How, if at all, is ground condition and geotechnical risk allocated under the Warkworth to Te Hana Project Agreement, particularly in relation to the twin tunnels through Kraack Hill above the Dome Valley?

Answer

The approach to risk in this PPP represents an evolution of the New Zealand PPP model consistent with the updated Treasury PPP Policy and lessons from Transmission Gully and the Puhoi to Warkworth project. A key lesson from previous PPPs was to optimise risk sharing arrangements by ensuring risk is borne by the party best placed to manage it at least cost. Previous PPPs have tended to put all risk onto the PPP partner. There is some limited risk sharing during the construction period where the Contractor will take risk up to a certain threshold and NZTA will share the risk thereafter.