Transport Minister Simeon Brown made the announcement yesterday as part of the changes to NZ Transport Agency/Waka Kotahi’s New Zealand Upgrade Programme (NZUP).
The NZUP includes the "Queenstown Package", which proposes upgrades such as new bus lanes on SH6, new bus priority measures on SH6A, improved pedestrian access to public transport, and improved safety and access across the network with a focus on walking and cycling.
This is along with improvements to the existing Frankton bus hub and upgrades at the SH6-SH6A intersection.
Work began last month, and the initial stages will include site establishment, removing trees at the golf course, installing a new stormwater pipe and relocating utility services.
Mr Brown was present at the sod-turning ceremony last month.
He said yesterday the SH6-SH6A Frankton intersection had become increasingly congested and inefficient, with more than 40,000 vehicles passing through each day at peak time.
"With tourism returning to pre-Covid restriction levels, and continued growth in and around Queenstown, upgrades to this critical intersection will help local communities and visitors can get to where they are going quickly and safely.
"The confirmed funding will be used to fund the priority works for the package.
"This includes installing traffic signals at the SH6-6A Frankton intersection, extending the bus hub and a new roundabout at the SH6 Howards Dr intersection."
The whole intersection, roads and bus hub were expected to be operational by 2028, he said.
The cost of the Queenstown Package was initially factored at $115m but swelled to $250m by the start of this year.
"When we came to government, we were advised that there would be a significant funding gap of up to $1.5b to deliver the NZUP projects", Mr Brown said.
"NZUP was subject to significant cost blowouts that resulted in project cancellations and delays across the country."
The NZUP had been renamed the Roads of National Significance and Roads of Regional Significance programme to better reflect the direction of the new government’s approach, Mr Brown said.
The nationwide budget for the projects had been set at $6.54b.
"We have made clear to NZTA that it must deliver these projects within the existing funding envelope, as there will be no additional Crown funding", Mr Brown said.
"In order to continue to deliver these projects, difficult decisions were made to keep costs within the existing $6.54b funding."
Some projects, such as the Brougham St (SH76) upgrade in Christchurch and the SH22 Drury project in Auckland, only have its pre-implementation guaranteed funding.
Brougham St is due to start later this year.
At the time of the original sod-turning ceremony, Queenstown Mayor Glyn Lewers said he was "not going to sugarcoat" the fact there would be "significant disruption" at the key intersection.
"I ask that we all keep a cool head, plan ahead and keep an eye on the prize", he said.
"These improvements take time, but they will make it better."
