Actual cost of Transmission Gully to be $2.5 billion

Friday, 7 November 2025

Transmission Gully has road surface problems, three years after it opened.

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Transport Minister Chris Bishop has confirmed the total cost of Transmission Gully will be $2.5 billion, as a needed repair job has reignited debate about its cost.

The oft-cited estimated cost of Public-Private Partnership (PPP) built Transmission Gully is $1.25b, a figure used by the New Zealand Transport Agency (NZTA) and frequently in media reports since the 27-km highway opened in March 2022.

However, Bishop has been pressed on the total cost of the troubled roading project to the Crown after a confidential settlement with the road builders, and questions about a summer-long rebuild of a 6km section of the road which began this week.

In the House on Thursday afternoon, Bishop confirmed the $1.25b cost was separate to the average annual $113m payments made under the terms of the PPP arrangement to the road builders, a consortium called Wellington Gateway Partnership.

Despite troubles with Transmission Gully, Transport Minister Chris Bishop has said lessons have been learnt to improve future PPPs.

“The cost of the road was $1.25 billion to build it, and there’s an ongoing cost to the Crown for the reimbursement of the people who built the road in the first place,” Bishop said afterwards.

His office later confirmed the $1.25b figure was the “traditional construction cost” equivalent, which comprised of the original $850m cost of building the road under the PPP arrangement, plus $400m paid for two commercial settlements over delays caused by problems including the Kaikōura Earthquake and Covid-19 restrictions.

But this sum excludes both capital and interest costs paid to the road builders by the Crown under the PPP arrangement, through the quarterly payments averaging $113m per annum.

“The amount was going to be higher than that. It’s now less than that, because we’ve taken over the cost of ongoing operations and the maintenance,” Bishop said.

Green Party transport spokesperson Julie Anne Genter says PPPs don’t transfer risk away from the Government, despite a greater cost.

This meant the expected total cost of the 25-year contract, according to Bishop’s office, was $2.5b.

This was separate from ongoing maintenance and repair costs. NZTA has said $32m has been budgeted for maintenance and repair of Transmission Gully over the 2025/26 work programme. The cost of the 6km rebuild job was confirmed by Bishop to be covered by a third commercial settlement, obtained from the road builders.

Green Party transport spokesperson Julie Anne Genter, who questioned Bishop about the project cost in the House, said the Government appeared to be “trying to obfuscate and hide the true total cost of Transmission Gully”.

“They've said that settlements with the private consortium that was meant to provide for the road and ongoing operations and maintenance, are commercial in-confidence, and they can't tell us what they are.

“If we're just paying the finance costs in that $113 million a year, that's a lot. That makes the road much, much more expensive for the public, and that means that's money that we can't spend on other important services and infrastructure that flow through to guaranteed profits for private investors.”

NZTA assumed responsibility for maintenance and repair after a legal dispute with construction companies CPB and HEB over the road quality and unfinished work was settlement, and both companies withdrew from the decades-long contract.

The settlement did not cost the Crown, and was not part of the total $2.5b cost figure provided by the transport minister on Tuesday.

Before the settlement was reached, in March 2024, BusinessDesk reported that NZTA expected to pay the $3.1b in total for Transmission Gully.