Council approves additional budget for Queenstown arterial road

Councillors have approved a budget increase of $20.61M necessary to complete the Queenstown Arterial Stage 1 project against a background of local labour shortages, inflation increases and ongoing global supply chain pressures.

Queenstown Lakes District Council (QLDC) Chief Executive Mike Theelen said elected members voted to support the move at a public excluded session (allowing free and frank discussion of commercially sensitive information) of the Full Council meeting on 27 April.

“The previous forecast was based on design at 30% as well as price data from June 2021. This is not uncommon for a project of this scale, duration and scope. With significant progress since then, we are now able to provide this latest forecast based on design 100% completed and procurement of sub-contractors and materials at 75%,” he said.

“At the same time, the ongoing challenges of managing such projects since the pandemic remain. Ongoing cost increases, labour shortages, shipping delays and capacity issues at a local, national and global level are well-publicised. Whilst these have been factored into the latest forecast and we have contingencies in place, it’s impossible to rule out further increases given the state of the global economy and sometimes unforeseen conditions below street level.”

Mr Theelen said a portion of the cost increases will be offset by QLDC’s delivery partners in Kā Huanui a Tāhuna, the Whakatipu Transport Programme Alliance following practical completion. It comprises Waka Kotahi NZ Transport Agency, Beca, Downer, Fulton Hogan and WSP alongside QLDC.

“The Alliance is actively looking at ways to mitigate cost increases as it works to deliver this significant infrastructure project that will ultimately remove traffic from Stanley Street to enable more public transport and more open spaces in the town centre for people to enjoy.”

The revised QLDC Ten Year Plan (TYP) 2021-2031 project budget now stands at $108.84M, up from $88.23M agreed by Council in October 2021 and a provisional budget in the original TYP of $49.50M.

However, the estimated net cost is $58.84M after accounting for $50M funding from the Government’s Infrastructure Reference Group Fund and offsets associated with the eventual transfer and/or sale of properties acquired through the project.

The Kā Huanui a Tāhuna team has made great progress upgrading underground services along the Stage 1 route and constructing large retaining walls to create the new link between Melbourne and Henry Streets.

Gorge Road, which has been closed between Stanley and Weaver Street since October last year, is on track to re-open temporarily for the busy ski season on 16 June. It will then close again in October for the completion of works which is expected just before Christmas.

Stage 1 as a whole is on track to be completed by the end of 2024.

Full details on the project are available on the QLDC website: https://www.qldc.govt.nz/your-council/major-projects/queenstown-town-centre-arterial  

ENDS|KUA MUTU.

Media contact: communications@qldc.govt.nz or call 03 441 1802.

FURTHER INFORMATION | Kā pāroko tāpiri:

• The Town Centre Arterial Road (Stage 1) is being delivered by Kā Huanui a Tāhuna, a transport alliance between Queenstown Lakes District Council and Waka Kotahi NZ Transport Agency, along with four design and construction companies: Beca, WSP, Downer New Zealand and Fulton Hogan.