Here’s hoping Transport Minister applies Transmission Gully lessons (and delays) to Light Rail project in Auckland

The Transmission Gully interim review has found serious flaws at the planning stage of the 27km highway, “undermining” the successful completion of the four-lane motorway north of Wellington, according to Infrastructure Minister Grant Robertson and Transport Minister Michael Wood.

Grant Robertson said the review found the public-private partnership (PPP) established under the last National government lacked the proper rigour and consideration.

The review was focused on how the project was awarded for the agreed price, whether the price was realistic, and whether the risks then identified were appropriately considered.

When  announcing  the  review  in  August last  year,  the  government said Transmission Gully would open by September 2021 but will cost another $208m to build, taking  the  cost  to $1.25bn.  Originally the  project’s  cost  was put  at $850m,   but Covid lockdowns  set it spiralling upwards.

At  that point in 2020 the government was  said  to have   “slammed” the delays and increased costs.

But hey – remember  that  Phil  Twyford  had   already  had  three  years as  Transport  Minister  to  expedite  the  project .  Yet all he  did was  order  a  review.

So  given that  history,  how  does  it  look  for the  Auckland $6bn  Light  Rail  project?

Michael  Wood stepped  into  the  Transport  portfolio  after PM  Jacinda  Ardern  recognised  Twyford  might  do   better  in some  other  portfolio (she gave him Disarmament, confident he can’t do much  harm there because there’s  not  much to disarm).

Wood, meanwhile, is “reviewing”  the  Light  Rail plan.

Perhaps  when  he  has  finished  that  review,  he  will come  up with  a  report  to  earn  the  same sort  of  headline as Transmission Gully got  from  the  Dominion-Post this morning:  “Gully  flawed  from  the  start”.

But the  fact  is the  review of  the Transmission Gully work  concedes  that  any project  on  this scale  is  likely to be “fraught”.

And  the financial settlement  Waka Kotahi reached  with the  contractors  last year acknowledged that the COVID-19 pandemic and the resulting disruptions and delays were outside the control of CPB HEB; they were not something they could have reasonably anticipated.

The inability to access the work site during COVID-19 Alert Level 4, the loss of productivity at Levels 3 and 2, border restrictions, and pushing the work programme into the winter season, had all contributed to increased costs and delays for the project.

Wood  should  be  reflecting  on the  complexity  of  the  Gully  project  as  he  gets to grips  with the  Light Rail scheme.   There  are  27  bridges, including  one that is  230 metres  in  length, as  well as 534 hectares of  ecological mitigation areas  and 27km  of stream remediation  along  the  Gully  route.

The  review,  while critical  of  parts  of  the  partnership  process, stopped  short of  saying  a  PPP  is  necessarily incompatible with a  project like  Transmission  Gully.

The  review  identified a  lack of transparency around how key PPP decisions were being made, less than ideal consenting risk management, a non-PPP scheme design used in the PPP procurement, and the price  set far too low from the beginning.

Robertson said  this obviously  was not a recipe for success and he has  called  for  a  revision of PPP guidance to make sure any future PPPs don’t encounter the same issues.

“There have also been other issues and cost overruns during Transmission Gully’s construction and Wellingtonians’ deserve answers. That’s why we’ve directed Te Waihanga to undertake a further review of the project after construction has been completed” .

Wood said the government  is committed to  learning the  lessons.

“Waka Kotahi and Te Waihanga will implement the recommendations from the review. We are making sure taxpayers and future governments aren’t left with similar messes like the one we inherited”.

Taxpayers  nevertheless may be  left   with  some  doubts  on that  score,  given   the  Ardern’s  government’s  performance in  wasting  their   hard-earned  coin  on (for example) the  Pike  River  mine  re-entry ($50m) or the  Hamilton -Auckland  commuter  train  ($82m).

And though Wellingtonians have waited a long time  for  a  second road  north  out of the  capital – a  route up  Transmission  Gully  was  first  mooted in 1919 – they’ll be relieved  when it finally  opens.

2 thoughts on “Here’s hoping Transport Minister applies Transmission Gully lessons (and delays) to Light Rail project in Auckland

  1. One of the biggest problems with the road cost was the contractual variations. NZTA changed the specs several times. That is the recipe for cost over-runs. And Councils are even worse at project management.

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  2. Reblogged this on The Inquiring Mind and commented:
    This post makes clear that a number of factors contributed to the increase, not least issues occasioned by the COVID-19 crisis. It would be useful to know if the government took account, prior to entering into the PPP, of the many lessons to be learned from projects elsewhere? Was a rigorous risk analysis done of the process for incepting the project? Was a rigorous risk analysis done of the construction issues? How was the project pricing arrived at? Given the congenital inability which seems to afflict the NZ public service in respect of major projects, what comfort should we have, that this will not happen again? I suggest little comfort at all.

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