Yet the state government has allocated just 10 per cent of the total project cost in its 2008-09 budget.

The $16 million in funding was revealed in NSW Treasury papers as part of yesterday's budget announcement.

The papers claim $13.3 million has been spent on the project to date, with completion due in 2011.

In August 2002, then Roads Minister Carl Scully announced the $80 million project would provide a new primary link between Port Macquarie and the Pacific Hwy, with construction to begin in 2005.

But it took until February this year before a sod was turned in the project.

Preliminary work began on stage one of the upgrade in mid-February with clearing at the Wrights Rd roundabout and construction of an access road off Lindfield Park Rd.

The works will result in a new, larger roundabout with an east-bound slip lane and a new cross-over bridge across the old highway west of Phillip Charley Dve.

They will provide a single lane in each direction but the road will be built to dual carriageway width to allow for the later stage works.

It will also include the construction of a temporary westbound connection at the cross-over of the existing highway west of Phillip Charley Dve.

The stage one works are expected to be complete in early 2009.

Port Macquarie MP Rob Oakeshott said the government was spending "record capital expenditure" of more than $250 million locally.

"Our biggest spend in the past has been around $100 million in one financial year so this increase is certainly welcome," he said.

"It is primarily due to Pacific Hwy works now under way in the electorate, as well as the bigger dollars now starting to come on-line for the Oxley Hwy upgrade. For this project, $16 million has been allocated for this year and $50 million for the following year, as current capital works continue."

The government has also allocated $348,000 for the final part of the Port Macquarie TAFE upgrade, due to be completed next year. Total funding is almost $9.5 million.