In 2012, a report commissioned by the NZ Transport Agency identified options to bypass or replace the current Manawatū Gorge route. These options ranged from $120 million to $1.8 billion. You can read the full report here [PDF, 19 MB].
The Transport Agency is currently working with the Tararua District, Manawatu District, Palmerston North City and Horizons Regional Councils to progress a Detailed Business Case (DBC) process to look at all of the options available to provide a long term, resilient and safe connection through the Ruahine and Tararua Ranges. The DBC will consider all of the options identified in the 2012 report, along with other potential options such as significantly upgrading the Saddle Road to state highway standards. This process will involve assessing the costs, benefits and viability of constructing each of the options, including the impact each option will have on the environment in the Ruahine and Tararua Ranges.