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NZ Transport Agency senior project manager Phil Dowsett said the water main burst "some weeks ago'' at the Tucker Beach Rd/State Highway 6 intersection, causing gravel to wash into the new pipes.
"These pipes have since all been cleaned out and checked with cameras to ensure no gravel remained, and they meet both transport agency and Queenstown Lakes District Council standards for freshwater pipes.''
Council property and infrastructure general manager Peter Hansby said he was made aware of the burst water main as soon as it happened.
He said the burst main was associated with trenching work that was happening alongside it.
Work on the $6.4million project, which will result in an underpass for Tucker Beach Rd traffic - leading to a slip road on State Highway 6 for Queenstown-bound traffic - began in September last year.
Since then, motorists have faced lengthy delays and back-to-back traffic at peak travel times.
Mr Dowsett said it was now expected the road would be finished in "late April/early May''.
Asphalt was expected to be laid early next month, provided the weather remained warm and dry.