Latest / Early Edition with Ryan Bridge / Dom Kalasih: Transporting New Zealand CEO on National's pledge to construct the Belfast-to-Pegasus Motorway

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Dom Kalasih: Transporting New Zealand CEO on National's pledge to construct the Belfast-to-Pegasus Motorway · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: More infrastructure promises from the Nats in its roads. $ 800
• 0:03
  Speaker 1: million to fully fund 11 kilometres from Belfast to Pegasus.
• 0:06
  Speaker 1: It's a motorway. It's in Christchurch. NZTA says having that
• 0:10
  Speaker 1: road there will save up to 10 minutes. But everyone's
• 0:12
  Speaker 1: asking the question, why does it cost so much?
• 0:14
  Speaker 2: We will contribute $ 800 million of Crown capital in.
• 0:18
  Speaker 1: Budget 2027 if we're re-elected, which means we can get
• 0:21
  Speaker 1: on with the road in the 2027 construction season. It's
• 0:24
  Speaker 1: farcical what they're doing at the moment. They announced many
• 0:27
  Speaker 1: of the roads that they're re-announcing in this campaign at
• 0:29
  Speaker 1: the last election. Dom Kalasi is the Transporting New Zealand
• 0:33
  Speaker 1: Chief Executive Officer and joins me now. Hello, Dom.
• 0:36
  Speaker 2: Good morning, Andrew.
• 0:38
  Speaker 1: Is this road necessary? Will it be good?
• 0:43
  Speaker 2: Well, I think we're probably having this call because there's
• 0:48
  Speaker 2: not a lot of certainty about this thing. Okay.
• 0:52
  Speaker 1: You're the guy from Transporting New Zealand, you know, so
• 0:54
  Speaker 1: all those guys who transport, will they sit there and go, ah, yeah,
• 0:57
  Speaker 1: 11 kilometres, Belfast to Pegasus, this is going to make
• 0:59
  Speaker 1: such a good difference. Is it going to be good?
• 1:02
  Speaker 2: Look, so it will make a difference, okay? It will
• 1:06
  Speaker 2: make a difference. But the concern we have is whether
• 1:10
  Speaker 2: we're getting the best value for money from the money
• 1:14
  Speaker 2: being spent and also whether there's not a degree, sorry,
• 1:20
  Speaker 2: there's not a degree of certainty on whether it'll be
• 1:23
  Speaker 2: delivered on budget. And I'll just give you a few examples, okay? Yeah.
• 1:29
  Speaker 2: If you look at Transmission Gully, that's the Wellington Expressway,
• 1:33
  Speaker 2: that cost $ 1. 25 billion, right, up from an initial estimate
• 1:41
  Speaker 2: of $ 850 million. And it's a 25-kilometre section of road.
• 1:45
  Speaker 2: So that cost, construction cost was $ 46 million a kilometre, right?
• 1:50
  Speaker 2: If you look at Otake to north of Levit, which
• 1:53
  Speaker 2: is a bit further north of there, that's costing $ 2. 1 billion, right?
• 1:58
  Speaker 2: up from an estimate in 2020 of $ 800 million. It's
• 2:05
  Speaker 2: 24 kilometres, so the cost of that is about $ 87
• 2:09
  Speaker 2: million per kilometre.
• 2:11
  Speaker 1: All right. I understand what you're doing here. You're doing
• 2:16
  Speaker 1: the price per kilometre. This one, 73 million a kilometre.
• 2:19
  Speaker 1: That's extraordinary. If we built the East-West Highway, that was
• 2:24
  Speaker 1: budgeted at $ 327 million a kilometre. So I actually did
• 2:31
  Speaker 1: some research this morning. I said, what is the global
• 2:32
  Speaker 1: average for building a highway? How much does it cost
• 2:34
  Speaker 1: a kilometre? The global average is around about $ 15 to
• 2:37
  Speaker 1: $ 16 million. Why does it cost so much in New Zealand?
• 2:41
  Speaker 2: Look, it's going to vary in New Zealand depending where
• 2:44
  Speaker 2: you build, right? And because of our, we do have
• 2:48
  Speaker 2: challenging topography, right? And in fact, one of the issues was, say,
• 2:51
  Speaker 2: Otaki and the North of Levin, because I asked the
• 2:54
  Speaker 2: project engineer that exact question, 11Ks, sorry, 24Ks, why is
• 3:00
  Speaker 2: it so expensive? There's 11 bridges there. between 11 bridges
• 3:05
  Speaker 2: and Colbert. And that really ramps up the cost.
• 3:09
  Speaker 1: Yeah, but Belfast to Pegasus, it's flat.
• 3:13
  Speaker 2: Well, that's right.
• 3:15
  Speaker 1: There is no problem. It's still $ 73 million a kilometre.
• 3:18
  Speaker 1: Is it because we stop-start with our development and therefore
• 3:22
  Speaker 1: we have to restart everything and rehire everybody and restock
• 3:26
  Speaker 1: everything and so it costs so much more because we
• 3:28
  Speaker 1: don't have our plans?
• 3:31
  Speaker 2: I think that's some of it. But the other thing
• 3:34
  Speaker 2: is it will depend on when the land was purchased.
• 3:37
  Speaker 2: So if you look at the transmission gully, now that
• 3:41
  Speaker 2: was being talked about for 60 years. So, you know,
• 3:43
  Speaker 2: there'd been property designated for that section of road, so
• 3:47
  Speaker 2: they didn't have to go and purchase that. Whereas Otaki
• 3:50
  Speaker 2: to north of Levin, you also see Taranaki way with
• 3:54
  Speaker 2: Awakena Gorge. They're having to buy land now. Yeah. That
• 4:01
  Speaker 2: brings a lot of uncertainty.
• 4:03
  Speaker 1: Dom, it's a tragedy that roads cost so much in
• 4:05
  Speaker 1: this country, and it's something that if someone could fix,
• 4:08
  Speaker 1: we'd all cheer.