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Widening work on parts of the road was expected to start at the end of last year but the Queenstown Lakes District Council has delayed the work so a business case can be made for a much larger roading project than originally intended.
Increasing traffic volumes, spillover from the Roys Peak Track car park and increased use by cyclists have prompted calls from groups such as the police and Wanaka Community Board for the road to be widened.
Traffic will be disrupted on the road for the next week as roading crews carry out resealing work from near the Rippon Vineyard to the start of the gap near Glendhu Bay.
The work is part of the council's scheduled resealing programme for the summer and does not involve widening the road.
QLDC chief engineer Ulrich Glasner said a business case for the estimated $4million needed for the whole project was being worked on by council staff.
If confirmed, the business case would be included in the council's 10-year-plan review in 2018.
About $1.4million towards the road widening project would be included in the council's draft annual plan, which would be released for consultation later next month, Mr Glasner said.
Work would start on widening a 220m stretch of the road near the Roys Peak car park in September, as part of a joint venture between the council and the Department of Conservation.
It had been timed to coincide with the lambing season, when the track was closed to the public for about seven weeks.
Wanaka Community Board chairwoman Rachel Brown said while it was disappointing the work had been pushed back the council had made the right decision to wait until the work could be done properly.