Bypass budget blows out again

3 minutes read
Posted 12 February, 2024
Screenshot 2024 02 12 161704

The bypass connects Frankton Road with Gorge Road, via Melbourne St, Henry St and a cut through. Photo: March 2023

Queenstown Lakes councillors are being asked to approve a further budget increase of $17.65 million for stage one of the Town Centre Arterial Road project.

This takes the overall budget to $128.02m, up from the original $88m.

Council boss Mike Theelen says the road project has proven to be incredibly complex, against a backdrop of escalating costs affecting the entire construction industry.

It is being delivered by Kā Huanui a Tāhuna (Whakatipu Transport Programme Alliance - see below).

"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," Theelen says.

"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."

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.

Council Property and Infrastructure GM Tony Avery says 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," Avery says.

"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."

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," Avery says.

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.

Kā Huanui a Tāhuna (Whakatipu Transport Programme Alliance) consists of Queenstown Lakes District Council and New Zealand Transport Agency (Waka Kotahi), along with four design and construction companies: Beca, WSP, Downer New Zealand and Fulton Hogan.

Full details on the project are available on the QLDC website:


Related articles

Latest issue

Issue 960 Read Now

Last week’s issue

Issue 959 Read Now


Download or update to the new Queenstown App today



The Lakes Weekly is part of Queenstown Media Group (QMG).

QMG is Queenstown’s leading locally owned and operated media company with print, online and social platforms that engage locals with what they care about — everything local!

The Lakes Weekly delivers stories and news that connects with local so they come away each week better connected to their community. Advertising sits within this curated content environment, and it’s a trusted relationship between readers and the Lakes Weekly. Advertisers benefit from the association with the LWB brand values.

The Lakes Weekly is hand delivered to every business in Queenstown, Arrowtown, Frankton, Five Mile Remarkables Park and Glenda Drive on Tuesday. Copies are available in service stations, libraries and drop boxes throughout the region and every supermarket throughout the Queenstown basin and Wanaka.

Online the issue is available Monday afternoon, on and the Qtn App.


Printed copies
each week


Estimated weekly
Read the
Latest issue