Public Private Partnership (PPP) procurement for Pūhoi to Warkworth project


The NZ Transport Agency has welcomed the Government’s decision to allow the Agency to finance, design, build, manage and maintain the Pūhoi to Warkworth motorway through a Public Private Partnership (PPP).

Transport Agency Chief Executive Geoff Dangerfield said it was a significant step towards improving the safety, reliability and resilience of State Highway 1 between Northland and the upper North Island freight triangle of Auckland, Waikato and Tauranga. 

In September 2014, a Board of Inquiry confirmed approval of the Transport Agency’s application for designation and resource consents for the project.

Mr Dangerfield said the Pūhoi to Warkworth project seeks to procure a PPP contract that would deliver a value-for-money motorway which will assist economic growth in Northland.

“The imperative is to achieve this and deliver a motorway that will provide greater resilience, improved road safety and journey time reliability, and a better connection for freight, tourism and motorists.

“A PPP contract will likely see the PPP consortium manage and maintain the motorway for the 25 years that will follow the anticipated six-year period to build the motorway.”

He said PPPs are a particularly suitable procurement method for delivering great results for large-scale and complex infrastructure. 

“Using a PPP for key infrastructure projects will open the door for private sector innovations that are not always achievable under traditional public sector procurement methods.

“PPPs allow specific outcomes to be established and measured - and for risks to be identified and transferred to the private sector. 

“An outcomes-based PPP for the Pūhoi to Warkworth project will also allow great flexibility within the designation to achieve optimised innovative outcomes.”

Mr Dangerfield said that under a PPP, full ownership of the motorway will always remain with the public sector.

“The nature of the contract to be used will provide a strong incentive for the successful PPP consortium to deliver the best possible results for road users.”

The next steps in the PPP procurement process for the project will see a shortlist of PPP consortia expected to be identified by the third quarter of 2015, which will be followed by the selection of a ‘preferred bidder’ by mid-2016, and the awarding of the PPP contract in the last quarter of 2016.  These timeframes are indicative only and may be subject to change.

Tentatively, construction of the Pūhoi to Warkworth motorway, under a PPP arrangement, could possibly start in late 2016 with the road completed and open by 2022.

Mr Dangerfield said no decision has been made on tolling for the Pūhoi to Warkworth route but should the motorway be tolled, the Transport Agency would retain responsibility for tolling.

“The public would be fully consulted on any tolling proposal which must also obtain Ministerial approval,” he said.

He said the Transport Agency would continue to consider PPPs for other large-scale and complex infrastructure projects which could potentially benefit from the innovation and value-for-money that can be achieved through a PPP approach.

The first state highway in New Zealand to be delivered through a PPP is the Transmission Gully (MacKays to Linden) project in Wellington.

In July 2014, the Transport Agency signed a PPP contract with the Wellington Gateway Partnership (WGP).  Work on Transmission Gully began in September last year, and the motorway will be open for traffic by 2020.

In late 2014, the Transmission Gully motorway project was named the ‘2014 Asia-Pacific PPP Deal of the Year’ by two international project finance publications (Project Finance International [PFI] and IJ Global).

In addition, the project was highly commended at the Infrastructures Partnerships Australia (IPA) National Infrastructure awards in March 2015. 

View(external link) questions and answers on the Pūhoi to Warkworth project (PDF, 183KB).