It was discussed by the Otago Regional Transport Committee in Alexandra yesterday, when members unanimously agreed to signal it as being of national, rather than regional, significance.
The two-stage project was included in the committee's Draft Otago Regional Land Transport Programme for 2009-12, which was approved yesterday for public consultation.
Committee members said the Caversham development should be eligible for national funding as it was on State Highway 1.
"It's a sad situation if we have to put regional money into SH1, which is the main arterial route in this country," committee member Peter McPherson, of the Clutha District Council, said.
Within the committee's draft programme the first stage of the Caversham project was costed at $31.4 million, and the second stage at $17.4 million.
Stage one was to be fully funded by regional transport funding, with stage two paid for by national funding.
Dunedin City Council deputy mayor Syd Brown said the Caversham work could be paid for by national funding, although it would be at least 25 or 30 years away. Dunedin, and the region, could not wait that long, he said.
The committee's draft programme allocated about $40 million of the total regional funding for spending in the next three years, which concerned Queenstown Lakes District Mayor Clive Geddes.
The committee had forecast about $138 million of regional funding for projects over the next 10 years, although that was likely an over-allocation, Otago Regional Council transport senior policy analyst Jane Turnbull said.
A lower estimate was about $102 million, with a middle-range estimate allocation of about $120 million, she said.
"It indicates we're likely to be facing a funding shortfall if our expenditure is what we expect it to be. I think we can reasonably say the full 10-year programme will have an even greater funding gap," she said.
Mr Geddes said he wanted fellow committee members to understand the implications of spending so much regional funding in the first of three, three-year programmes.
"We are signing off almost half of our total regional funding on certain projects . . . it could mean other projects have to be given up.
"I've no confidence the [New Zealand Transport] Agency will give national funding for projects which were listed under regional funding, because our experience to date shows the opposite," he said.
NZTA regional director Bruce Richards agreed, saying the probability of getting national funding to compensate spending large amounts of regional funding was "zilch".
"I agree this is a project of national significance and we should be putting our hands up for national funding for it.
It's just a matter of having to wait and see whether we can get money," he said.
Mr Geddes said funding uncertainty was a major concern, and with all committee members in agreement, it was decided a letter would be drafted to the NZTA, which Mr Richards could present to a board meeting in Wellington next Friday.
It was resolved the letter would highlight the committee's concern about a lack of national funding for what it considered projects of national significance in the South, as well as concern about the uncertainty of funding and associated difficulties of funding future projects.
A final draft programme for 2009-12 is expected to be publicly released about March 20, after which the entire committee will form a hearings panel to address submissions on the document.
Dr Turnbull said the week-long hearings would be held throughout Otago, starting on May 18, with times, dates, and venues to be confirmed.
