The New Zealand Transport Agency says Riccarton Rd, in East Taieri, could become the new State Highway 87 - clearing heavy vehicles from Mosgiel's main street - but only if the Dunedin City Council helps pay for it.
However, NZTA and Dunedin City Council staff appear to be in a standoff over the idea, with both sides saying yesterday it was up to the other to make the first move.
At least one East Taieri resident - Riccarton Rd property owner Brian Miller - has also warned the idea would sound the death knell for businesses along Mosgiel's main street.
The idea was raised again by Mosgiel Taieri Community Board member Martin Dillon - a long-time Mosgiel resident - last week.
He believed moving the highway could end prolonged debate over Riccarton Rd's future, and came after the council in May scrapped plans for a $7.8 million upgrade of the road.
Dunedin city councillors were instead considering two cheaper options to upgrade Riccarton Rd, costing up to $2.6 million and involving only modest improvements, which would be discussed with the community after next month's election.
However, Mr Dillon told the Otago Daily Times shifting the highway to Riccarton Rd, to link with SH1, would free Gordon Rd - Mosgiel's main street - from the congestion of heavy traffic.
Gordon Rd was becoming choked by traffic, yet plans to upgrade Riccarton Rd were being "strangled" by a "very, very small minority", he said.
"Some residents of Riccarton Rd are going to be upset ... but there's 12,000 people in Mosgiel who have had a gutsful of Gordon Rd.
"It's just a no-brainer," he said.
In response, NZTA Otago-Southland regional director Bruce Richards said the agency "could consider" shifting the highway, but only if asked by the council.
That would place the onus to upgrade the road to a state highway standard on the council, although NZTA would provide a 65% subsidy.
However, council acting transportation planning manager Lisa Clifford said the idea was not being considered and "would really be something that NZTA would have to initiate".
Council projects engineer Evan Matheson agreed, saying any upgrade would likely cost up to $10 million and - if initiated by NZTA - would "totally" be up to the agency to fund and manage.
He questioned the benefit of using ratepayers' money to fund the highway's development, only to hand it over to NZTA.
"That's not a plan of ours."
Mr Richards said the agency's long-term goal was "to get out of main streets" and provide the most efficient routes, particularly for freight, as had already happened at Temuka, in South Canterbury.
"We would much rather bypass 50kmh areas," he said.
However, the shortness of Gordon Rd made the project less attractive, and if the council did not take the initiative "then they will be waiting a long time", he warned.
The debate has prompted mixed reactions.
Mr Dillon's fellow board member, Sandra Wilson, has supported using Riccarton Rd as a heavy traffic bypass while leaving SH87 running through Mosgiel.
However, board chairman Barry Barbour believed the future of both roads should be considered together, and would be "one of the first major issues" for the new board.
Mr Miller - the Riccarton Rd West Safety Society chairman - said he was not opposed to changes to Riccarton Rd, but only "if it goes through the correct process".
However, he believed the Mosgiel business community "certainly wouldn't support" moving the highway.
"I think the business area of Mosgiel would die. We would end up like Temuka," he said.
