The Government released its Draft Government Policy Statement (GPS) 2018 on land transport last week.
Among the proposed changes was a 96 per cent increase in funding over three years to support regional projects improving safety, resilience and access, and an 11 per cent decrease in funding for state highway improvements.
Te Ngae Rd upgrades could fall into either category.
In the same week the Rotorua Lakes Council Operations and Monitoring Committee meeting agenda said work on the Tarawera Rd intersection, as part of the Connect Rotorua project, was expected to start about September. But the NZ Transport Agency (NZTA) says that date is yet to be confirmed.
A spokeswoman for NZTA said detailed plans, costs and timing for specific transport projects, including Connect Rotorua, could not be provided until the final GPS had been adopted.
"At that stage we will have greater certainty about what the final GPS will guide us to invest in through the next National Land Transport Programme and which projects we will deliver to meet the new Government priorities."
The proposal to have four-laning out to Rotorua Airport is also up in the air, with the project ranked 12th out of 35 priority projects in the Regional Land Transport Plan 2018.
Rotorua MP Todd McClay said the decision to use government funding to improve Te Ngae Rd sat with NZTA, which he claimed had "shown no commitment to the Te Ngae Rd project".
"I pushed really hard for improvements to Te Ngae Rd in the last Government as it is a priority for Rotorua and is exactly what is needed, but there is no clear commitment from the current Government for a road like Te Ngae."
Last September former Prime Minister Bill English promised to extend Te Ngae Rd to four lanes by 2020 - a move McClay at the time said would ease congestion, make Rotorua more appealing and improve safety along State Highway 30.
"The only way the four-laning project would be finished by 2020 is if it was started this year, but I've seen no sign of that happening. This project is becoming increasingly urgent but without that commitment from the Government and NZTA, it's hard to see it being done in the near future.
"I will continue to push for this to be a priority," McClay told the Rotorua Daily Post.
Te Ngae Rd is regarded as one of Rotorua's busiest roads and plans to remedy the congestion have been discussed for years.
Plans for its upgrade were revealed when the council voted for the removal of the Rotorua Eastern Arterial roading project designation in April 2016, which would have run through sensitive Maori land of Te Arawa hapu.
The upgrade includes intersection improvements in the Sala St, Tarawera Rd and Iles Rd area, two 3m shared walked and cycling corridors and four-laning to Iles Rd.
Waiariki MP Tamati Coffey said the Government had two goals for its new investment in roading.
"First and foremost, safety, and then the upgrading our local roads which over the last nine years have fallen into disrepair in favour of the bigger projects.
"We're going to see a lot more investment going into reducing road deaths and into supporting growth in the regions."
Coffey used the expansion of Te Ngae Rd as an example of "hollow promises" made by the National Party leading up to the election.
"Regarding Te Ngae Rd, while the GPS provides a strategic direction for funding, it's always been the case that the NZ Transport Agency independently makes decisions about what individual roading projects get funded."
Coffey said he could not say how the "rebalancing of transport investment" would affect decisions around Te Ngae Rd as NZTA's decisions were made at arms-length of the Government.
"But as the local MP that understands that the expansion of Rotorua depends on the ability to keep traffic flowing, I will continue to advocate for it.
"I know based on previous statements that NZTA are closely monitoring the traffic growth trends in Rotorua and that our council has been working closely with NZTA."
Mayor Steve Chadwick said in a written statement the council "took the opportunity to advocate on behalf of Rotorua whenever we speak with government ministers".
"We'll continue to do that to ensure the Government and its agencies are very aware of Rotorua's progress, needs, challenges and opportunities.
"Improving the city's eastern corridor remains a priority for the council and there is progress."
She said work was also progressing on the business case for four-laning from Iles Rd to the airport.
"We are asking that the Bay of Plenty Regional Council elevate this project in terms of regional priorities.
"All key corridors in and out of our city are priorities for us and we will continue to work with NZTA to ensure our roading network caters for both current and future needs of our growing district."
NZTA director regional relationships Parekawhia McLean said the agency was developing a new draft state highway investment proposal based on the guidance of the draft GPS.
"This will outline the proposed investment in state highway improvements during the next three years in line with available funding in the draft GPS."
The Government's draft GPS is open to public engagement until May 2 with the final GPS to be adopted by June 30.