How much the first stage of the Government's multibillion-dollar Northland Expressway will cost and whether it stacks up economically will remain secret until after public-private partnership contracts are signed.
Representing stage one, the Warkworth to Te Hana road is a 26km, four-lane highway that includes an 850m twin-bore tunnel through Dome Valley.
A rough three-year-old estimate showed the road may cost close to $4 billion.
Trees are already being felled in Dome Valley's Matariki Forest to make way for the road.
NZTA has said it will soon move to negotiations with a preferred bidder, and aims to award a contract by the end of July, subject to Cabinet approval. The successful consortium would begin early construction works within seven months.
But the project's updated cost estimate and its benefit-cost ratio (BCR), a measure of whether the investment delivers value for money, have been withheld from the public throughout the procurement process.
The Transport Ministry and NZTA have refused requests for both figures, citing the need to protect the Crown's negotiating position.
Chief Ombudsman John Allen this week upheld that decision, saying he accepted there was "significant public interest" in releasing the information but was not persuaded it outweighed the commercial sensitivity of the public-private partnership process.
Allen accepted the ministry's argument that the costings "would have the greatest potential to impact ongoing negotiations", with even small pricing differences potentially adding up to hundreds of millions of dollars over the life of the contract.
In an explanation to the Ombudsman, the ministry said releasing value for money advice "could create uncertainty amongst respondents if it brings into question the Government's decision to proceed to procurement".
Transport officials added that telling the public about the costs could undermine bids "if [bidders] no longer consider it is worth committing time and resource to as they believe a decision may be taken to no longer proceed with the project".
Critics have suggested when finished the complete Northland expressway may become the most expensive state highway ever built in New Zealand.
Transport advocate Connor Sharp, who requested the information and received the response under the Official Information Act, opined there was only one way to read that.
"The implication is that the BCR is so bad that if it were released, it would be untenable for the Government to go forward," he said.
Questions about the Northland road cost come amid pressure on transport funding.
Last public business case from 2019
The last publicly available benefit-cost ratio for the project, from a seven-year-old business case, was 0.7, meaning every dollar spent would return 70 cents in benefits.
That figure was calculated before Covid-era construction inflation drove costs sharply higher across a range of projects.
The Ombudsman also accepted NZTA's argument that releasing the BCR would reveal the "perceived profitability or marginal value for the Crown", and that the private sector could "see opportunities to increase their return at the expense of the Crown's value".
It comes after a spate of serious crashes on the main state highway to Kaitaia. (Source: 1News)
The project was estimated to cost between $1.7 billion and $2.1 billion in 2019. By late 2023, NZTA's own inflation-adjusted estimates put the Warkworth to Wellsford section at between $2.9 billion and $3.75 billion, according to reporting by the NZ Herald.
Sharp said a project of that scale deserved the same scrutiny as other large transport mega-projects, such as the $5.5 billion City Rail Link.
"How does the public scrutinise something if they don't know anything about it?
"When we are spending these large amounts of money, we should be scrutinising them.
"It's actually really useful to know if something's good, so we can promote it — but also if something's going wrong or something needs to be changed, we need to be able to have that conversation."
Transport Minister Chris Bishop said the Government was "committed to being as transparent as possible within the bounds of the law and commercial confidentiality".
"Taxpayers also expect us to achieve good value for money, which can at times require confidential negotiations. I note the Ombudsman agrees, and I am comfortable with the approach taken," he said in a statement.
NZTA said it could not comment on the procurement or disclose the cost estimate while the process was underway, but confirmed the timeline was on track. An agency spokesperson said it planned to release the contract value after financial close.
The Infrastructure Commission, an independent government advisory body which released a national infrastructure plan earlier this year, has previously been vocal about the need for transparency in larger projects.
Commission chief executive Geoff Cooper spoke to Q+A's Jack Tame following the release of the national infrastructure plan. (Source: Q and A)
A spokesperson for the commission told 1News: "We recognise that factors such as commercial sensitivity have to be balanced alongside the drive for transparency around major infrastructure projects. These will need to be considered on a case-by-case basis.
"However, more generally, we would highlight the importance of ensuring projects have strong business cases and information is transparent where possible to ensure the public and decision makers can have confidence that projects represent good value for money."
The commission's 2022 report on transparency in large infrastructure projects recommended "developing stronger best practice for and strengthening oversight over sharing information with the public about large infrastructure projects".
Pressure on transport funding intensifies
NZTA said the highway would cut travel times by seven to 10 minutes compared with the existing route, take nearly 1000 heavy vehicles a day off SH1 through Wellsford and Te Hana, and address long-standing safety and resilience problems in Dome Valley.
Sharp said those problems were real, but argued the project was overbuilt for what was needed. "All of the work has shown that it doesn't need to be this big," he said.
Companies managing about $6 trillion in combined capital gather to consider major new works for New Zealand. (Source: 1News)
"You could spend a fraction of the cost and get 80% of the benefit."
NZTA said property agreements were in place for all land required and geotechnical investigations were complete.
But the project's progress comes amid broader transport funding headwinds.
1News reported last week that flow-on effects from rising fuel prices were projected to cut between $80 million and $311 million from the National Land Transport Fund, with officials warning the shortfall could force NZTA to renegotiate deals and delay projects.
Bishop said at the time the situation was "tricky", adding the fuel crisis was deepening funding challenges and projects could "progress slower than previously planned".
"More than 7,900 submissions were received from across Northland and Auckland, with 93% in support of the increased speed limit and 91% strongly supporting it," Transport Minister Chris Bishop said. (Source: 1News)
AA principal policy adviser Terry Collins said the funding gap put the Government's flagship Roads of National Significance programme at risk.
"If you can't fund it, you can't do it," he told 1News.
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