The expressway will extend the Pūhoi to Warkworth motorway, which was also completed as a public-private partnership (PPP).
The new 26km, four-lane expressway will have grade-separated interchanges at Warkworth, Wellsford and Te Hana.
The Northern Expressway stage 1 North Tunnel Portal and Control building.
It includes 15 bridges, two underpasses, 12 wetland stormwater treatment basins and twin tunnels of around 1km through Kraack Hill above the Dome Valley.
PPPs were also used for Transmission Gully and a contract recently awarded for the $440 million Christchurch Men’s Prison.
The Northway consortium was announced as the preferred bidder in May this year.
“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,” Bishop said.
“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.”
The Government said the project’s net present value of $3.649b was about $251m below its $3.9b Public Sector Comparator, an estimate of what the project would cost through traditional public procurement.
Bishop said the PPP represented good value for taxpayers.
“Every dollar invested is also expected to return $1.60 in wider economic benefits to New Zealand.”
He said the Northway consortium, which represents global and local infrastructure companies, put forward the strongest proposal, representing the best balance of price, quality and risk.
State Highway 1 is a busy road with dangerous stretches, particularly through the Dome Valley.
“Over the life of the expressway, the benefits are expected to include 145 fewer deaths and serious injuries, travel time savings of seven to 10 minutes per vehicle, more than 1000 fewer closure hours caused by unexpected events such as severe weather, and the removal of around 1000 heavy vehicles a day from the existing SH1 main streets through Wellsford and Te Hana,” Bishop said.
Lessons from previous PPPs, including Transmission Gully, which faced time and cost blowouts, have been incorporated into the contract, he insisted.
The Northway consortium expects around 60% 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.
Northway has also indicated it will create internships, graduate roles and apprenticeships, with a focus on local young people.
The Government has provided NZ Transport Agency (NZTA) with a $1.6b, 10-year loan to finance a Crown Capital Contribution towards construction. NZTA is expected to begin making those payments to the contractor during the latter stages of construction from July 2028.
Separate Unitary Charge payments will begin once the road opens and will be linked to performance, safety, maintenance and availability standards.
The Project Agreement expires in 2058, when the road will be handed back to NZTA.
Katie Bradford is a Senior Correspondent at the Herald. She has been a broadcast journalist for over 20 years and was based in the press gallery for 10 years. She specialises in politics, business and Auckland issues.