Infrastructure

Transmission Gully stand-off ‘opportunistic’

The man who once led the private parties behind Transmission Gully hints private contractor CPB is trying to take advantage of a crisis

A resolution to the Transmission Gully stand-off will arrive within the month, with Transport Minister Phil Twyford confirming he has been briefed "regularly and frequently" by the former chairperson of the private partnership behind the project.

At the Transport and Infrastructure Select Committee on Thursday, the man who chaired the Wellington Gateway Partnership for four years, Sir Brian Roche, had an opportunity to give his own opinion on what was happening behind the scenes. 

"At times of vulnerability, opportunistic behaviour occurs. We have to limit that because it's public money," Roche said.

Newsroom reported contractor CPB has been accused of trying to 'weasel' out of another roading public-private partnership in Australia against a backdrop of financial issues with its parent company CIMIC.

Roche was the original chairperson of WGP - the private partnership tasked with building and maintaining Transmission Gully over a 25-year period - but left that board last year to replace Michael Stiassny as chair of NZTA.

"We are committed to getting the relationship to work. We don't have sole decision rights in that matter, we are reliant on the contractor taking a fair and reasonable approach to this."

When the Public-Private Partnership document was signed in 2014, the private parties within WGP included Leighton Contractors (CPB), HEB Construction, the Accident Compensation Corporation (ACC), InfraRed Infrastructure General Partner Ltd, and Bank of Tokyo-Mitsubishi UFJ.

They signed a contract to fund, build and maintain the road for a period of 25 years after it was built.

National Party Transport spokesman Chris Bishop gave Roche the chance to comment on allegations Newsroom reported that NZTA was now searching for different contractors outside of CPB (which own 80 percent of the CPB-HEB joint venture that is building it) in case negotiations fell flat.

"As a Wellingtonian, [I am] also very focused on the successful and timely completion of that project [Transmission Gully] ... we are in the middle of negotiations, we would hope for decisions to be made in the next four to six weeks. Everything else is speculation," Roche said.

"We are committed to getting the relationship to work. We don't have sole decision rights in that matter, we are reliant on the contractor taking a fair and reasonable approach to this."

Twyford said Roche had briefed him many times on the project and the internal politics at play between the different project partners.

"He's uniquely placed to understand the dynamics there.

"NZTA's trying really hard to get this sorted. No one wants to see it drag on."

NZTA has already paid over $200m to WGP. The strict terms of the agreement require no upfront payment from the Government, and for private parties to bear all financial and construction risks while the road is being built. Instead they are paid out after construction, and by a long-term maintenance contract attached to the road.

Newsroom has reported on tensions behind the scenes between CPB (which owns 80 percent of the joint venture tasked with building the project) and NZTA over our country's largest PPP - with CPB wanting to walk away from the project entirely.

A stand-off between the private joint venture and NZTA started this year after the Covid-19 lockdown triggered a clause that allowed the private partners to end their involvement in the project if they were locked out of the site for two months. 

The project, officially scheduled for April 2020, has been delayed by over a year to well into 2021. However, Newsroom has reported that a date in 2022 is being considered to allow for an extra season of earthworks. 

Sources associated with the partnership put the delays - and the alleged attempt to break up the partnership - down to issues in the subsoil and within the base course of the road which included pipes laid incorrectly and stabiliser spread unevenly.

This has reportedly made the long-term maintenance contract attached to it less profitable for WGP as it would require expensive maintenance works on the road after it opened.

WGP has denied that the reported issues with the road were "engineering or design flaws" because the road was still under construction. They have said a "rework of structural layers of pavement" are a part of quality control processes on-site.

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