Two compete for $848m Kiwi highway

Consortia led by Leighton and John Laing Investments have been shortlisted to build the 27km Transmission Gully project.

The New Zealand Transport Agency (NZTA) shortlisted two consortia today for the country’s first-ever road public-private partnership (PPP) – the Transmission Gully highway, set to open in 2020. 

Wellington Gateway Partnership – led by Leighton Contractors and including HEB Construction, InfraRed Infrastructure, Bank of Tokyo-Mitsubishi and the Accident Compensation Corporation – and Positive Connection – led by John Laing Investments and comprising Fulton Hogan, The Fletcher Construction Company, Macquarie Group Holdings New Zealand and Woodward Infrastructure, general partner for the PIP Fund – are the two selected teams. 

The NZTA will issue a request for proposals to the two consortia with a view to announcing a winner in early 2014. The 25-year Transmission Gully project will be a design, build, finance, maintain and operate contract linking the northern Wellington region, the Kapiti Coast, and Auckland over 27 kilometres. It is set to cost about NZ$1 billion (€650 million; $848 million). 

The highway contract carries no traffic risk for the private sector partner, which will instead receive availability payments from the government in exchange for making the asset available in good condition. Still, the NZTA is considering whether to toll the road. Tolls, however, would always be collected by the NZTA and would not tie in to the PPP contract in any way, the agency stressed. 

Additionally, the two shortlisted bidders will have to convince the transport agency of the merits of the PPP model. 

“The bottom line here is value for money, and the successful bidder will have to demonstrate clearly that New Zealand motorists and taxpayers will be better off than if the road were to be built with a traditional procurement and funding model,” said Geoff Dangerfield, chief executive of the NZTA. 

Transmission Gully is New Zealand’s third PPP, following the Wiri Prison and Hobsonville schools PPPs – both 25-year contracts, expected to launch between 2013 and 2014.