Treasury has warned Wellington’s massive $6.4 billion transport plan is expected to cost significantly more than first thought, increasing the risk it may not be delivered in full.
Let’s Get Wellington Moving (LGWM) was announced two years ago and includes doubling the Mt Victoria Tunnel, mass rapid transit from the city to the airport, as well as bus priority measures and better walking and cycling.
LGWM is a three-way partnership between Wellington City Council, Greater Wellington Regional Council, and Waka Kotahi NZTA.
The Budget Economic and Fiscal Update 2021, released today, said LGWM board partners
have indicated the indicative package is expected to cost significantly more than previously estimated.
This increased the risk the project may not be delivered in full, the document said.
“The ability to deliver LGWM in full also relies on local government providing its own share. Due to competing funding priorities of local councils, it is possible that central government is asked to contribute funding to LGWM.”
Wellington City Council in particular is facing a heavy financial burden between its ageing three waters network, earthquake-prone buildings, and a $400 million social housing budget hole.
In March, officials signalled LGWM was headed towards a budget blowout as they tried to get the troubled transport project back on track.
Transport Minister Michael Wood confirmed at the time he had seen initial indications of bigger projects potentially costing more than first thought, but did not elaborate further, saying he did not have “full information” yet.
“That potentially means that we need to think really carefully about what we prioritise, it means we look at things like the phasing of projects, but whichever way we cut it, this will be the biggest investment in Wellington’s transport infrastructure in generations.
“I’m confident that we’ve now got the parties around the table to make some good decisions about that.”
Wood has been approached for comment on Treasury’s most recent update today.
In Wellington City Council’s initial briefing to Wood, as an incoming minister, the council said LGWM was unaffordable in its current form without new funding tools.
The document said the council wanted to talk to the Transport Minister urgently about LGWM’s delivery and governance models, overall affordability, and potential new
funding tools to “decide whether any changes are required to ensure success.”
A “health check” of LGWM, completed at the end of last year, revealed leadership problems, a detrimental culture, inadequate resourcing, and ultimately that it was at risk of failing.
These issues have started to be addressed though the creation of new roles and new staff.
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