Otago MP Jacqui Dean has criticised opposition from Transit New Zealand to a subdivision proposed opposite Pisa Moorings on SH6 just north of Cromwell.
Transit had said the proximity of the two communities would mean there would be pedestrian and cyclist interaction, and that could lead to calls for a restricted speed zone.
Mrs Dean said the applicant's research had shown any increase in traffic would not have a major effect.
Transit's Otago acting area manager Bruce Richards argues the whole purpose of state highways is to get people from A to B in the shortest time.
State highways needed to be both safe and efficient as there was a considerable amount of heavy traffic such as buses with timetables and truck drivers with driving restraints to be dealt with, he has said.
"Our ideal of a state highway is that it passes everything [all the towns and smaller communities], and people get access to it at appropriate intersections at appropriate frequencies," Mr Richards said.
Towns were sometimes bypassed by new highways.
"Take Twizel, for instance. The state highway was put there first and the town put beside it. We like residential activity to be on one side or the other, not straddling it," he said.
He said there were many subdivisions in Central Otago that had been broken down into 8ha blocks for grapes.
When owners found they did not need all that land, they subdivided again, and more activities grew on that land, such as the proposed Aurum subdivision and others along the state highways.
That meant more of the highway needed reduced speed signs, slowing traffic.
Mrs Dean said there had been projects delayed and even stopped because of Transit's opposition, and she worried about the negative growth in the region as a result.
Projects affected included a cinema expansion in Wanaka, a $25 million commercial complex at Frankton, and the siting of Frankton's new primary school.
The Dunes subdivision near the Cromwell golf course, had proposed entry from SH8B, but Transit forced the relocation of the entrance to Neplusultra St.
Mike Mulvey, from Prophet Rock, had applied for consent to build his winery on SH6.
Transit had said it was next to the intersection of SH8B, but the panel decided one kilometre was not really anywhere near to the intersection and consent was granted.
Mr Mulvey said Transit needed to add development to the equation when they were looking at resource consents.
He said it did not appear to be a part of the equation at the moment and it was necessary, especially in Queenstown and Frankton, where development played a big part.
