NZ Launches Market Sounding on Toll Concessions to Boost Road Infrastructure

The New Zealand Government is set to commence market soundings with local and international toll road investors, operators, and financiers next week to assess the viability of using toll concessions as a means to develop, operate, and maintain major road infrastructure. Infrastructure and Transport Minister Chris Bishop announced that this step is integral to the Government’s strategic push to explore alternative funding and delivery models for nationally significant transport projects.

Context: Why Toll Concessions?

The Government is committed to improving high-quality road infrastructure that enhances economic productivity, reduces travel times, and boosts safety. With increasing demands on public funding and growing infrastructure needs, the Government is examining how public-private partnerships (PPPs) through toll concessions can support faster delivery of projects. Toll concessions involve private entities—referred to as concessionaires—being granted the right to manage and operate toll roads for a set period. In return, they collect tolls to recoup investment and operational costs while the Government receives upfront capital that can be reinvested in further transport development.

Currently, New Zealand has three operational toll roads: the Northern Gateway in Auckland, and Takitimu Drive and Tauranga Eastern Link in Tauranga. Three more—Penlink, Takitimu North Link, and Ōtaki to North of Levin—are in various stages of planning or construction and have been confirmed for future tolling.

Scope of the Market Sounding

The Ministry of Transport will lead the market sounding initiative, aiming to consult a wide range of stakeholders including:

• International toll road operators

• Domestic and global investors

• Local iwi with an interest in infrastructure

• Financial and legal advisors familiar with transport infrastructure PPPs

These discussions will focus on opportunities and challenges related to operating and maintaining both existing and future toll roads under a concession model. The intent is to gather critical insights into how toll road concessions can be structured, what financial models are most effective, and how risks can be shared between public and private sectors.

Toll Concession Models and Benefits

Under a concession, the Government retains ownership of the toll road while transferring operational responsibilities to a private entity. Concessions may be applied in two main formats:

1. O&M Concessions (Operations & Maintenance): Focused on existing toll roads where the private partner maintains and manages the road, collecting tolls for operational costs.

2. DBFOM Concessions (Design, Build, Finance, Operate, Maintain): Typically used for new roads where the private partner is responsible for the full project lifecycle.

Advantages of toll concessions include:

• Upfront capital for the Government to fast-track more infrastructure projects.

• Access to private sector expertise in construction, technology, and traffic management.

• Efficient risk-sharing and innovation in tolling systems and infrastructure design.

Focus Areas and Future Vision

Minister Bishop confirmed that market soundings will evaluate the potential for toll concessions across the following:

• Existing toll roads – Northern Gateway, Takitimu Drive, Tauranga Eastern Link.

• Confirmed new toll projects – Penlink, Takitimu North Link, Ōtaki to North of Levin.

• Future Roads of National Significance (RoNS) – Large-scale infrastructure under the Government Policy Statement on Land Transport 2024.

• Major long-term projects – Including transformative infrastructure like the proposed alternative Waitematā Harbour crossing.

The Government also seeks to assess whether toll concessions could support other emerging mega-projects that require innovative funding and operational models due to their complexity and cost.

Expert Advisory: Citi Appointed as Financial Advisor

To ensure an informed and robust process, the Ministry has appointed Citi, a global investment bank, as its financial and commercial advisor. Citi brings extensive international experience in toll concession arrangements, particularly across Europe, Asia, and North America, where toll PPPs are well-established.

Citi’s role includes structuring the market engagement, identifying investment frameworks, and providing strategic insights into financial modeling, legal structuring, and risk mitigation.

Next Steps and Decision Timeline

Market soundings will begin in July 2025 and run over the coming weeks. The findings will feed into policy recommendations to Cabinet, with the Government expected to make key decisions on the viability, scope, and structure of toll road concessions later this year.

Minister Bishop emphasized that any toll concession model adopted will prioritize long-term value for taxpayers, safety, and the efficient delivery of transport services.

This initiative marks a turning point in New Zealand’s infrastructure strategy—one that embraces public-private collaboration to tackle major transport challenges. By testing the waters through comprehensive market consultation, the Government is aiming to unlock new sources of funding, accelerate project timelines, and improve transport outcomes for all New Zealanders.