In late November 2012 Cabinet approved the New Zealand Transport Agency’s (NZTA) application to pursue a Public-Private Partnership (PPP) for Transmission Gully – the much anticipated 27-km leg of the 110-km Wellington Northern Corridor.

PPP’s are a long-term contract between the public and private sectors covering the financing, design, building, maintenance and operation of public infrastructure or services. They are increasingly commonplace in large construction projects overseas and are seen as a way to use private sector innovation and funding sources, as well as increase certainty of delivery by transferring risk to the private sector.

The NZTA predict that a PPP for Transmission Gully will drive greater value for money in dealing with the project’s size and complexity, as well as allowing for construction to begin in 2014, with an anticipated completion date of 2020. Since the NZTA announced its intention to proceed with a PPP it has received strong support from those who see it as more effective than traditional procurement methods.

Similarly, CCANZ believes the PPP is an opportunity for innovation, and to build a new era of roads made from concrete. The economic, environmental and safety benefits of concrete roads are well documented. Concrete’s long-term durability offers significant potential returns on investment. A concrete road’s extended service life, low maintenance, and reduced fuel consumption benefits for motorists are compelling economic factors. Concrete roads can also be good for the environment. They require minimal maintenance, which in turn reduces congestion and exhaust emissions. They also enhance the fuel efficiency of heavy vehicles by reducing rolling resistance.

Concrete roads could also slow the process of global warming. The albedo of concrete - the ratio of the reflected solar energy to the total solar energy received - is high. This means the light coloured surface of a concrete road translates to greater radiation reflectivity. The light coloured surface of concrete roads can also enhance roadway lighting systems, improving safety for motorists.

Noise factors can also be mitigated. Grind-and-groove surface technology to reduce surface noise from concrete roads is now commonplace in Australia and North America.

While these benefits are generally recognised, New Zealand has been slow to take advantage of them. NZTA’s high discount rate is a factor in this. This rate determines the cost and benefits of infrastructure projects over time, and relates to the evaluation period for infrastructure. Although both have been adjusted recently, from a discount rate of 10% to 8% and an evaluation period of 25 years to 30-years, a lower discount rate and longer evaluation period would most likely favour infrastructure projects that reduce the total cost of maintenance and operation overtime – such as projects with a long service-life achieved through concrete.

It must also be considered that global oil prices are trending upwards, meaning that traditional road technologies are becoming more and more costly to install and maintain.

The NZTA has a good reputation for prudent asset management. This could be enhanced further with the selection of concrete as the roading material of choice, particularly for high traffic density sections of the Roads of National Significance.

Rob Gaimster (CCANZ).

Taken from the July 2013 NZRMCA Newsletter
Images - NZTA