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The 20m-radius single-lane roundabout will replace the existing T-intersection linking State Highways 6 and 8B.
Rising crash numbers at the intersection had caused the NZ Transport Agency to look at safety improvements.
Between 2010 and 2019, 23 accidents occurred at the intersection, one crash resulting in two deaths.
In 2012, a separate left turn lane was added and the speed limit reduced from 100kmh to 80kmh. Further improvements were identified as needed.
Estimated project costs for the roundabout, including design, resource consents and small land purchase from the Central Otago District Council, total $5million and are funded by the NZTA through the Government’s $6.8billion NZ Upgrade Programme.
Principal project manager Brendon French said the project was expected to be completed in the second half of 2022 and would help reduce the rising number of serious injury crashes at the intersection.
Construction preparation work, including relocating a water main, would start this month, Mr French said.