Transmission Gully should perhaps be renamed “Transmission-to-what”. This project looks like it really is in trouble. It was imposed on NZTA by Steven Joyce when he was Minister of Everything.
I was on NZTA when Minister Joyce was pushing the NZTA Board really hard to approve it. I enquired had the engineers considered that the main fault line went right up the valley. They glibly told the Board that engineers can plan to accommodate earthquakes. My retort that engineers had a lot to answer for in Canterbury was just ignored. I wonder how many of the additional costs were as a result of what the engineering profession learned as a result of the Canterbury and Kaikoura earthquakes. Now the project is in deep trouble. The main contractors are from Australia and they are obviously attempting to step out of the contract.
This is yet another example of private profits and public picking up the long-term bill. Just like how architects and builders left leaky homes to Central and Local Government and dissolved their companies so there was no liability on them.
Newsroom printed this very good article on PPP’s which demonstrate further how difficult it is to make them work. Interest rates at around 1% for Central and Local Government make PPP’s uneconomic.
The essence of a PPP is that Central and Local Government take the long view the private sector provides the efficiency. They are not all failures. CCC has had a very successful PPP in the landfill at Kate Valley. It is the regional landfill for Canterbury. It is owned by five city or district councils, and the subsidiary of a holding company owned by the city of Beijing, China. The other side of PPP’s is that the company which the Council’s negotiated with was then owned in New Zealand. Now it’s overseas owned.
Kate Valley Landfill is located within the Hurunui District and is reached by turning off at Waipara, where SHs 1 and 7 meet, towards the Pacific coast. The landfill opened in 2005 and has an expected capacity until circa 2040. The landfill was championed by Denis O’Rourke while he was chairman of the Sustainable Transport and Utilities Committee of Christchurch City Council, and at the time the project was rather unpopular. It now powers 3000 houses with electricity which is produced from the gas coming off the site.