Documents show Waka Kotahi believed it was well placed to step into the country's $100 million-plus bitumen market in a big way.
Waka Kotahi's plans to become the country's biggest bitumen supplier has riled the current largest importer Z Energy. Photo: 123rf
The agency has been looking at intervening since the Marsden Point oil refinery shut down, though intervention was a "sensitive" matter for local companies despite the volatility of global prices.
Official Information Act (OIA) responses show the agency in July last year had expected that, by now, mid-2022, it would "be well positioned ... to ensure supply continuity, efficient access and fair pricing".
The Transport Agency's move to become the biggest bitumen supplier, in addition to being the country's biggest customer, has riled the current largest importer, Z Energy.
RNZ revealed in April Z Energy told customers it would be pulling out because the agency's plan to procure, transport and distribute bitumen would leave it no room to operate.
However, the latest update in an OIA response indicates the agency may be reducing its vision.
It was taking "a pragmatic approach" to talks with existing market players "that recognises their established commercial interests", an April 2022 board paper said.
"Waka Kotahi does not see any need to enter into the downstream part of the supply chain (ie, land-side manufacture and distribution) as this part of the market is expected to continue functioning well."
The agency remains cagey about its plans, releasing only patchy information in a series of short, redacted OIA responses.
The April board note said: "Current efforts are focusing on exploring and developing the option [of market involvement] in confidentiality with key industry stakeholders."
Waka Kotahi has previously told RNZ no bitumen plan existed, and also said it had no record of a verbal briefing it gave the transport minister at the end of last year.
After RNZ appealed to the ombudsman, it sent through a summary of what it told minister Michael Wood:
Its board "has approved a strategy to develop a bitumen supply chain, options for which include the possibility of direct sourcing and storage of bitumen for New Zealand", though no decision had been made, it told Wood.
"This strategy may have implications for incumbents across the supply chain and so is sensitive in nature."
The other challenge has been market volatility, with the global price for bitumen oscillating between $300 and $800 a tonne this year, spiking over fuel supply fears due to Russia's war on Ukraine.
'Well positioned'
Well before that, an OIA response shows in July 2021, the Transport Agency told the Ministry of Business, Innovation and Employment (MBIE), for its review of supply chain pressures, that:
"Several alternative supply chain models have already been developed and are being tested with potential supply chain partners and expert industry advisors.
"At present, the supply chain is working well, with the bitumen tanks being kept full under existing contractual arrangements.
"These existing contracts begin to expire from mid-2022, at which time there will be a progressive switch to a replacement import model."
The agency had a discussion with MBIE about fuel resilience, Marsden Point's closure and the bitumen supply chain.
"The meeting quickly concluded that there was no meaningful link," Waka Kotahi told RNZ in its OIA response.
It has not just been RNZ getting patchy information: The OIAs show ministers Megan Woods and Poto Williams got only a partial briefing from MBIE about bitumen at one stage.
"The briefing to Ministers should have reflected that New Zealand currently has sufficient bitumen supply to meet the needs of the land transport sector.
"It should have also described the ongoing work Waka Kotahi is doing to review the bitumen supply chain.
"Waka Kotahi is working with MBIE to update its briefing to the [Construction Sector Accord] co-chair Ministers."