Tauranga Eastern Link (TEL), Takitimu North Link (TNL) and Tauriko West. These were intended to support housing and business development.
It committed to prioritising two Roads of National Significance.
The first was the TNL stage two (Te Puna to Ōmokoroa), which was recently approved for Fast-track Approvals Act consent.
Widening State Highway 29A for Tauriko West was the other priority, to enable hundreds more homes and a 43ha expansion of the Tauriko Business Estate, plus about 3000 homes in the Keenan Rd housing growth area and industrial land development at Lower Belk Rd.
The deal’s “exploring further tolling” commitment may include “tolling of the three main highway entrances to Tauranga” – perhaps with different toll rates for trucks.
The region has two of New Zealand’s three toll roads, including the TEL (more gantries coming soon) and Takitimu Drive. The Government has confirmed the TNL will be tolled when it opens.
State Highway 29 over the Kaimai Range and State Highway 36 towards Rotorua are not tolled. Part of State Highway 2 north of Tauranga will become a local road when the TNL opens.
Bishop said the corridors “are going to unlock thousands of new homes and businesses and support thousands of new jobs”.
Estimates included capacity for about 12,000 new greenfield homes, 3000 infill homes, 350ha of industrial land and at least 15,000 new jobs.
Projects were expected to be funded through a mix of government transport budgets and council long-term plans, alongside new funding tools still being worked through.
Bishop said an “innovative feature” of the deal was a proposal for central and local government to jointly fund projects using proceeds from asset recycling and a Crown “uplift” – with total Crown contributions considered case by case.
Watts said no decisions had been made on which assets could be sold or repurposed.
“We have the opportunities to be able to recycle assets to deploy that capital into areas of high priority.”
The deal stated this would be used for projects to improve productivity along State Highway 2.
The initial projects agreed were the Connecting Mount Maunganui upgrades to Hull Rd, Hewletts Rd and Totara St, and the Katikati Bypass.
Katikati is bisected by SH2 and a bypass around the township has been talked about for decades – the library has material going back to 1960.
The deal also mentioned Health NZ plans to redevelop Tauranga Hospital in stages over 20 years, with a push to release the hold on Tauranga Racecourse land once earmarked for a new hospital.
Seymour said the agreement marked a shift in how central and local government worked together.
“For too long, there has been no co-operation,” he said.
“We’ve never had this level of formal co-operation between local government and central government.”
Watts said the key benefit of the deal was greater certainty.
“Often underestimated is the power of certainty – actually knowing what we’re going to do in the next decade and what we’re not going to do.”
He said the agreement would support long-term growth, productivity and resilience, positioning the Western Bay as a major trade and export hub.
“This deal is about ensuring growth is well planned, well connected and backed by the infrastructure communities need.”
Tauranga Mayor Mahé Drysdale said aligning priorities between central and local government would help address long-standing challenges in the region.
“By aligning central and local government in these areas, we can make real progress on solving some of the biggest issues communities face.”
Local MP Sam Uffindell said the agreement reinforced the region’s role in New Zealand’s export economy, driven by industries such as kiwifruit and freight.
“When this region grows, New Zealand grows.”
– LDR is local body journalism co-funded by RNZ and NZ On Air.
Ayla Yeoman is a Local Democracy Reporting journalist based in Tauranga. She holds a Bachelor of Arts majoring in communications, politics and international relations from the University of Auckland, and has been a journalist since 2022.