Rusting bolts, failed asphalt tests and Covid-19 are all contributing to rising costs on major highway projects, but savings have been made.
A section of the Pūhoi-to-Warkworth highway. Photo: Waka Kotahi screenshot
Between them, four of the biggest projects have exceeded their original estimated costs by about $300 million.
But the Hamilton section of the Waikato Expressway will open this month with a price tag $140m less than was allocated seven years ago, helping rein the increases in.
All four roads though are well over time compared to the original timeframes: Hamilton and Bayfair to Baypark in Tauranga are three years late; Pūhoi-to-Warkworth Ara Tūhono motorway is at least two years late; and Pekapeka to Ōtaki at least 16 months late.
Latest Waka Kotahi estimates are that the four will together cost $2.4 billion, compared to original estimates of $2.1b. Inflation over several years accounts for some of that, but not all, and the rises erode the cost-benefit ratios used to help justify construction in the first place.
It is more evidence of the skyrocketing costs for roading that forced the government last year to increase what it puts into the New Zealand Upgrade programme by $1.9 billion, to $8.7b, and to pull the pin on several of the programme's biggest projects, notably the Mill Rd highway in Auckland.
The numbers for the four highways are:
- Pūhoi-to-Warkworth - original estimate $710m and opening October 2021; new estimate $877m, equal to $47m per kilometre, to open 2023
- Pekapeka to Ōtaki - approx $320m, Nov 2020; $445m, $34m per km, late 2022 or early 2023
- Bayfair to Baypark - $102m, late 2020; $262m, $109m per km, late 2023
- Hamilton - $974m, June 2019; $837m, $38m per km, July 2022
Risk registers and project dashboards released under the Official Information Act reveal some unexpected difficulties:
At Pūhoi and Ōkahu, a quality control consultant "has reported on galvanised bolts ... which are rusting and remedial works are required", a report in January said.
Motorists have been driving across the Ōkahu Viaduct since May.
The Pūhoi Viaduct pictured when it was under construction in late 2020. Photo: Waka Kotahi
Waka Kotahi said it was up to the builders to deliver a safe highway.
"Waka Kotahi requires a regular report on potential risks and issues to ensure they are being addressed appropriately. That applies to the bolts on the viaduct in the same way it does to all other risks and issues identified," it told RNZ.
It referred RNZ's questions to the joint venture, NX2, between Fletcher and Acciona.
Nerves were showing through at Pekapeka to Ōtaki: "[Name blanked out] is a little bit nervous due to not having a Quality Manager who has handed over a project like this," one note says.
The project has had to shell out an extra $50m on stronger asphalt to try to avoid the surface problems that bedevilled Transmission Gully during construction and State Highway 1 through Paraparaumu after it opened.
But trials of the wonder product - epoxy modified open graded porous asphalt - "have not been successful", one report says.
Also, costs had been incurred by "extensive lab testing and laydown trials of paving with new types of bitumen".
"This was necessary due to a change in the source of bitumen used on New Zealand roads as Marsden Point Refinery decided to cease production of locally made bitumen."
The actual job of laying it required "extensive quality assurance". Some earlier asphalting had "issues/rework needed".
The epoxy asphalt job has had to be put off until after winter, one of the major hurdles for a highway where the timelines keep shifting. Recently, a February 2023 opening date was brought forward to Christmas 2022 or even October, perhaps.
"Financial stability may be affected as the impacts of the Omicron outbreak become clear," another report said in March.
"All major claims to date for these time-related and indirect costs have been negotiated and settled with Fletchers. Further claims are expected as Covid-19 impacts continue to affect the project."
At Hamilton, though the highway is not as expensive as it could have been, it is costing a lot more per kilometre than other parts of the Waikato Expressway.
Partly that was due to dealing with iron ochre in groundwater around Ruakura and peat around Resolution Dr, NZTA said.
"Surfacing didn't have any significant impact on increased costs," it said.
"The road was designed for a 110km/h speed limit from the outset."
Pūhoi-to-Warkworth is a public-private partnership project, adding to the interest in its progress because the first highway built under a PPP was Transmission Gully motorway near Wellington, which was much delayed and the government criticised that PPP.
OIA reports on Transmission Gully show just how worried project reviewers were about the builder rushing to try to meet a deadline to open by September and then Christmas last year.
"We continue to have serious concerns about the condensing of works completion," the review engineers said in August last year, after reports noting how the chipseal was bleeding and how water lying around on the saddle "in winter will be a safety issue".
"This now presents an extreme risk to the builders' and the contractors' ability" to finish the highway, the review said.
Transmission Gully finally opened in March.
Transmission Gully which has been open for three months after years of delay. Photo: Supplied/ Dan Bailey
