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Council asked to approve budget increase to complete Queenstown arterial road (stage 1) – QLDC

Queenstown Lakes District Councillors are being asked to approve a further budget increase of $17.65m to deliver Stage 1 of the Town Centre Arterial Road project in Queenstown, taking the overall budget to $128.02m.

Queenstown Lakes District Council (QLDC) Chief Executive Mike Theelen said this first stage of the Arterial, which is being delivered by Kā Huanui a Tāhuna (Whakatipu Transport Programme Alliance), had proven to be incredibly complex, against a backdrop of escalating costs affecting the entire construction industry.

“Since the previous reforecast and subsequent budget increase of $20.61m in April 2023, there has been a number of factors that made it clear the approved budget would no longer be sufficient to complete the project in its entirety.”

“While the Alliance had priced remaining work based on the final design, not all components had been priced using the latest market rates as procurement for materials and subcontractors had not been completed. The latest reforecast from the Alliance has updated all its figures to current market rates,” Mr Theelen said.

The reforecast has also factored in further cost escalations throughout the course of the project such as the challenging installation of 12 large retaining panels, additional resource to meet updated traffic management code of practice requirements, difficult ground conditions and spaces to work in and resolving unexpected clashes with existing underground services.

QLDC General Manager Property and Infrastructure Tony Avery said while there has been cost escalation throughout the duration of the project, the Alliance team has worked closely with QLDC to continuously review opportunities for cost savings.

“A number of cost savings have already been implemented including rationalising the stormwater network and changing concrete footpaths to asphalt. We will continue to work together to look for further opportunities as construction continues,” Mr Avery said.

“We are recommending approval for another significant increase and I acknowledge how challenging that is for Councillors in the current climate of uncertainty and funding constraints,” Mr Avery said.

“A second option included in the Council report is to not provide additional funding and to reduce the scope of the project which would result in a partially completed road. This would see the Alliance rationalise the remaining work within existing budget so that some areas are complete and others are made safe until future funding becomes available,” he said.

Most of the progress is under the ground with over 7km of wastewater, stormwater and drinking water pipes installed along the Stage 1 route so far. Further progress includes installation of large retaining walls to create the new link between Melbourne and Henry Streets and upgrades to the Henry Street/Gorge Road intersection.

The Arterial Road, stage 1 of which is partially funded by a $50m contribution by the Government’s Infrastructure Reference Group (IRG) fund, is intended to remove traffic from Stanley Street, enable improved public transport facilities and improve accessibility to the town centre. If Council approves the additional funding, the new road is expected to be open by Christmas this year.

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


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