Tauranga City Council is continuing to work towards a Route K-Turret Road swap with NZ Transport Agency - possibly by July next year.

Two decisions made this week confirm the establishment of joint work streams between council and NZTA over financial and debt transfer arrangements, and finalising the asset register, property boundaries, highway structures and future of the toll plaza.

Turret Road will be four-laned as part of the Hairini Link.

Each entity is looking at the legal issues involved and the order in council required to revoke the Route K Empowering Act, and the TCC Route K Bylaw.

Staff will report back to council on progress after Christmas.

The other part of the process, revoking Turret Road's State Highway 2A status is also agreed to in principle.

Justification comes from the Tauranga Urban Network Study approved by council in April. It states SH2A operates as a non-strategic urban arterial road with increasing volumes of local traffic but little through traffic and low volumes of heavy commercial vehicles.

According to previous studies, supplied in the agenda, it has always been the plan to revoke 15th Avenue Turret Road's state highway status once the Harbour Link Project was completed.

Councillors expressed concerns the agreement to continue the work streams will let the government out of its 2008 promise to pay $100million for the work with the Turret Road four-laning and Hairini bridge duplication yet to be completed.

Mayor Stuart Crosby argued the government is keeping John Key's promise so far with the $50million or so being spent on the underpass to Welcome Bay.

Other councillors expressed concern that now the government has the strategically important SH29 highway traffic protected, it will not complete the Turret Road four-laning and bridge duplication – also expected to cost about $50million.

The danger is if the promised money isn't paid up by the government, the city council will be forced to borrow that money to complete the work itself – which will wipe the gains made by shedding the Route K debt.

Councillors Bill Grainger, Catherine Stewart, Rick Curach and Murray Guy voted against it. In support are David Stewart, Bill Faulkner, Terry Molloy, Wayne Moultrie, Larry Baldock. Tony Christiansen was absent.

The council has confirmed support from NZTA will underwrite the financial risk for the outstanding Route K debt at a date to be agreed up to 35years from the date of declaration.

Both TCC and NZTA agree the Route K toll road functions as a national strategic state highway, and that it should be declared a state highway.

As a state highway NZTA will be responsible for maintenance and renewal, operating the strategic network as a single system and plan for future upgrades.

NZTA plans to convert Route K to electronic toll collection, delivering immediate savings in travel time and align the customer experience with the level of service expected on the Tauranga Eastern Link and the Northern Gateway toll road.

Tauranga City Council has been desperately seeking a way to remove the $60 million Route K debt off the council books. The council is close to its borrowing capacity, and removing the Route K debt will give some breathing space.

By 2020 the Route K debt is projected to grow to nearly $75million. Without the intervention of the NZTA, the only way for the city council to achieve its stated goal of having the toll road debt free by 2026 is to either raise the tolls by 247 per cent or immediately increase traffic by the same amount. This year the road is expected to produce a loss of $1.5 to $2 million.