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What proportion, if any, of the stated $251 million saving against the Public Sector Comparator for Warkworth to Te Hana is attributable to differences in risk transfer rather than to lower forecast cost? and 1 other question

Answered 34458, 35878 (2026)
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Asked by

Tangi Utikere

Member for Palmerston North · Labour Party

Questions

  • 34458

    Question published

    What proportion, if any, of the stated $251 million saving against the Public Sector Comparator for Warkworth to Te Hana is attributable to differences in risk transfer rather than to lower forecast cost?

  • 35878

    Question published

    Of the approximately $251 million by which he has stated the final Warkworth to Te Hana project cost of $3.649 billion net present value falls below the $3.9 billion Public Sector Comparator approved by Cabinet in March 2025, how much is attributable to risk adjustments and the valuation of risk transfer, and how much is attributable to differences in underlying construction, financing, operating, maintenance and lifecycle costs?

    Original response/referral lodged:

Answered by

Hon Chris Bishop

Member for Hutt South · National Party · Minister of Transport

Answer

The $251 million headroom to the Public Sector Comparator was not a specific risk-transfer benefit. Consistent with Treasury PPP Guidance, the calculation of the Public Sector Comparator (PSC) included adjustments for transferred risks and pricing uncertainties for the PPP. The project cost estimate of $3.649 billion NPV represents a cost that resulted from the competitive procurement process including innovation and cost savings by the PPP Contractor. This included a combination of multiple delivery, technical, commercial and financial factors to generate a lower cost which resulted in an estimated project cost lower than the PSC by $251 million.