Funding cuts by the New Zealand Transport Agency (NZTA) could cost the Queenstown Lakes District Council up to $2 million a year if it continues to defer road maintenance, according to the council's acting transport manager, Geoff Cobb.
Mr Cobb said the funding cut for road maintenance was nearly $5 million, or 8%, over three years.
The council asked for $61.9 million and NTZA approved $57 million, he said.
He said it was a "policy turnaround" by NZTA, which had always put maintaining existing networks before constructing new projects.
The council had received extra funding requested for resurfacing the backlog of defective sealed roads.
However, the council had no choice but to reduce resurfacing work as a result of the 8% cut.
Even if the "current competitive market" led to some cost savings, reductions in work would still have to be made, he said.
"This will result in higher reactive maintenance demand, and with the cumulative effect, annual costs of deferred maintenance will grow at an increasing rate year by year," he said.
He calculated the deferred maintenance would cost an extra $2 million a year because the roads would deteriorate "more rapidly and more extensively".
NZTA Otago Southland regional director Bruce Richards said the funding was not "cut".
"They just didn't get as much as they wanted.
We give as much as we can.
Nothing has been reduced, only their expectations," he said.
The agency had doubled the council's funding from the previous three years, which was the highest increase of any other council in the country, he said.
Glenorchy Rd had been fully subsidised by $7 million.
About $6.6 million had been earmarked for the Crown Range Rd, $900,000 less than requested.
Both are deemed "special purpose roads".
"We hope the council could be innovative and provide a level of service for that money and could find efficiencies in its tender prices," Mr Richards said.
He said the agency would be watching closely what effect the funding levels had on Queenstown Lakes District roads, and would report back to the Ministry of Transport in time for the next funding round, in three years.
