QTS-074 · Board or committee paper · 2022
Advice to Minister - Queenstown Package (Budget cost escalation claim: NZUP Queenstown Package)
Marked 'Budget sensitive' by its author. Publicly released by NZTA / OIA-20263 on 30 Jan 2026.
Budget-sensitive cost escalation claim for the NZUP Queenstown Package, prepared by Waka Kotahi for Joint Ministers (Transport and Finance) on a Treasury template. It states Cabinet allocated the March 2021 baseline P50 estimate of $115 million in May 2021. Design updates, scope expansion (Frankton North), property and escalation then raised the estimate by $65 million (P50) to $95 million (P95): current P50 $180 million, P95 $210 million. Waka Kotahi seeks $95 million in capital (2022/23 to 2025/26: $31m, $24m, $22m, $18m), an 83% increase on the $115 million budget. This is made up of escalation $9m, property $7m, scope change $23m, other cost changes $26m and funding risk contingency $30m, funded to P95. Escalation cannot be funded from the National Land Transport Fund. Main works were expected to start August 2023, with practical completion in August 2026. Scaling the scope would lose mode shift and emissions benefits, but no scaled option is costed.
What the document says
Context and purpose: A Budget-sensitive cost escalation claim on a Treasury template for the 'NZUP Queenstown Package', with Joint Ministers as lead Ministers (p1). The department contact is Craig Mitchell (Deputy Programme Director, NZUP) and the Treasury contact is Mark Hodge (p1). It is undated; the OIA-20263 schedule dates it 2 November 2022.
Description (p1): The package includes bus priority on SH6/SH6A, bus lanes on SH6, improvements to the Frankton bus hub and SH6A/SH6 intersection, and pedestrian access improvements. Capacity on SH6A was exceeded on more than 140 days in 2019. Kā Huanui a Tāhuna (the Queenstown Alliance) delivers the town centre streetscape, Arterials Stage 1 and NZUP works.
Cost escalation (p2): Cabinet allocated the March 2021 baseline P50 estimate of $115 million in May 2021. Design updates, scope expansion, property and escalation have added $65 million (P50) to $95 million (P95). The current P50 is $180 million and the P95 $210 million. Drivers: material and labour costs, Frankton North requirements, and property prices and extra land. Escalation cannot be funded from the NLTF. Cost management includes governance review, Quantitative Risk Assessment, peer-reviewed estimates and quarterly assurance (p2). Confidence is moderate because construction has not started (p3).
Funding sought (pp1, 4, 6): $95 million capital, phased $31m (22/23), $24m (23/24), $22m (24/25), $18m (25/26), against a current budget of $115m ($38m, $30m, $26m, $21m), an 83% change. The breakdown: additional escalation $9m, property $7m, scope change $23m, other cost changes (design, specification, P&G) $26m, and funding risk contingency $30m. The claim moves the project from P50 to P95 funding and would increase the existing NZUP appropriation (p6).
Scaled option (p5): Reducing scope would mean no public transport and active travel infrastructure to support mode shift (private cars make up 83% of travel on SH6A) and the emissions reduction programme (the business case forecasts a 15% reduction despite near-doubling of population). No scaled option is costed. Delivery (p7): main works expected from August 2023, practical completion August 2026, assuming no Environment Court appeals.
Mass rapid transit: The document says nothing about mass rapid transit.
Key figures
- March 2021 baseline P50 estimate $115 million, allocated by Cabinet May 2021 (p2)
- Increase of $65 million (P50) to $95 million (P95); current P50 $180 million, P95 $210 million (p2)
- Capital sought $95m: $31m / $24m / $22m / $18m for 2022/23-2025/26 (pp1, 4)
- Current budget profile $38m / $30m / $26m / $21m = $115m; 83% change (p4)
- Breakdown: escalation $9m; property $7m; scope change $23m; other cost changes $26m; funding risk contingency $30m (p6)
- SH6A capacity exceeded more than 140 days in 2019 (p1)
- Private car trips 83% of travel on SH6A; package forecast to cut emissions 15% (p5)
- Main works from August 2023; practical completion August 2026 (p7)
Files
- Open Main document (PDF, 720 KB) Opens in a new tab.
Main document
Actions recorded
Joint Ministers to provide $95 million additional capital funding (increase to the existing NZUP appropriation) to fund the Queenstown Package to P95.
Not assessed · Central government / Ministers · 2022/23 to 2025/26
Total funding being requested 31 24 22 18 95
Confirm funding as soon as possible to provide commercial certainty to deliver the Package.
Not assessed · Central government / Ministers · As soon as possible
It is critical confirmation of funding is obtained as soon as possible
Study cost
Not separately commissioned. This is an internal or corporate document.
Citation
NZTA (Waka Kotahi). Advice to Minister - Queenstown Package (Budget cost escalation claim: NZUP Queenstown Package) (2022).