The Government has signed a public-private partnership (PPP) agreement to deliver the first section of the Northland Expressway - Warkworth to Te Hana - starting one of New Zealand's most significant infrastructure projects, Transport Minister Chris Bishop has announced.
The Project Agreement was signed this week between the Crown and the Northway consortium to design, build, finance, maintain and operate the expressway, and reached financial close today.
Detailed design, site mobilisation and early construction works are expected to begin in the coming months.
"Northland has incredible potential and Warkworth to Te Hana is one of the most significant infrastructure investments this Government is making to support jobs, unlock economic growth, and provide a safer, more resilient connection for people and freight between Auckland and Northland," Mr Bishop says.
"The scope includes a new 26-kilometre, four-lane expressway with grade-separated interchanges at Warkworth, Wellsford and Te Hana. It also includes 15 standardised bridges, two underpasses, numerous large culverts, 12 wetland stormwater treatment basins, and twin tunnels of around one kilometre through Kraack Hill above the Dome Valley near Dome Forest.
"Over the life of the expressway, the benefits are expected to include 145 fewer deaths and serious injuries, travel time savings of seven to ten minutes per vehicle, more than 1,000 fewer closure hours caused by unexpected events such as severe weather, and the removal of around 1,000 heavy vehicles a day from the existing SH1 main streets through Wellsford and Te Hana.
"Following strong interest in the Northland Expressway at our Infrastructure Investment Summit in March last year, three competitive consortia were shortlisted by the New Zealand Transport Agency (NZTA) to deliver the first section. The Northway consortium was confirmed as the preferred bidder in May this year.
"This PPP represents good value for taxpayers. The final project cost has a net present value (NPV) of $3.649 billion, around $251 million below the $3.9 billion Public Sector Comparator approved by Cabinet in March last year, which estimates what the project would cost under traditional public sector procurement.
"Every dollar invested is also expected to return $1.60 in wider economic benefits to New Zealand.
"Warkworth to Te Hana is the largest public-private partnership in New Zealand's history and demonstrates the benefits that well-structured, highly competitive PPPs can deliver. Lessons from previous PPPs, including Transmission Gully, along with international best practice and market feedback, have been incorporated from the outset.
"This has included a more sophisticated approach to allocating risk, securing property and resource consents earlier, and establishing a stronger evidence base for setting affordability thresholds.
"The procurement process was also strengthened through bid cost reimbursement to encourage competitive participation, NZTA retaining intellectual property, price evaluation during the Request for Proposal stage, and an optimisation phase to maintain competitive tension between the final bidders.
"Ultimately, the Northway consortium put forward the strongest overall proposal, providing the best balance of price, quality and risk. The agreement provides greater certainty over costs, reduces the risk of disputes and delays during construction, and delivers better value for taxpayers over its lifetime.
"A PPP is like getting a mortgage to buy a house. Rather than paying the full cost upfront, it is spread over a longer period and repaid over time. But a PPP goes further than financing alone. The private partner is also responsible for designing and building the road, maintaining it, and meeting agreed performance standards throughout the life of the contract."
In August 2025, Cabinet agreed to a Crown Capital Contribution (CCC) towards construction of the project. The Government provided NZTA with a $1.6 billion, 10-year loan to finance the contribution. NZTA will make these payments to the contractor during the latter stages of construction, beginning from 1 July 2028 (FY2029).
"NZTA will also begin making regular Unitary Charge payments once the road opens. These payments are linked to agreed performance, safety, maintenance and availability standards, helping protect value for taxpayers over the 25-year operating period. Financial deductions apply if those standards or KPIs are not met," Mr Bishop says.
"Delivering wider employment and economic development benefits for Northland is also critically important. The Northway consortium expects around 60 per cent of total physical works spending to flow through local supply chains, creating opportunities for local subcontractors across earthworks, drainage, pavements, bridges and other civil engineering works.
"In addition, Northway has indicated it will create youth and graduate opportunities through internships, graduate roles, apprenticeships and school-to-work pathways, with a focus on local young people, including Māori and Pasifika. These opportunities will be backed by training, mentoring and pastoral support to help participants gain skills, qualifications and pathways into long-term infrastructure careers.
"I want to thank the unsuccessful bidders for their strong participation in a robust and competitive procurement process and congratulate the Northway consortium on its successful bid. I look forward to joining them on site in the coming months to celebrate design and construction getting underway.
"Northland has incredible potential, and today's agreement is a major milestone in unlocking the infrastructure, jobs and economic growth the region deserves."
