NZTA grants relief to Transmission Gully contractor over 2016 quake, flooding delays

Friday 26th January 2018

The New Zealand Transport Agency has given the joint venture building the $850 million Transmission Gully motorway north of Wellington some breathing room on its completion date after the November 2016 earthquake, followed by torrential rain, held up the project.

The joint venture between CPB Contractors and HEB Construction building the 27-kilometre, four-lane highway updated its programme last year to include delays from those events, saying if the time impacts weren't approved by NZTA and the public-private partnership contractor, Wellington Gateway Partnership, then the April 2020 opening date could get pushed out further than anticipated, to August 2020.

The PPP contract has provisions for the contractor to seek relief if construction is hindered by events outside its control, subject to independent reviewer Aurecon New Zealand's approval. Those terms allow for an extension to the start date, or NZTA covering the change in costs.

NZTA senior manager project delivery Chris Hunt told BusinessDesk in an emailed statement the contractor sought relief for minor on-site delays as a result of the quake and flooding, which the government agency put to the independent reviewer.

"The independent assessment concluded that 20 additional days will be required to complete work on Transmission Gully as a result of these events," Hunt said. "The New Zealand Transport Agency has accepted this time extension."

NZTA valued the Transmission Gully assets and liabilities at $395.6 million as at June 30, 2017, up from $245 million a year earlier. The construction of the road, which traverses highly technical terrain, is estimated to cost $850 million, although the Crown agency anticipates $2.7 billion of total capital and operating expenditure to build and maintain the highway over 25 years.

The CPB HEB joint venture acknowledged the delays caused by the quakes and flooding last year, but said it had made good progress last summer, and monthly updates to WGP show it achieved "good productivities" in May and June, and wasn't hindered too much by winter rain.

The project faced a separate setback last year when it found work to dispose of "unsuitable material, ground improvements, environmental controls, topsoils stripping and stockpiling" didn't appear to be "sufficiently allowed for in the consents", and needed new consents for an additional 3 million cubic metres of earthworks, which it's subsequently received.

That pace of building work started hitting its stride last year with project hours on a 12-month rolling total reaching 1.63 million in September, up from about 897,000 in November 2016.

(BusinessDesk)

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