Hon Annette King
Minister of Transport

Major boost for land transport funding

The government's land transport spending is increasing to $13.4 billion over the next five years to guarantee and accelerate New Zealand's largest ever road building programme.

Budget 2006 allocates an extra $1.3 billion to guarantee the state highway programme and to speed up work on major projects to ease traffic congestion in Auckland, Wellington, and Christchurch. It also continues the momentum of much-needed improvements around New Zealand.

In addition, an announcement will be made tomorrow on a multi-million dollar funding package to address the Waikato region's transport needs.

These investments mean that over the next five years the government will spend $300 million more on land transport than it takes by way of petrol excise duties, road user charges, and motor vehicle registration fees.

"This will assure New Zealanders that the Labour-led government regards a world-class transport network, which moves people and goods safely and efficiently, as a centrepiece of our drive to transform the New Zealand economy," Transport Minister Annette King said.

"Today's package not only eliminates the projected $862 million shortfall in state highway funding and the whole National Land Transport Programme over the next five years, but also provides an extra $425 million to accelerate major projects, including:
• Warkworth Improvements Stage 1
• Manukau Harbour Crossing (Auckland Western Ring Route)
• Tauranga Eastern Motorway
• Investigation of Transmission Gully (Wellington Western Corridor)
• Christchurch Southern Motorway
• Arahura Bridge replacement.

See Appendix A for the full list of projects.

Some projects, which had been facing deferral as a result of the projected shortfall will now proceed, as set out last August in the State Highway plan, and in some cases will be speeded up.

The package guarantees funding for a five-year package of state highway construction and for other land transport activity, including local road construction activity, public transport services and maintenance of the roading network.

Annette King said the government was changing the funding arrangements to increase certainty, particularly around state highway projects.

The funding package will be delivered through a five-year, multi-year appropriation, which will be reviewed periodically to ensure that the construction programme can be delivered despite possible future revenue reductions or cost escalation.

"This is a significant departure from the past when funding was only guaranteed in one year blocks. Regions need to have confidence their issues are going to be addressed quickly. This major funding package shows that the government is determined to achieve this.

“To assist with reducing volatility, the funding package will be also accompanied by new revised funding and planning processes, which are being developed by the transport agencies.”

In addition, the advisory group established earlier this year to investigate ways of moderating cost increases in the roading sectors is continuing its work. It is looking at construction costs, design standards and processes, tendering processes, and the cost of materials and other inputs. The group will also look at procurement processes.

Land Transport NZ will decide the precise funding allocations under the new funding package.

Contact: John Harvey, press secretary, 04 4719 9305, 021 461 675,
john.harvey@parliament.govt.nz

Appendix A: Projects to be advanced due to today's $1.3 billion funding package:

Northland
Kamo Bypass Stage 1

Auckland
Manukau Harbour Crossing as part of the Western Ring Route
Warkworth Improvements Stage 1

Waikato*
Design of Longswamp to Rangiriri
Design of Huntly Bypass
Kopu Bridge Replacement
East Taupo Arterial (revised cost and scope)

Bay of Plenty
Tauranga Eastern Motorway**

Hawkes Bay
Hawkes Bay Motorway Extension (Southern)

Taranaki
Awakino Gorge

Manawatu/Wanganui
Ohinigaiti-Makohine Realignment
Papatawa Realignment

Wellington
Investigation of Transmission Gully**
Investigation of Basin Reserve Improvements
SH2/SH58 grade separation

Nelson/Tasman/Marlborough
Ruby Bay
Investigation of Whangamoa South

Canterbury
Christchurch Southern Motorway

West Coast
Arahura Bridge Replacement

Otago
Caversham four-laning**

Southland
Edendale Realignment

In addition:
Transit NZ is also investigating a number of other improvement projects. These include SH1 North of Auckland; SH1 (Auckland Southern Sector); SH3/21/1 (Hamilton Southern Links); SH29 (Kaimai Ranges); S1/2 Ngauranga to Airport (Wellington); SH6/60 (Nelson); SH6/6A (Queenstown).

*An additional announcement on a funding package for the Waikato region will be made tomorrow.
**These projects are also dependent on local funding to proceed.

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